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1. Statement of accounting policies
Kenmare Resources plc (the \u201cCompany\u201d) is domiciled in the Republic of Ireland. The Company\u2019s registered address is Styne House, Hatch
Street Upper, Dublin 2. The Company has a premium listing on the Main Market of the London Stock Exchange and a secondary listing on
Euronext Dublin. These consolidated financial statements comprise the Company and its subsidiaries (the \u201cGroup\u201d). The principal activity of
the Group is the operation and further development of the Moma Titanium Minerals Mine in Mozambique.
The significant accounting policies adopted by the Group are set out below.
Adoption of new and revised standards
Standards adopted in the current financial year
The following new and revised standards, all of which are effective for accounting periods beginning on or after 1 January 2022, have been
adopted in the current financial year.
\u2022 Onerous Contracts \u2013 Cost of Fulfilling a Contract \u2013 Amendments to IAS 37
\u2022 Annual Improvements to IFRS Standards 2018\u20132020
\u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16
\u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3
None of the new and revised standards and interpretations listed above have a material effect on the Group\u2019s financial statements.
Standards to be adopted in future accounting periods
At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these
financial statements were in issue but not yet effective. The Group will apply the relevant standards from their effective dates. The standards
are mandatory for future accounting periods but are not yet effective and have not been early-adopted by the Group.
\u2022 Classification of Liabilities as Current or Non-current \u2013 Amendment to IAS 1 effective 1 January 2024
\u2022 IFRS 17 Insurance Contracts and Amendments to IFRS 17 effective 1 January 2023
\u2022 Disclosure of Accounting Policies \u2013 Amendments to IAS 1 and IFRS Practice Statement 2 effective 1 January 2023
\u2022 Definition of Accounting Estimate \u2013 Amendments to IAS 8 effective 1 January 2023
\u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 effective 1 January 2023
\u2022 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IFRS 10 and IAS 28
\u2022 Lease Liability in a Sale and Leaseback \u2013 (Amendments to IFRS 16) effective 1 January 2024
The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial
statements of the Group in future periods.
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by
the International Accounting Standards Board (IASB) and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by
the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS Regulation.
The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of
sales. In addition, foreign exchange losses have been reclassified to other operating costs and are no longer presented separately on the face
of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense.
Further details can be found in Note 4.
Going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have or will
have adequate resources to continue in operational existence for the foreseeable future. Based on the Group\u2019s cash flow forecast, liquidity,
solvency position and available finance facilities, the Directors have a reasonable expectation that the Group has adequate resources for the
foreseeable future and, therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements.
The Group forecast has been prepared by management with best estimates of production, pricing and cost assumptions over the period. Key assumptions upon which the Group forecast is based include a Mine plan covering production using the Namalope, Nataka, Pilivili and Mualadi reserves and resources as set out in the unaudited mineral reserves and resources table on page 42. Specific resource material is included only where there is a high degree of confidence in its economic extraction. Production levels for the purpose of the forecast are approximately 1.2 million tonnes per annum of ilmenite plus co-products, zircon, concentrates and rutile, over the next 12 months. Assumptions for product sales prices are based on contract prices as stipulated in marketing agreements with customers or, where contract prices are based on market prices or production is not presently contracted, prices are forecast taking into account independent titanium mineral sands expertise and management expectations. Operating costs are based on approved budget costs for 2023, taking into account the current running costs of the Mine and escalated by 2% per annum thereafter. Capital costs are based on the capital plans and include escalation at 2% per annum. The 2023 operating costs and forecast capital costs take into account the current inflationary environment. The 2% inflation rate used from 2024 to escalate these costs over the life of mine is an estimated long-term inflation rate. Sensitivity analysis is applied to the assumptions above to test the robustness of the cash flow forecasts for changes in market prices, shipments and operating and capital cost assumptions. Changes in these assumptions affect the level of sales and profitability of the Group and the amount of capital required to deliver the projected production levels. As a result of this assessment, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the 12 month period from the date of authorisation of these financial statements. Basis of accounting The financial statements are presented in US Dollars rounded to the nearest thousand. They have been prepared under the historical cost convention except for certain trade receivables and share-based payments, which are recorded at fair value. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company, its subsidiaries and its subsidiaries\u2019 branches. Subsidiaries are entities controlled by the Group. The Group \u2018controls\u2019 an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control listed above. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation. When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets, less liabilities of the subsidiary. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets and liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as required by applicable IFRS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments or, when applicable, the costs on initial recognition of an investment in an associate or a joint venture. Determination of ore reserve estimates The Group estimates its ore reserves and mineral resources based on information compiled by a Competent Person as defined in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 Edition (the \u201cJORC Code\u201d). Ore reserves and mineral resources determined in this way are used in the calculation of depreciation, amortisation and impairment charges, the assessment of life of mine and for forecasting the timing of the payment of close-down costs, restoration costs and clean-up costs. In assessing the life of a mine for accounting purposes, mineral resources are taken into account only where there is a high degree of confidence of economic extraction. There are numerous uncertainties inherent in estimating ore reserves and mineral resources and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of final products, production costs or recovery rates may change the economic status of ore reserves and mineral resources and may ultimately result in the reserves being revised. Accounting for climate change Management have considered the impact of climate change on amounts reported within the financial statements, including the potential financial impact of the physical and transitional risks identified in the Strategic Climate Report in accordance with the recommendations of the Taskforce on Climate-related Financial Disclosures. Considerations in respect of climate-related matters have been made on a number of key estimates and judgements including: \u2022 The estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash- generating unit; \u2022 The Mine closure provision and Mine rehabilitation provision; and \u2022 The useful lives of property, plant and equipment. Whilst the Group has set ambitions to be net zero by 2040, the financial impact is still being assessed as the Group considers how it will work towards meeting this target. As such, the estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash-generating unit does not consider the expenditure (or any related savings) associated with the company\u2019s ambition to become net zero nor the financial impact of the climate risks disclosed within the Group\u2019s TCFD reporting as a reliable estimate thereof cannot currently be made. The Group considered whether its climate ambitions required changes to the useful lives of existing assets. No adjustments to useful lives were made during the period as a direct result of the impact of the Group\u2019s climate ambition to become net zero as the Group\u2019s transition plan is still under development. Should pathways for eliminating fossil fuel power generating assets be identified, depending on technological development within the industry, which is highly uncertain, the Group\u2019s property, plant and equipment profile may change and accelerated depreciation of assets may be required in the future. However, at this present time the requirement for fossil fuel-powered assets means that early retirement of existing assets is not expected. The Group estimates the Mine closure and rehabilitation provision based on current restoration standards, techniques and climate conditions. Closure plans and cost estimates are supported by detailed studies which are provided by external estimates. Detailed closure cost studies are refreshed at least every five years and these studies are evolving to incorporate greater consideration of forecast climate conditions at closure. Management continues to monitor future uncertainty around climate change risks and is continually developing the Group\u2019s assessment of the impact that climate change has on the amounts recognised in the financial statements. It is, therefore, likely that the future carrying amounts of assets or liabilities may change as the Group\u2019s judgements and estimates evolve as the Group responds to its climate change ambitions. Revenue recognition Revenue represents the value of goods and services supplied to third parties during the year. Revenue is measured at the fair value of consideration received or receivable and excludes any discounts and applicable sales tax. Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or service to a customer. The Group has a mixture of long-term contracts and spot contracts with customers for the sale of mineral products ilmenite, zircon, concentrates and rutile. Sales contracts are evaluated to determine the performance obligations, the transaction price and the point at which there is transfer of control. Sales are made on either a \u201cfree on board\u201d (FOB), \u201ccost, insurance and freight\u201d (CIF), or a \u201ccost and freight\u201d (CFR) basis. Control of mineral products passes from the Group to customers on delivery and delivery is deemed to take place when the product is loaded on the ocean-going vessel chartered by either the customer or the Group. The transactional price is the amount of consideration due in exchange for transferring the promised goods or services to the customer and is allocated against the performance obligations and recognised in accordance with whether control is recognised over a defined period or at a specific point in time. The customer is responsible for the cost of shipping and handling for all FOB Incoterms. The Group is responsible for shipping the product to a destination port specified by the customer for all CIF and CFR Incoterms. The Group has determined that the shipping service represents a separate performance obligation, and revenue in relation to such services is deferred and recognised separately from the sale of the material over time as the shipping service is provided. Shipment revenue is recognised at the contracted price to the Group. All shipping and handling costs incurred by the Group are recognised as a cost of sale. Finance income Finance income represents deposit interest earned. Deposit interest is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Finance costs Finance costs consist of interest on bank borrowings, interest on lease liabilities, trade receivable facilities fees, debt commitment fees and the unwinding of the Mine closure provision. The accounting policies applicable for these finance costs are set out in borrowing costs, leases, financial assets and provisions. Debt commitment fees for undrawn facilities are recognised in the period to which they relate. Employee benefits SHORT-TERM EMPLOYEE BENEFITS Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay as a result of past services provided by the employee and the obligation can be reliably estimated. DEFINED CONTRIBUTION PLANS Obligations for contributions to defined contribution plans are expensed as the related service is provided. Share-based payments The Group grants equity settled share-based payments to certain employees as part of their remuneration. The grant date fair value of equity settled share-based payment arrangements is recognised as an expense with a corresponding increase in equity on a straight-line basis over the vesting period. The fair value of the award is deemed to be the nominal share price at grant date. Where an award has a $nil strike price, the Company has determined that the risk-free rate and market volatility rate has a negligible impact on fair value. No adjustment is made to fair value for expected dividends throughout the vesting period as the award holder is entitled to receive dividend equivalents at the end of the vesting period. Fair value incorporates the effect of market-based conditions where applicable. Non-market based vesting conditions are only taken into account when assessing the number of awards expected to vest such that the cumulate expense recognised equates to the number of awards that actually vest. A modification to an award which reduces the number of equity instruments granted is accounted for as a cancellation. The cancellation of awards is accounted for as an acceleration of the vesting period and therefore any amount unrecognised that would otherwise have been charged are recognised immediately in profit & loss. Where a shared understanding of the award is deemed not to exist and employees are rendering services for the award beginning on a date earlier than the grant date, the Group estimates the cost of such awards from the date of communication to the vesting date. The Group adjusts the fair value estimate of such awards to the grant date when a shared understanding is obtained. The dilutive effect of outstanding options, to the extent that they are to be settled by the issue of new shares and to the extent that the vesting conditions would have been satisfied if the end of the reporting period was the end of the contingency period, is reflected as additional share dilution in the determination of diluted earnings per share. Foreign currency The individual financial statements of each Group entity are prepared in their functional currency, which in each case is US Dollars. The presentation currency for the consolidated financial statements is also US Dollars. In preparing the financial statements of the individual entities, transactions in currencies other than the entity\u2019s functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at rates prevailing on such reporting date. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of comprehensive income for the financial year in foreign exchange gain/loss and are not part of the operating profit or loss. Borrowing costs All borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets until such time as the assets are substantially ready for their intended use. Taxation The tax expense represents the sum of the current tax and deferred tax. Current tax payable is based on the best estimate of the tax amount expected to be paid and reflects uncertainty related to income taxes, if any. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expenses that are taxable or deductible in other financial years and it further excludes items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using the tax rates that have been enacted or substantively enacted at the reporting 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 statement of financial position 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. Deferred tax liabilities are not recognised for taxable temporary differences arising on investments in subsidiary undertakings, if the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is released and reflects uncertainty related to income taxes, if any. Deferred tax is charged or credited in the statement of comprehensive income, 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 Group intends to settle its current tax assets and tax liabilities on a net basis. Property, plant and equipment The cost of property, plant and equipment comprises any costs directly attributable to bringing an asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated closure costs associated with the asset. This includes the cost of moving plant and associated infrastructure to the orebodies under the Group\u2019s mining concessions which form part of the Group\u2019s life of Mine plan. Construction in progress expenditures for the construction and commissioning of property, plant and equipment are deferred until the facilities are operational, at which point the costs are transferred to property, plant and equipment and depreciated at the applicable rates. When an asset is subject to regular major inspections or overhauls, a component approach to depreciation is applied and the cost of a maintenance event is capitalised and depreciated over the time to the next occurrence. Other subsequent expenditure on an item of property, plant and equipment is capitalised as part of the cost of an asset only when it increases the future economic benefits associated with the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred. Property, plant and equipment are depreciated over their useful life on a straight-line basis, or over the remaining life of the Mine if shorter, or on a units of production basis. The major categories of property, plant and equipment are depreciated as follows: Plant and equipment Unit of production basis Development expenditure Unit of production basis Other assets Vessels Five to twenty-five years Buildings and airstrip Twenty years Mobile equipment Three to five years Fixtures and equipment Three to ten years Units of production depreciation is calculated using the quantity of heavy mineral concentrate extracted from the Mine for processing in the period as a percentage of the total quantity of heavy mineral concentrate planned to be extracted in current and future periods based on the mining reserve. The mining reserve is updated on an annual basis for results of drilling programmes carried out, mining activity during the year, and other relevant considerations. The unit of production depreciation rate is adjusted as a result of this update and applied prospectively. Capital spares consist of critical plant spares with estimated useful lives greater than one year and are included in property, plant and equipment. Capital spares are stated at cost. Residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Changes to the estimated residual values or useful lives are accounted for prospectively . Development expenditure Project development costs include expenditure on the development of an orebody including pre-feasibility and feasibility studies on mining the orebody, the transport of mining plants to the orebody, additional infrastructure required to mine the orebody and community resettlement costs. Project development costs include finance costs and lender and advisor fees incurred during the period before such mine is capable of operating at production levels in the manner intended by management are deferred and included in property, plant and equipment. In addition, expenses including depreciation net of revenue earned during commissioning of the Mine in the period before it is capable of operating in the manner intended by management are deferred. These costs include an allocation of costs, including share-based payments, as determined by management and incurred by Group companies. Interest on borrowings relating to the Mine construction and development projects are capitalised until the point when the activities that enable the Mine to operate in its intended manner are complete. Once the Mine is operating in the manner intended by management, the related costs are depreciated off over the life of the estimated ore reserve of such mine on a unit of production basis, or over its useful life if shorter. Where the Mine project is terminated or impairment of value has occurred, related costs are written off immediately. Exploration and evaluation expenditure Exploration and evaluation expenditure activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation expenditure is charged to the statement of comprehensive income as incurred, except where the existence of a commercially viable mineral deposit has been established and it is expected that the deposit will be mined. Capitalised exploration and evaluation expenditure considered to be tangible is recognised as a component of property, plant and equipment at cost less impairment charges. Until such time as an asset is available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment as part of development expenditure. To the extent that capitalised expenditure is not expected to be recovered, it is charged to the statement of comprehensive income. Leases The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost (being the present value of the lease liabilities), and subsequently at cost less accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability. Right-of-use assets are depreciated over their lease term. The lease liability is initially measured at the present value of the future lease payments, discounted using the Group\u2019s incremental borrowing rate. The Group has applied judgement to determine the discount rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Group has applied judgement to determine the lease term for some lease contracts that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognised. The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases including heavy mobile equipment rental at the Mine. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. Impairment of non-current assets At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the fair value for the Mine is difficult to determine, the Group uses its value in use in estimating the recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of the asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior financial years. A reversal of an impairment loss is recognised as income immediately . Inventories Product inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour costs and overheads, including depreciation, incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs necessary to make the sale. Quantities are assessed primarily through surveys and assays. Consumable spares are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method and comprises the purchase price and related costs incurred in bringing the inventories to their present location and condition. Consumable spares identified as obsolete are recognised as an expense immediately. Financial instruments Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial assets The financial assets of the Group consist of cash and cash equivalents and trade and other receivables. Classification of financial assets Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Cash and cash equivalents are initially measured at fair value and are subsequently measured at amortised cost. They are held by the Group to collect deposit interest and to meet the liquidity requirements of the Group. The Group has a trade finance facility for three of the Group\u2019s customers. In accordance with this facility, the bank purchases 80% of the receivable without recourse and therefore assumes the credit risk. Derecognition of the trade receivables occurs when the customer\u2019s invoices is factored and the Group receives cash from the bank. The Group also has a trade facility for customers to which it sells to under letter of credit terms. Under this facility, the bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The bank can also discount these letters of credit thereby providing early payment of receivables to the Group. Derecognition of the trade receivables occurs when the customer\u2019s invoices are discounted and the Group receives cash from the bank. These facilities assist the Group in managing its liquidity for funding of operations. Trade receivables which are not factored are initially measured at fair value and subsequently measured at amortised cost as they are held by the Group in order to collect receipts under the credit terms of the sales contracts i.e. solely payment of principal and interest (SPPI). Trade receivables which are factored or letters of credit which are always confirmed and discounted are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored or confirmed and discounted as the case may be are classified as fair value through other comprehensive income (FVOCI). This is because their cash flows are generated through a combination of collection and sales (by factoring or confirming and discounting letters of credit). Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset. Interest income is recognised in profit or loss and is included in the \u201cfinance income\u201d line item . Impairment of financial assets The Group recognises a loss allowance for expected credit losses on trade receivables that are not measured at fair value through profit or loss. The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for financial assets which requires expected lifetime losses to be recognised from initial recognition of the receivable. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the trade receivable. When determining whether the credit risk of a trade receivable has increased the Group considers credit risk ratings where available, the Group\u2019s historical credit loss experience, adjusted for factors that are specific to the customers, general economic conditions and an assessment of both the current as well as the forecast conditions at the reporting date. Sales to certain customers are undertaken on a letter of credit basis thereby reducing the credit risk of these customers. The Group considers a trade receivable to be in default when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered into bankruptcy proceedings. The Group considers a trade receivable to be credit impaired when there is evidence that the customer is in significant financial difficulty and the debt is more than 90 days past due. Foreign exchange gains and losses The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For financial assets measured at amortised cost, exchange differences are recognised in profit or loss in the \u201cforeign exchange gains and losses\u201d line. Financial liabilities and equity The financial liabilities of the Group consist of bank borrowings, leases and trade payables. The equity of the Group consists of share capital issued by the Company and own shares. Classification of issued debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Issued equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. The only equity instrument of the Company is ordinary shares. Own Shares Ordinary shares acquired by the Company or purchased on behalf of the Company by the Kenmare Employee Benefit Trust are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company\u2019s own equity instruments. Financial liabilities The financial liabilities of the Group are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Financial liabilities measured subsequently at amortised cost The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in profit or loss. Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in profit or loss. When the Group exchanges with an existing lender one debt instrument for another with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between the carrying amount of the liability before the modification and the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses. A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d). The Group has exposure to IBORs on its financial instruments that will be reformed as part of these market-wide initiatives. The Group\u2019s main IBOR exposure at the reporting date is US LIBOR, which is administered by ICE Benchmark Administration (IBA). The alternative reference rate for US LIBOR is the US Secured Overnight Financing Rate (SOFR). On 5 March 2021, IBA stated that it will cease the publication of (i) the overnight and one, three, six and twelve months USD LIBOR settings immediately following the LIBOR publication on Friday 30 June 2023, and (ii) all other LIBOR settings, including the one week and two months USD LIBOR settings, immediately following the LIBOR publication on Friday 31 December 2021. The Group plans to modify contractual terms for purposes of migrating from USD LIBOR to SOFR prior to the discontinuance of the administration and publication of the relevant LIBOR rates by IBA. Derivative financial instruments The Group has not entered into any derivative financial instruments during the financial year . Dividends Dividends are recognised as a liability in the Company\u2019s financial statements in the period in which the dividends are approved by the Company\u2019s shareholders. Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Contingent liabilities are recognised when the Group has a possible obligation and the existence of which will only be confirmed by uncertain future events that are not wholly within the control of the Group. Mine closure provision The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation provision. A corresponding amount equal to the provision is recognised as part of property, plant and equipment and depreciated over its estimated useful life. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure provision is determined as the net present value of such estimated costs discounted at a risk-free rate. The Group uses long-term rates as provided by the US Treasury extrapolated to the duration of the Mine life. This is deemed the best estimate to reflect the current market assessment of the time value of money on a risk-free basis. Risks specific to the liability are included in the cost estimate. Changes in the expected costs or estimated timing of costs are recorded by an adjustment to the provision and a corresponding adjustment to property, plant and equipment. The unwinding of the discount on the Mine closure provision is recognised as a finance cost. Mine rehabilitation provision The Mine rehabilitation provision represents the Directors\u2019 best estimate of the liability for reclaiming areas disturbed by mining activities. Reclamation costs are recognised in each period in the statement of comprehensive income based on the area disturbed in such period. Segmental reporting Information on the operations of the Moma Titanium Minerals Mine in Mozambique is reported by the Executive Committee to the Group\u2019s Board for the purposes of resource allocation and assessment of segment performance. The principal categories for disaggregating revenue are by product type and by country of the customer\u2019s location. The product types are ilmenite, zircon, rutile and concentrates. Concentrates includes secondary zircon and mineral sands concentrates. Critical accounting judgements and key sources of estimation uncertainty Critical judgements in applying the Group\u2019s accounting policies In the process of applying the Group\u2019s accounting policies, the Directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below). Property, plant and equipment The recovery of property, plant and equipment is dependent upon the successful operation of the Mine. The realisation of cash flow forecast assumptions would result in the recovery of such amounts. During the financial year, the Group carried out an impairment review of property, plant and equipment. In performing the impairment review, a significant level of judgement is required in determining the key assumptions which have a significant impact on the impairment model. The assumptions are set out in Note 11. As a result of the review, no impairment provision is required in the financial year. Consolidation of Structured Entities The Group has established the Kenmare Employee Benefit Trust which facilitates the operation of the Kenmare Restricted Share Plan (KRSP). Whilst the Group does not hold any of the equity of the trust, the Directors have concluded that the Group controls its activities and therefore the financial statements of the trust are included in the Group\u2019s Consolidated Financial Statements. Key sources of estimation uncertainty The preparation of financial statements requires the Directors to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the reporting date. The nature of estimation means the actual outcomes could differ from those estimates. The main areas subject to estimation uncertainty are detailed below. Provisions MINE CLOSURE AND MINE REHABILITATION PROVISION The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation provision. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure provision is estimated based on the net present value at the risk-free rate of estimated future Mine closure costs. Mine closure costs are a normal consequence of mining, and the majority of such costs are incurred at the end of the life of mine. The Mine rehabilitation provision represents the Directors\u2019 best estimate of the Group\u2019s liability for reclaiming areas disturbed by mining activities. Reclamation costs are recognised in each period based on the area disturbed in the period and an estimated cost of rehabilitation per hectare, which is reviewed regularly against actual rehabilitation cost per hectare. Actual rehabilitation expenditure is incurred approximately 12 months after the area has been disturbed. There is significant estimation uncertainty in the calculation of the Mine closure and Mine rehabilitation provision and cost estimates can vary in response to many factors including: \u2022 Changes to the relevant legal or local/national government requirements and any other commitments made to stakeholders; \u2022 Additional remediation requirements identified during the rehabilitation; \u2022 The emergence of new restoration techniques; \u2022 Change in the expected closure date; \u2022 Change in the discount rate; and \u2022 The effects of inflation. The quantitative inputs and sensitivity information relating to the Mine closure and Mine rehabilitation provision are detailed in Note 21. Units of production depreciation Units of production depreciation is calculated using the quantity of heavy mineral concentrates extracted from the Mine for processing in the period as a percentage of the total quantity of heavy mineral concentrates planned to be extracted in current and future periods based on the mining reserve as detailed in the unaudited mineral reserves and resources table on page 42. The Group estimates its ore reserves and mineral resources based on information compiled by a Competent Person as defined in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition. There are numerous uncertainties inherent in estimating ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of final products, production costs or recovery rates may change the economic status of reserves and may ultimately result in the reserves being revised. 2. Revenue
2022 2021
$\u2019000 $\u2019000
Revenue from contracts with customers
Revenue derived from the sale of mineral products
498,339
420,550
Revenue derived from freight services
27,649
35,394
Total Revenue
525,988
455,944
Revenue by product The principal categories for disaggregating mineral products revenue are by product type and by country of the customer\u2019s location. The product types are ilmenite, zircon, rutile and concentrates. Concentrates includes secondary zircon and mineral sands concentrates. During the financial year, the Group sold 1,075,600 tonnes (2021: 1,285,300 tonnes) of finished products to customers at a sales value of $498.3 million (2021: $420.6 million). The Group earned revenue derived from freight services of $27.6 million (2021: $35.4 million).
2022 2021
$\u2019000 $\u2019000
Revenue derived from sales of mineral products by primary product
Ilmenite
347,446
334,714
Primary zircon
99,152
62,727
Concentrates
33,057
19,554
Rutile
18,684
3,555
Total revenue from mineral products
498,339
420,550
Revenue derived from freight services
27,649
35,394
Total Revenue
525,988
455,944
Revenue by destination In the following table, revenue is disaggregated by primary geographical market. The Group allocates revenue from external customers to individual countries and discloses revenues in each country where revenues represent 10% or more of the Group\u2019s total revenue. Where total disclosed revenue disaggregated by country constitutes less than 75% of total Group revenue, additional disclosures are made on a regional basis until at least 75% of the Group\u2019s disaggregated revenue is disclosed. There were no individual countries within Europe, Asia (excluding China) or the Rest of the World with revenues representing 10% or more of the Group\u2019s total revenue during the year.
2022 2021
$\u2019000 $\u2019000
Revenue derived from sales of mineral product by destination
China
154,704
192,635
Europe
130,440
77,891
Asia (excluding China)
108,487
74,583
USA
51,600
44,312
Rest of the World
53,108
31,129
Total revenue from mineral products
498,339
420,550
Revenue derived from freight
27,649
35,394
Total Revenue
525,988
455,944
Revenue by major customers
The Group evaluates the concentration of mineral product revenue by major customer. The following table disaggregates mineral product
revenue from the Group\u2019s four largest customers.
2022 2021
$\u2019000 $\u2019000
Revenue derived from sale of mineral product by major customers
Largest customer
74,671
65,500
Second largest customer
62,791
62,285
Third largest customer
58,413
50,642
Fourth largest customer
41,015
42,029
Total
236,890
220,456
All Group revenues from external customers are generated by the Moma Titanium Minerals Mine in Mozambique. Further details on this
operating segment can be found in Note 3. Sales to and from Ireland were $nil (2021: $nil) in the year.
3. Segment reporting $\u2019000
Information on the operations of the Moma Titanium Minerals Mine in Mozambique is reported to the Group\u2019s Board for the purposes of
resource allocation and assessment of segment performance. Information regarding the Group\u2019s operating segment is reported below:
2022
2021
Restated
Corporate
Mozambique
Total
Corporate
Mozambique
Total
Revenue & Results
Revenue
\u2013
525,988
525,988
\u2013
455,944
455,944
Cost of sales
\u2013
(282,694)
(282,694)
\u2013
(295,010)
(295,010)
Gross profit
\u2013
243,294
243,294
\u2013
160,934
160,934
Administrative expenses
(7,848)
(2,014)
(9,862)
(7,700)
(2,125)
(9,825)
Segment operating profit
(7,848)
241,280
233,432
(7,700)
158,809
151,109
Finance income
23
1,124
1,147
47
218
265
Finance expenses
(83)
(12,389)
(12,472)
(98)
(13,980)
(14,078)
Profit before tax
(7,908)
230,015
222,107
(7,751)
145,047
137,296
Income tax expense
(1,601)
(14,472)
(16,073)
(3,083)
(5,687)
(8,770)
Profit for the financial year
(9,509)
215,543
206,034
(10,834)
139,360
128,526
Segment Assets & Liabilities
Segment Assets
12,583
1,236,244
1,248,827
6,798
1,153,919
1,160,717
Segment Liabilities
4,722
140,571
145,293
4,221
225,853
230,074
Additions to non-current assets
Segment Additions to non-current
assets
\u2013
59,867
59,867
\u2013
60,342
60,342
* Revenue excludes inter-segment revenue of $24.2m earned by the corporate segment relating to marketing and management services fee income. Inter-segment revenue is not
regularly reviewed by the Chief Operating Decision Maker.
Corporate assets consist of the Company\u2019s property, plant and equipment including right-of-use assets, cash and cash equivalents and
prepayments at the reporting date. Corporate liabilities consist of trade and other payables at the reporting date.
4. Cost and income analysis
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by function
Cost of sales
282,694
295,010
Administrative expenses
9,862
9,825
Total
292,556
304,835
Expenses by nature can be analysed as follows:
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by nature
Staff costs
55,907
46,712
Repairs and maintenance
43,151
43,208
Power and fuel
43,960
30,400
Freight
27,649
35,394
Distribution costs
5,699
5,215
Other production and operating costs
72,099
69,552
Movement of mineral products inventory
(21,628)
9,346
Depreciation of property, plant and equipment and right-of-use assets
64,596
63,136
Foreign exchange loss
1,123
1,872
Total
292,556
304,835
Mineral products consist of finished products and heavy mineral concentrate as detailed in Note 13. Mineral stock movement in the year was an increase of $21.6 million (2021: $9.3 million decrease). Distribution costs of $5.7 million (2021: $5.2 million) represent the cost of running the Mine\u2019s finished product storage, jetty and marine fleet. Freight costs of $27.6 million (2021: $35.4 million) arise from sales to customers on a CIF or CFR basis. There were no exceptional items within operating profit in 2022 (2021 restated: $nil). The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of sales. In addition, foreign exchange gains and losses have been reclassified to administrative costs and are no longer presented separately on the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense.
As previously As restated
reported
Adjustment
$\u2019000
Revenue
455,944
\u2013
455,944
Cost of sales
(244,986)
(50,024)
(295,010)
Other Operating Costs/Administration Expenses
(57,977)
48,152
(9,825)
Net Finance costs
(11,788)
(2,025)
(13,813)
Foreign exchange
(3,897)
3,897
\u2013
Taxation
(8,770)
\u2013
(8,770)
Profit for the financial year and total comprehensive income for the financial year
128,526
\u2013
128,526
5. Employee benefits The aggregate payroll costs incurred in respect of employees comprised:
2022 2021
$\u2019000 $\u2019000
Wages and salaries
46,836
40,092
Share-based payments
5,601
3,420
Social insurance costs
2,764
2,597
Retirement benefit costs
706
603
55,907
46,712
Included in the payroll cost above are Executive and Non-Executive Director emoluments (inclusive of share-based payments) of $4.1 million
(2021: $3.5 million).
The Company contributes to a Company pension plan or individual pension schemes on behalf of certain employees. Contributions to the scheme of $0.7 million (2021: $0.6 million) were charged in the period in which they are payable to the scheme. The average number of persons employed by the Group (including Executive Directors) in 2022 was 1,662 (2021: 1,551) and is analysed below:
2022 2021
Headcount Headcount
Management and administration
347
331
Operations
1,315
1,220
1,662
1,551
6. Share-based payments Share-based payment expense recognised in the consolidated income statement:
2022 2021
$\u2019000 $\u2019000
Expense arising from the Kenmare Restricted Share Plan
5,601
3,420
The Group, under its incentive plan known as the Kenmare Restricted Share Plan (KRSP), grants equity-settled share-based payments to employees as part of their remuneration. In the case of the Executive Directors KRSP awards made prior to 2020 vest, subject to continued employment, 60% on the third anniversary of grant date, 20% on fourth anniversary, and 20% on fifth anniversary. The Executive Director awards granted from 2020 onwards vest, subject to continued employment and to the Remuneration Committee\u2019s assessment against a discretionary underpin, on the third anniversary of grant date. The vested KRSP awards are subject to a two-year holding period which may extend beyond an Executive Director\u2019s cessation of employment in accordance with the post-employment holding requirements of the 2020 remuneration policy. The discretionary underpin contains five core elements which the Remuneration Committee will consider including operational performance, share price performance, ESG performance, major strategic or project decisions, and the long-term strategic vision for the Company. The committee has not set fixed, quantitative underpins in respect of these factors. As such, these elements including share price performance are considered non-market performance conditions and accordingly are not reflected in the grant date fair value. The grant date of awards containing a discretionary underpin is deemed to occur when a shared understanding of the award is obtained by all parties and this generally occurs upon the Remuneration Committee\u2019s assessment of the Group\u2019s performance in the year of vesting. In addition, in the case of Executive Directors, where the annual bonus achieved exceeds 50% of base salary, Executive Directors are granted restricted shares under the KRSP in respect of the excess outcome above this level. Such restricted shares would not be subject to forfeiture or the discretionary underpin.
For other Group employees, awards under the KRSP vest, subject to continued employment, on the third anniversary of award.
Number of Number of
shares shares
2022 2021
Awards outstanding at the beginning of the financial year
2,284,429
2,040,151
Awards issued during the financial year
927,832
692,879
Awards exercised during the financial year
(540,973)
(418,997)
Awards forfeited during the financial year
(31,530)
\u2013
Awards cancelled during the financial year
(77,555)
\u2013
Awards lapsed during the financial year
\u2013
(29,604)
Awards outstanding at the end of the financial year
2,562,203
2,284,429
Awards exercisable at the end of the financial year
22,588
56,980
In
awarded is $4.1 million. During the year 203,206 shares were granted in the form of dividend equivalents. The fair value is determined using
2022
, awards in respect of 724,626 shares were granted to employees under the 2022 KRSP award. The estimated fair value of the shares
the share price on the date of the award.
In 2022, awards in respect of 540,973 shares were exercised under the KRSP award. 295,443 awards (2021: Nil) were exercised in equity
through shares held by the Kenmare Employee Benefit Trust as described in Note 18. 245,443 awards were settled in cash resulting in a cash
outflow of $1.6 million (2021: $2.3 million).
7. Auditor\u2019s remuneration
The analysis of the auditor\u2019s remuneration is as follows:
2022 2021
$\u2019000 $\u2019000
Audit fees
Audit of the Company\u2019s financial statements
18
15
Audit of the Company\u2019s subsidiary undertakings
162
151
Total audit fee
180
166
Non-audit fees
Other assurance services
76
61
Taxation compliance services
10
15
Other non-audit services
11
16
Total non-audit fees
97
92
Total fees
277
258
$116,300
(2021: $94,500) of the total fee was paid to KPMG Dublin and $160,900 (2021: $163,500) of the total fee was paid to KPMG Maputo.
8. Net Finance costs
Restated
2022 2021
$\u2019000 $\u2019000
Finance costs
Interest on bank borrowings
(8,829)
(9,475)
Interest on lease liabilities
(147)
(239)
Factoring and other trade facility fees
(2,218)
(1,431)
Commitment and other fees
(534)
(161)
Unwinding of discount on Mine closure provision
(744)
(747)
Foreign exchange loss
\u2013
(2,025)
Total Finance Costs
(12,472)
(14,078)
Interest earned on bank deposits
657
265
Foreign exchange gain
490
\u2013
Total Finance Income
1,147
265
Net finance costs recognised in profit or loss
(11,325)
(13,813)
All interest has been expensed in the financial year. The Group has classified factoring and other trade facility fees in net cash from operating activities in the Consolidated Statement of Cashflows. 9. Income tax expense
2022 2021
$\u2019000 $\u2019000
Corporation tax
16,073
8,770
Deferred tax
\u2013
\u2013
Total
16,073
8,770
Reconciliation of effective tax rate
Profit before tax
222,107
137,296
Profit before tax multiplied by the applicable tax rate (12.5%)
27,763
17,162
Under provision in respect of prior years
546
\u2013
Non-taxable income
(18,120)
(10,826)
Non-deductible expenses
483
331
Differences in effective tax rates on overseas earnings
5,401
2,103
Total
16,073
8,770
During the year, Kenmare Moma Mining (Mauritius) Limited Mozambique Branch had taxable profits of $39.9 million (2021: $16.2 million), resulting in an income tax expense of $14.5 million (2021: $5.7 million) being recognised. The income tax rate applicable to taxable profits of KMML Mozambique Branch is 35% (2021: 35%). Kenmare Moma Mining (Mauritius) Limited Mozambique Branch has elected, and the fiscal regime applicable to mining allows for, the option to deduct, as an allowable deduction, depreciation of exploration and development expense and capital expenditure over the life of mine. Tax losses may be carried forward for three years. There are no tax losses carried forward at 31 December 2022. Kenmare Moma Processing (Mauritius) Limited Mozambique Branch has Industrial Free Zone (IFZ) status. As an IFZ Branch, it is exempted from corporation taxes and hence its income is non-taxable. During the year, Kenmare Resources plc had taxable profits of $13.3 million (2021: $32.5 million) as a result of management and marketing service fee income earned on services provided to subsidiary undertakings, resulting in a corporate tax expense of $1.6 million (2021: $3.1 million). 10. Earnings per share The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company is based on the following data:
2022 2021
$\u2019000 $\u2019000
Profit for the financial year attributable to equity holders of the Company
206,034
128,526
2022 2021
Number of Number of
shares shares
Weighted average number of issued ordinary shares for
the purpose of basic earnings per share
94,919,944
108,843,459
Effect of dilutive potential ordinary shares:
Share awards
2,361,819
2,185,857
Weighted average number of ordinary shares for
the purposes of diluted earnings per share
97,281,763
111,029,316
$ per share
$ per share
Basic earnings per share
2.17
1.18
Diluted earnings per share
2.12
1.16
The denominator for the purposes of calculating both basic and diluted earnings per share has been adjusted to reflect shares acquired and subsequently cancelled during the year. 11. Property, plant and equipment
Plant and Development Construction Other
Equipment Expenditure In Progress Assets Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Cost
At 1 January 2021
995,856
249,971
52,416
63,114
1,361,357
Additions during the financial year
784
\u2013
59,558
\u2013
60,342
Transfer from construction in progress
29,586
8,201
(50,544)
12,757
\u2013
Disposals
(6,557)
\u2013
\u2013
(11,440)
(17,997)
Adjustment to Mine closure cost
(2,240)
\u2013
\u2013
\u2013
(2,240)
At 31 December 2021
1,017,429
258,172
61,430
64,431
1,401,462
Additions during the financial year
252
112
59,261
242
59,867
Transfer from construction in progress
48,233
1,767
(69,918)
19,918
\u2013
Disposals
(10,230)
\u2013
\u2013
(7,201)
(17,431)
Adjustment to Mine closure cost
(20,080)
\u2013
\u2013
\u2013
(20,080)
At 31 December 2022
1,035,604
260,051
50,773
77,390
1,423,818
Accumulated depreciation
At 1 January 2021
232,441
135,153
\u2013
35,255
402,849
Charge for the financial year
44,229
6,336
\u2013
11,487
62,052
Disposals
(6,557)
\u2013
\u2013
(11,440)
(17,997)
At 31 December 2021
270,113
141,489
\u2013
35,302
446,904
Charge for the financial year
44,435
6,379
\u2013
12,772
63,586
Disposals
(10,230)
\u2013
\u2013
(7,201)
(17,431)
At 31 December 2022
304,318
147,868
\u2013
40,873
493,059
Carrying amount
At 31 December 2022
731,286
112,183
50,773
36,517
930,759
At 31 December 2021
747,316
116,683
61,430
29,129
954,558
An adjustment to the Mine closure cost of $20.1 million (2021: $2.2 million) was made during the year as a result of an update in the discount rate as detailed in Note 21. At each reporting date, the Group assesses whether there is any indication that property, plant and equipment may be impaired. The Group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing for indicators for impairment. As at 31 December 2022, the market capitalisation of the Group was below the book value of net assets, which is considered an indicator of impairment. The Group carried out an impairment review of property, plant and equipment as at 31 December 2022. As a result of the review, and given the performance and outlook of the Group, no impairment provision was recognised in the current financial year. No impairment was recognised in the prior financial year. Given the historic volatility in product pricing and sensitivity analysis of forecast product pricing, the discount rate and to a lesser extent operating costs, the impairment loss of $64.8 million, which was recognised in the consolidated statement of comprehensive income in 2014, was not reversed. The cash-generating unit for the purpose of impairment testing is the Moma Titanium Minerals Mine. The basis on which the Mine is assessed is its value in use. The cash flow forecast employed for the value in use computation is from a life of mine financial model. The recoverable amount obtained from the financial model represents the present value of the future discounted pre-tax, pre-finance cash flows discounted at 14.0% (2021: 10.5%).
Key assumptions include the following:
\u2022 The discount rate is based on the Group\u2019s weighted average cost of capital. This rate is a best estimate of the current market assessment
of the time value of money and the risks specific to the Mine, taking into consideration country risk, currency risk and price risk. The factors
making up the cost of equity, cost of debt and capital structure have changed from the prior year review, to reflect increases in the risk-free
rate, resulting in a discount rate of 14.0% (2021: 10.5%). The Group\u2019s estimation of the country risk premium included in the discount rate
has remained unchanged from the prior year. The Group does not consider it appropriate to apply the full current country risk premium for
Mozambique to the calculation of the Group\u2019s weighted average cost of capital as it believes the specific circumstances which have resulted
in the risk premium increase over the past number of years are not relevant to the specific circumstances of the Moma Mine. Hence,
country risk premium applicable to the calculation of the cost of equity has been adjusted accordingly. Using a discount rate of 14.0%, the
recoverable amount is greater than the carrying amount by $86.9 million (2021: $384.0 million). The discount rate is a significant factor in
determining the recoverable amount. A 1.5% increase in the discount rate to 15.5% reduces the recoverable amount by $86.9 million to $nil,
assuming all other inputs remain unchanged. The decrease in the recoverable amount from the prior year is a result of decreased cash flows
over the life of mine as a result of increased forecast capital and operating costs and an increase in the discount rate from 10.5% to 14.0%
\u2022 A Mine plan is based on the Namalope, Nataka, Pilivili and Mualadi proved and probable reserves and resources. Specific resource
material is included only where there is a high degree of confidence in its economic extraction. The Mine life assumption of 40 years
has not changed from the prior year review. Average annual production is approximately 1.2 million tonnes (2021: 1.2 million tonnes) of
ilmenite and co-products zircon, rutile and concentrates over the life of the Mine and remains unchanged from the prior year review.
This Mine plan does not include investment in additional mining capacity. Certain minimum stocks of final and intermediate products are
assumed to be maintained at period ends.
\u2022 Product sales prices are based on contract prices as stipulated in marketing agreements with customers, or where contracts are based
on market prices or production is not currently contracted, prices are forecast by the Group taking into account independent titanium
mineral sands expertise provided by TiPMC Solutions and management expectations including general inflation of 2% per annum.
Forecast prices provided by TiPMC Solutions have been reviewed and found to be consistent with other external sources of information.
Average forecast product sales prices have increased over the life of mine from the prior year-end review as a result of revised forecast
pricing. A 2.5% reduction in average sales prices over the life of mine reduces the recoverable amount by $86.9 million to $nil, assuming
all other inputs remain unchanged.
\u2022 Operating costs are based on approved budget costs for 2023 taking into account conservative estimated inflation for 2023. From 2024
onwards, operating costs are escalated by 2% per annum as management expects inflation to normalise and average 2% over the life
of mine period. Average forecast operating costs have increased from the prior year-end review as a result of increased production
and inflation. Increased costs associated with estimated future power consumption and unit prices for mining in Nataka have also been
included in the forecast cashflows. A 5.0% increase in operating costs over the life of mine reduces the recoverable amount by $86.9
million to $nil, assuming all other inputs remain unchanged.
\u2022 Whilst the Group has set ambitions to be net zero by 2040, the financial impact is still being assessed as the Group considers how it will
work towards meeting this target. As such, estimates and judgements within these financial statements do not consider the expenditure
(or any related savings) associated with the Company\u2019s ambition to become net zero nor the financial impact of the climate risks
disclosed within the Group\u2019s TCFD reporting as a reliable estimate cannot currently be made.
\u2022 Capital costs are based on a life of mine capital plan including inflation at 2% per annum from 2024. Average forecast capital costs have
increased and their scheduling has changed from the prior year-end review based on updated sustaining and development capital plans
required to maintain the existing plant over the life of mine. A 8.0% increase in capital costs over the life of mine reduces the recoverable
amount by $86.9 million to $nil, assuming all other inputs remain unchanged.
12. Right-of-use assets and lease liabilities
Plant and Land and
Equipment Buildings Total
$\u2019000 $\u2019000 $\u2019000
Cost
At 1 January 2022
3,319
2,108
5,427
Additions
\u2013
482
482
At 31 December 2022
3,319
2,590
5,909
Accumulated Depreciation
At 1 January 2022
2,489
802
3,291
Depreciation expense
830
180
1,010
At 31 December 2022
3,319
982
4,301
Carrying amount
At 31 December 2022
\u2013
1,608
1,608
At 31 December 2021
830
1,306
2,136
On 1 January 2019, the Group recognised a lease liability of $3.3 million in relation to electricity generators at the Mine. The lease for the electricity generators was renewed in November 2017 for a five-year period and rental payments were fixed for the five years. The lease agreement expired in November 2022 and following negotiations the Group completed the acquisition process of the electricity generators in February 2023. On 1 January 2019, the Group recognised a lease liability of $1.7 million in respect of the rental of its Irish head office. The lease has a term of 10 years commencing August 2017 and rental payments are fixed for five years. This lease obligation is denominated in Euros. In February 2019, the Group recognised a lease liability of $0.4 million in respect of its Mozambican country office in Maputo. The lease has a seven-year term commencing February 2019 and rental payments are fixed for seven years. This lease obligation is denominated in US Dollars. The Branch has discounted lease payments using its incremental borrowing rates. The weighted average rate applied is 7%. In December 2022, the Maputo Office lease was modified and remeasured. The lease term was extended to 10 years commencing 1 December 2022. In addition, additional floor space of 250 square meters was leased as an addendum to the existing contract. The Group has determined that the lease modification should not be accounted for as a separate lease because the lease payments for the new office space are not considered commensurate with market rentals for office space of that size and characteristic. The incremental borrowing rate applied to the remeasured lease is 10.2%. At each reporting date, the Company assesses whether there is any indication that right-of-use assets may be impaired. No impairment indicators were identified as at 31 December 2022 or 31 December 2021. The Group has recognised a rental expense of $3.9 million (2021: $9.0 million) in relation to short-term leases of machinery and vehicles which have not been recognised as a right-of-use asset. Set out below are the carrying amounts of lease liabilities at each reporting date:
2022 2021
$\u2019000 $\u2019000
Current
245
1,207
Non-current
1,540
971
Total
1,785
2,178
The consolidated income statement includes the following amounts relating to leases: 2022 2021
$\u2019000 $\u2019000
Depreciation expense
1,010
1,084
Interest expense on lease liabilities
147
239
Total
1,157
1,323
13. Inventories
2022 2021
$\u2019000 $\u2019000
Mineral products
43,655
22,027
Consumable spares
40,516
38,192
84,171
60,219
At 31 December 2022, total final product stock was 213,500 tonnes (2021: 88,700 tonnes). Closing stock of heavy mineral concentrate was 18,800 tonnes (2021: 11,500 tonnes). During the year, inventory amounting to $235.2 million (2021: $246.4 million) was recognised as an expense in cost of sales. Net realisable value is determined with reference to forecast prices of finished products expected to be achieved. There is no guarantee that these prices will be achieved in the future, particularly in weak product markets. During the financial year, there was a write-down of $nil (2021: $0.5 million) to mineral products charged to cost of sales to value mineral products at net realisable value. 14. Trade and other receivables
2022 2021
$\u2019000 $\u2019000
Trade receivables
104,970
66,204
VAT receivable
4,527
790
Prepayments
14,521
7,753
124,018
74,747
Further details on trade receivables can be found in Note 24 . 15. Cash and cash equivalents
2022 2021
$\u2019000 $\u2019000
Bank balances
108,271
69,057
Cash and cash equivalents comprise cash balances held for the purposes of meeting short-term cash commitments and investments which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Where investments are categorised as cash equivalents, the related balances have a maturity of three months or less from the date of investment. 16. Called-up share capital
2022 2021
\u20ac\u2019000 \u20ac\u2019000
Authorised share capital
181,000,000 ordinary shares of \u20ac0.001 each
181
181
181
181
2022 2021
$\u2019000 $\u2019000
Allotted, called up and fully paid
Opening balance
94,921,970
(2021: 109,736,382) ordinary shares of \u20ac0.001 each
104
120
Acquired and cancelled
92,419
(2021: 14,814,412) ordinary shares of \u20ac0.001 each
\u2013
(16)
Closing balance
94,829,551
(2021:
94,921,970) ordinary shares of \u20ac0.001 each
104
104
Total called-up share capital
104
104
No ordinary shares were issued during the year (2021: $nil). On 3 October 2022, under the authority granted at the Company\u2019s Annual General Meeting held on 26 May 2022, and in accordance with Section 1075 of the Companies Act 2014 and article 147 of the Articles of Association, the Company completed an Odd-lot Offer which involved the acquisition of 92,419 ordinary shares of \u20ac0.001 each in the capital of the Company representing 0.1% of the then called-up share capital of the Company for a total cash consideration of $0.5 million. The Odd-lot Offer buyback was funded from distributable reserves and all ordinary shares acquired by the Company were subsequently cancelled. Transaction costs associated with the transaction amounted to $0.1 million and were accounted for as a deduction from retained earnings. On 10 December 2021, under the authority granted at the Company\u2019s extraordinary General Meeting held on 9 December 2021, and in accordance with Section 105(1) and Section 106(1) of the Companies Act 2014 and article 47 and article 48 of the Articles of Association, the Company completed a tender offer buyback of 14,814,412 ordinary shares of \u20ac0.001 each in the capital of the Company representing 13.5% of the then called-up share capital of the Company for a total cash consideration of $81.6 million. The tender offer share buyback was funded from distributable reserves and all ordinary shares acquired by the Company were subsequently cancelled. Transaction costs associated with the transaction amounted to $1.5 million and were accounted for as a deduction from retained earnings. 17. Share premium
2022 2021
$\u2019000 $\u2019000
Opening balance
545,950
545,950
Shares issued during the year
\u2013
\u2013
Closing balance
545,950
545,950
There were no additions to share premium during the year (2021: $nil). 18. Other reserves
Share-Based
Undenominated Own Payment
Capital Shares Reserve Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Balance at 1 January 2021
226,262
\u2013
5,088
231,350
Recognition of share-based payment expense
\u2013
\u2013
3,420
3,420
Exercise of share-based payment awards
\u2013
\u2013
(2,283)
(2,283)
Unvested and expired share-based payments
\u2013
\u2013
(1,964)
(1,964)
Tender offer share buyback (Note 16)
16
81,589
\u2013
81,605
Cancellation of treasury shares
\u2013
(81,589)
\u2013
(81,589)
Balance at 1 January 2022
226,278
\u2013
4,261
230,539
Recognition of share-based payment expense
\u2013
\u2013
5,601
5,601
Exercise of share-based payment awards
\u2013
(3,363)
(3,363)
Odd-lot Offer share buyback (Note 16)
\u2013
515
\u2013
515
Cancellation of treasury shares
\u2013
(515)
\u2013
(515)
Shares acquired by the Kenmare Employee Benefit Trust
\u2013
(1,797)
\u2013
(1,797)
Shares distributed by the Kenmare Employee Benefit Trust
\u2013
1,779
\u2013
1,779
Balance at 31 December 2022
226,278
(18)
6,499
232,759
Undenominated capital Undenominated capital consists of the capital conversion reserve fund and the capital redemption reserve fund. The movement in undenominated capital during the prior year relates to the share buyback as detailed in Note 16. CAPITAL CONVERSION RESERVE FUND The capital conversion reserve fund totalling $0.8 million arose from the renominalisation of the Company\u2019s share capital from Irish Punts to Euros. CAPITAL REDEMPTION RESERVE FUND The capital redemption reserve represents the nominal value of share capital repurchased. At 31 December 2022, the reserve balance stands at $225.5 million (2021: $225.5 million) .
Own Shares
Own shares represent shares acquired by the Kenmare Employee Benefit Trust under the terms of the Kenmare Restricted Share Plan and
shares acquired by the Company through odd lot and tender offers.
2022 2021
No. of shares No. of shares
At 1 January
\u2013
\u2013
Tender offer share buyback
\u2013
14,814,412
Odd-lot Offer share buyback
92,419
\u2013
Cancellation of treasury shares
(92,419)
(14,814,412)
Shares acquired by the Kenmare Employee Benefit Trust
298,477
\u2013
Shares distributed by the Kenmare Employee Benefit Trust
(295,443)
\u2013
Closing balance
3,034
\u2013
As at 31 December 2022, the nominal value of treasury shares held by the Kenmare Employee Benefit Trust was $0.01 million (2020: $nil).
During the year, treasury shares were purchased by the Kenmare Employee Benefit Trust at an average price of $5.84. The number of
treasury shares held by the Kenmare Employee Benefit Trust represents 0.003% of the total called up share capital of the Company.
Further information on the odd lot buyback and tender offer buyback can be found in Note 16.
Share-based payment reserve
The share-based payment reserve arises on the grant of shares under the Group share-based payment schemes as detailed in Note 6 .
19. Retained earnings
2022 2021
$\u2019000 $\u2019000
Opening balance
154,050
123,083
Profit for the financial year attributable to equity holders of the Parent
206,034
128,526
Tender offer share buyback (Note 16)
\u2013
(81,589)
Tender offer share buyback transaction costs (Note 16)
\u2013
(1,540)
Odd lot offer share buyback (Note 16)
(515)
\u2013
Odd lot offer share buyback transaction costs (Note 16)
(122)
\u2013
Unvested and expired share-based payments
\u2013
1,964
Dividends paid
(34,726)
(16,394)
Closing balance
324,721
154,050
Retained earnings comprise the accumulated profit and losses in the current and prior financial years net of dividends, share buybacks and
related costs, and adjustments relating to the share-based payment reserve.
In May 2022, the Company paid a final 2021 dividend of $24.1 million representing USc25.42 per share (2021: USc7.69). In October 2022, the
Company paid a 2022 interim dividend of USc10.98 (H1 2021: USc7.29) per ordinary share, totalling $10.6 million.
20. Bank loans
2022 2021
$\u2019000 $\u2019000
Borrowings
78,578
148,099
The borrowings are repayable as follows:
Less than one year
33,653
73,342
Between two and five years
47,142
78,572
80,795
151,914
Transaction costs
(2,217)
(3,815)
Total carrying amount
78,578
148,099
Borrowings On 11 December 2019, the Group entered into debt facilities with Absa Bank Limited (acting through its Corporate and Investment Banking Division) (\u201cAbsa\u201d), The Emerging Africa Infrastructure Fund (part of the Private Infrastructure Development Group) (\u201cEAIF\u201d), Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (\u201cNedbank\u201d), Rand Merchant Bank and Standard Bank Group (\u201cStandard Bank\u201d). The debt facilities comprise a $110 million Term Loan Facility and a $40 million Revolving Credit Facility that share common terms and a common security package. The finance documentation also accommodates for a Mine Closure Guarantee Facility (provided by either the existing Lenders or other finance providers) of up to $40 million, with the provider(s) of such a facility sharing in the common security package. The potential total aggregate principal amount of indebtedness secured under the finance documentation is therefore $190 million. The transaction costs for arrangement of the debt facilities amounted to $6.5 million. The Term Loan Facility has a final maturity date of 11 March 2025. As at year end, interest is at LIBOR plus 5.40% per annum. Repayment is in seven equal semi-annual instalments, beginning 11 March 2022. On 21 July 2022 the Revolving Credit Facility was extended by 12 months and now has a final maturity date of 11 December 2023, which is extendable by a further 12 months subject to lender consent. As at year end, interest is at LIBOR plus 4.25% per annum (5.0% up to 11 December 2022). The Group entered into a Mine closure guarantee facility with Absa Bank Mo\u00e7ambique SA effective from 1 July 2022 for an amount of $18.9 million. This guarantee shares the security package with the Term Loan Facility and Revolving Credit Facility on a pro rata and pari passu basis. The security package consists of (a) security over the Group\u2019s bank accounts (subject to certain exceptions), (b) pledges of the shares of Kenmare Moma Processing (Mauritius) Limited and Kenmare Moma Mining (Mauritius) Limited (the \u201cProject Companies\u201d), (c) security over intercompany loans, and (d) Mozambican law security interests over certain rights and agreements with Mozambican authorities, including over the Implementation Agreement, the Mineral Licensing Contract and the Mining Licence. The carrying amount of the secured bank accounts of the Group was $102.9 million as at 31 December 2022 (2021: $66.9 million). The shares of the Project Companies and intercompany loans are not included in the consolidated statement of financial position as they are eliminated on consolidation. They, therefore, do not have a carrying amount but, upon enforcement of the pledges on behalf of the lender group, the shares in the Project Companies would cease to be owned or controlled by the Group. The secured rights and agreements do not have a carrying amount. They are, however, necessary for the Project Companies to operate the Mine in Mozambique. At 31 December 2022, total debt of $78.6 million (2021: $148.1 million) was recognised by the Group. The $40 million revolving credit facility was repaid in full in February 2022 and a further $20 million was drawn down in September 2022 and subsequently repaid in November 2022. $31.4 million of principal repayments were made against the term loan over the course of the year. Unamortised transaction costs of $2.2 million (2021: $3.8 million) plus interest amortised of $2.2 million (2021: $2.0 million) were recognised by the Group at 31 December 2022.
Reconciliation of movements of debt to cash flows arising from financing activities (excluding leases)
2022 2021
$\u2019000 $\u2019000
Bank loans
Balance at 1 January
148,099
145,771
Cash movements
Loan interest paid
(6,921)
(7,147)
Principal paid
(91,429)
(20,000)
Loan drawn down
Non-cash movements
20,000
20,000
Loan interest accrued
8,829
9,475
Balance at 31 December
78,578
148,099
Covenants
The finance documents contain a number of representations, covenants and events of default on customary terms, the breach of which
could lead to the secured parties under the finance documentation accelerating the outstanding loans and taking other enforcement steps,
such as the enforcement of some or all of the security interests, which could lead to, in extremis, the Group losing its interest in the Mine. The
most salient of the relevant terms that could lead to acceleration of the loans and/or enforcement of security are the financial covenants.
All covenants have been complied with during the year. The key financial covenants are detailed below:
As at As at
31 December 31 December
2022
2021
Covenant
Interest Coverage Ratio
34.96:1
21.8:1
Not less than
4.00:1
Net Debt to EBITDA
(0.09):1
0.38:1
Not greater than
2.00:1
Debt Service Coverage Ratio
3.11:1
22.3:1
Not less than
1.20:1
Liquidity
$148,271,000
$69,057,000
Not less than
$15,000,000
Reserve Tail Ratio
81%
78%
Not less than
30%
The definition of the covenants under the debt facilities are set out below:
\u2022 Interest Coverage Ratio is defined as the ratio of EBITDA to Net Interest Cost.
\u2022 Net Debt is defined as total financial indebtedness excluding leases less consolidated cash and cash equivalents.
\u2022 The Debt Service Coverage Ratio is the ratio of cash and cash equivalents at the beginning of a reporting period plus available facilities
plus cash generated in the period to debt repayments in the period.
\u2022 Liquidity is defined as consolidated cash and cash equivalents plus undrawn amounts of the Revolving Credit Facility.
\u2022 Reserve Tail Ratio means the reserve tail ratio, expressed as a percentage of the termination date reserves (estimated remaining
reserves in March 2025) divided by the initial reserves (estimated reserves in December 2019).
21. Provisions
2022 2021
$\u2019000 $\u2019000
Mine closure provision
16,623
35,959
Mine rehabilitation provision
4,121
3,998
Other provisions
\u2013
2,264
20,744
42,221
Current
998
3,222
Non-current
19,746
38,999
20,744
42,221
Mine Mine
Closure Rehabilitation Other
Provision Provision Provisions Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
At 1 January 2021
37,451
3,893
\u2013
41,344
(Decrease)/increase in provision during the financial year
(2,239)
470
2,264
495
Provision utilised during the financial year
\u2013
(365)
\u2013
(365)
Unwinding of the discount
747
\u2013
\u2013
747
At 1 January 2022
35,959
3,998
2,264
42,221
(Decrease)/Increase in provision during the financial year
(20,080)
4,131
948
(15,001)
Provision utilised during the financial year
\u2013
(4,008)
(3,212)
(7,220)
Unwinding of the discount
744
\u2013
\u2013
744
At 31 December 2022
16,623
4,121
\u2013
20,744
The Mine closure provision represents the Directors\u2019 best estimate of the Project Companies\u2019 liability for close-down, dismantling and restoration of the mining and processing site. A corresponding amount equal to the provision is recognised as part of property, plant and equipment. The costs are estimated on the basis of a formal closure plan, are subject to regular review and are estimated based on the net present value of estimated future costs. Mine closure costs are a normal consequence of mining, and the majority of close-down and restoration expenditure is incurred at the end of the life of the Mine. The unwinding of the discount is recognised as a finance cost and $0.7 million (2021: $0.7 million) has been recognised in the statement of comprehensive income for the financial year. The main assumptions used in the calculation of the estimated future costs include: \u2022 A discount rate of 4.0% (2021: 2.1%); \u2022 An inflation rate of 2% (2021: 2%); \u2022 An estimated life of mine of 40 years (2021: 40 years). It is assumed that all licences and permits required to operate will be renewed or extended during the life of mine; and \u2022 An estimated closure cost of $34.1 million (2021: $34.1 million) and an estimated post-closure monitoring provision of $3.9 million (2021: $3.9 million). The life of mine plan is based on the Namalope, Nataka, Pilivili and Mualadi reserves and resources as set out in the reserve and resources table. Specific resource material is included only where there is a high degree of confidence in its economic extraction. The Mine closure provision has decreased by $20.1 million as a result of a change in the discount rate from 2.1% to 4.0%. The discount rate is a significant factor in determining the Mine closure provision. The discount rate increased to 4.0% (2021: 2.1%) as a result of movements in the US Treasury rates. 30-year US Treasury yields are the longest period for which yields are quoted. A 40-year rate to align with the estimated life of mine has been calculated by taking the average of the increase in yield from 10 to 20 years and the increase in yield from 20 to 30 years and adding this average to the 30-year treasury rate to arrive at an estimated extrapolated rate for 40 years. This discount rate is deemed to provide the best estimate of the current market assessment of the risk-free time value of money. Risks specific to the liability are included in the cost estimate. A reasonable possible increase of 1% in the estimated discount rate results in the Mine closure provision decreasing to $11.2 million. A 1% decrease in the estimated discount rate results in the Mine closure provision increasing to $24.7 million. The Mine rehabilitation provision represents the Directors\u2019 best estimate of the Company\u2019s liability for rehabilitating areas disturbed by mining activities. Rehabilitation costs are recognised based on the area disturbed and estimated cost of rehabilitation per hectare, which is reviewed regularly against actual rehabilitation cost per hectare. Actual rehabilitation expenditure is incurred approximately 12 months after the area has been disturbed. During the financial year, there was a release of $4.0 million (2021: $0.4 million) to reflect the actual Mine rehabilitation costs incurred, and an addition to the provision of $4.1 million (2021: $0.5 million) for areas newly disturbed. Other provisions comprise an amount of $nil (2021: $2.3 million) in relation to a potential indirect tax liability. The matter was resolved following a final settlement of $3.2 million with the Mozambican Tax Authority during the year. 22. Trade and other payables
2022 2021
$\u2019000 $\u2019000
Trade payables
7,305
7,186
Deferred income
2,740
\u2013
Accruals
25,248
25,582
35,293
32,768
Included in accruals at the financial year end is an amount of $1.6 million (2021: $1.6 million) for payroll and social insurance taxes. Deferred income relates to sales contracts which contain separate performance obligations for the sale of mineral products and the provision of freight services. The portion of the revenue representing the obligation to perform the freight service is deferred and recognised over time as the obligation is fulfilled, along with the associated costs. 23. Current tax liabilities
2022 2021
$\u2019000 $\u2019000
Current tax liabilities
8,893
4,808
Refer to Note 9 for further information on the Group\u2019s tax expense. 24. Financial instruments
2022
2021
Carrying Carrying
amount Fair value amount Fair value
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Financial assets at fair value through
profit and loss
Trade receivables
31,188
31,188
Level 2
37,086
37,086
Level 2
Financial assets at fair value
through OCI
Trade receivables
43,065
43,065
Level 2
14,539
14,539
Level 2
Financial assets not measured
at fair value
Trade receivables
30,717
30,717
Level 2
14,579
14,579
Level 2
Cash and cash equivalents
108,271
108,271
Level 2
69,057
69,057
Level 2
213,241
213,241
135,261
135,261
Financial liabilities not measured
at fair value
Bank loans
78,578
80,795
Level 2
148,099
148,827
Level 2
1 2 3 1 Relates to trade receivables which will be discounted through the Barclay\u2019s Bank facility. 2 Relates to trade receivables which may be factored through the Absa facility. 3 Relates to trade receivables which will not be discounted or factored. The carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy are detailed above. The table does not include fair value information for other receivables, prepayments, trade payables and accruals as these are not measured at fair value as the carrying amount is a reasonable approximation of their fair value. Trade receivables which are factored through the Absa Bank facility or letters of credit which are discounted through the Barclays Bank facility are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored are classified as fair value through other comprehensive income (FVOCI). Trade receivables which will not be factored and for which balances will be recovered under the sale contract credit terms are classified and subsequently measured at amortised cost. In the case of factored receivables, the Group derecognises the discounted receivable to which the arrangement applies when payment is received from the bank as the terms of the arrangement are non-recourse. The payment to the bank by the Group\u2019s customers are considered non-cash transactions for the purposes of the consolidated statement of cashflows
The valuation technique used in measuring Level 2 fair values is discounted cash flows, which considers the expected receipts or payments
discounted using adjusted market discount rates or where these rates are not available estimated discount rates.
The Group has exposure to credit risk, liquidity risk and market risk arising from financial instruments.
Risk management framework
The Board is ultimately responsible for risk management within the Group. It has delegated responsibility for the monitoring of the
effectiveness of the Group\u2019s risk management and internal control systems to the Audit & Risk Committee. The Board and Audit & Risk
Committee receive reports from Executive management on the key risks to the business and the steps being taken to mitigate such
risks. The Audit & Risk Committee is assisted in its role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk
management controls and procedures, the results of which are reported to the Audit & Risk Committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group\u2019s trade receivables from customers. The carrying amount of financial assets represents the
maximum credit exposure.
The Group\u2019s exposure to credit risk is influenced by the individual circumstances of each customer. The Group also considers the factors
that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which
customers operate. The Group reduces its exposure to customers perceived to have a higher credit risk through a letter of credit trade
facility. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk.
The Group\u2019s customers have been transacting with the Group for a significant number of years, and no customers\u2019 balances have been
written off or are credit impaired at the financial year end. In monitoring customer credit risk, customers are regularly reviewed individually
and the Group has not identified any factors that would merit reducing exposure to any particular customer. The Group does not require
collateral in respect of trade receivables.
The gross exposure to credit risk for trade receivables by geographic region was as follows:
2022 2021
$\u2019000 $\u2019000
China
19,009
37,120
Asia (excluding China)
17,243
5,127
Europe
45,806
15,410
USA
22,776
8,547
Africa
136
\u2013
Total
104,970
66,204
At 31 December 2022, $35.4 million (2021: $41.3 million) is due from the Group\u2019s three largest customers.
A summary of the Group\u2019s exposure to credit risk for trade receivables is as follows:
2022 2021
$\u2019000 $\u2019000
External credit ratings at least Baa3 (Moody\u2019s)
31,188
37,535
External credit ratings Ba3 to Ba1 (Moody\u2019s)
\u2013
19,051
Other
75,316
10,042
Total gross carrying amount
106,504
66,628
Loss allowance
(1,534)
(424)
Total
104,970
66,204
The following table provides ageing information relevant to the exposure to credit risk for trade receivables from individual customers.
No balances were considered credit impaired at 31 December 2022 or 31 December 2021.
Current
$\u2019000
More than More than More than
30 days 60 days 90 days
past due past due past due Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
2022
104,962
\u2013
\u2013
8
104,970
2021
66,133
\u2013
\u2013
71
66,204
Expected credit loss assessment of trade receivables
For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each
customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings,
financial statements and available market information about customers) and applying experienced credit judgement.
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022.
Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021.
Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other
comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by
international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s)
long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating.
At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled in cash
payments. The Group\u2019s objective when managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due.
The Group monitors Mine payment forecasts, both operating and capital, which assist it in monitoring cash flow requirements and optimising
its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected
cash outflows on financial liabilities. The Group monitors the level of expected cash inflows on trade receivables together with expected cash
outflows on trade and other payables.
The Group has a trade finance facility with Absa Bank for three of the Group\u2019s largest customers. In accordance with this facility, the bank
purchases certain customers\u2019 receivables without recourse. The facility is for a maximum amount of $30 million with limits on the maximum
amount that can be factored for each of the customers named in the facility. During the period, no trade receivables were factored under
this agreement. At the year end, trade receivables amounting to $43.1 million (2021: $14.5 million) may be factored under this facility and are
therefore included in trade receivables measured at fair value through OCI as at 31 December 2022. The cost of this facility for the period,
which amounted to $0.2 million (2021: $0.2 million), is included in finance costs in the statement of comprehensive income and in net cash
from operating activities in the statement of consolidated cash flows.
The Group has a trade facility with Barclays Bank for customers which it sells to under letter of credit terms. Under this facility, Barclays
Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. Barclays Bank can also discount these
letters of credit thereby providing early payment of receivables to the Group. There is no limit under the Barclays Bank facility. During the
period, trade receivables of $201.4 million (2021: $224.4 million) were discounted under this facility. At the year end, there were $31.2 million
(2021: $37.1 million) of trade receivables which will be discounted under this facility. The cost of this facility for the period, which amounted
to $2.0 million (2021: $1.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating
activities in the statement of consolidated cash flows.
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2022 based on the gross contractual
undiscounted payments:
Financial liabilities
Between
Less than two and five More than
Total one year years five years
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
89,536
38,005
51,531
\u2013
Lease liabilities
2,409
390
1,447
572
Trade and other payables
32,553
32,553
\u2013
\u2013
124,498
70,948
52,978
572
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2021 based on the gross contractual
undiscounted payments:
Between
Less than two and five More than
Total one year years five years
Financial liabilities $\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
151,914
73,342
78,572
\u2013
Lease liabilities
2,684
1,207
1,317
160
Trade and other payables
32,768
32,768
\u2013
\u2013
187,366
107,317
79,889
160
As disclosed in Note 20, the Group has bank loans that contain loan covenants. A future breach of covenant may require the Group to repay
the loan earlier than indicated in the above table. Under the loan agreement, the covenants are monitored on a regular basis by Group
finance and regularly reported to management and the Lenders to ensure compliance with the agreement.
Furthermore, the Group has authorised and committed expenditure on operations-related capital projects amounting to $11.5 million
(2021: $18.9 million) as disclosed in Note 26.
Risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group\u2019s performance to developments affecting a particular industry. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Details of concentration of revenue are included in Note 2. Market risk Market risk is risk that changes in market prices, foreign exchange rates and interest rates will affect the Group\u2019s income statement. The objective of market risk management is to manage and control market risk exposures while optimising returns. Currency risk The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional currency of all Group entities is US Dollars. The presentational currency of the Group is US Dollars. Sales and bank loans are denominated in US Dollars, which significantly reduces the exposure of the Group to foreign currency risk. Payable transactions are denominated in Mozambican Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi. Exposure to currency risk The Group\u2019s gross exposure to currency risk as at 31 December 2022 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
12,172
756
489
72
88
\u2013
Cash and cash equivalents
1,397
12,894
892
1,129
17
34
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,255)
\u2013
\u2013
\u2013
Trade and other payables
(20,367)
(2,178)
(502)
(10)
\u2013
\u2013
Net exposure
(6,798)
11,472
(376)
1,191
105
34
The Group\u2019s exposure to currency risk as at 31 December 2021 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
2,717
1,275
928
55
364
\u2013
Cash and cash equivalents
1,030
2,337
479
338
6
36
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,528)
\u2013
\u2013
\u2013
Trade and other payables
(14,082)
(1,905)
(2,395)
(35)
(68)
\u2013
Net exposure
(10,335)
1,707
(2,516)
358
302
36
Sensitivity analysis
A reasonably possible strengthening or weakening of the Mozambique Metical, South African Rand, Euro, Sterling, Australian Dollar and
Renminbi by 10% against the US Dollar would have affected profit or loss by the amounts shown below. The analysis assumes that all other
variables remain constant.
Profit or loss
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
31 December 2022
Strengthening
(680)
1,147
(38)
119
11
3
Weakening
680
(1,147)
38
(119)
(11)
(3)
31 December 2021
Strengthening
(1,030)
170
(250)
40
30
4
Weakening
1,030
(170)
250
(40)
(30)
(4)
Interest rate risk
The loan facilities are arranged at variable rates and expose the Group to cash flow interest rate risk. Variable rates are based on six-month
LIBOR. The borrowing rate at financial year end was 9.2% (2021: 5.8%). The interest rate profile of the Group\u2019s loan balances at the financial
year end was as follows:
2022 2021
$\u2019000 $\u2019000
Variable rate debt
80,795
151,914
Under the assumption that all other variables remain constant, a reasonable possible change of 1% in the six-month LIBOR rate results in a
$0.8 million (2021: $1.5 million) change in finance costs for the financial year.
The above sensitivity analyses are estimates of the impact of market risks assuming the specified change occurs. Actual results in the future
may differ materially from these results due to developments in the global financial markets, which may cause fluctuations in interest rates to
vary from the assumptions made above and therefore should not be considered a projection of likely future events.
Interest rate benchmark reform
A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered
rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d), including LIBOR (the London Interbank Offered Rate). The
Group had, at the reporting date, exposure to US LIBOR on its debt facilities.
Pursuant to an Amendment and Restatement Agreement entered into on 9 March 2023 in respect of the Group\u2019s debt facilities, the basis
on which interest is calculated in respect of those facilities were amended with effect from 11 March 2023. As a result of the amendment,
interest rates for interest periods commencing from 11 March 2023 onwards are no longer determined by reference to US LIBOR; instead
they are determined on the basis of the applicable Term SOFR Rate. While US LIBOR represented an inter-bank lending rate, Term SOFR is
a published screen rate derived from SOFR, being the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of
New York. As SOFR represents a risk-free rate, a credit adjustment spread is applied in addition, which spread varies according to the length
of the relevant interest period.
The six-month SOFR rate set on 11 March 2023 relating to the next interest period to 11 September 2023 was 5.4%. The credit adjustment
spread of 0.4% plus the margin of 5.4% results in an interest rate of 11.2% on the Term Loan. The Group has concluded that the new basis for
determining cashflows is economically equivalent to the previous basis.
25. Capital management The Group\u2019s capital management objective is to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The principal activity of the Group is the operation of the Mine. The Group therefore manages its capital to ensure existing operations are adequately funded and, based on planned mine production levels, that the Mine will continue to achieve positive cash flows allowing returns to shareholders. At 31 December 2022, the Group had total debt facilities in place of $150 million (2021: $150 million), details of which are set out in Note 20. The Board periodically reviews the capital structure of the Group, including the cost of capital and the risks associated with each class of capital. The Group manages and, if necessary, adjusts its capital structure taking account of the underlying economic conditions. Any material adjustments to the Group\u2019s capital structure in terms of the relative proportions of debt and equity are approved by the Board. The Group is not subject to any externally imposed capital requirements. The definition of capital/capital structure of the Group consists of debt (which includes bank borrowings as disclosed in Note 20 and leases as disclosed in Note 12) and equity attributable to equity holders of the Company, comprising issued capital, reserves, retained profits and other reserves as disclosed in Notes 16 to 19. 26. Capital commitments
2022 2021
$\u2019000 $\u2019000
Contracts for future expenditure authorised by the Board:
Capital authorised and contracted
11,535
18,921
Capital authorised and not contracted
12,439
6,370
Capital authorised and contracted represents the amount authorised and contracted at 31 December of the relevant financial year to be spent on Mine operations-related approved capital projects. Capital authorised not contracted represents the amount not contracted but authorised at 31 December of the relevant financial year to be spent on Mine operations-related approved capital projects . 27. Related party transactions Remuneration of key management personnel The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
2022 2021
$\u2019000 $\u2019000
Short-term employee benefits
2,295
2,571
Post-employment benefits
104
110
Share-based payments
778
\u2013
Total benefits
3,177
2,681
Further information about the remuneration of individual Directors and payments to former Directors is provided in the Directors\u2019 Annual Report on remuneration on pages 122-134 and is deemed to be incorporated in this Note to the financial statements . 28. Kenmare Resources plc Kenmare Resources Public Company Limited is a public limited company. The place of registration is Ireland and the registered office address is Styne House, Hatch Street Upper, Dublin 2. The registered number is 37550. 29. Events after the statement of financial position date On 21 March 2023, the Board proposed a final dividend of USc43.33 per share. This proposed dividend is subject to approval by the shareholders at the Annual General Meeting. These financial statements do not reflect this dividend. In February 2023, power lines nearby the Mine were subject to a direct lightning strike of unusually high intensity resulting in severe disruption to mining operations. The Group is working to establish and mitigate the capital and operating cost impacts of the disruptions and a reliable estimate cannot be made at this time. Insurance cover is in place and the Group is liaising with its insurers to process claims in relation to the lightning strike. 30. Approval of financial statements The financial statements were approved by the Board on 6 April 2023.", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-280": { "value": "1. Statement of accounting policies Kenmare Resources plc (the \u201cCompany\u201d) is domiciled in the Republic of Ireland. The Company\u2019s registered address is Styne House, Hatch Street Upper, Dublin 2. The Company has a premium listing on the Main Market of the London Stock Exchange and a secondary listing on Euronext Dublin. These consolidated financial statements comprise the Company and its subsidiaries (the \u201cGroup\u201d). The principal activity of the Group is the operation and further development of the Moma Titanium Minerals Mine in Mozambique. The significant accounting policies adopted by the Group are set out below. Adoption of new and revised standards Standards adopted in the current financial year The following new and revised standards, all of which are effective for accounting periods beginning on or after 1 January 2022, have been adopted in the current financial year. \u2022 Onerous Contracts \u2013 Cost of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018\u20132020 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 None of the new and revised standards and interpretations listed above have a material effect on the Group\u2019s financial statements. Standards to be adopted in future accounting periods At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective. The Group will apply the relevant standards from their effective dates. The standards are mandatory for future accounting periods but are not yet effective and have not been early-adopted by the Group. \u2022 Classification of Liabilities as Current or Non-current \u2013 Amendment to IAS 1 effective 1 January 2024 \u2022 IFRS 17 Insurance Contracts and Amendments to IFRS 17 effective 1 January 2023 \u2022 Disclosure of Accounting Policies \u2013 Amendments to IAS 1 and IFRS Practice Statement 2 effective 1 January 2023 \u2022 Definition of Accounting Estimate \u2013 Amendments to IAS 8 effective 1 January 2023 \u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 effective 1 January 2023 \u2022 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IFRS 10 and IAS 28 \u2022 Lease Liability in a Sale and Leaseback \u2013 (Amendments to IFRS 16) effective 1 January 2024 The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial statements of the Group in future periods. Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS Regulation. The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of sales. In addition, foreign exchange losses have been reclassified to other operating costs and are no longer presented separately on the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense. Further details can be found in Note 4. Going concern The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have or will have adequate resources to continue in operational existence for the foreseeable future. Based on the Group\u2019s cash flow forecast, liquidity, solvency position and available finance facilities, the Directors have a reasonable expectation that the Group has adequate resources for the foreseeable future and, therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements. The Group forecast has been prepared by management with best estimates of production, pricing and cost assumptions over the period. Key assumptions upon which the Group forecast is based include a Mine plan covering production using the Namalope, Nataka, Pilivili and Mualadi reserves and resources as set out in the unaudited mineral reserves and resources table on page 42. Specific resource material is included only where there is a high degree of confidence in its economic extraction. Production levels for the purpose of the forecast are approximately 1.2 million tonnes per annum of ilmenite plus co-products, zircon, concentrates and rutile, over the next 12 months. Assumptions for product sales prices are based on contract prices as stipulated in marketing agreements with customers or, where contract prices are based on market prices or production is not presently contracted, prices are forecast taking into account independent titanium mineral sands expertise and management expectations. Operating costs are based on approved budget costs for 2023, taking into account the current running costs of the Mine and escalated by 2% per annum thereafter. Capital costs are based on the capital plans and include escalation at 2% per annum. The 2023 operating costs and forecast capital costs take into account the current inflationary environment. The 2% inflation rate used from 2024 to escalate these costs over the life of mine is an estimated long-term inflation rate. Sensitivity analysis is applied to the assumptions above to test the robustness of the cash flow forecasts for changes in market prices, shipments and operating and capital cost assumptions. Changes in these assumptions affect the level of sales and profitability of the Group and the amount of capital required to deliver the projected production levels. As a result of this assessment, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the 12 month period from the date of authorisation of these financial statements. Basis of accounting The financial statements are presented in US Dollars rounded to the nearest thousand. They have been prepared under the historical cost convention except for certain trade receivables and share-based payments, which are recorded at fair value. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company, its subsidiaries and its subsidiaries\u2019 branches. Subsidiaries are entities controlled by the Group. The Group \u2018controls\u2019 an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the elements of control listed above. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are eliminated on consolidation. When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying amount of the assets, less liabilities of the subsidiary. All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed of the related assets and liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another category of equity as required by applicable IFRS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9 Financial Instruments or, when applicable, the costs on initial recognition of an investment in an associate or a joint venture. Determination of ore reserve estimates The Group estimates its ore reserves and mineral resources based on information compiled by a Competent Person as defined in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 Edition (the \u201cJORC Code\u201d). Ore reserves and mineral resources determined in this way are used in the calculation of depreciation, amortisation and impairment charges, the assessment of life of mine and for forecasting the timing of the payment of close-down costs, restoration costs and clean-up costs. In assessing the life of a mine for accounting purposes, mineral resources are taken into account only where there is a high degree of confidence of economic extraction. There are numerous uncertainties inherent in estimating ore reserves and mineral resources and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of final products, production costs or recovery rates may change the economic status of ore reserves and mineral resources and may ultimately result in the reserves being revised. Accounting for climate change Management have considered the impact of climate change on amounts reported within the financial statements, including the potential financial impact of the physical and transitional risks identified in the Strategic Climate Report in accordance with the recommendations of the Taskforce on Climate-related Financial Disclosures. Considerations in respect of climate-related matters have been made on a number of key estimates and judgements including: \u2022 The estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash- generating unit; \u2022 The Mine closure provision and Mine rehabilitation provision; and \u2022 The useful lives of property, plant and equipment. Whilst the Group has set ambitions to be net zero by 2040, the financial impact is still being assessed as the Group considers how it will work towards meeting this target. As such, the estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash-generating unit does not consider the expenditure (or any related savings) associated with the company\u2019s ambition to become net zero nor the financial impact of the climate risks disclosed within the Group\u2019s TCFD reporting as a reliable estimate thereof cannot currently be made. The Group considered whether its climate ambitions required changes to the useful lives of existing assets. No adjustments to useful lives were made during the period as a direct result of the impact of the Group\u2019s climate ambition to become net zero as the Group\u2019s transition plan is still under development. Should pathways for eliminating fossil fuel power generating assets be identified, depending on technological development within the industry, which is highly uncertain, the Group\u2019s property, plant and equipment profile may change and accelerated depreciation of assets may be required in the future. However, at this present time the requirement for fossil fuel-powered assets means that early retirement of existing assets is not expected. The Group estimates the Mine closure and rehabilitation provision based on current restoration standards, techniques and climate conditions. Closure plans and cost estimates are supported by detailed studies which are provided by external estimates. Detailed closure cost studies are refreshed at least every five years and these studies are evolving to incorporate greater consideration of forecast climate conditions at closure. Management continues to monitor future uncertainty around climate change risks and is continually developing the Group\u2019s assessment of the impact that climate change has on the amounts recognised in the financial statements. It is, therefore, likely that the future carrying amounts of assets or liabilities may change as the Group\u2019s judgements and estimates evolve as the Group responds to its climate change ambitions. Revenue recognition Revenue represents the value of goods and services supplied to third parties during the year. Revenue is measured at the fair value of consideration received or receivable and excludes any discounts and applicable sales tax. Revenue is recognised when the Group satisfies a performance obligation by transferring a promised good or service to a customer. The Group has a mixture of long-term contracts and spot contracts with customers for the sale of mineral products ilmenite, zircon, concentrates and rutile. Sales contracts are evaluated to determine the performance obligations, the transaction price and the point at which there is transfer of control. Sales are made on either a \u201cfree on board\u201d (FOB), \u201ccost, insurance and freight\u201d (CIF), or a \u201ccost and freight\u201d (CFR) basis. Control of mineral products passes from the Group to customers on delivery and delivery is deemed to take place when the product is loaded on the ocean-going vessel chartered by either the customer or the Group. The transactional price is the amount of consideration due in exchange for transferring the promised goods or services to the customer and is allocated against the performance obligations and recognised in accordance with whether control is recognised over a defined period or at a specific point in time. The customer is responsible for the cost of shipping and handling for all FOB Incoterms. The Group is responsible for shipping the product to a destination port specified by the customer for all CIF and CFR Incoterms. The Group has determined that the shipping service represents a separate performance obligation, and revenue in relation to such services is deferred and recognised separately from the sale of the material over time as the shipping service is provided. Shipment revenue is recognised at the contracted price to the Group. All shipping and handling costs incurred by the Group are recognised as a cost of sale. Finance income Finance income represents deposit interest earned. Deposit interest is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Finance costs Finance costs consist of interest on bank borrowings, interest on lease liabilities, trade receivable facilities fees, debt commitment fees and the unwinding of the Mine closure provision. The accounting policies applicable for these finance costs are set out in borrowing costs, leases, financial assets and provisions. Debt commitment fees for undrawn facilities are recognised in the period to which they relate. Employee benefits SHORT-TERM EMPLOYEE BENEFITS Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay as a result of past services provided by the employee and the obligation can be reliably estimated. DEFINED CONTRIBUTION PLANS Obligations for contributions to defined contribution plans are expensed as the related service is provided. Share-based payments The Group grants equity settled share-based payments to certain employees as part of their remuneration. The grant date fair value of equity settled share-based payment arrangements is recognised as an expense with a corresponding increase in equity on a straight-line basis over the vesting period. The fair value of the award is deemed to be the nominal share price at grant date. Where an award has a $nil strike price, the Company has determined that the risk-free rate and market volatility rate has a negligible impact on fair value. No adjustment is made to fair value for expected dividends throughout the vesting period as the award holder is entitled to receive dividend equivalents at the end of the vesting period. Fair value incorporates the effect of market-based conditions where applicable. Non-market based vesting conditions are only taken into account when assessing the number of awards expected to vest such that the cumulate expense recognised equates to the number of awards that actually vest. A modification to an award which reduces the number of equity instruments granted is accounted for as a cancellation. The cancellation of awards is accounted for as an acceleration of the vesting period and therefore any amount unrecognised that would otherwise have been charged are recognised immediately in profit & loss. Where a shared understanding of the award is deemed not to exist and employees are rendering services for the award beginning on a date earlier than the grant date, the Group estimates the cost of such awards from the date of communication to the vesting date. The Group adjusts the fair value estimate of such awards to the grant date when a shared understanding is obtained. The dilutive effect of outstanding options, to the extent that they are to be settled by the issue of new shares and to the extent that the vesting conditions would have been satisfied if the end of the reporting period was the end of the contingency period, is reflected as additional share dilution in the determination of diluted earnings per share. Foreign currency The individual financial statements of each Group entity are prepared in their functional currency, which in each case is US Dollars. The presentation currency for the consolidated financial statements is also US Dollars. In preparing the financial statements of the individual entities, transactions in currencies other than the entity\u2019s functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at rates prevailing on such reporting date. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of comprehensive income for the financial year in foreign exchange gain/loss and are not part of the operating profit or loss. Borrowing costs All borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets until such time as the assets are substantially ready for their intended use. Taxation The tax expense represents the sum of the current tax and deferred tax. Current tax payable is based on the best estimate of the tax amount expected to be paid and reflects uncertainty related to income taxes, if any. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income or expenses that are taxable or deductible in other financial years and it further excludes items that are never taxable or deductible. The Group\u2019s liability for current tax is calculated using the tax rates that have been enacted or substantively enacted at the reporting 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 statement of financial position 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. Deferred tax liabilities are not recognised for taxable temporary differences arising on investments in subsidiary undertakings, if the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is released and reflects uncertainty related to income taxes, if any. Deferred tax is charged or credited in the statement of comprehensive income, 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 Group intends to settle its current tax assets and tax liabilities on a net basis. Property, plant and equipment The cost of property, plant and equipment comprises any costs directly attributable to bringing an asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated closure costs associated with the asset. This includes the cost of moving plant and associated infrastructure to the orebodies under the Group\u2019s mining concessions which form part of the Group\u2019s life of Mine plan. Construction in progress expenditures for the construction and commissioning of property, plant and equipment are deferred until the facilities are operational, at which point the costs are transferred to property, plant and equipment and depreciated at the applicable rates. When an asset is subject to regular major inspections or overhauls, a component approach to depreciation is applied and the cost of a maintenance event is capitalised and depreciated over the time to the next occurrence. Other subsequent expenditure on an item of property, plant and equipment is capitalised as part of the cost of an asset only when it increases the future economic benefits associated with the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred. Property, plant and equipment are depreciated over their useful life on a straight-line basis, or over the remaining life of the Mine if shorter, or on a units of production basis. The major categories of property, plant and equipment are depreciated as follows: Plant and equipment Unit of production basis Development expenditure Unit of production basis Other assets Vessels Five to twenty-five years Buildings and airstrip Twenty years Mobile equipment Three to five years Fixtures and equipment Three to ten years Units of production depreciation is calculated using the quantity of heavy mineral concentrate extracted from the Mine for processing in the period as a percentage of the total quantity of heavy mineral concentrate planned to be extracted in current and future periods based on the mining reserve. The mining reserve is updated on an annual basis for results of drilling programmes carried out, mining activity during the year, and other relevant considerations. The unit of production depreciation rate is adjusted as a result of this update and applied prospectively. Capital spares consist of critical plant spares with estimated useful lives greater than one year and are included in property, plant and equipment. Capital spares are stated at cost. Residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Changes to the estimated residual values or useful lives are accounted for prospectively . Development expenditure Project development costs include expenditure on the development of an orebody including pre-feasibility and feasibility studies on mining the orebody, the transport of mining plants to the orebody, additional infrastructure required to mine the orebody and community resettlement costs. Project development costs include finance costs and lender and advisor fees incurred during the period before such mine is capable of operating at production levels in the manner intended by management are deferred and included in property, plant and equipment. In addition, expenses including depreciation net of revenue earned during commissioning of the Mine in the period before it is capable of operating in the manner intended by management are deferred. These costs include an allocation of costs, including share-based payments, as determined by management and incurred by Group companies. Interest on borrowings relating to the Mine construction and development projects are capitalised until the point when the activities that enable the Mine to operate in its intended manner are complete. Once the Mine is operating in the manner intended by management, the related costs are depreciated off over the life of the estimated ore reserve of such mine on a unit of production basis, or over its useful life if shorter. Where the Mine project is terminated or impairment of value has occurred, related costs are written off immediately. Exploration and evaluation expenditure Exploration and evaluation expenditure activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation expenditure is charged to the statement of comprehensive income as incurred, except where the existence of a commercially viable mineral deposit has been established and it is expected that the deposit will be mined. Capitalised exploration and evaluation expenditure considered to be tangible is recognised as a component of property, plant and equipment at cost less impairment charges. Until such time as an asset is available for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment as part of development expenditure. To the extent that capitalised expenditure is not expected to be recovered, it is charged to the statement of comprehensive income. Leases The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost (being the present value of the lease liabilities), and subsequently at cost less accumulated depreciation and impairment losses, and adjusted for certain remeasurements of the lease liability. Right-of-use assets are depreciated over their lease term. The lease liability is initially measured at the present value of the future lease payments, discounted using the Group\u2019s incremental borrowing rate. The Group has applied judgement to determine the discount rate. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero. The Group has applied judgement to determine the lease term for some lease contracts that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease liabilities and right-of-use assets recognised. The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases including heavy mobile equipment rental at the Mine. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. Impairment of non-current assets At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the fair value for the Mine is difficult to determine, the Group uses its value in use in estimating the recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of the asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior financial years. A reversal of an impairment loss is recognised as income immediately . Inventories Product inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour costs and overheads, including depreciation, incurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Net realisable value represents the estimated selling price less all estimated costs necessary to make the sale. Quantities are assessed primarily through surveys and assays. Consumable spares are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method and comprises the purchase price and related costs incurred in bringing the inventories to their present location and condition. Consumable spares identified as obsolete are recognised as an expense immediately. Financial instruments Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial assets The financial assets of the Group consist of cash and cash equivalents and trade and other receivables. Classification of financial assets Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Cash and cash equivalents are initially measured at fair value and are subsequently measured at amortised cost. They are held by the Group to collect deposit interest and to meet the liquidity requirements of the Group. The Group has a trade finance facility for three of the Group\u2019s customers. In accordance with this facility, the bank purchases 80% of the receivable without recourse and therefore assumes the credit risk. Derecognition of the trade receivables occurs when the customer\u2019s invoices is factored and the Group receives cash from the bank. The Group also has a trade facility for customers to which it sells to under letter of credit terms. Under this facility, the bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The bank can also discount these letters of credit thereby providing early payment of receivables to the Group. Derecognition of the trade receivables occurs when the customer\u2019s invoices are discounted and the Group receives cash from the bank. These facilities assist the Group in managing its liquidity for funding of operations. Trade receivables which are not factored are initially measured at fair value and subsequently measured at amortised cost as they are held by the Group in order to collect receipts under the credit terms of the sales contracts i.e. solely payment of principal and interest (SPPI). Trade receivables which are factored or letters of credit which are always confirmed and discounted are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored or confirmed and discounted as the case may be are classified as fair value through other comprehensive income (FVOCI). This is because their cash flows are generated through a combination of collection and sales (by factoring or confirming and discounting letters of credit). Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset. Interest income is recognised in profit or loss and is included in the \u201cfinance income\u201d line item . Impairment of financial assets The Group recognises a loss allowance for expected credit losses on trade receivables that are not measured at fair value through profit or loss. The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for financial assets which requires expected lifetime losses to be recognised from initial recognition of the receivable. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the trade receivable. When determining whether the credit risk of a trade receivable has increased the Group considers credit risk ratings where available, the Group\u2019s historical credit loss experience, adjusted for factors that are specific to the customers, general economic conditions and an assessment of both the current as well as the forecast conditions at the reporting date. Sales to certain customers are undertaken on a letter of credit basis thereby reducing the credit risk of these customers. The Group considers a trade receivable to be in default when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered into bankruptcy proceedings. The Group considers a trade receivable to be credit impaired when there is evidence that the customer is in significant financial difficulty and the debt is more than 90 days past due. Foreign exchange gains and losses The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For financial assets measured at amortised cost, exchange differences are recognised in profit or loss in the \u201cforeign exchange gains and losses\u201d line. Financial liabilities and equity The financial liabilities of the Group consist of bank borrowings, leases and trade payables. The equity of the Group consists of share capital issued by the Company and own shares. Classification of issued debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. Issued equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. The only equity instrument of the Company is ordinary shares. Own Shares Ordinary shares acquired by the Company or purchased on behalf of the Company by the Kenmare Employee Benefit Trust are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company\u2019s own equity instruments. Financial liabilities The financial liabilities of the Group are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. Financial liabilities measured subsequently at amortised cost The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in profit or loss. Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in profit or loss. When the Group exchanges with an existing lender one debt instrument for another with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between the carrying amount of the liability before the modification and the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses. A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d). The Group has exposure to IBORs on its financial instruments that will be reformed as part of these market-wide initiatives. The Group\u2019s main IBOR exposure at the reporting date is US LIBOR, which is administered by ICE Benchmark Administration (IBA). The alternative reference rate for US LIBOR is the US Secured Overnight Financing Rate (SOFR). On 5 March 2021, IBA stated that it will cease the publication of (i) the overnight and one, three, six and twelve months USD LIBOR settings immediately following the LIBOR publication on Friday 30 June 2023, and (ii) all other LIBOR settings, including the one week and two months USD LIBOR settings, immediately following the LIBOR publication on Friday 31 December 2021. The Group plans to modify contractual terms for purposes of migrating from USD LIBOR to SOFR prior to the discontinuance of the administration and publication of the relevant LIBOR rates by IBA. Derivative financial instruments The Group has not entered into any derivative financial instruments during the financial year . Dividends Dividends are recognised as a liability in the Company\u2019s financial statements in the period in which the dividends are approved by the Company\u2019s shareholders. Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Contingent liabilities are recognised when the Group has a possible obligation and the existence of which will only be confirmed by uncertain future events that are not wholly within the control of the Group. Mine closure provision The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation provision. A corresponding amount equal to the provision is recognised as part of property, plant and equipment and depreciated over its estimated useful life. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure provision is determined as the net present value of such estimated costs discounted at a risk-free rate. The Group uses long-term rates as provided by the US Treasury extrapolated to the duration of the Mine life. This is deemed the best estimate to reflect the current market assessment of the time value of money on a risk-free basis. Risks specific to the liability are included in the cost estimate. Changes in the expected costs or estimated timing of costs are recorded by an adjustment to the provision and a corresponding adjustment to property, plant and equipment. The unwinding of the discount on the Mine closure provision is recognised as a finance cost. Mine rehabilitation provision The Mine rehabilitation provision represents the Directors\u2019 best estimate of the liability for reclaiming areas disturbed by mining activities. Reclamation costs are recognised in each period in the statement of comprehensive income based on the area disturbed in such period. Segmental reporting Information on the operations of the Moma Titanium Minerals Mine in Mozambique is reported by the Executive Committee to the Group\u2019s Board for the purposes of resource allocation and assessment of segment performance. The principal categories for disaggregating revenue are by product type and by country of the customer\u2019s location. The product types are ilmenite, zircon, rutile and concentrates. Concentrates includes secondary zircon and mineral sands concentrates. Critical accounting judgements and key sources of estimation uncertainty Critical judgements in applying the Group\u2019s accounting policies In the process of applying the Group\u2019s accounting policies, the Directors have made the following judgements that have the most significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below). Property, plant and equipment The recovery of property, plant and equipment is dependent upon the successful operation of the Mine. The realisation of cash flow forecast assumptions would result in the recovery of such amounts. During the financial year, the Group carried out an impairment review of property, plant and equipment. In performing the impairment review, a significant level of judgement is required in determining the key assumptions which have a significant impact on the impairment model. The assumptions are set out in Note 11. As a result of the review, no impairment provision is required in the financial year. Consolidation of Structured Entities The Group has established the Kenmare Employee Benefit Trust which facilitates the operation of the Kenmare Restricted Share Plan (KRSP). Whilst the Group does not hold any of the equity of the trust, the Directors have concluded that the Group controls its activities and therefore the financial statements of the trust are included in the Group\u2019s Consolidated Financial Statements. Key sources of estimation uncertainty The preparation of financial statements requires the Directors to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the reporting date. The nature of estimation means the actual outcomes could differ from those estimates. The main areas subject to estimation uncertainty are detailed below. Provisions MINE CLOSURE AND MINE REHABILITATION PROVISION The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation provision. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure provision is estimated based on the net present value at the risk-free rate of estimated future Mine closure costs. Mine closure costs are a normal consequence of mining, and the majority of such costs are incurred at the end of the life of mine. The Mine rehabilitation provision represents the Directors\u2019 best estimate of the Group\u2019s liability for reclaiming areas disturbed by mining activities. Reclamation costs are recognised in each period based on the area disturbed in the period and an estimated cost of rehabilitation per hectare, which is reviewed regularly against actual rehabilitation cost per hectare. Actual rehabilitation expenditure is incurred approximately 12 months after the area has been disturbed. There is significant estimation uncertainty in the calculation of the Mine closure and Mine rehabilitation provision and cost estimates can vary in response to many factors including: \u2022 Changes to the relevant legal or local/national government requirements and any other commitments made to stakeholders; \u2022 Additional remediation requirements identified during the rehabilitation; \u2022 The emergence of new restoration techniques; \u2022 Change in the expected closure date; \u2022 Change in the discount rate; and \u2022 The effects of inflation. The quantitative inputs and sensitivity information relating to the Mine closure and Mine rehabilitation provision are detailed in Note 21.
Units of production depreciation
Units of production depreciation is calculated using the quantity of heavy mineral concentrates extracted from the Mine for processing in the
period as a percentage of the total quantity of heavy mineral concentrates planned to be extracted in current and future periods based on
the mining reserve as detailed in the unaudited mineral reserves and resources table on page 42.
The Group estimates its ore reserves and mineral resources based on information compiled by a Competent Person as defined in accordance
with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition. There are numerous
uncertainties inherent in estimating ore reserves, and assumptions that are valid at the time of estimation may change significantly when
new information becomes available. Changes in the forecast prices of final products, production costs or recovery rates may change the
economic status of reserves and may ultimately result in the reserves being revised.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-281": { "value": "Kenmare Resources plc (the \u201cCompany\u201d) is domiciled in the Republic of Ireland. The Company\u2019s registered address is Styne House, Hatch Street Upper, Dublin 2. The Company has a premium listing on the Main Market of the London Stock Exchange and a secondary listing on Euronext Dublin. These consolidated financial statements comprise the Company and its subsidiaries (the \u201cGroup\u201d). The principal activity of the Group is the operation and further development of the Moma Titanium Minerals Mine in Mozambique. The significant accounting policies adopted by the Group are set out below. ", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-2": { "value": "Kenmare Resources plc ", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-385": { "value": "Kenmare Resources plc", "dimensions": { "concept": "ifrs-full:NameOfUltimateParentOfGroup", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-333": { "value": "plc", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-276": { "value": " Republic of Ireland", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-3": { "value": "Republic of Ireland", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-4": { "value": "Styne House, Hatch Street Upper, Dublin 2", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-5": { "value": "The principal activity of the Group is the operation and further development of the Moma Titanium Minerals Mine in Mozambique", "dimensions": { "concept": "ifrs-full:DescriptionOfNatureOfEntitysOperationsAndPrincipalActivities", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-361": { "value": "Adoption of new and revised standards Standards adopted in the current financial year The following new and revised standards, all of which are effective for accounting periods beginning on or after 1 January 2022, have been adopted in the current financial year. \u2022 Onerous Contracts \u2013 Cost of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018\u20132020 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 None of the new and revised standards and interpretations listed above have a material effect on the Group\u2019s financial statements. Standards to be adopted in future accounting periods At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective. The Group will apply the relevant standards from their effective dates. The standards are mandatory for future accounting periods but are not yet effective and have not been early-adopted by the Group. \u2022 Classification of Liabilities as Current or Non-current \u2013 Amendment to IAS 1 effective 1 January 2024 \u2022 IFRS 17 Insurance Contracts and Amendments to IFRS 17 effective 1 January 2023 \u2022 Disclosure of Accounting Policies \u2013 Amendments to IAS 1 and IFRS Practice Statement 2 effective 1 January 2023 \u2022 Definition of Accounting Estimate \u2013 Amendments to IAS 8 effective 1 January 2023 \u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 effective 1 January 2023 \u2022 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IFRS 10 and IAS 28 \u2022 Lease Liability in a Sale and Leaseback \u2013 (Amendments to IFRS 16) effective 1 January 2024 The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial statements of the Group in future periods. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-331": { "value": "Adoption of new and revised standards Standards adopted in the current financial year The following new and revised standards, all of which are effective for accounting periods beginning on or after 1 January 2022, have been adopted in the current financial year. \u2022 Onerous Contracts \u2013 Cost of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018\u20132020 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 None of the new and revised standards and interpretations listed above have a material effect on the Group\u2019s financial statements. Standards to be adopted in future accounting periods At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective. The Group will apply the relevant standards from their effective dates. The standards are mandatory for future accounting periods but are not yet effective and have not been early-adopted by the Group. \u2022 Classification of Liabilities as Current or Non-current \u2013 Amendment to IAS 1 effective 1 January 2024 \u2022 IFRS 17 Insurance Contracts and Amendments to IFRS 17 effective 1 January 2023 \u2022 Disclosure of Accounting Policies \u2013 Amendments to IAS 1 and IFRS Practice Statement 2 effective 1 January 2023 \u2022 Definition of Accounting Estimate \u2013 Amendments to IAS 8 effective 1 January 2023 \u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 effective 1 January 2023 \u2022 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IFRS 10 and IAS 28 \u2022 Lease Liability in a Sale and Leaseback \u2013 (Amendments to IFRS 16) effective 1 January 2024 The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial statements of the Group in future periods. ", "dimensions": { "concept": "ifrs-full:DescriptionOfInitialApplicationOfStandardsOrInterpretations", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-282": { "value": "Adoption of new and revised standards Standards adopted in the current financial year The following new and revised standards, all of which are effective for accounting periods beginning on or after 1 January 2022, have been adopted in the current financial year. \u2022 Onerous Contracts \u2013 Cost of Fulfilling a Contract \u2013 Amendments to IAS 37 \u2022 Annual Improvements to IFRS Standards 2018\u20132020 \u2022 Property, Plant and Equipment: Proceeds before Intended Use \u2013 Amendments to IAS 16 \u2022 Reference to the Conceptual Framework \u2013 Amendments to IFRS 3 None of the new and revised standards and interpretations listed above have a material effect on the Group\u2019s financial statements. Standards to be adopted in future accounting periods At the date of authorisation of these financial statements, the following standards and interpretations which have not been applied in these financial statements were in issue but not yet effective. The Group will apply the relevant standards from their effective dates. The standards are mandatory for future accounting periods but are not yet effective and have not been early-adopted by the Group. \u2022 Classification of Liabilities as Current or Non-current \u2013 Amendment to IAS 1 effective 1 January 2024 \u2022 IFRS 17 Insurance Contracts and Amendments to IFRS 17 effective 1 January 2023 \u2022 Disclosure of Accounting Policies \u2013 Amendments to IAS 1 and IFRS Practice Statement 2 effective 1 January 2023 \u2022 Definition of Accounting Estimate \u2013 Amendments to IAS 8 effective 1 January 2023 \u2022 Deferred Tax related to Assets and Liabilities arising from a Single Transaction \u2013 Amendments to IAS 12 effective 1 January 2023 \u2022 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture \u2013 Amendments to IFRS 10 and IAS 28 \u2022 Lease Liability in a Sale and Leaseback \u2013 (Amendments to IFRS 16) effective 1 January 2024 The Directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial statements of the Group in future periods. ", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-283": { "value": "Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS Regulation. The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of sales. In addition, foreign exchange losses have been reclassified to other operating costs and are no longer presented separately on the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense. Further details can be found in Note 4. ", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-332": { "value": "The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB) and interpretations issued by the IFR Interpretations Committee (IFRIC) as adopted by the EU and those parts of the Companies Act 2014 applicable to companies reporting under IFRS and Article 4 of the IAS Regulation. ", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-284": { "value": "Going concern The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company and the Group have or will have adequate resources to continue in operational existence for the foreseeable future. Based on the Group\u2019s cash flow forecast, liquidity, solvency position and available finance facilities, the Directors have a reasonable expectation that the Group has adequate resources for the foreseeable future and, therefore, they continue to adopt the going concern basis of accounting in preparing the financial statements.
The Group forecast has been prepared by management with best estimates of production, pricing and cost assumptions over the period.
Key assumptions upon which the Group forecast is based include a Mine plan covering production using the Namalope, Nataka, Pilivili and
Mualadi reserves and resources as set out in the unaudited mineral reserves and resources table on page 42. Specific resource material
is included only where there is a high degree of confidence in its economic extraction. Production levels for the purpose of the forecast
are approximately 1.2 million tonnes per annum of ilmenite plus co-products, zircon, concentrates and rutile, over the next 12 months.
Assumptions for product sales prices are based on contract prices as stipulated in marketing agreements with customers or, where contract
prices are based on market prices or production is not presently contracted, prices are forecast taking into account independent titanium
mineral sands expertise and management expectations. Operating costs are based on approved budget costs for 2023, taking into account
the current running costs of the Mine and escalated by 2% per annum thereafter. Capital costs are based on the capital plans and include
escalation at 2% per annum. The 2023 operating costs and forecast capital costs take into account the current inflationary environment. The
2% inflation rate used from 2024 to escalate these costs over the life of mine is an estimated long-term inflation rate.
Sensitivity analysis is applied to the assumptions above to test the robustness of the cash flow forecasts for changes in market prices,
shipments and operating and capital cost assumptions. Changes in these assumptions affect the level of sales and profitability of the Group
and the amount of capital required to deliver the projected production levels. As a result of this assessment, the Board has a reasonable
expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the 12 month period from the date
of authorisation of these financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoingConcernExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-285": { "value": "
The financial statements are presented in US Dollars rounded to the nearest thousand. They have been prepared under the historical cost
convention except for certain trade receivables and share-based payments, which are recorded at fair value.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-286": { "value": "
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company, its subsidiaries and its subsidiaries\u2019 branches.
Subsidiaries are entities controlled by the Group. The Group \u2018controls\u2019 an entity when it is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements
of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which
control ceases.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of
the elements of control listed above.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members of the Group are
eliminated on consolidation.
When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest, and (ii) the previous carrying
amount of the assets, less liabilities of the subsidiary. All amounts previously recognised in other comprehensive income in relation to that
subsidiary are accounted for as if the Group had directly disposed of the related assets and liabilities of the subsidiary (i.e. reclassified to
profit or loss or transferred to another category of equity as required by applicable IFRS). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IFRS 9
Financial Instruments or, when applicable, the costs on initial recognition of an investment in an associate or a joint venture.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-287": { "value": "
Determination of ore reserve estimates
The Group estimates its ore reserves and mineral resources based on information compiled by a Competent Person as defined in accordance
with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 Edition (the \u201cJORC Code\u201d). Ore
reserves and mineral resources determined in this way are used in the calculation of depreciation, amortisation and impairment charges,
the assessment of life of mine and for forecasting the timing of the payment of close-down costs, restoration costs and clean-up costs.
In assessing the life of a mine for accounting purposes, mineral resources are taken into account only where there is a high degree of
confidence of economic extraction. There are numerous uncertainties inherent in estimating ore reserves and mineral resources and
assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the
forecast prices of final products, production costs or recovery rates may change the economic status of ore reserves and mineral resources
and may ultimately result in the reserves being revised.
", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForDeterminationOfOreReserveEstimates", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-288": { "value": "
Accounting for climate change
Management have considered the impact of climate change on amounts reported within the financial statements, including the potential
financial impact of the physical and transitional risks identified in the Strategic Climate Report in accordance with the recommendations of
the Taskforce on Climate-related Financial Disclosures. Considerations in respect of climate-related matters have been made on a number of
key estimates and judgements including:
\u2022 The estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash-
generating unit;
\u2022 The Mine closure provision and Mine rehabilitation provision; and
\u2022 The useful lives of property, plant and equipment.
Whilst the Group has set ambitions to be net zero by 2040, the financial impact is still being assessed as the Group considers how it will work
towards meeting this target. As such, the estimate of future cash flows used in determining the recoverable amount of the Moma Titanium
Minerals Mine cash-generating unit does not consider the expenditure (or any related savings) associated with the company\u2019s ambition
to become net zero nor the financial impact of the climate risks disclosed within the Group\u2019s TCFD reporting as a reliable estimate thereof
cannot currently be made.
The Group considered whether its climate ambitions required changes to the useful lives of existing assets. No adjustments to useful lives
were made during the period as a direct result of the impact of the Group\u2019s climate ambition to become net zero as the Group\u2019s transition
plan is still under development. Should pathways for eliminating fossil fuel power generating assets be identified, depending on technological
development within the industry, which is highly uncertain, the Group\u2019s property, plant and equipment profile may change and accelerated
depreciation of assets may be required in the future. However, at this present time the requirement for fossil fuel-powered assets means that
early retirement of existing assets is not expected.
The Group estimates the Mine closure and rehabilitation provision based on current restoration standards, techniques and climate
conditions. Closure plans and cost estimates are supported by detailed studies which are provided by external estimates. Detailed closure
cost studies are refreshed at least every five years and these studies are evolving to incorporate greater consideration of forecast climate
conditions at closure.
Management continues to monitor future uncertainty around climate change risks and is continually developing the Group\u2019s assessment
of the impact that climate change has on the amounts recognised in the financial statements. It is, therefore, likely that the future carrying
amounts of assets or liabilities may change as the Group\u2019s judgements and estimates evolve as the Group responds to its climate
change ambitions.
", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForAccountingForClimateChange", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-362": { "value": "Accounting for climate change Management have considered the impact of climate change on amounts reported within the financial statements, including the potential financial impact of the physical and transitional risks identified in the Strategic Climate Report in accordance with the recommendations of the Taskforce on Climate-related Financial Disclosures. Considerations in respect of climate-related matters have been made on a number of key estimates and judgements including: \u2022 The estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash- generating unit; \u2022 The Mine closure provision and Mine rehabilitation provision; and \u2022 The useful lives of property, plant and equipment. Whilst the Group has set ambitions to be net zero by 2040, the financial impact is still being assessed as the Group considers how it will work towards meeting this target. As such, the estimate of future cash flows used in determining the recoverable amount of the Moma Titanium Minerals Mine cash-generating unit does not consider the expenditure (or any related savings) associated with the company\u2019s ambition to become net zero nor the financial impact of the climate risks disclosed within the Group\u2019s TCFD reporting as a reliable estimate thereof cannot currently be made. The Group considered whether its climate ambitions required changes to the useful lives of existing assets. No adjustments to useful lives were made during the period as a direct result of the impact of the Group\u2019s climate ambition to become net zero as the Group\u2019s transition plan is still under development. Should pathways for eliminating fossil fuel power generating assets be identified, depending on technological development within the industry, which is highly uncertain, the Group\u2019s property, plant and equipment profile may change and accelerated depreciation of assets may be required in the future. However, at this present time the requirement for fossil fuel-powered assets means that early retirement of existing assets is not expected. The Group estimates the Mine closure and rehabilitation provision based on current restoration standards, techniques and climate conditions. Closure plans and cost estimates are supported by detailed studies which are provided by external estimates. Detailed closure cost studies are refreshed at least every five years and these studies are evolving to incorporate greater consideration of forecast climate conditions at closure. Management continues to monitor future uncertainty around climate change risks and is continually developing the Group\u2019s assessment of the impact that climate change has on the amounts recognised in the financial statements. It is, therefore, likely that the future carrying amounts of assets or liabilities may change as the Group\u2019s judgements and estimates evolve as the Group responds to its climate change ambitions", "dimensions": { "concept": "ifrs-full:DescriptionOfOtherAccountingPoliciesRelevantToUnderstandingOfFinancialStatements", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-289": { "value": "
Revenue recognition
Revenue represents the value of goods and services supplied to third parties during the year. Revenue is measured at the fair value of
consideration received or receivable and excludes any discounts and applicable sales tax. Revenue is recognised when the Group satisfies a
performance obligation by transferring a promised good or service to a customer.
The Group has a mixture of long-term contracts and spot contracts with customers for the sale of mineral products ilmenite, zircon,
concentrates and rutile. Sales contracts are evaluated to determine the performance obligations, the transaction price and the point at which
there is transfer of control. Sales are made on either a \u201cfree on board\u201d (FOB), \u201ccost, insurance and freight\u201d (CIF), or a \u201ccost and freight\u201d (CFR)
basis. Control of mineral products passes from the Group to customers on delivery and delivery is deemed to take place when the product
is loaded on the ocean-going vessel chartered by either the customer or the Group. The transactional price is the amount of consideration
due in exchange for transferring the promised goods or services to the customer and is allocated against the performance obligations and
recognised in accordance with whether control is recognised over a defined period or at a specific point in time.
The customer is responsible for the cost of shipping and handling for all FOB Incoterms. The Group is responsible for shipping the product to
a destination port specified by the customer for all CIF and CFR Incoterms. The Group has determined that the shipping service represents a
separate performance obligation, and revenue in relation to such services is deferred and recognised separately from the sale of the material
over time as the shipping service is provided. Shipment revenue is recognised at the contracted price to the Group. All shipping and handling
costs incurred by the Group are recognised as a cost of sale.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-290": { "value": "
Finance income
Finance income represents deposit interest earned. Deposit interest is accrued on a time basis by reference to the principal outstanding and
at the effective interest rate applicable.
Finance costs
Finance costs consist of interest on bank borrowings, interest on lease liabilities, trade receivable facilities fees, debt commitment fees and
the unwinding of the Mine closure provision. The accounting policies applicable for these finance costs are set out in borrowing costs, leases,
financial assets and provisions. Debt commitment fees for undrawn facilities are recognised in the period to which they relate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-334": { "value": "Finance costs Finance costs consist of interest on bank borrowings, interest on lease liabilities, trade receivable facilities fees, debt commitment fees and the unwinding of the Mine closure provision. The accounting policies applicable for these finance costs are set out in borrowing costs, leases, financial assets and provisions. Debt commitment fees for undrawn facilities are recognised in the period to which they relate. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-291": { "value": "
Employee benefits
SHORT-TERM EMPLOYEE BENEFITS
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if
the Group has a present legal or constructive obligation to pay as a result of past services provided by the employee and the obligation can
be reliably estimated.
DEFINED CONTRIBUTION PLANS
Obligations for contributions to defined contribution plans are expensed as the related service is provided.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-292": { "value": "
Share-based payments
The Group grants equity settled share-based payments to certain employees as part of their remuneration. The grant date fair value of
equity settled share-based payment arrangements is recognised as an expense with a corresponding increase in equity on a straight-line
basis over the vesting period.
The fair value of the award is deemed to be the nominal share price at grant date. Where an award has a $nil strike price, the Company has
determined that the risk-free rate and market volatility rate has a negligible impact on fair value. No adjustment is made to fair value for expected
dividends throughout the vesting period as the award holder is entitled to receive dividend equivalents at the end of the vesting period.
Fair value incorporates the effect of market-based conditions where applicable. Non-market based vesting conditions are only taken into
account when assessing the number of awards expected to vest such that the cumulate expense recognised equates to the number of
awards that actually vest.
A modification to an award which reduces the number of equity instruments granted is accounted for as a cancellation. The cancellation of
awards is accounted for as an acceleration of the vesting period and therefore any amount unrecognised that would otherwise have been
charged are recognised immediately in profit & loss.
Where a shared understanding of the award is deemed not to exist and employees are rendering services for the award beginning on a date
earlier than the grant date, the Group estimates the cost of such awards from the date of communication to the vesting date. The Group
adjusts the fair value estimate of such awards to the grant date when a shared understanding is obtained.
The dilutive effect of outstanding options, to the extent that they are to be settled by the issue of new shares and to the extent that the
vesting conditions would have been satisfied if the end of the reporting period was the end of the contingency period, is reflected as
additional share dilution in the determination of diluted earnings per share.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-293": { "value": "
Foreign currency
The individual financial statements of each Group entity are prepared in their functional currency, which in each case is US Dollars. The
presentation currency for the consolidated financial statements is also US Dollars.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity\u2019s functional currency are
recorded at the rates of exchange prevailing on the dates of the transactions. At each reporting date, monetary items denominated in foreign
currencies are retranslated at rates prevailing on such reporting date.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement
of comprehensive income for the financial year in foreign exchange gain/loss and are not part of the operating profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-294": { "value": "
Borrowing costs
All borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use, are added to the cost of those assets until such time as the assets are
substantially ready for their intended use.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-295": { "value": "
Taxation
The tax expense represents the sum of the current tax and deferred tax.
Current tax payable is based on the best estimate of the tax amount expected to be paid and reflects uncertainty related to income taxes,
if any. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludes items of income
or expenses that are taxable or deductible in other financial years and it further excludes items that are never taxable or deductible. The
Group\u2019s liability for current tax is calculated using the tax rates that have been enacted or substantively enacted at the reporting 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 statement
of financial position 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.
Deferred tax liabilities are not recognised for taxable temporary differences arising on investments in subsidiary undertakings, if the
Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is released and
reflects uncertainty related to income taxes, if any. Deferred tax is charged or credited in the statement of comprehensive income, 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 Group intends to settle its current tax assets and tax
liabilities on a net basis.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-335": { "value": "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 statement of financial position 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. Deferred tax liabilities are not recognised for taxable temporary differences arising on investments in subsidiary undertakings, if the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax is measured at the tax rates that are expected to apply in the period when the liability is settled or the asset is released and reflects uncertainty related to income taxes, if any. Deferred tax is charged or credited in the statement of comprehensive income, 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 Group intends to settle its current tax assets and tax liabilities on a net basis. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-296": { "value": "Property, plant and equipment The cost of property, plant and equipment comprises any costs directly attributable to bringing an asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the estimated closure costs associated with the asset. This includes the cost of moving plant and associated infrastructure to the orebodies under the Group\u2019s mining concessions which form part of the Group\u2019s life of Mine plan. Construction in progress expenditures for the construction and commissioning of property, plant and equipment are deferred until the facilities are operational, at which point the costs are transferred to property, plant and equipment and depreciated at the applicable rates. When an asset is subject to regular major inspections or overhauls, a component approach to depreciation is applied and the cost of a maintenance event is capitalised and depreciated over the time to the next occurrence. Other subsequent expenditure on an item of property, plant and equipment is capitalised as part of the cost of an asset only when it increases the future economic benefits associated with the specific asset to which it relates. All other expenditure is recognised in profit or loss as incurred. Property, plant and equipment are depreciated over their useful life on a straight-line basis, or over the remaining life of the Mine if shorter, or on a units of production basis. The major categories of property, plant and equipment are depreciated as follows: Plant and equipment Unit of production basis Development expenditure Unit of production basis Other assets Vessels Five to twenty-five years Buildings and airstrip Twenty years Mobile equipment Three to five years Fixtures and equipment Three to ten years Units of production depreciation is calculated using the quantity of heavy mineral concentrate extracted from the Mine for processing in the period as a percentage of the total quantity of heavy mineral concentrate planned to be extracted in current and future periods based on the mining reserve. The mining reserve is updated on an annual basis for results of drilling programmes carried out, mining activity during the year, and other relevant considerations. The unit of production depreciation rate is adjusted as a result of this update and applied prospectively. Capital spares consist of critical plant spares with estimated useful lives greater than one year and are included in property, plant and equipment. Capital spares are stated at cost. Residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Changes to the estimated residual values or useful lives are accounted for prospectively . Development expenditure Project development costs include expenditure on the development of an orebody including pre-feasibility and feasibility studies on mining the orebody, the transport of mining plants to the orebody, additional infrastructure required to mine the orebody and community resettlement costs.
Project development costs include finance costs and lender and advisor fees incurred during the period before such mine is capable of
operating at production levels in the manner intended by management are deferred and included in property, plant and equipment. In
addition, expenses including depreciation net of revenue earned during commissioning of the Mine in the period before it is capable of
operating in the manner intended by management are deferred. These costs include an allocation of costs, including share-based payments,
as determined by management and incurred by Group companies. Interest on borrowings relating to the Mine construction and development
projects are capitalised until the point when the activities that enable the Mine to operate in its intended manner are complete. Once the
Mine is operating in the manner intended by management, the related costs are depreciated off over the life of the estimated ore reserve
of such mine on a unit of production basis, or over its useful life if shorter. Where the Mine project is terminated or impairment of value has
occurred, related costs are written off immediately.
Exploration and evaluation expenditure
Exploration and evaluation expenditure activity involves the search for mineral resources, the determination of technical feasibility and
the assessment of commercial viability of an identified resource. Exploration and evaluation expenditure is charged to the statement
of comprehensive income as incurred, except where the existence of a commercially viable mineral deposit has been established
and it is expected that the deposit will be mined. Capitalised exploration and evaluation expenditure considered to be tangible is
recognised as a component of property, plant and equipment at cost less impairment charges. Until such time as an asset is available
for use, it is not depreciated. All capitalised exploration and evaluation expenditure is monitored for indications of impairment as part of
development expenditure. To the extent that capitalised expenditure is not expected to be recovered, it is charged to the statement of
comprehensive income.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-336": { "value": "Property, plant and equipment are depreciated over their useful life on a straight-line basis, or over the remaining life of the Mine if shorter, or on a units of production basis. The major categories of property, plant and equipment are depreciated as follows: Plant and equipment Unit of production basis Development expenditure Unit of production basis Other assets Vessels Five to twenty-five years Buildings and airstrip Twenty years Mobile equipment Three to five years Fixtures and equipment Three to ten years Units of production depreciation is calculated using the quantity of heavy mineral concentrate extracted from the Mine for processing in the period as a percentage of the total quantity of heavy mineral concentrate planned to be extracted in current and future periods based on the mining reserve. The mining reserve is updated on an annual basis for results of drilling programmes carried out, mining activity during the year, and other relevant considerations. The unit of production depreciation rate is adjusted as a result of this update and applied prospectively. Capital spares consist of critical plant spares with estimated useful lives greater than one year and are included in property, plant and equipment. Capital spares are stated at cost. Residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Changes to the estimated residual values or useful lives are accounted for prospectively ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-297": { "value": "
Leases
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured
at cost (being the present value of the lease liabilities), and subsequently at cost less accumulated depreciation and impairment losses, and
adjusted for certain remeasurements of the lease liability. Right-of-use assets are depreciated over their lease term.
The lease liability is initially measured at the present value of the future lease payments, discounted using the Group\u2019s incremental borrowing
rate. The Group has applied judgement to determine the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payments made. It is
remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the
amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or
extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has applied judgement to determine the lease term for some lease contracts that include renewal options. The assessment of
whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the amount of lease
liabilities and right-of-use assets recognised.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases including
heavy mobile equipment rental at the Mine. The Group recognises the lease payments associated with these leases as an expense on a
straight-line basis over the lease term.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-363": { "value": "Impairment of non-current assets At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the fair value for the Mine is difficult to determine, the Group uses its value in use in estimating the recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of the asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior financial years. A reversal of an impairment loss is recognised as income immediately Impairment of financial assets The Group recognises a loss allowance for expected credit losses on trade receivables that are not measured at fair value through profit or loss. The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for financial assets which requires expected lifetime losses to be recognised from initial recognition of the receivable. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the trade receivable. When determining whether the credit risk of a trade receivable has increased the Group considers credit risk ratings where available, the Group\u2019s historical credit loss experience, adjusted for factors that are specific to the customers, general economic conditions and an assessment of both the current as well as the forecast conditions at the reporting date. Sales to certain customers are undertaken on a letter of credit basis thereby reducing the credit risk of these customers. The Group considers a trade receivable to be in default when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered into bankruptcy proceedings. The Group considers a trade receivable to be credit impaired when there is evidence that the customer is in significant financial difficulty and the debt is more than 90 days past due. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-298": { "value": "Impairment of non-current assets At each reporting date, the Group reviews the carrying amounts of its non-current assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As the fair value for the Mine is difficult to determine, the Group uses its value in use in estimating the recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of the asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior financial years. A reversal of an impairment loss is recognised as income immediately . ", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForNonCurrentAssets", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-299": { "value": "
Inventories
Product inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour costs and
overheads, including depreciation, incurred in bringing the inventories to their present location and condition. Cost is calculated using the
weighted average method. Net realisable value represents the estimated selling price less all estimated costs necessary to make the sale.
Quantities are assessed primarily through surveys and assays.
Consumable spares are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average method and
comprises the purchase price and related costs incurred in bringing the inventories to their present location and condition. Consumable
spares identified as obsolete are recognised as an expense immediately.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-300": { "value": "Financial instruments Financial assets and financial liabilities are recognised in the Group\u2019s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Financial assets The financial assets of the Group consist of cash and cash equivalents and trade and other receivables. Classification of financial assets Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Cash and cash equivalents are initially measured at fair value and are subsequently measured at amortised cost. They are held by the Group to collect deposit interest and to meet the liquidity requirements of the Group. The Group has a trade finance facility for three of the Group\u2019s customers. In accordance with this facility, the bank purchases 80% of the receivable without recourse and therefore assumes the credit risk. Derecognition of the trade receivables occurs when the customer\u2019s invoices is factored and the Group receives cash from the bank. The Group also has a trade facility for customers to which it sells to under letter of credit terms. Under this facility, the bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The bank can also discount these letters of credit thereby providing early payment of receivables to the Group. Derecognition of the trade receivables occurs when the customer\u2019s invoices are discounted and the Group receives cash from the bank. These facilities assist the Group in managing its liquidity for funding of operations. Trade receivables which are not factored are initially measured at fair value and subsequently measured at amortised cost as they are held by the Group in order to collect receipts under the credit terms of the sales contracts i.e. solely payment of principal and interest (SPPI). Trade receivables which are factored or letters of credit which are always confirmed and discounted are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored or confirmed and discounted as the case may be are classified as fair value through other comprehensive income (FVOCI). This is because their cash flows are generated through a combination of collection and sales (by factoring or confirming and discounting letters of credit). Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset. Interest income is recognised in profit or loss and is included in the \u201cfinance income\u201d line item .
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on trade receivables that are not measured at fair value through profit or
loss. The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for financial
assets which requires expected lifetime losses to be recognised from initial recognition of the receivable. The amount of expected credit
losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the trade receivable.
When determining whether the credit risk of a trade receivable has increased the Group considers credit risk ratings where available,
the Group\u2019s historical credit loss experience, adjusted for factors that are specific to the customers, general economic conditions and an
assessment of both the current as well as the forecast conditions at the reporting date. Sales to certain customers are undertaken on a letter
of credit basis thereby reducing the credit risk of these customers.
The Group considers a trade receivable to be in default when there is information indicating that the debtor is in severe financial difficulty
and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered into bankruptcy proceedings.
The Group considers a trade receivable to be credit impaired when there is evidence that the customer is in significant financial difficulty and
the debt is more than 90 days past due.
Foreign exchange gains and losses
The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at
the spot rate at the end of each reporting period. For financial assets measured at amortised cost, exchange differences are recognised in
profit or loss in the \u201cforeign exchange gains and losses\u201d line.
Financial liabilities and equity
The financial liabilities of the Group consist of bank borrowings, leases and trade payables. The equity of the Group consists of share capital
issued by the Company and own shares.
Classification of issued debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual
arrangements and the definitions of a financial liability and an equity instrument.
Issued equity
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity
instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. The only equity instrument of the
Company is ordinary shares.
Own Shares
Ordinary shares acquired by the Company or purchased on behalf of the Company by the Kenmare Employee Benefit Trust are deducted
from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company\u2019s own equity
instruments.
Financial liabilities
The financial liabilities of the Group are initially measured at fair value and subsequently measured at amortised cost using the effective
interest method.
Financial liabilities measured subsequently at amortised cost
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest expense
over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees,
transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period,
to the amortised cost of a financial liability.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period,
the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and
losses are recognised in profit or loss.
Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in profit or loss. When the Group exchanges with an existing lender one debt instrument for another with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference between the carrying amount of the liability before the modification and the present value of the cash flows after modification is recognised in profit or loss as the modification gain or loss within other gains and losses. A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d). The Group has exposure to IBORs on its financial instruments that will be reformed as part of these market-wide initiatives. The Group\u2019s main IBOR exposure at the reporting date is US LIBOR, which is administered by ICE Benchmark Administration (IBA). The alternative reference rate for US LIBOR is the US Secured Overnight Financing Rate (SOFR). On 5 March 2021, IBA stated that it will cease the publication of (i) the overnight and one, three, six and twelve months USD LIBOR settings immediately following the LIBOR publication on Friday 30 June 2023, and (ii) all other LIBOR settings, including the one week and two months USD LIBOR settings, immediately following the LIBOR publication on Friday 31 December 2021. The Group plans to modify contractual terms for purposes of migrating from USD LIBOR to SOFR prior to the discontinuance of the administration and publication of the relevant LIBOR rates by IBA. Derivative financial instruments The Group has not entered into any derivative financial instruments during the financial year ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-337": { "value": "
Financial assets
The financial assets of the Group consist of cash and cash equivalents and trade and other receivables.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-364": { "value": "
Classification of financial assets
Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of change in value. Cash and cash equivalents are initially
measured at fair value and are subsequently measured at amortised cost. They are held by the Group to collect deposit interest and to meet
the liquidity requirements of the Group.
The Group has a trade finance facility for three of the Group\u2019s customers. In accordance with this facility, the bank purchases 80% of the
receivable without recourse and therefore assumes the credit risk. Derecognition of the trade receivables occurs when the customer\u2019s
invoices is factored and the Group receives cash from the bank.
The Group also has a trade facility for customers to which it sells to under letter of credit terms. Under this facility, the bank confirms the
letter of credit from the issuing bank and therefore assumes the credit risk. The bank can also discount these letters of credit thereby
providing early payment of receivables to the Group. Derecognition of the trade receivables occurs when the customer\u2019s invoices are
discounted and the Group receives cash from the bank.
These facilities assist the Group in managing its liquidity for funding of operations. Trade receivables which are not factored are initially
measured at fair value and subsequently measured at amortised cost as they are held by the Group in order to collect receipts under the
credit terms of the sales contracts i.e. solely payment of principal and interest (SPPI). Trade receivables which are factored or letters of credit
which are always confirmed and discounted are initially measured at fair value and subsequently measured at fair value through profit or loss
(FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored or confirmed and discounted
as the case may be are classified as fair value through other comprehensive income (FVOCI). This is because their cash flows are generated
through a combination of collection and sales (by factoring or confirming and discounting letters of credit).
Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. For
financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset. Interest
income is recognised in profit or loss and is included in the \u201cfinance income\u201d line item .
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-338": { "value": "Classification of financial assets Cash and cash equivalents comprise cash on hand, demand deposits and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Cash and cash equivalents are initially measured at fair value and are subsequently measured at amortised cost. They are held by the Group to collect deposit interest and to meet the liquidity requirements of the Group. The Group has a trade finance facility for three of the Group\u2019s customers. In accordance with this facility, the bank purchases 80% of the receivable without recourse and therefore assumes the credit risk. Derecognition of the trade receivables occurs when the customer\u2019s invoices is factored and the Group receives cash from the bank. The Group also has a trade facility for customers to which it sells to under letter of credit terms. Under this facility, the bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The bank can also discount these letters of credit thereby providing early payment of receivables to the Group. Derecognition of the trade receivables occurs when the customer\u2019s invoices are discounted and the Group receives cash from the bank. These facilities assist the Group in managing its liquidity for funding of operations. Trade receivables which are not factored are initially measured at fair value and subsequently measured at amortised cost as they are held by the Group in order to collect receipts under the credit terms of the sales contracts i.e. solely payment of principal and interest (SPPI). Trade receivables which are factored or letters of credit which are always confirmed and discounted are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored or confirmed and discounted as the case may be are classified as fair value through other comprehensive income (FVOCI). This is because their cash flows are generated through a combination of collection and sales (by factoring or confirming and discounting letters of credit). Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost. For financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset. Interest income is recognised in profit or loss and is included in the \u201cfinance income\u201d line item ", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForClassificationOfFinancialAssets", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-339": { "value": "Impairment of financial assets The Group recognises a loss allowance for expected credit losses on trade receivables that are not measured at fair value through profit or loss. The Group applies the simplified approach permitted by IFRS 9 Financial Instruments to measure expected credit losses for financial assets which requires expected lifetime losses to be recognised from initial recognition of the receivable. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the trade receivable. When determining whether the credit risk of a trade receivable has increased the Group considers credit risk ratings where available, the Group\u2019s historical credit loss experience, adjusted for factors that are specific to the customers, general economic conditions and an assessment of both the current as well as the forecast conditions at the reporting date. Sales to certain customers are undertaken on a letter of credit basis thereby reducing the credit risk of these customers. The Group considers a trade receivable to be in default when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered into bankruptcy proceedings. The Group considers a trade receivable to be credit impaired when there is evidence that the customer is in significant financial difficulty and the debt is more than 90 days past due. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-340": { "value": "Foreign exchange gains and losses The carrying amount of financial assets that are denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For financial assets measured at amortised cost, exchange differences are recognised in profit or loss in the \u201cforeign exchange gains and losses\u201d line. Foreign exchange gains and losses For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments. These foreign exchange gains and losses are recognised in profit or loss. ", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForForeignExchangeGainsAndLosses", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-341": { "value": "Financial liabilities and equity The financial liabilities of the Group consist of bank borrowings, leases and trade payables. The equity of the Group consists of share capital issued by the Company and own shares.", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForFinancialLiabilitiesAndEquity", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-342": { "value": "Classification of issued debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. ", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForClassificationOfIssuedDebtOrEquity", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-343": { "value": "Issued equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs. The only equity instrument of the Company is ordinary shares. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-344": { "value": "Own Shares Ordinary shares acquired by the Company or purchased on behalf of the Company by the Kenmare Employee Benefit Trust are deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Company\u2019s own equity instruments", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-345": { "value": "Financial liabilities The financial liabilities of the Group are initially measured at fair value and subsequently measured at amortised cost using the effective interest method. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-346": { "value": "Financial liabilities measured subsequently at amortised cost The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating the interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. ", "dimensions": { "concept": "kenmareresourcesplc:DescriptionOfAccountingPolicyForFinancialLiabilitiesMeasuredSubsequentlyAtAmoritisedCost", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-347": { "value": "
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group\u2019s obligations are discharged, cancelled or have expired. The
difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in profit or loss.
When the Group exchanges with an existing lender one debt instrument for another with substantially different terms, such exchange
is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, the Group
accounts for substantial modification of terms of an existing liability or part of it as an extinguishment of the original financial liability and the
recognition of a new liability. It is assumed that the terms are substantially different if the discounted present value of the cash flows under
the new terms, including any fees paid net of any fees received and discounted using the original effective rate is at least 10% different from
the discounted present value of the remaining cash flows of the original financial liability. If the modification is not substantial, the difference
between the carrying amount of the liability before the modification and the present value of the cash flows after modification is recognised
in profit or loss as the modification gain or loss within other gains and losses.
A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank
offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d). The Group has exposure to IBORs on its financial
instruments that will be reformed as part of these market-wide initiatives. The Group\u2019s main IBOR exposure at the reporting date is US LIBOR,
which is administered by ICE Benchmark Administration (IBA). The alternative reference rate for US LIBOR is the US Secured Overnight
Financing Rate (SOFR).
On 5 March 2021, IBA stated that it will cease the publication of (i) the overnight and one, three, six and twelve months USD LIBOR
settings immediately following the LIBOR publication on Friday 30 June 2023, and (ii) all other LIBOR settings, including the one week and
two months USD LIBOR settings, immediately following the LIBOR publication on Friday 31 December 2021. The Group plans to modify
contractual terms for purposes of migrating from USD LIBOR to SOFR prior to the discontinuance of the administration and publication of
the relevant LIBOR rates by IBA.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-348": { "value": "
Derivative financial instruments
The Group has not entered into any derivative financial instruments during the financial year .
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-301": { "value": "
Dividends
Dividends are recognised as a liability in the Company\u2019s financial statements in the period in which the dividends are approved by the
Company\u2019s shareholders.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-302": { "value": "
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the
Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration to settle the present obligation at the reporting date, taking
into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle
the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is
recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
Contingent liabilities are recognised when the Group has a possible obligation and the existence of which will only be confirmed by uncertain
future events that are not wholly within the control of the Group.
Mine closure provision
The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the
mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation
provision. A corresponding amount equal to the provision is recognised as part of property, plant and equipment and depreciated over
its estimated useful life. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure
provision is determined as the net present value of such estimated costs discounted at a risk-free rate. The Group uses long-term rates as
provided by the US Treasury extrapolated to the duration of the Mine life. This is deemed the best estimate to reflect the current market
assessment of the time value of money on a risk-free basis. Risks specific to the liability are included in the cost estimate. Changes in the
expected costs or estimated timing of costs are recorded by an adjustment to the provision and a corresponding adjustment to property,
plant and equipment. The unwinding of the discount on the Mine closure provision is recognised as a finance cost.
Mine rehabilitation provision
The Mine rehabilitation provision represents the Directors\u2019 best estimate of the liability for reclaiming areas disturbed by mining activities.
Reclamation costs are recognised in each period in the statement of comprehensive income based on the area disturbed in such period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-349": { "value": "Mine closure provision The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation provision. A corresponding amount equal to the provision is recognised as part of property, plant and equipment and depreciated over its estimated useful life. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure provision is determined as the net present value of such estimated costs discounted at a risk-free rate. The Group uses long-term rates as provided by the US Treasury extrapolated to the duration of the Mine life. This is deemed the best estimate to reflect the current market assessment of the time value of money on a risk-free basis. Risks specific to the liability are included in the cost estimate. Changes in the expected costs or estimated timing of costs are recorded by an adjustment to the provision and a corresponding adjustment to property, plant and equipment. The unwinding of the discount on the Mine closure provision is recognised as a finance cost. Mine rehabilitation provision The Mine rehabilitation provision represents the Directors\u2019 best estimate of the liability for reclaiming areas disturbed by mining activities. Reclamation costs are recognised in each period in the statement of comprehensive income based on the area disturbed in such period. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDecommissioningRestorationAndRehabilitationProvisionsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-303": { "value": "
Segmental reporting
Information on the operations of the Moma Titanium Minerals Mine in Mozambique is reported by the Executive Committee to the Group\u2019s
Board for the purposes of resource allocation and assessment of segment performance. The principal categories for disaggregating revenue
are by product type and by country of the customer\u2019s location. The product types are ilmenite, zircon, rutile and concentrates. Concentrates
includes secondary zircon and mineral sands concentrates.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-304": { "value": "
Critical accounting judgements and key sources of estimation uncertainty
Critical judgements in applying the Group\u2019s accounting policies
In the process of applying the Group\u2019s accounting policies, the Directors have made the following judgements that have the most significant
effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below).
Property, plant and equipment
The recovery of property, plant and equipment is dependent upon the successful operation of the Mine. The realisation of cash flow forecast
assumptions would result in the recovery of such amounts. During the financial year, the Group carried out an impairment review of property,
plant and equipment. In performing the impairment review, a significant level of judgement is required in determining the key assumptions
which have a significant impact on the impairment model. The assumptions are set out in Note 11. As a result of the review, no impairment
provision is required in the financial year.
Consolidation of Structured Entities
The Group has established the Kenmare Employee Benefit Trust which facilitates the operation of the Kenmare Restricted Share Plan
(KRSP). Whilst the Group does not hold any of the equity of the trust, the Directors have concluded that the Group controls its activities and
therefore the financial statements of the trust are included in the Group\u2019s Consolidated Financial Statements.
Key sources of estimation uncertainty
The preparation of financial statements requires the Directors to make estimates and assumptions that affect the amounts reported for
assets and liabilities as at the reporting date. The nature of estimation means the actual outcomes could differ from those estimates. The
main areas subject to estimation uncertainty are detailed below.
Provisions
MINE CLOSURE AND MINE REHABILITATION PROVISION
The Mine closure provision represents the Directors\u2019 best estimate of the Group\u2019s liability for close-down, dismantling and restoration of the
mining and processing site, excluding reclamation of areas disturbed by mining activities, which is covered under the Mine rehabilitation
provision. The costs are estimated on the basis of a formal closure plan and are subject to regular review. The Mine closure provision is
estimated based on the net present value at the risk-free rate of estimated future Mine closure costs. Mine closure costs are a normal
consequence of mining, and the majority of such costs are incurred at the end of the life of mine.
The Mine rehabilitation provision represents the Directors\u2019 best estimate of the Group\u2019s liability for reclaiming areas disturbed by mining
activities. Reclamation costs are recognised in each period based on the area disturbed in the period and an estimated cost of rehabilitation
per hectare, which is reviewed regularly against actual rehabilitation cost per hectare. Actual rehabilitation expenditure is incurred
approximately 12 months after the area has been disturbed.
There is significant estimation uncertainty in the calculation of the Mine closure and Mine rehabilitation provision and cost estimates can
vary in response to many factors including:
\u2022 Changes to the relevant legal or local/national government requirements and any other commitments made to stakeholders;
\u2022 Additional remediation requirements identified during the rehabilitation;
\u2022 The emergence of new restoration techniques;
\u2022 Change in the expected closure date;
\u2022 Change in the discount rate; and
\u2022 The effects of inflation.
The quantitative inputs and sensitivity information relating to the Mine closure and Mine rehabilitation provision are detailed in Note 21.
Units of production depreciation Units of production depreciation is calculated using the quantity of heavy mineral concentrates extracted from the Mine for processing in the period as a percentage of the total quantity of heavy mineral concentrates planned to be extracted in current and future periods based on the mining reserve as detailed in the unaudited mineral reserves and resources table on page 42. The Group estimates its ore reserves and mineral resources based on information compiled by a Competent Person as defined in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition. There are numerous uncertainties inherent in estimating ore reserves, and assumptions that are valid at the time of estimation may change significantly when new information becomes available. Changes in the forecast prices of final products, production costs or recovery rates may change the economic status of reserves and may ultimately result in the reserves being revised. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-305": { "value": "
2. Revenue
2022 2021
$\u2019000 $\u2019000
Revenue from contracts with customers
Revenue derived from the sale of mineral products
498,339
420,550
Revenue derived from freight services
27,649
35,394
Total Revenue
525,988
455,944
Revenue by product
The principal categories for disaggregating mineral products revenue are by product type and by country of the customer\u2019s location. The
product types are ilmenite, zircon, rutile and concentrates. Concentrates includes secondary zircon and mineral sands concentrates.
During the financial year, the Group sold 1,075,600 tonnes (2021: 1,285,300 tonnes) of finished products to customers at a sales value of
$498.3 million (2021: $420.6 million). The Group earned revenue derived from freight services of $27.6 million (2021: $35.4 million).
2022 2021
$\u2019000 $\u2019000
Revenue derived from sales of mineral products by primary product
Ilmenite
347,446
334,714
Primary zircon
99,152
62,727
Concentrates
33,057
19,554
Rutile
18,684
3,555
Total revenue from mineral products
498,339
420,550
Revenue derived from freight services
27,649
35,394
Total Revenue
525,988
455,944
Revenue by destination
In the following table, revenue is disaggregated by primary geographical market. The Group allocates revenue from external customers to
individual countries and discloses revenues in each country where revenues represent 10% or more of the Group\u2019s total revenue. Where total
disclosed revenue disaggregated by country constitutes less than 75% of total Group revenue, additional disclosures are made on a regional
basis until at least 75% of the Group\u2019s disaggregated revenue is disclosed. There were no individual countries within Europe, Asia (excluding
China) or the Rest of the World with revenues representing 10% or more of the Group\u2019s total revenue during the year.
2022 2021
$\u2019000 $\u2019000
Revenue derived from sales of mineral product by destination
China
154,704
192,635
Europe
130,440
77,891
Asia (excluding China)
108,487
74,583
USA
51,600
44,312
Rest of the World
53,108
31,129
Total revenue from mineral products
498,339
420,550
Revenue derived from freight
27,649
35,394
Total Revenue
525,988
455,944
Revenue by major customers The Group evaluates the concentration of mineral product revenue by major customer. The following table disaggregates mineral product revenue from the Group\u2019s four largest customers.
2022 2021
$\u2019000 $\u2019000
Revenue derived from sale of mineral product by major customers
Largest customer
74,671
65,500
Second largest customer
62,791
62,285
Third largest customer
58,413
50,642
Fourth largest customer
41,015
42,029
Total
236,890
220,456
All Group revenues from external customers are generated by the Moma Titanium Minerals Mine in Mozambique. Further details on this operating segment can be found in Note 3. Sales to and from Ireland were $nil (2021: $nil) in the year", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-306": { "value": "3. Segment reporting $\u2019000 Information on the operations of the Moma Titanium Minerals Mine in Mozambique is reported to the Group\u2019s Board for the purposes of resource allocation and assessment of segment performance. Information regarding the Group\u2019s operating segment is reported below:
2022
2021
Restated
Corporate
Mozambique
Total
Corporate
Mozambique
Total
Revenue & Results
Revenue
\u2013
525,988
525,988
\u2013
455,944
455,944
Cost of sales
\u2013
(282,694)
(282,694)
\u2013
(295,010)
(295,010)
Gross profit
\u2013
243,294
243,294
\u2013
160,934
160,934
Administrative expenses
(7,848)
(2,014)
(9,862)
(7,700)
(2,125)
(9,825)
Segment operating profit
(7,848)
241,280
233,432
(7,700)
158,809
151,109
Finance income
23
1,124
1,147
47
218
265
Finance expenses
(83)
(12,389)
(12,472)
(98)
(13,980)
(14,078)
Profit before tax
(7,908)
230,015
222,107
(7,751)
145,047
137,296
Income tax expense
(1,601)
(14,472)
(16,073)
(3,083)
(5,687)
(8,770)
Profit for the financial year
(9,509)
215,543
206,034
(10,834)
139,360
128,526
Segment Assets & Liabilities
Segment Assets
12,583
1,236,244
1,248,827
6,798
1,153,919
1,160,717
Segment Liabilities
4,722
140,571
145,293
4,221
225,853
230,074
Additions to non-current assets
Segment Additions to non-current
assets
\u2013
59,867
59,867
\u2013
60,342
60,342
* Revenue excludes inter-segment revenue of $24.2m earned by the corporate segment relating to marketing and management services fee income. Inter-segment revenue is not regularly reviewed by the Chief Operating Decision Maker. Corporate assets consist of the Company\u2019s property, plant and equipment including right-of-use assets, cash and cash equivalents and prepayments at the reporting date. Corporate liabilities consist of trade and other payables at the reporting date. ", "dimensions": { "concept": "ifrs-full:DisclosureOfEntitysReportableSegmentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-307": { "value": "
4. Cost and income analysis
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by function
Cost of sales
282,694
295,010
Administrative expenses
9,862
9,825
Total
292,556
304,835
Expenses by nature can be analysed as follows:
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by nature
Staff costs
55,907
46,712
Repairs and maintenance
43,151
43,208
Power and fuel
43,960
30,400
Freight
27,649
35,394
Distribution costs
5,699
5,215
Other production and operating costs
72,099
69,552
Movement of mineral products inventory
(21,628)
9,346
Depreciation of property, plant and equipment and right-of-use assets
64,596
63,136
Foreign exchange loss
1,123
1,872
Total
292,556
304,835
Mineral products consist of finished products and heavy mineral concentrate as detailed in Note 13. Mineral stock movement in the year was
an increase of $21.6 million (2021: $9.3 million decrease). Distribution costs of $5.7 million (2021: $5.2 million) represent the cost of running the
Mine\u2019s finished product storage, jetty and marine fleet. Freight costs of $27.6 million (2021: $35.4 million) arise from sales to customers on a
CIF or CFR basis. There were no exceptional items within operating profit in 2022 (2021 restated: $nil).
The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of
sales. In addition, foreign exchange gains and losses have been reclassified to administrative costs and are no longer presented separately on
the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of
expense.
As previously As restated
reported
Adjustment
$\u2019000
Revenue
455,944
\u2013
455,944
Cost of sales
(244,986)
(50,024)
(295,010)
Other Operating Costs/Administration Expenses
(57,977)
48,152
(9,825)
Net Finance costs
(11,788)
(2,025)
(13,813)
Foreign exchange
(3,897)
3,897
\u2013
Taxation
(8,770)
\u2013
(8,770)
Profit for the financial year and total comprehensive income for the financial year
128,526
\u2013
128,526
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-383": { "value": "4. Cost and income analysis
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by function
Cost of sales
282,694
295,010
Administrative expenses
9,862
9,825
Total
292,556
304,835
Expenses by nature can be analysed as follows:
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by nature
Staff costs
55,907
46,712
Repairs and maintenance
43,151
43,208
Power and fuel
43,960
30,400
Freight
27,649
35,394
Distribution costs
5,699
5,215
Other production and operating costs
72,099
69,552
Movement of mineral products inventory
(21,628)
9,346
Depreciation of property, plant and equipment and right-of-use assets
64,596
63,136
Foreign exchange loss
1,123
1,872
Total
292,556
304,835
Mineral products consist of finished products and heavy mineral concentrate as detailed in Note 13. Mineral stock movement in the year was an increase of $21.6 million (2021: $9.3 million decrease). Distribution costs of $5.7 million (2021: $5.2 million) represent the cost of running the Mine\u2019s finished product storage, jetty and marine fleet. Freight costs of $27.6 million (2021: $35.4 million) arise from sales to customers on a CIF or CFR basis. There were no exceptional items within operating profit in 2022 (2021 restated: $nil). The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of sales. In addition, foreign exchange gains and losses have been reclassified to administrative costs and are no longer presented separately on the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense.
As previously As restated
reported
Adjustment
$\u2019000
Revenue
455,944
\u2013
455,944
Cost of sales
(244,986)
(50,024)
(295,010)
Other Operating Costs/Administration Expenses
(57,977)
48,152
(9,825)
Net Finance costs
(11,788)
(2,025)
(13,813)
Foreign exchange
(3,897)
3,897
\u2013
Taxation
(8,770)
\u2013
(8,770)
Profit for the financial year and total comprehensive income for the financial year
128,526
\u2013
128,526
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-380": { "value": "4. Cost and income analysis
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by function
Cost of sales
282,694
295,010
Administrative expenses
9,862
9,825
Total
292,556
304,835
", "dimensions": { "concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-365": { "value": "4. Cost and income analysis
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by function
Cost of sales
282,694
295,010
Administrative expenses
9,862
9,825
Total
292,556
304,835
Expenses by nature can be analysed as follows:
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by nature
Staff costs
55,907
46,712
Repairs and maintenance
43,151
43,208
Power and fuel
43,960
30,400
Freight
27,649
35,394
Distribution costs
5,699
5,215
Other production and operating costs
72,099
69,552
Movement of mineral products inventory
(21,628)
9,346
Depreciation of property, plant and equipment and right-of-use assets
64,596
63,136
Foreign exchange loss
1,123
1,872
Total
292,556
304,835
Mineral products consist of finished products and heavy mineral concentrate as detailed in Note 13. Mineral stock movement in the year was an increase of $21.6 million (2021: $9.3 million decrease). Distribution costs of $5.7 million (2021: $5.2 million) represent the cost of running the Mine\u2019s finished product storage, jetty and marine fleet. Freight costs of $27.6 million (2021: $35.4 million) arise from sales to customers on a CIF or CFR basis. There were no exceptional items within operating profit in 2022 (2021 restated: $nil). The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of sales. In addition, foreign exchange gains and losses have been reclassified to administrative costs and are no longer presented separately on the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense.
As previously As restated
reported
Adjustment
$\u2019000
Revenue
455,944
\u2013
455,944
Cost of sales
(244,986)
(50,024)
(295,010)
Other Operating Costs/Administration Expenses
(57,977)
48,152
(9,825)
Net Finance costs
(11,788)
(2,025)
(13,813)
Foreign exchange
(3,897)
3,897
\u2013
Taxation
(8,770)
\u2013
(8,770)
Profit for the financial year and total comprehensive income for the financial year
128,526
\u2013
128,526
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-350": { "value": "4. Cost and income analysis
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by function
Cost of sales
282,694
295,010
Administrative expenses
9,862
9,825
Total
292,556
304,835
Expenses by nature can be analysed as follows:
Restated
2022 2021
$\u2019000 $\u2019000
Expenses by nature
Staff costs
55,907
46,712
Repairs and maintenance
43,151
43,208
Power and fuel
43,960
30,400
Freight
27,649
35,394
Distribution costs
5,699
5,215
Other production and operating costs
72,099
69,552
Movement of mineral products inventory
(21,628)
9,346
Depreciation of property, plant and equipment and right-of-use assets
64,596
63,136
Foreign exchange loss
1,123
1,872
Total
292,556
304,835
Mineral products consist of finished products and heavy mineral concentrate as detailed in Note 13. Mineral stock movement in the year was an increase of $21.6 million (2021: $9.3 million decrease). Distribution costs of $5.7 million (2021: $5.2 million) represent the cost of running the Mine\u2019s finished product storage, jetty and marine fleet. Freight costs of $27.6 million (2021: $35.4 million) arise from sales to customers on a CIF or CFR basis. There were no exceptional items within operating profit in 2022 (2021 restated: $nil). The 2021 income statement has been restated in order to reclassify freight costs and distribution costs from other operating costs to cost of sales. In addition, foreign exchange gains and losses have been reclassified to administrative costs and are no longer presented separately on the face of the income statement. Management feel these presentational changes more appropriately reflect the nature of each category of expense.
As previously As restated
reported
Adjustment
$\u2019000
Revenue
455,944
\u2013
455,944
Cost of sales
(244,986)
(50,024)
(295,010)
Other Operating Costs/Administration Expenses
(57,977)
48,152
(9,825)
Net Finance costs
(11,788)
(2,025)
(13,813)
Foreign exchange
(3,897)
3,897
\u2013
Taxation
(8,770)
\u2013
(8,770)
Profit for the financial year and total comprehensive income for the financial year
128,526
\u2013
128,526
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-379": { "value": "
As previously As restated
reported
Adjustment
$\u2019000
Revenue
455,944
\u2013
455,944
Cost of sales
(244,986)
(50,024)
(295,010)
Other Operating Costs/Administration Expenses
(57,977)
48,152
(9,825)
Net Finance costs
(11,788)
(2,025)
(13,813)
Foreign exchange
(3,897)
3,897
\u2013
Taxation
(8,770)
\u2013
(8,770)
Profit for the financial year and total comprehensive income for the financial year
128,526
\u2013
128,526
", "dimensions": { "concept": "ifrs-full:DisclosureOfReclassificationsOrChangesInPresentationExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-308": { "value": "
5. Employee benefits
The aggregate payroll costs incurred in respect of employees comprised:
2022 2021
$\u2019000 $\u2019000
Wages and salaries
46,836
40,092
Share-based payments
5,601
3,420
Social insurance costs
2,764
2,597
Retirement benefit costs
706
603
55,907
46,712
Included in the payroll cost above are Executive and Non-Executive Director emoluments (inclusive of share-based payments) of $4.1 million
(2021: $3.5 million).
The Company contributes to a Company pension plan or individual pension schemes on behalf of certain employees. Contributions to the
scheme of $0.7 million (2021: $0.6 million) were charged in the period in which they are payable to the scheme.
The average number of persons employed by the Group (including Executive Directors) in 2022 was 1,662 (2021: 1,551) and is analysed below:
2022 2021
Headcount Headcount
Management and administration
347
331
Operations
1,315
1,220
1,662
1,551
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-351": { "value": "5. Employee benefits The aggregate payroll costs incurred in respect of employees comprised:
2022 2021
$\u2019000 $\u2019000
Wages and salaries
46,836
40,092
Share-based payments
5,601
3,420
Social insurance costs
2,764
2,597
Retirement benefit costs
706
603
55,907
46,712
Included in the payroll cost above are Executive and Non-Executive Director emoluments (inclusive of share-based payments) of $4.1 million
(2021: $3.5 million).
The Company contributes to a Company pension plan or individual pension schemes on behalf of certain employees. Contributions to the scheme of $0.7 million (2021: $0.6 million) were charged in the period in which they are payable to the scheme. The average number of persons employed by the Group (including Executive Directors) in 2022 was 1,662 (2021: 1,551) and is analysed below:
2022 2021
Headcount Headcount
Management and administration
347
331
Operations
1,315
1,220
1,662
1,551
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutEmployeesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-309": { "value": "
6. Share-based payments
Share-based payment expense recognised in the consolidated income statement:
2022 2021
$\u2019000 $\u2019000
Expense arising from the Kenmare Restricted Share Plan
5,601
3,420
The Group, under its incentive plan known as the Kenmare Restricted Share Plan (KRSP), grants equity-settled share-based payments to
employees as part of their remuneration.
In the case of the Executive Directors KRSP awards made prior to 2020 vest, subject to continued employment, 60% on the third anniversary
of grant date, 20% on fourth anniversary, and 20% on fifth anniversary.
The Executive Director awards granted from 2020 onwards vest, subject to continued employment and to the Remuneration Committee\u2019s
assessment against a discretionary underpin, on the third anniversary of grant date. The vested KRSP awards are subject to a two-year
holding period which may extend beyond an Executive Director\u2019s cessation of employment in accordance with the post-employment holding
requirements of the 2020 remuneration policy.
The discretionary underpin contains five core elements which the Remuneration Committee will consider including operational performance,
share price performance, ESG performance, major strategic or project decisions, and the long-term strategic vision for the Company. The
committee has not set fixed, quantitative underpins in respect of these factors. As such, these elements including share price performance
are considered non-market performance conditions and accordingly are not reflected in the grant date fair value. The grant date of awards
containing a discretionary underpin is deemed to occur when a shared understanding of the award is obtained by all parties and this
generally occurs upon the Remuneration Committee\u2019s assessment of the Group\u2019s performance in the year of vesting.
In addition, in the case of Executive Directors, where the annual bonus achieved exceeds 50% of base salary, Executive Directors are granted
restricted shares under the KRSP in respect of the excess outcome above this level. Such restricted shares would not be subject to forfeiture
or the discretionary underpin.
For other Group employees, awards under the KRSP vest, subject to continued employment, on the third anniversary of award.
Number of Number of
shares shares
2022 2021
Awards outstanding at the beginning of the financial year
2,284,429
2,040,151
Awards issued during the financial year
927,832
692,879
Awards exercised during the financial year
(540,973)
(418,997)
Awards forfeited during the financial year
(31,530)
\u2013
Awards cancelled during the financial year
(77,555)
\u2013
Awards lapsed during the financial year
\u2013
(29,604)
Awards outstanding at the end of the financial year
2,562,203
2,284,429
Awards exercisable at the end of the financial year
22,588
56,980
In
awarded is $4.1 million. During the year 203,206 shares were granted in the form of dividend equivalents. The fair value is determined using
2022
, awards in respect of 724,626 shares were granted to employees under the 2022 KRSP award. The estimated fair value of the shares
the share price on the date of the award.
In 2022, awards in respect of 540,973 shares were exercised under the KRSP award. 295,443 awards (2021: Nil) were exercised in equity through shares held by the Kenmare Employee Benefit Trust as described in Note 18. 245,443 awards were settled in cash resulting in a cash outflow of $1.6 million (2021: $2.3 million). ", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-310": { "value": "7. Auditor\u2019s remuneration The analysis of the auditor\u2019s remuneration is as follows:
2022 2021
$\u2019000 $\u2019000
Audit fees
Audit of the Company\u2019s financial statements
18
15
Audit of the Company\u2019s subsidiary undertakings
162
151
Total audit fee
180
166
Non-audit fees
Other assurance services
76
61
Taxation compliance services
10
15
Other non-audit services
11
16
Total non-audit fees
97
92
Total fees
277
258
$116,300
(2021: $94,500) of the total fee was paid to KPMG Dublin and $160,900 (2021: $163,500) of the total fee was paid to KPMG Maputo.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-311": { "value": "
8. Net Finance costs
Restated
2022 2021
$\u2019000 $\u2019000
Finance costs
Interest on bank borrowings
(8,829)
(9,475)
Interest on lease liabilities
(147)
(239)
Factoring and other trade facility fees
(2,218)
(1,431)
Commitment and other fees
(534)
(161)
Unwinding of discount on Mine closure provision
(744)
(747)
Foreign exchange loss
\u2013
(2,025)
Total Finance Costs
(12,472)
(14,078)
Interest earned on bank deposits
657
265
Foreign exchange gain
490
\u2013
Total Finance Income
1,147
265
Net finance costs recognised in profit or loss
(11,325)
(13,813)
All interest has been expensed in the financial year. The Group has classified factoring and other trade facility fees in net cash from operating
activities in the Consolidated Statement of Cashflows.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-366": { "value": "8. Net Finance costs
Restated
2022 2021
$\u2019000 $\u2019000
Finance costs
Interest on bank borrowings
(8,829)
(9,475)
Interest on lease liabilities
(147)
(239)
Factoring and other trade facility fees
(2,218)
(1,431)
Commitment and other fees
(534)
(161)
Unwinding of discount on Mine closure provision
(744)
(747)
Foreign exchange loss
\u2013
(2,025)
Total Finance Costs
(12,472)
(14,078)
Interest earned on bank deposits
657
265
Foreign exchange gain
490
\u2013
Total Finance Income
1,147
265
Net finance costs recognised in profit or loss
(11,325)
(13,813)
All interest has been expensed in the financial year. The Group has classified factoring and other trade facility fees in net cash from operating activities in the Consolidated Statement of Cashflows. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-352": { "value": "8. Net Finance costs
Restated
2022 2021
$\u2019000 $\u2019000
Finance costs
Interest on bank borrowings
(8,829)
(9,475)
Interest on lease liabilities
(147)
(239)
Factoring and other trade facility fees
(2,218)
(1,431)
Commitment and other fees
(534)
(161)
Unwinding of discount on Mine closure provision
(744)
(747)
Foreign exchange loss
\u2013
(2,025)
Total Finance Costs
(12,472)
(14,078)
Interest earned on bank deposits
657
265
Foreign exchange gain
490
\u2013
Total Finance Income
1,147
265
Net finance costs recognised in profit or loss
(11,325)
(13,813)
All interest has been expensed in the financial year. The Group has classified factoring and other trade facility fees in net cash from operating activities in the Consolidated Statement of Cashflows. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-312": { "value": "
9. Income tax expense
2022 2021
$\u2019000 $\u2019000
Corporation tax
16,073
8,770
Deferred tax
\u2013
\u2013
Total
16,073
8,770
Reconciliation of effective tax rate
Profit before tax
222,107
137,296
Profit before tax multiplied by the applicable tax rate (12.5%)
27,763
17,162
Under provision in respect of prior years
546
\u2013
Non-taxable income
(18,120)
(10,826)
Non-deductible expenses
483
331
Differences in effective tax rates on overseas earnings
5,401
2,103
Total
16,073
8,770
During the year, Kenmare Moma Mining (Mauritius) Limited Mozambique Branch had taxable profits of $39.9 million (2021: $16.2 million),
resulting in an income tax expense of $14.5 million (2021: $5.7 million) being recognised. The income tax rate applicable to taxable profits of
KMML Mozambique Branch is 35% (2021: 35%).
Kenmare Moma Mining (Mauritius) Limited Mozambique Branch has elected, and the fiscal regime applicable to mining allows for, the option
to deduct, as an allowable deduction, depreciation of exploration and development expense and capital expenditure over the life of mine. Tax
losses may be carried forward for three years. There are no tax losses carried forward at 31 December 2022.
Kenmare Moma Processing (Mauritius) Limited Mozambique Branch has Industrial Free Zone (IFZ) status. As an IFZ Branch, it is exempted
from corporation taxes and hence its income is non-taxable.
During the year, Kenmare Resources plc had taxable profits of $13.3 million (2021: $32.5 million) as a result of management and
marketing service fee income earned on services provided to subsidiary undertakings, resulting in a corporate tax expense of $1.6 million
(2021: $3.1 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-313": { "value": "
10. Earnings per share
The calculation of the basic and diluted earnings per share attributable to the ordinary equity holders of the Company is based on the
following data:
2022 2021
$\u2019000 $\u2019000
Profit for the financial year attributable to equity holders of the Company
206,034
128,526
2022 2021
Number of Number of
shares shares
Weighted average number of issued ordinary shares for
the purpose of basic earnings per share
94,919,944
108,843,459
Effect of dilutive potential ordinary shares:
Share awards
2,361,819
2,185,857
Weighted average number of ordinary shares for
the purposes of diluted earnings per share
97,281,763
111,029,316
$ per share
$ per share
Basic earnings per share
2.17
1.18
Diluted earnings per share
2.12
1.16
The denominator for the purposes of calculating both basic and diluted earnings per share has been adjusted to reflect shares acquired and
subsequently cancelled during the year.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-314": { "value": "
11. Property, plant and equipment
Plant and Development Construction Other
Equipment Expenditure In Progress Assets Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Cost
At 1 January 2021
995,856
249,971
52,416
63,114
1,361,357
Additions during the financial year
784
\u2013
59,558
\u2013
60,342
Transfer from construction in progress
29,586
8,201
(50,544)
12,757
\u2013
Disposals
(6,557)
\u2013
\u2013
(11,440)
(17,997)
Adjustment to Mine closure cost
(2,240)
\u2013
\u2013
\u2013
(2,240)
At 31 December 2021
1,017,429
258,172
61,430
64,431
1,401,462
Additions during the financial year
252
112
59,261
242
59,867
Transfer from construction in progress
48,233
1,767
(69,918)
19,918
\u2013
Disposals
(10,230)
\u2013
\u2013
(7,201)
(17,431)
Adjustment to Mine closure cost
(20,080)
\u2013
\u2013
\u2013
(20,080)
At 31 December 2022
1,035,604
260,051
50,773
77,390
1,423,818
Accumulated depreciation
At 1 January 2021
232,441
135,153
\u2013
35,255
402,849
Charge for the financial year
44,229
6,336
\u2013
11,487
62,052
Disposals
(6,557)
\u2013
\u2013
(11,440)
(17,997)
At 31 December 2021
270,113
141,489
\u2013
35,302
446,904
Charge for the financial year
44,435
6,379
\u2013
12,772
63,586
Disposals
(10,230)
\u2013
\u2013
(7,201)
(17,431)
At 31 December 2022
304,318
147,868
\u2013
40,873
493,059
Carrying amount
At 31 December 2022
731,286
112,183
50,773
36,517
930,759
At 31 December 2021
747,316
116,683
61,430
29,129
954,558
An adjustment to the Mine closure cost of $20.1 million (2021: $2.2 million) was made during the year as a result of an update in the discount
rate as detailed in Note 21.
At each reporting date, the Group assesses whether there is any indication that property, plant and equipment may be impaired. The Group
considers the relationship between its market capitalisation and its book value, among other factors, when reviewing for indicators for
impairment. As at 31 December 2022, the market capitalisation of the Group was below the book value of net assets, which is considered an
indicator of impairment. The Group carried out an impairment review of property, plant and equipment as at 31 December 2022. As a result
of the review, and given the performance and outlook of the Group, no impairment provision was recognised in the current financial year.
No impairment was recognised in the prior financial year. Given the historic volatility in product pricing and sensitivity analysis of forecast
product pricing, the discount rate and to a lesser extent operating costs, the impairment loss of $64.8 million, which was recognised in the
consolidated statement of comprehensive income in 2014, was not reversed.
The cash-generating unit for the purpose of impairment testing is the Moma Titanium Minerals Mine. The basis on which the Mine is
assessed is its value in use. The cash flow forecast employed for the value in use computation is from a life of mine financial model. The
recoverable amount obtained from the financial model represents the present value of the future discounted pre-tax, pre-finance cash flows
discounted at 14.0% (2021: 10.5%).
Key assumptions include the following: \u2022 The discount rate is based on the Group\u2019s weighted average cost of capital. This rate is a best estimate of the current market assessment of the time value of money and the risks specific to the Mine, taking into consideration country risk, currency risk and price risk. The factors making up the cost of equity, cost of debt and capital structure have changed from the prior year review, to reflect increases in the risk-free rate, resulting in a discount rate of 14.0% (2021: 10.5%). The Group\u2019s estimation of the country risk premium included in the discount rate has remained unchanged from the prior year. The Group does not consider it appropriate to apply the full current country risk premium for Mozambique to the calculation of the Group\u2019s weighted average cost of capital as it believes the specific circumstances which have resulted in the risk premium increase over the past number of years are not relevant to the specific circumstances of the Moma Mine. Hence, country risk premium applicable to the calculation of the cost of equity has been adjusted accordingly. Using a discount rate of 14.0%, the recoverable amount is greater than the carrying amount by $86.9 million (2021: $384.0 million). The discount rate is a significant factor in determining the recoverable amount. A 1.5% increase in the discount rate to 15.5% reduces the recoverable amount by $86.9 million to $nil, assuming all other inputs remain unchanged. The decrease in the recoverable amount from the prior year is a result of decreased cash flows over the life of mine as a result of increased forecast capital and operating costs and an increase in the discount rate from 10.5% to 14.0% \u2022 A Mine plan is based on the Namalope, Nataka, Pilivili and Mualadi proved and probable reserves and resources. Specific resource material is included only where there is a high degree of confidence in its economic extraction. The Mine life assumption of 40 years has not changed from the prior year review. Average annual production is approximately 1.2 million tonnes (2021: 1.2 million tonnes) of ilmenite and co-products zircon, rutile and concentrates over the life of the Mine and remains unchanged from the prior year review. This Mine plan does not include investment in additional mining capacity. Certain minimum stocks of final and intermediate products are assumed to be maintained at period ends. \u2022 Product sales prices are based on contract prices as stipulated in marketing agreements with customers, or where contracts are based on market prices or production is not currently contracted, prices are forecast by the Group taking into account independent titanium mineral sands expertise provided by TiPMC Solutions and management expectations including general inflation of 2% per annum. Forecast prices provided by TiPMC Solutions have been reviewed and found to be consistent with other external sources of information. Average forecast product sales prices have increased over the life of mine from the prior year-end review as a result of revised forecast pricing. A 2.5% reduction in average sales prices over the life of mine reduces the recoverable amount by $86.9 million to $nil, assuming all other inputs remain unchanged. \u2022 Operating costs are based on approved budget costs for 2023 taking into account conservative estimated inflation for 2023. From 2024 onwards, operating costs are escalated by 2% per annum as management expects inflation to normalise and average 2% over the life of mine period. Average forecast operating costs have increased from the prior year-end review as a result of increased production and inflation. Increased costs associated with estimated future power consumption and unit prices for mining in Nataka have also been included in the forecast cashflows. A 5.0% increase in operating costs over the life of mine reduces the recoverable amount by $86.9 million to $nil, assuming all other inputs remain unchanged. \u2022 Whilst the Group has set ambitions to be net zero by 2040, the financial impact is still being assessed as the Group considers how it will work towards meeting this target. As such, estimates and judgements within these financial statements do not consider the expenditure (or any related savings) associated with the Company\u2019s ambition to become net zero nor the financial impact of the climate risks disclosed within the Group\u2019s TCFD reporting as a reliable estimate cannot currently be made. \u2022 Capital costs are based on a life of mine capital plan including inflation at 2% per annum from 2024. Average forecast capital costs have increased and their scheduling has changed from the prior year-end review based on updated sustaining and development capital plans required to maintain the existing plant over the life of mine. A 8.0% increase in capital costs over the life of mine reduces the recoverable amount by $86.9 million to $nil, assuming all other inputs remain unchanged. ", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-315": { "value": "
12. Right-of-use assets and lease liabilities
Plant and Land and
Equipment Buildings Total
$\u2019000 $\u2019000 $\u2019000
Cost
At 1 January 2022
3,319
2,108
5,427
Additions
\u2013
482
482
At 31 December 2022
3,319
2,590
5,909
Accumulated Depreciation
At 1 January 2022
2,489
802
3,291
Depreciation expense
830
180
1,010
At 31 December 2022
3,319
982
4,301
Carrying amount
At 31 December 2022
\u2013
1,608
1,608
At 31 December 2021
830
1,306
2,136
On 1 January 2019, the Group recognised a lease liability of $3.3 million in relation to electricity generators at the Mine. The lease for the
electricity generators was renewed in November 2017 for a five-year period and rental payments were fixed for the five years. The lease
agreement expired in November 2022 and following negotiations the Group completed the acquisition process of the electricity generators
in February 2023.
On 1 January 2019, the Group recognised a lease liability of $1.7 million in respect of the rental of its Irish head office. The lease has a term of
10 years commencing August 2017 and rental payments are fixed for five years. This lease obligation is denominated in Euros.
In February 2019, the Group recognised a lease liability of $0.4 million in respect of its Mozambican country office in Maputo. The lease has
a seven-year term commencing February 2019 and rental payments are fixed for seven years. This lease obligation is denominated in US
Dollars. The Branch has discounted lease payments using its incremental borrowing rates. The weighted average rate applied is 7%.
In December 2022, the Maputo Office lease was modified and remeasured. The lease term was extended to 10 years commencing
1 December 2022. In addition, additional floor space of 250 square meters was leased as an addendum to the existing contract. The Group
has determined that the lease modification should not be accounted for as a separate lease because the lease payments for the new office
space are not considered commensurate with market rentals for office space of that size and characteristic. The incremental borrowing rate
applied to the remeasured lease is 10.2%.
At each reporting date, the Company assesses whether there is any indication that right-of-use assets may be impaired. No impairment
indicators were identified as at 31 December 2022 or 31 December 2021.
The Group has recognised a rental expense of $3.9 million (2021: $9.0 million) in relation to short-term leases of machinery and vehicles
which have not been recognised as a right-of-use asset.
Set out below are the carrying amounts of lease liabilities at each reporting date:
2022 2021
$\u2019000 $\u2019000
Current
245
1,207
Non-current
1,540
971
Total
1,785
2,178
The consolidated income statement includes the following amounts relating to leases: 2022 2021
$\u2019000 $\u2019000
Depreciation expense
1,010
1,084
Interest expense on lease liabilities
147
239
Total
1,157
1,323
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-316": { "value": "
13. Inventories
2022 2021
$\u2019000 $\u2019000
Mineral products
43,655
22,027
Consumable spares
40,516
38,192
84,171
60,219
At 31 December 2022, total final product stock was 213,500 tonnes (2021: 88,700 tonnes). Closing stock of heavy mineral concentrate was
18,800 tonnes (2021: 11,500 tonnes). During the year, inventory amounting to $235.2 million (2021: $246.4 million) was recognised as an
expense in cost of sales.
Net realisable value is determined with reference to forecast prices of finished products expected to be achieved. There is no guarantee
that these prices will be achieved in the future, particularly in weak product markets. During the financial year, there was a write-down of $nil
(2021: $0.5 million) to mineral products charged to cost of sales to value mineral products at net realisable value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-354": { "value": "14. Trade and other receivables
2022 2021
$\u2019000 $\u2019000
Trade receivables
104,970
66,204
VAT receivable
4,527
790
Prepayments
14,521
7,753
124,018
74,747
Further details on trade receivables can be found in Note 24 ", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-317": { "value": "14. Trade and other receivables
2022 2021
$\u2019000 $\u2019000
Trade receivables
104,970
66,204
VAT receivable
4,527
790
Prepayments
14,521
7,753
124,018
74,747
Further details on trade receivables can be found in Note 24 . ", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-318": { "value": "
15. Cash and cash equivalents
2022 2021
$\u2019000 $\u2019000
Bank balances
108,271
69,057
Cash and cash equivalents comprise cash balances held for the purposes of meeting short-term cash commitments and investments
which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Where investments are
categorised as cash equivalents, the related balances have a maturity of three months or less from the date of investment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-319": { "value": "
16. Called-up share capital
2022 2021
\u20ac\u2019000 \u20ac\u2019000
Authorised share capital
181,000,000 ordinary shares of \u20ac0.001 each
181
181
181
181
2022 2021
$\u2019000 $\u2019000
Allotted, called up and fully paid
Opening balance
94,921,970
(2021: 109,736,382) ordinary shares of \u20ac0.001 each
104
120
Acquired and cancelled
92,419
(2021: 14,814,412) ordinary shares of \u20ac0.001 each
\u2013
(16)
Closing balance
94,829,551
(2021:
94,921,970) ordinary shares of \u20ac0.001 each
104
104
Total called-up share capital
104
104
No ordinary shares were issued during the year (2021: $nil).
On 3 October 2022, under the authority granted at the Company\u2019s Annual General Meeting held on 26 May 2022, and in accordance with
Section 1075 of the Companies Act 2014 and article 147 of the Articles of Association, the Company completed an Odd-lot Offer which
involved the acquisition of 92,419 ordinary shares of \u20ac0.001 each in the capital of the Company representing 0.1% of the then called-up share
capital of the Company for a total cash consideration of $0.5 million. The Odd-lot Offer buyback was funded from distributable reserves and
all ordinary shares acquired by the Company were subsequently cancelled. Transaction costs associated with the transaction amounted to
$0.1 million and were accounted for as a deduction from retained earnings.
On 10 December 2021, under the authority granted at the Company\u2019s extraordinary General Meeting held on 9 December 2021, and in
accordance with Section 105(1) and Section 106(1) of the Companies Act 2014 and article 47 and article 48 of the Articles of Association, the
Company completed a tender offer buyback of 14,814,412 ordinary shares of \u20ac0.001 each in the capital of the Company representing 13.5% of
the then called-up share capital of the Company for a total cash consideration of $81.6 million. The tender offer share buyback was funded
from distributable reserves and all ordinary shares acquired by the Company were subsequently cancelled. Transaction costs associated with
the transaction amounted to $1.5 million and were accounted for as a deduction from retained earnings.
17. Share premium
2022 2021
$\u2019000 $\u2019000
Opening balance
545,950
545,950
Shares issued during the year
\u2013
\u2013
Closing balance
545,950
545,950
There were no additions to share premium during the year (2021: $nil).
18. Other reserves
Share-Based
Undenominated Own Payment
Capital Shares Reserve Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Balance at 1 January 2021
226,262
\u2013
5,088
231,350
Recognition of share-based payment expense
\u2013
\u2013
3,420
3,420
Exercise of share-based payment awards
\u2013
\u2013
(2,283)
(2,283)
Unvested and expired share-based payments
\u2013
\u2013
(1,964)
(1,964)
Tender offer share buyback (Note 16)
16
81,589
\u2013
81,605
Cancellation of treasury shares
\u2013
(81,589)
\u2013
(81,589)
Balance at 1 January 2022
226,278
\u2013
4,261
230,539
Recognition of share-based payment expense
\u2013
\u2013
5,601
5,601
Exercise of share-based payment awards
\u2013
(3,363)
(3,363)
Odd-lot Offer share buyback (Note 16)
\u2013
515
\u2013
515
Cancellation of treasury shares
\u2013
(515)
\u2013
(515)
Shares acquired by the Kenmare Employee Benefit Trust
\u2013
(1,797)
\u2013
(1,797)
Shares distributed by the Kenmare Employee Benefit Trust
\u2013
1,779
\u2013
1,779
Balance at 31 December 2022
226,278
(18)
6,499
232,759
Undenominated capital
Undenominated capital consists of the capital conversion reserve fund and the capital redemption reserve fund. The movement in
undenominated capital during the prior year relates to the share buyback as detailed in Note 16.
CAPITAL CONVERSION RESERVE FUND
The capital conversion reserve fund totalling $0.8 million arose from the renominalisation of the Company\u2019s share capital from Irish Punts
to Euros.
CAPITAL REDEMPTION RESERVE FUND
The capital redemption reserve represents the nominal value of share capital repurchased. At 31 December 2022, the reserve balance stands
at $225.5 million (2021: $225.5 million) .
Own Shares Own shares represent shares acquired by the Kenmare Employee Benefit Trust under the terms of the Kenmare Restricted Share Plan and shares acquired by the Company through odd lot and tender offers.
2022 2021
No. of shares No. of shares
At 1 January
\u2013
\u2013
Tender offer share buyback
\u2013
14,814,412
Odd-lot Offer share buyback
92,419
\u2013
Cancellation of treasury shares
(92,419)
(14,814,412)
Shares acquired by the Kenmare Employee Benefit Trust
298,477
\u2013
Shares distributed by the Kenmare Employee Benefit Trust
(295,443)
\u2013
Closing balance
3,034
\u2013
As at 31 December 2022, the nominal value of treasury shares held by the Kenmare Employee Benefit Trust was $0.01 million (2020: $nil). During the year, treasury shares were purchased by the Kenmare Employee Benefit Trust at an average price of $5.84. The number of treasury shares held by the Kenmare Employee Benefit Trust represents 0.003% of the total called up share capital of the Company. Further information on the odd lot buyback and tender offer buyback can be found in Note 16. Share-based payment reserve The share-based payment reserve arises on the grant of shares under the Group share-based payment schemes as detailed in Note 6 . 19. Retained earnings
2022 2021
$\u2019000 $\u2019000
Opening balance
154,050
123,083
Profit for the financial year attributable to equity holders of the Parent
206,034
128,526
Tender offer share buyback (Note 16)
\u2013
(81,589)
Tender offer share buyback transaction costs (Note 16)
\u2013
(1,540)
Odd lot offer share buyback (Note 16)
(515)
\u2013
Odd lot offer share buyback transaction costs (Note 16)
(122)
\u2013
Unvested and expired share-based payments
\u2013
1,964
Dividends paid
(34,726)
(16,394)
Closing balance
324,721
154,050
Retained earnings comprise the accumulated profit and losses in the current and prior financial years net of dividends, share buybacks and related costs, and adjustments relating to the share-based payment reserve. In May 2022, the Company paid a final 2021 dividend of $24.1 million representing USc25.42 per share (2021: USc7.69). In October 2022, the Company paid a 2022 interim dividend of USc10.98 (H1 2021: USc7.29) per ordinary share, totalling $10.6 million.", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-353": { "value": "16. Called-up share capital
2022 2021
\u20ac\u2019000 \u20ac\u2019000
Authorised share capital
181,000,000 ordinary shares of \u20ac0.001 each
181
181
181
181
2022 2021
$\u2019000 $\u2019000
Allotted, called up and fully paid
Opening balance
94,921,970
(2021: 109,736,382) ordinary shares of \u20ac0.001 each
104
120
Acquired and cancelled
92,419
(2021: 14,814,412) ordinary shares of \u20ac0.001 each
\u2013
(16)
Closing balance
94,829,551
(2021:
94,921,970) ordinary shares of \u20ac0.001 each
104
104
Total called-up share capital
104
104
No ordinary shares were issued during the year (2021: $nil). On 3 October 2022, under the authority granted at the Company\u2019s Annual General Meeting held on 26 May 2022, and in accordance with Section 1075 of the Companies Act 2014 and article 147 of the Articles of Association, the Company completed an Odd-lot Offer which involved the acquisition of 92,419 ordinary shares of \u20ac0.001 each in the capital of the Company representing 0.1% of the then called-up share capital of the Company for a total cash consideration of $0.5 million. The Odd-lot Offer buyback was funded from distributable reserves and all ordinary shares acquired by the Company were subsequently cancelled. Transaction costs associated with the transaction amounted to $0.1 million and were accounted for as a deduction from retained earnings. On 10 December 2021, under the authority granted at the Company\u2019s extraordinary General Meeting held on 9 December 2021, and in accordance with Section 105(1) and Section 106(1) of the Companies Act 2014 and article 47 and article 48 of the Articles of Association, the Company completed a tender offer buyback of 14,814,412 ordinary shares of \u20ac0.001 each in the capital of the Company representing 13.5% of the then called-up share capital of the Company for a total cash consideration of $81.6 million. The tender offer share buyback was funded from distributable reserves and all ordinary shares acquired by the Company were subsequently cancelled. Transaction costs associated with the transaction amounted to $1.5 million and were accounted for as a deduction from retained earnings. ", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-355": { "value": "17. Share premium
2022 2021
$\u2019000 $\u2019000
Opening balance
545,950
545,950
Shares issued during the year
\u2013
\u2013
Closing balance
545,950
545,950
There were no additions to share premium during the year (2021: $nil). ", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfSharePremium", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-356": { "value": "18. Other reserves
Share-Based
Undenominated Own Payment
Capital Shares Reserve Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Balance at 1 January 2021
226,262
\u2013
5,088
231,350
Recognition of share-based payment expense
\u2013
\u2013
3,420
3,420
Exercise of share-based payment awards
\u2013
\u2013
(2,283)
(2,283)
Unvested and expired share-based payments
\u2013
\u2013
(1,964)
(1,964)
Tender offer share buyback (Note 16)
16
81,589
\u2013
81,605
Cancellation of treasury shares
\u2013
(81,589)
\u2013
(81,589)
Balance at 1 January 2022
226,278
\u2013
4,261
230,539
Recognition of share-based payment expense
\u2013
\u2013
5,601
5,601
Exercise of share-based payment awards
\u2013
(3,363)
(3,363)
Odd-lot Offer share buyback (Note 16)
\u2013
515
\u2013
515
Cancellation of treasury shares
\u2013
(515)
\u2013
(515)
Shares acquired by the Kenmare Employee Benefit Trust
\u2013
(1,797)
\u2013
(1,797)
Shares distributed by the Kenmare Employee Benefit Trust
\u2013
1,779
\u2013
1,779
Balance at 31 December 2022
226,278
(18)
6,499
232,759
Undenominated capital Undenominated capital consists of the capital conversion reserve fund and the capital redemption reserve fund. The movement in undenominated capital during the prior year relates to the share buyback as detailed in Note 16. CAPITAL CONVERSION RESERVE FUND The capital conversion reserve fund totalling $0.8 million arose from the renominalisation of the Company\u2019s share capital from Irish Punts to Euros. CAPITAL REDEMPTION RESERVE FUND The capital redemption reserve represents the nominal value of share capital repurchased. At 31 December 2022, the reserve balance stands at $225.5 million (2021: $225.5 million) Own Shares Own shares represent shares acquired by the Kenmare Employee Benefit Trust under the terms of the Kenmare Restricted Share Plan and shares acquired by the Company through odd lot and tender offers.
2022 2021
No. of shares No. of shares
At 1 January
\u2013
\u2013
Tender offer share buyback
\u2013
14,814,412
Odd-lot Offer share buyback
92,419
\u2013
Cancellation of treasury shares
(92,419)
(14,814,412)
Shares acquired by the Kenmare Employee Benefit Trust
298,477
\u2013
Shares distributed by the Kenmare Employee Benefit Trust
(295,443)
\u2013
Closing balance
3,034
\u2013
As at 31 December 2022, the nominal value of treasury shares held by the Kenmare Employee Benefit Trust was $0.01 million (2020: $nil). During the year, treasury shares were purchased by the Kenmare Employee Benefit Trust at an average price of $5.84. The number of treasury shares held by the Kenmare Employee Benefit Trust represents 0.003% of the total called up share capital of the Company. Further information on the odd lot buyback and tender offer buyback can be found in Note 16. Share-based payment reserve The share-based payment reserve arises on the grant of shares under the Group share-based payment schemes as detailed in Note 6 ", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfOtherReserves", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-367": { "value": "Own Shares Own shares represent shares acquired by the Kenmare Employee Benefit Trust under the terms of the Kenmare Restricted Share Plan and shares acquired by the Company through odd lot and tender offers.
2022 2021
No. of shares No. of shares
At 1 January
\u2013
\u2013
Tender offer share buyback
\u2013
14,814,412
Odd-lot Offer share buyback
92,419
\u2013
Cancellation of treasury shares
(92,419)
(14,814,412)
Shares acquired by the Kenmare Employee Benefit Trust
298,477
\u2013
Shares distributed by the Kenmare Employee Benefit Trust
(295,443)
\u2013
Closing balance
3,034
\u2013
As at 31 December 2022, the nominal value of treasury shares held by the Kenmare Employee Benefit Trust was $0.01 million (2020: $nil). During the year, treasury shares were purchased by the Kenmare Employee Benefit Trust at an average price of $5.84. The number of treasury shares held by the Kenmare Employee Benefit Trust represents 0.003% of the total called up share capital of the Company. Further information on the odd lot buyback and tender offer buyback can be found in Note 16", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-357": { "value": "19. Retained earnings
2022 2021
$\u2019000 $\u2019000
Opening balance
154,050
123,083
Profit for the financial year attributable to equity holders of the Parent
206,034
128,526
Tender offer share buyback (Note 16)
\u2013
(81,589)
Tender offer share buyback transaction costs (Note 16)
\u2013
(1,540)
Odd lot offer share buyback (Note 16)
(515)
\u2013
Odd lot offer share buyback transaction costs (Note 16)
(122)
\u2013
Unvested and expired share-based payments
\u2013
1,964
Dividends paid
(34,726)
(16,394)
Closing balance
324,721
154,050
Retained earnings comprise the accumulated profit and losses in the current and prior financial years net of dividends, share buybacks and related costs, and adjustments relating to the share-based payment reserve. In May 2022, the Company paid a final 2021 dividend of $24.1 million representing USc25.42 per share (2021: USc7.69). In October 2022, the Company paid a 2022 interim dividend of USc10.98 (H1 2021: USc7.29) per ordinary share, totalling $10.6 million.", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfRetainedEarnings", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-368": { "value": "In May 2022, the Company paid a final 2021 dividend of $24.1 million representing USc25.42 per share (2021: USc7.69). In October 2022, the Company paid a 2022 interim dividend of USc10.98 (H1 2021: USc7.29) per ordinary share, totalling $10.6 million.", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-320": { "value": "
20. Bank loans
2022 2021
$\u2019000 $\u2019000
Borrowings
78,578
148,099
The borrowings are repayable as follows:
Less than one year
33,653
73,342
Between two and five years
47,142
78,572
80,795
151,914
Transaction costs
(2,217)
(3,815)
Total carrying amount
78,578
148,099
Borrowings
On 11 December 2019, the Group entered into debt facilities with Absa Bank Limited (acting through its Corporate and Investment Banking
Division) (\u201cAbsa\u201d), The Emerging Africa Infrastructure Fund (part of the Private Infrastructure Development Group) (\u201cEAIF\u201d), Nedbank
Limited (acting through its Nedbank Corporate and Investment Banking division) (\u201cNedbank\u201d), Rand Merchant Bank and Standard Bank
Group (\u201cStandard Bank\u201d).
The debt facilities comprise a $110 million Term Loan Facility and a $40 million Revolving Credit Facility that share common terms and a
common security package. The finance documentation also accommodates for a Mine Closure Guarantee Facility (provided by either the
existing Lenders or other finance providers) of up to $40 million, with the provider(s) of such a facility sharing in the common security
package. The potential total aggregate principal amount of indebtedness secured under the finance documentation is therefore $190 million.
The transaction costs for arrangement of the debt facilities amounted to $6.5 million.
The Term Loan Facility has a final maturity date of 11 March 2025. As at year end, interest is at LIBOR plus 5.40% per annum. Repayment is in
seven equal semi-annual instalments, beginning 11 March 2022.
On 21 July 2022 the Revolving Credit Facility was extended by 12 months and now has a final maturity date of 11 December 2023, which is
extendable by a further 12 months subject to lender consent. As at year end, interest is at LIBOR plus 4.25% per annum (5.0% up to
11 December 2022).
The Group entered into a Mine closure guarantee facility with Absa Bank Mo\u00e7ambique SA effective from 1 July 2022 for an amount of $18.9 million.
This guarantee shares the security package with the Term Loan Facility and Revolving Credit Facility on a pro rata and pari passu basis.
The security package consists of (a) security over the Group\u2019s bank accounts (subject to certain exceptions), (b) pledges of the shares of
Kenmare Moma Processing (Mauritius) Limited and Kenmare Moma Mining (Mauritius) Limited (the \u201cProject Companies\u201d), (c) security over
intercompany loans, and (d) Mozambican law security interests over certain rights and agreements with Mozambican authorities, including
over the Implementation Agreement, the Mineral Licensing Contract and the Mining Licence.
The carrying amount of the secured bank accounts of the Group was $102.9 million as at 31 December 2022 (2021: $66.9 million). The shares
of the Project Companies and intercompany loans are not included in the consolidated statement of financial position as they are eliminated
on consolidation. They, therefore, do not have a carrying amount but, upon enforcement of the pledges on behalf of the lender group, the
shares in the Project Companies would cease to be owned or controlled by the Group. The secured rights and agreements do not have a
carrying amount. They are, however, necessary for the Project Companies to operate the Mine in Mozambique.
At 31 December 2022, total debt of $78.6 million (2021: $148.1 million) was recognised by the Group. The $40 million revolving credit facility
was repaid in full in February 2022 and a further $20 million was drawn down in September 2022 and subsequently repaid in November 2022.
$31.4 million of principal repayments were made against the term loan over the course of the year. Unamortised transaction costs of
$2.2 million (2021: $3.8 million) plus interest amortised of $2.2 million (2021: $2.0 million) were recognised by the Group at 31 December 2022.
Reconciliation of movements of debt to cash flows arising from financing activities (excluding leases)
2022 2021
$\u2019000 $\u2019000
Bank loans
Balance at 1 January
148,099
145,771
Cash movements
Loan interest paid
(6,921)
(7,147)
Principal paid
(91,429)
(20,000)
Loan drawn down
Non-cash movements
20,000
20,000
Loan interest accrued
8,829
9,475
Balance at 31 December
78,578
148,099
Covenants The finance documents contain a number of representations, covenants and events of default on customary terms, the breach of which could lead to the secured parties under the finance documentation accelerating the outstanding loans and taking other enforcement steps, such as the enforcement of some or all of the security interests, which could lead to, in extremis, the Group losing its interest in the Mine. The most salient of the relevant terms that could lead to acceleration of the loans and/or enforcement of security are the financial covenants. All covenants have been complied with during the year. The key financial covenants are detailed below:
As at As at
31 December 31 December
2022
2021
Covenant
Interest Coverage Ratio
34.96:1
21.8:1
Not less than
4.00:1
Net Debt to EBITDA
(0.09):1
0.38:1
Not greater than
2.00:1
Debt Service Coverage Ratio
3.11:1
22.3:1
Not less than
1.20:1
Liquidity
$148,271,000
$69,057,000
Not less than
$15,000,000
Reserve Tail Ratio
81%
78%
Not less than
30%
The definition of the covenants under the debt facilities are set out below: \u2022 Interest Coverage Ratio is defined as the ratio of EBITDA to Net Interest Cost. \u2022 Net Debt is defined as total financial indebtedness excluding leases less consolidated cash and cash equivalents. \u2022 The Debt Service Coverage Ratio is the ratio of cash and cash equivalents at the beginning of a reporting period plus available facilities plus cash generated in the period to debt repayments in the period. \u2022 Liquidity is defined as consolidated cash and cash equivalents plus undrawn amounts of the Revolving Credit Facility. \u2022 Reserve Tail Ratio means the reserve tail ratio, expressed as a percentage of the termination date reserves (estimated remaining reserves in March 2025) divided by the initial reserves (estimated reserves in December 2019). ", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-369": { "value": "21. Provisions
2022 2021
$\u2019000 $\u2019000
Mine closure provision
16,623
35,959
Mine rehabilitation provision
4,121
3,998
Other provisions
\u2013
2,264
20,744
42,221
Current
998
3,222
Non-current
19,746
38,999
20,744
42,221
Mine Mine
Closure Rehabilitation Other
Provision Provision Provisions Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
At 1 January 2021
37,451
3,893
\u2013
41,344
(Decrease)/increase in provision during the financial year
(2,239)
470
2,264
495
Provision utilised during the financial year
\u2013
(365)
\u2013
(365)
Unwinding of the discount
747
\u2013
\u2013
747
At 1 January 2022
35,959
3,998
2,264
42,221
(Decrease)/Increase in provision during the financial year
(20,080)
4,131
948
(15,001)
Provision utilised during the financial year
\u2013
(4,008)
(3,212)
(7,220)
Unwinding of the discount
744
\u2013
\u2013
744
At 31 December 2022
16,623
4,121
\u2013
20,744
The Mine closure provision represents the Directors\u2019 best estimate of the Project Companies\u2019 liability for close-down, dismantling and restoration of the mining and processing site. A corresponding amount equal to the provision is recognised as part of property, plant and equipment. The costs are estimated on the basis of a formal closure plan, are subject to regular review and are estimated based on the net present value of estimated future costs. Mine closure costs are a normal consequence of mining, and the majority of close-down and restoration expenditure is incurred at the end of the life of the Mine. The unwinding of the discount is recognised as a finance cost and $0.7 million (2021: $0.7 million) has been recognised in the statement of comprehensive income for the financial year. The main assumptions used in the calculation of the estimated future costs include: \u2022 A discount rate of 4.0% (2021: 2.1%); \u2022 An inflation rate of 2% (2021: 2%); \u2022 An estimated life of mine of 40 years (2021: 40 years). It is assumed that all licences and permits required to operate will be renewed or extended during the life of mine; and \u2022 An estimated closure cost of $34.1 million (2021: $34.1 million) and an estimated post-closure monitoring provision of $3.9 million (2021: $3.9 million). The life of mine plan is based on the Namalope, Nataka, Pilivili and Mualadi reserves and resources as set out in the reserve and resources table. Specific resource material is included only where there is a high degree of confidence in its economic extraction. The Mine closure provision has decreased by $20.1 million as a result of a change in the discount rate from 2.1% to 4.0%. The discount rate is a significant factor in determining the Mine closure provision. The discount rate increased to 4.0% (2021: 2.1%) as a result of movements in the US Treasury rates. 30-year US Treasury yields are the longest period for which yields are quoted. A 40-year rate to align with the estimated life of mine has been calculated by taking the average of the increase in yield from 10 to 20 years and the increase in yield from 20 to 30 years and adding this average to the 30-year treasury rate to arrive at an estimated extrapolated rate for 40 years. This discount rate is deemed to provide the best estimate of the current market assessment of the risk-free time value of money. Risks specific to the liability are included in the cost estimate. A reasonable possible increase of 1% in the estimated discount rate results in the Mine closure provision decreasing to $11.2 million. A 1% decrease in the estimated discount rate results in the Mine closure provision increasing to $24.7 million. The Mine rehabilitation provision represents the Directors\u2019 best estimate of the Company\u2019s liability for rehabilitating areas disturbed by mining activities. Rehabilitation costs are recognised based on the area disturbed and estimated cost of rehabilitation per hectare, which is reviewed regularly against actual rehabilitation cost per hectare. Actual rehabilitation expenditure is incurred approximately 12 months after the area has been disturbed. During the financial year, there was a release of $4.0 million (2021: $0.4 million) to reflect the actual Mine rehabilitation costs incurred, and an addition to the provision of $4.1 million (2021: $0.5 million) for areas newly disturbed. Other provisions comprise an amount of $nil (2021: $2.3 million) in relation to a potential indirect tax liability. The matter was resolved following a final settlement of $3.2 million with the Mozambican Tax Authority during the year. ", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-321": { "value": "21. Provisions
2022 2021
$\u2019000 $\u2019000
Mine closure provision
16,623
35,959
Mine rehabilitation provision
4,121
3,998
Other provisions
\u2013
2,264
20,744
42,221
Current
998
3,222
Non-current
19,746
38,999
20,744
42,221
Mine Mine
Closure Rehabilitation Other
Provision Provision Provisions Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
At 1 January 2021
37,451
3,893
\u2013
41,344
(Decrease)/increase in provision during the financial year
(2,239)
470
2,264
495
Provision utilised during the financial year
\u2013
(365)
\u2013
(365)
Unwinding of the discount
747
\u2013
\u2013
747
At 1 January 2022
35,959
3,998
2,264
42,221
(Decrease)/Increase in provision during the financial year
(20,080)
4,131
948
(15,001)
Provision utilised during the financial year
\u2013
(4,008)
(3,212)
(7,220)
Unwinding of the discount
744
\u2013
\u2013
744
At 31 December 2022
16,623
4,121
\u2013
20,744
The Mine closure provision represents the Directors\u2019 best estimate of the Project Companies\u2019 liability for close-down, dismantling and
restoration of the mining and processing site. A corresponding amount equal to the provision is recognised as part of property, plant and
equipment. The costs are estimated on the basis of a formal closure plan, are subject to regular review and are estimated based on the
net present value of estimated future costs. Mine closure costs are a normal consequence of mining, and the majority of close-down and
restoration expenditure is incurred at the end of the life of the Mine. The unwinding of the discount is recognised as a finance cost and
$0.7 million (2021: $0.7 million) has been recognised in the statement of comprehensive income for the financial year.
The main assumptions used in the calculation of the estimated future costs include:
\u2022 A discount rate of 4.0% (2021: 2.1%);
\u2022 An inflation rate of 2% (2021: 2%);
\u2022 An estimated life of mine of 40 years (2021: 40 years). It is assumed that all licences and permits required to operate will be renewed or
extended during the life of mine; and
\u2022 An estimated closure cost of $34.1 million (2021: $34.1 million) and an estimated post-closure monitoring provision of $3.9 million
(2021: $3.9 million).
The life of mine plan is based on the Namalope, Nataka, Pilivili and Mualadi reserves and resources as set out in the reserve and resources
table. Specific resource material is included only where there is a high degree of confidence in its economic extraction. The Mine closure
provision has decreased by $20.1 million as a result of a change in the discount rate from 2.1% to 4.0%.
The discount rate is a significant factor in determining the Mine closure provision. The discount rate increased to 4.0% (2021: 2.1%) as a result
of movements in the US Treasury rates. 30-year US Treasury yields are the longest period for which yields are quoted. A 40-year rate to align
with the estimated life of mine has been calculated by taking the average of the increase in yield from 10 to 20 years and the increase in yield
from 20 to 30 years and adding this average to the 30-year treasury rate to arrive at an estimated extrapolated rate for 40 years. This discount
rate is deemed to provide the best estimate of the current market assessment of the risk-free time value of money. Risks specific to the liability
are included in the cost estimate. A reasonable possible increase of 1% in the estimated discount rate results in the Mine closure provision
decreasing to $11.2 million. A 1% decrease in the estimated discount rate results in the Mine closure provision increasing to $24.7 million.
The Mine rehabilitation provision represents the Directors\u2019 best estimate of the Company\u2019s liability for rehabilitating areas disturbed by
mining activities. Rehabilitation costs are recognised based on the area disturbed and estimated cost of rehabilitation per hectare, which
is reviewed regularly against actual rehabilitation cost per hectare. Actual rehabilitation expenditure is incurred approximately 12 months
after the area has been disturbed. During the financial year, there was a release of $4.0 million (2021: $0.4 million) to reflect the actual Mine
rehabilitation costs incurred, and an addition to the provision of $4.1 million (2021: $0.5 million) for areas newly disturbed.
Other provisions comprise an amount of $nil (2021: $2.3 million) in relation to a potential indirect tax liability. The matter was resolved
following a final settlement of $3.2 million with the Mozambican Tax Authority during the year.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-322": { "value": "
22. Trade and other payables
2022 2021
$\u2019000 $\u2019000
Trade payables
7,305
7,186
Deferred income
2,740
\u2013
Accruals
25,248
25,582
35,293
32,768
Included in accruals at the financial year end is an amount of $1.6 million (2021: $1.6 million) for payroll and social insurance taxes.
Deferred income relates to sales contracts which contain separate performance obligations for the sale of mineral products and the provision
of freight services. The portion of the revenue representing the obligation to perform the freight service is deferred and recognised over time
as the obligation is fulfilled, along with the associated costs.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-381": { "value": "22. Trade and other payables
2022 2021
$\u2019000 $\u2019000
Trade payables
7,305
7,186
Deferred income
2,740
\u2013
Accruals
25,248
25,582
35,293
32,768
Included in accruals at the financial year end is an amount of $1.6 million (2021: $1.6 million) for payroll and social insurance taxes. Deferred income relates to sales contracts which contain separate performance obligations for the sale of mineral products and the provision of freight services. The portion of the revenue representing the obligation to perform the freight service is deferred and recognised over time as the obligation is fulfilled, along with the associated costs. ", "dimensions": { "concept": "ifrs-full:DisclosureOfAccruedExpensesAndOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-323": { "value": "
23. Current tax liabilities
2022 2021
$\u2019000 $\u2019000
Current tax liabilities
8,893
4,808
Refer to Note 9 for further information on the Group\u2019s tax expense.
", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfCurrentTaxLiabilities", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-370": { "value": "23. Current tax liabilities
2022 2021
$\u2019000 $\u2019000
Current tax liabilities
8,893
4,808
Refer to Note 9 for further information on the Group\u2019s tax expense. ", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-324": { "value": "
24. Financial instruments
2022
2021
Carrying Carrying
amount Fair value amount Fair value
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Financial assets at fair value through
profit and loss
Trade receivables
31,188
31,188
Level 2
37,086
37,086
Level 2
Financial assets at fair value
through OCI
Trade receivables
43,065
43,065
Level 2
14,539
14,539
Level 2
Financial assets not measured
at fair value
Trade receivables
30,717
30,717
Level 2
14,579
14,579
Level 2
Cash and cash equivalents
108,271
108,271
Level 2
69,057
69,057
Level 2
213,241
213,241
135,261
135,261
Financial liabilities not measured
at fair value
Bank loans
78,578
80,795
Level 2
148,099
148,827
Level 2
1
2
3
1
Relates to trade receivables which will be discounted through the Barclay\u2019s Bank facility.
2
Relates to trade receivables which may be factored through the Absa facility.
3
Relates to trade receivables which will not be discounted or factored.
The carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy are detailed above.
The table does not include fair value information for other receivables, prepayments, trade payables and accruals as these are not measured
at fair value as the carrying amount is a reasonable approximation of their fair value.
Trade receivables which are factored through the Absa Bank facility or letters of credit which are discounted through the Barclays Bank
facility are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters
of credit where it is not known at initial recognition if they will be factored are classified as fair value through other comprehensive income
(FVOCI). Trade receivables which will not be factored and for which balances will be recovered under the sale contract credit terms are
classified and subsequently measured at amortised cost.
In the case of factored receivables, the Group derecognises the discounted receivable to which the arrangement applies when payment
is received from the bank as the terms of the arrangement are non-recourse. The payment to the bank by the Group\u2019s customers are
considered non-cash transactions for the purposes of the consolidated statement of cashflows
The valuation technique used in measuring Level 2 fair values is discounted cash flows, which considers the expected receipts or payments discounted using adjusted market discount rates or where these rates are not available estimated discount rates. The Group has exposure to credit risk, liquidity risk and market risk arising from financial instruments. Risk management framework The Board is ultimately responsible for risk management within the Group. It has delegated responsibility for the monitoring of the effectiveness of the Group\u2019s risk management and internal control systems to the Audit & Risk Committee. The Board and Audit & Risk Committee receive reports from Executive management on the key risks to the business and the steps being taken to mitigate such risks. The Audit & Risk Committee is assisted in its role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit & Risk Committee. Credit risk Credit risk is the risk of financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s trade receivables from customers. The carrying amount of financial assets represents the maximum credit exposure. The Group\u2019s exposure to credit risk is influenced by the individual circumstances of each customer. The Group also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Group reduces its exposure to customers perceived to have a higher credit risk through a letter of credit trade facility. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The Group\u2019s customers have been transacting with the Group for a significant number of years, and no customers\u2019 balances have been written off or are credit impaired at the financial year end. In monitoring customer credit risk, customers are regularly reviewed individually and the Group has not identified any factors that would merit reducing exposure to any particular customer. The Group does not require collateral in respect of trade receivables. The gross exposure to credit risk for trade receivables by geographic region was as follows:
2022 2021
$\u2019000 $\u2019000
China
19,009
37,120
Asia (excluding China)
17,243
5,127
Europe
45,806
15,410
USA
22,776
8,547
Africa
136
\u2013
Total
104,970
66,204
At 31 December 2022, $35.4 million (2021: $41.3 million) is due from the Group\u2019s three largest customers. A summary of the Group\u2019s exposure to credit risk for trade receivables is as follows:
2022 2021
$\u2019000 $\u2019000
External credit ratings at least Baa3 (Moody\u2019s)
31,188
37,535
External credit ratings Ba3 to Ba1 (Moody\u2019s)
\u2013
19,051
Other
75,316
10,042
Total gross carrying amount
106,504
66,628
Loss allowance
(1,534)
(424)
Total
104,970
66,204
The following table provides ageing information relevant to the exposure to credit risk for trade receivables from individual customers. No balances were considered credit impaired at 31 December 2022 or 31 December 2021. Current $\u2019000
More than More than More than
30 days 60 days 90 days
past due past due past due Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
2022
104,962
\u2013
\u2013
8
104,970
2021
66,133
\u2013
\u2013
71
66,204
Expected credit loss assessment of trade receivables For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, financial statements and available market information about customers) and applying experienced credit judgement. The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s) long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating. At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled in cash payments. The Group\u2019s objective when managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due. The Group monitors Mine payment forecasts, both operating and capital, which assist it in monitoring cash flow requirements and optimising its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities. The Group monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade and other payables. The Group has a trade finance facility with Absa Bank for three of the Group\u2019s largest customers. In accordance with this facility, the bank purchases certain customers\u2019 receivables without recourse. The facility is for a maximum amount of $30 million with limits on the maximum amount that can be factored for each of the customers named in the facility. During the period, no trade receivables were factored under this agreement. At the year end, trade receivables amounting to $43.1 million (2021: $14.5 million) may be factored under this facility and are therefore included in trade receivables measured at fair value through OCI as at 31 December 2022. The cost of this facility for the period, which amounted to $0.2 million (2021: $0.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The Group has a trade facility with Barclays Bank for customers which it sells to under letter of credit terms. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. Barclays Bank can also discount these letters of credit thereby providing early payment of receivables to the Group. There is no limit under the Barclays Bank facility. During the period, trade receivables of $201.4 million (2021: $224.4 million) were discounted under this facility. At the year end, there were $31.2 million (2021: $37.1 million) of trade receivables which will be discounted under this facility. The cost of this facility for the period, which amounted to $2.0 million (2021: $1.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2022 based on the gross contractual undiscounted payments: Financial liabilities
Between
Less than two and five More than
Total one year years five years
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
89,536
38,005
51,531
\u2013
Lease liabilities
2,409
390
1,447
572
Trade and other payables
32,553
32,553
\u2013
\u2013
124,498
70,948
52,978
572
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2021 based on the gross contractual undiscounted payments:
Between
Less than two and five More than
Total one year years five years
Financial liabilities $\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
151,914
73,342
78,572
\u2013
Lease liabilities
2,684
1,207
1,317
160
Trade and other payables
32,768
32,768
\u2013
\u2013
187,366
107,317
79,889
160
As disclosed in Note 20, the Group has bank loans that contain loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Under the loan agreement, the covenants are monitored on a regular basis by Group finance and regularly reported to management and the Lenders to ensure compliance with the agreement. Furthermore, the Group has authorised and committed expenditure on operations-related capital projects amounting to $11.5 million (2021: $18.9 million) as disclosed in Note 26. Risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group\u2019s performance to developments affecting a particular industry. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Details of concentration of revenue are included in Note 2. Market risk Market risk is risk that changes in market prices, foreign exchange rates and interest rates will affect the Group\u2019s income statement. The objective of market risk management is to manage and control market risk exposures while optimising returns. Currency risk The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional currency of all Group entities is US Dollars. The presentational currency of the Group is US Dollars. Sales and bank loans are denominated in US Dollars, which significantly reduces the exposure of the Group to foreign currency risk. Payable transactions are denominated in Mozambican Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi. Exposure to currency risk The Group\u2019s gross exposure to currency risk as at 31 December 2022 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
12,172
756
489
72
88
\u2013
Cash and cash equivalents
1,397
12,894
892
1,129
17
34
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,255)
\u2013
\u2013
\u2013
Trade and other payables
(20,367)
(2,178)
(502)
(10)
\u2013
\u2013
Net exposure
(6,798)
11,472
(376)
1,191
105
34
The Group\u2019s exposure to currency risk as at 31 December 2021 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
2,717
1,275
928
55
364
\u2013
Cash and cash equivalents
1,030
2,337
479
338
6
36
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,528)
\u2013
\u2013
\u2013
Trade and other payables
(14,082)
(1,905)
(2,395)
(35)
(68)
\u2013
Net exposure
(10,335)
1,707
(2,516)
358
302
36
Sensitivity analysis A reasonably possible strengthening or weakening of the Mozambique Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi by 10% against the US Dollar would have affected profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant. Profit or loss
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
31 December 2022
Strengthening
(680)
1,147
(38)
119
11
3
Weakening
680
(1,147)
38
(119)
(11)
(3)
31 December 2021
Strengthening
(1,030)
170
(250)
40
30
4
Weakening
1,030
(170)
250
(40)
(30)
(4)
Interest rate risk The loan facilities are arranged at variable rates and expose the Group to cash flow interest rate risk. Variable rates are based on six-month LIBOR. The borrowing rate at financial year end was 9.2% (2021: 5.8%). The interest rate profile of the Group\u2019s loan balances at the financial year end was as follows:
2022 2021
$\u2019000 $\u2019000
Variable rate debt
80,795
151,914
Under the assumption that all other variables remain constant, a reasonable possible change of 1% in the six-month LIBOR rate results in a $0.8 million (2021: $1.5 million) change in finance costs for the financial year. The above sensitivity analyses are estimates of the impact of market risks assuming the specified change occurs. Actual results in the future may differ materially from these results due to developments in the global financial markets, which may cause fluctuations in interest rates to vary from the assumptions made above and therefore should not be considered a projection of likely future events. Interest rate benchmark reform A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d), including LIBOR (the London Interbank Offered Rate). The Group had, at the reporting date, exposure to US LIBOR on its debt facilities. Pursuant to an Amendment and Restatement Agreement entered into on 9 March 2023 in respect of the Group\u2019s debt facilities, the basis on which interest is calculated in respect of those facilities were amended with effect from 11 March 2023. As a result of the amendment, interest rates for interest periods commencing from 11 March 2023 onwards are no longer determined by reference to US LIBOR; instead they are determined on the basis of the applicable Term SOFR Rate. While US LIBOR represented an inter-bank lending rate, Term SOFR is a published screen rate derived from SOFR, being the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York. As SOFR represents a risk-free rate, a credit adjustment spread is applied in addition, which spread varies according to the length of the relevant interest period. The six-month SOFR rate set on 11 March 2023 relating to the next interest period to 11 September 2023 was 5.4%. The credit adjustment spread of 0.4% plus the margin of 5.4% results in an interest rate of 11.2% on the Term Loan. The Group has concluded that the new basis for determining cashflows is economically equivalent to the previous basis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-386": { "value": "24. Financial instruments
2022
2021
Carrying Carrying
amount Fair value amount Fair value
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Financial assets at fair value through
profit and loss
Trade receivables
31,188
31,188
Level 2
37,086
37,086
Level 2
Financial assets at fair value
through OCI
Trade receivables
43,065
43,065
Level 2
14,539
14,539
Level 2
Financial assets not measured
at fair value
Trade receivables
30,717
30,717
Level 2
14,579
14,579
Level 2
Cash and cash equivalents
108,271
108,271
Level 2
69,057
69,057
Level 2
213,241
213,241
135,261
135,261
Financial liabilities not measured
at fair value
Bank loans
78,578
80,795
Level 2
148,099
148,827
Level 2
1 2 3 1 Relates to trade receivables which will be discounted through the Barclay\u2019s Bank facility. 2 Relates to trade receivables which may be factored through the Absa facility. 3 Relates to trade receivables which will not be discounted or factored. The carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy are detailed above. The table does not include fair value information for other receivables, prepayments, trade payables and accruals as these are not measured at fair value as the carrying amount is a reasonable approximation of their fair value. Trade receivables which are factored through the Absa Bank facility or letters of credit which are discounted through the Barclays Bank facility are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored are classified as fair value through other comprehensive income (FVOCI). Trade receivables which will not be factored and for which balances will be recovered under the sale contract credit terms are classified and subsequently measured at amortised cost. In the case of factored receivables, the Group derecognises the discounted receivable to which the arrangement applies when payment is received from the bank as the terms of the arrangement are non-recourse. The payment to the bank by the Group\u2019s customers are considered non-cash transactions for the purposes of the consolidated statement of cashflows The valuation technique used in measuring Level 2 fair values is discounted cash flows, which considers the expected receipts or payments discounted using adjusted market discount rates or where these rates are not available estimated discount rates. The Group has exposure to credit risk, liquidity risk and market risk arising from financial instruments. Risk management framework The Board is ultimately responsible for risk management within the Group. It has delegated responsibility for the monitoring of the effectiveness of the Group\u2019s risk management and internal control systems to the Audit & Risk Committee. The Board and Audit & Risk Committee receive reports from Executive management on the key risks to the business and the steps being taken to mitigate such risks. The Audit & Risk Committee is assisted in its role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit & Risk Committee. Credit risk Credit risk is the risk of financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s trade receivables from customers. The carrying amount of financial assets represents the maximum credit exposure. The Group\u2019s exposure to credit risk is influenced by the individual circumstances of each customer. The Group also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Group reduces its exposure to customers perceived to have a higher credit risk through a letter of credit trade facility. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The Group\u2019s customers have been transacting with the Group for a significant number of years, and no customers\u2019 balances have been written off or are credit impaired at the financial year end. In monitoring customer credit risk, customers are regularly reviewed individually and the Group has not identified any factors that would merit reducing exposure to any particular customer. The Group does not require collateral in respect of trade receivables. The gross exposure to credit risk for trade receivables by geographic region was as follows:
2022 2021
$\u2019000 $\u2019000
China
19,009
37,120
Asia (excluding China)
17,243
5,127
Europe
45,806
15,410
USA
22,776
8,547
Africa
136
\u2013
Total
104,970
66,204
At 31 December 2022, $35.4 million (2021: $41.3 million) is due from the Group\u2019s three largest customers. A summary of the Group\u2019s exposure to credit risk for trade receivables is as follows:
2022 2021
$\u2019000 $\u2019000
External credit ratings at least Baa3 (Moody\u2019s)
31,188
37,535
External credit ratings Ba3 to Ba1 (Moody\u2019s)
\u2013
19,051
Other
75,316
10,042
Total gross carrying amount
106,504
66,628
Loss allowance
(1,534)
(424)
Total
104,970
66,204
The following table provides ageing information relevant to the exposure to credit risk for trade receivables from individual customers. No balances were considered credit impaired at 31 December 2022 or 31 December 2021. Current $\u2019000
More than More than More than
30 days 60 days 90 days
past due past due past due Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
2022
104,962
\u2013
\u2013
8
104,970
2021
66,133
\u2013
\u2013
71
66,204
Expected credit loss assessment of trade receivables For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, financial statements and available market information about customers) and applying experienced credit judgement. The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s) long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating. At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled in cash payments. The Group\u2019s objective when managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due. The Group monitors Mine payment forecasts, both operating and capital, which assist it in monitoring cash flow requirements and optimising its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities. The Group monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade and other payables. The Group has a trade finance facility with Absa Bank for three of the Group\u2019s largest customers. In accordance with this facility, the bank purchases certain customers\u2019 receivables without recourse. The facility is for a maximum amount of $30 million with limits on the maximum amount that can be factored for each of the customers named in the facility. During the period, no trade receivables were factored under this agreement. At the year end, trade receivables amounting to $43.1 million (2021: $14.5 million) may be factored under this facility and are therefore included in trade receivables measured at fair value through OCI as at 31 December 2022. The cost of this facility for the period, which amounted to $0.2 million (2021: $0.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The Group has a trade facility with Barclays Bank for customers which it sells to under letter of credit terms. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. Barclays Bank can also discount these letters of credit thereby providing early payment of receivables to the Group. There is no limit under the Barclays Bank facility. During the period, trade receivables of $201.4 million (2021: $224.4 million) were discounted under this facility. At the year end, there were $31.2 million (2021: $37.1 million) of trade receivables which will be discounted under this facility. The cost of this facility for the period, which amounted to $2.0 million (2021: $1.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2022 based on the gross contractual undiscounted payments: Financial liabilities
Between
Less than two and five More than
Total one year years five years
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
89,536
38,005
51,531
\u2013
Lease liabilities
2,409
390
1,447
572
Trade and other payables
32,553
32,553
\u2013
\u2013
124,498
70,948
52,978
572
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2021 based on the gross contractual undiscounted payments:
Between
Less than two and five More than
Total one year years five years
Financial liabilities $\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
151,914
73,342
78,572
\u2013
Lease liabilities
2,684
1,207
1,317
160
Trade and other payables
32,768
32,768
\u2013
\u2013
187,366
107,317
79,889
160
As disclosed in Note 20, the Group has bank loans that contain loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Under the loan agreement, the covenants are monitored on a regular basis by Group finance and regularly reported to management and the Lenders to ensure compliance with the agreement. Furthermore, the Group has authorised and committed expenditure on operations-related capital projects amounting to $11.5 million (2021: $18.9 million) as disclosed in Note 26. Risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group\u2019s performance to developments affecting a particular industry. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Details of concentration of revenue are included in Note 2. Market risk Market risk is risk that changes in market prices, foreign exchange rates and interest rates will affect the Group\u2019s income statement. The objective of market risk management is to manage and control market risk exposures while optimising returns. Currency risk The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional currency of all Group entities is US Dollars. The presentational currency of the Group is US Dollars. Sales and bank loans are denominated in US Dollars, which significantly reduces the exposure of the Group to foreign currency risk. Payable transactions are denominated in Mozambican Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi. Exposure to currency risk The Group\u2019s gross exposure to currency risk as at 31 December 2022 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
12,172
756
489
72
88
\u2013
Cash and cash equivalents
1,397
12,894
892
1,129
17
34
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,255)
\u2013
\u2013
\u2013
Trade and other payables
(20,367)
(2,178)
(502)
(10)
\u2013
\u2013
Net exposure
(6,798)
11,472
(376)
1,191
105
34
The Group\u2019s exposure to currency risk as at 31 December 2021 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
2,717
1,275
928
55
364
\u2013
Cash and cash equivalents
1,030
2,337
479
338
6
36
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,528)
\u2013
\u2013
\u2013
Trade and other payables
(14,082)
(1,905)
(2,395)
(35)
(68)
\u2013
Net exposure
(10,335)
1,707
(2,516)
358
302
36
Sensitivity analysis A reasonably possible strengthening or weakening of the Mozambique Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi by 10% against the US Dollar would have affected profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant. Profit or loss
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
31 December 2022
Strengthening
(680)
1,147
(38)
119
11
3
Weakening
680
(1,147)
38
(119)
(11)
(3)
31 December 2021
Strengthening
(1,030)
170
(250)
40
30
4
Weakening
1,030
(170)
250
(40)
(30)
(4)
Interest rate risk The loan facilities are arranged at variable rates and expose the Group to cash flow interest rate risk. Variable rates are based on six-month LIBOR. The borrowing rate at financial year end was 9.2% (2021: 5.8%). The interest rate profile of the Group\u2019s loan balances at the financial year end was as follows:
2022 2021
$\u2019000 $\u2019000
Variable rate debt
80,795
151,914
Under the assumption that all other variables remain constant, a reasonable possible change of 1% in the six-month LIBOR rate results in a $0.8 million (2021: $1.5 million) change in finance costs for the financial year. The above sensitivity analyses are estimates of the impact of market risks assuming the specified change occurs. Actual results in the future may differ materially from these results due to developments in the global financial markets, which may cause fluctuations in interest rates to vary from the assumptions made above and therefore should not be considered a projection of likely future events. Interest rate benchmark reform A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d), including LIBOR (the London Interbank Offered Rate). The Group had, at the reporting date, exposure to US LIBOR on its debt facilities. Pursuant to an Amendment and Restatement Agreement entered into on 9 March 2023 in respect of the Group\u2019s debt facilities, the basis on which interest is calculated in respect of those facilities were amended with effect from 11 March 2023. As a result of the amendment, interest rates for interest periods commencing from 11 March 2023 onwards are no longer determined by reference to US LIBOR; instead they are determined on the basis of the applicable Term SOFR Rate. While US LIBOR represented an inter-bank lending rate, Term SOFR is a published screen rate derived from SOFR, being the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York. As SOFR represents a risk-free rate, a credit adjustment spread is applied in addition, which spread varies according to the length of the relevant interest period. The six-month SOFR rate set on 11 March 2023 relating to the next interest period to 11 September 2023 was 5.4%. The credit adjustment spread of 0.4% plus the margin of 5.4% results in an interest rate of 11.2% on the Term Loan. The Group has concluded that the new basis for determining cashflows is economically equivalent to the previous basis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-384": { "value": "24. Financial instruments
2022
2021
Carrying Carrying
amount Fair value amount Fair value
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Financial assets at fair value through
profit and loss
Trade receivables
31,188
31,188
Level 2
37,086
37,086
Level 2
Financial assets at fair value
through OCI
Trade receivables
43,065
43,065
Level 2
14,539
14,539
Level 2
Financial assets not measured
at fair value
Trade receivables
30,717
30,717
Level 2
14,579
14,579
Level 2
Cash and cash equivalents
108,271
108,271
Level 2
69,057
69,057
Level 2
213,241
213,241
135,261
135,261
Financial liabilities not measured
at fair value
Bank loans
78,578
80,795
Level 2
148,099
148,827
Level 2
1 2 3 1 Relates to trade receivables which will be discounted through the Barclay\u2019s Bank facility. 2 Relates to trade receivables which may be factored through the Absa facility. 3 Relates to trade receivables which will not be discounted or factored. The carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy are detailed above. The table does not include fair value information for other receivables, prepayments, trade payables and accruals as these are not measured at fair value as the carrying amount is a reasonable approximation of their fair value. Trade receivables which are factored through the Absa Bank facility or letters of credit which are discounted through the Barclays Bank facility are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored are classified as fair value through other comprehensive income (FVOCI). Trade receivables which will not be factored and for which balances will be recovered under the sale contract credit terms are classified and subsequently measured at amortised cost. In the case of factored receivables, the Group derecognises the discounted receivable to which the arrangement applies when payment is received from the bank as the terms of the arrangement are non-recourse. The payment to the bank by the Group\u2019s customers are considered non-cash transactions for the purposes of the consolidated statement of cashflows The valuation technique used in measuring Level 2 fair values is discounted cash flows, which considers the expected receipts or payments discounted using adjusted market discount rates or where these rates are not available estimated discount rates. The Group has exposure to credit risk, liquidity risk and market risk arising from financial instruments. Risk management framework The Board is ultimately responsible for risk management within the Group. It has delegated responsibility for the monitoring of the effectiveness of the Group\u2019s risk management and internal control systems to the Audit & Risk Committee. The Board and Audit & Risk Committee receive reports from Executive management on the key risks to the business and the steps being taken to mitigate such risks. The Audit & Risk Committee is assisted in its role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit & Risk Committee. Credit risk Credit risk is the risk of financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s trade receivables from customers. The carrying amount of financial assets represents the maximum credit exposure. The Group\u2019s exposure to credit risk is influenced by the individual circumstances of each customer. The Group also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Group reduces its exposure to customers perceived to have a higher credit risk through a letter of credit trade facility. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The Group\u2019s customers have been transacting with the Group for a significant number of years, and no customers\u2019 balances have been written off or are credit impaired at the financial year end. In monitoring customer credit risk, customers are regularly reviewed individually and the Group has not identified any factors that would merit reducing exposure to any particular customer. The Group does not require collateral in respect of trade receivables. The gross exposure to credit risk for trade receivables by geographic region was as follows:
2022 2021
$\u2019000 $\u2019000
China
19,009
37,120
Asia (excluding China)
17,243
5,127
Europe
45,806
15,410
USA
22,776
8,547
Africa
136
\u2013
Total
104,970
66,204
At 31 December 2022, $35.4 million (2021: $41.3 million) is due from the Group\u2019s three largest customers. A summary of the Group\u2019s exposure to credit risk for trade receivables is as follows:
2022 2021
$\u2019000 $\u2019000
External credit ratings at least Baa3 (Moody\u2019s)
31,188
37,535
External credit ratings Ba3 to Ba1 (Moody\u2019s)
\u2013
19,051
Other
75,316
10,042
Total gross carrying amount
106,504
66,628
Loss allowance
(1,534)
(424)
Total
104,970
66,204
The following table provides ageing information relevant to the exposure to credit risk for trade receivables from individual customers. No balances were considered credit impaired at 31 December 2022 or 31 December 2021. Current $\u2019000
More than More than More than
30 days 60 days 90 days
past due past due past due Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
2022
104,962
\u2013
\u2013
8
104,970
2021
66,133
\u2013
\u2013
71
66,204
Expected credit loss assessment of trade receivables For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, financial statements and available market information about customers) and applying experienced credit judgement. The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s) long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating. At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled in cash payments. The Group\u2019s objective when managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due. The Group monitors Mine payment forecasts, both operating and capital, which assist it in monitoring cash flow requirements and optimising its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities. The Group monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade and other payables. The Group has a trade finance facility with Absa Bank for three of the Group\u2019s largest customers. In accordance with this facility, the bank purchases certain customers\u2019 receivables without recourse. The facility is for a maximum amount of $30 million with limits on the maximum amount that can be factored for each of the customers named in the facility. During the period, no trade receivables were factored under this agreement. At the year end, trade receivables amounting to $43.1 million (2021: $14.5 million) may be factored under this facility and are therefore included in trade receivables measured at fair value through OCI as at 31 December 2022. The cost of this facility for the period, which amounted to $0.2 million (2021: $0.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The Group has a trade facility with Barclays Bank for customers which it sells to under letter of credit terms. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. Barclays Bank can also discount these letters of credit thereby providing early payment of receivables to the Group. There is no limit under the Barclays Bank facility. During the period, trade receivables of $201.4 million (2021: $224.4 million) were discounted under this facility. At the year end, there were $31.2 million (2021: $37.1 million) of trade receivables which will be discounted under this facility. The cost of this facility for the period, which amounted to $2.0 million (2021: $1.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2022 based on the gross contractual undiscounted payments: Financial liabilities
Between
Less than two and five More than
Total one year years five years
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
89,536
38,005
51,531
\u2013
Lease liabilities
2,409
390
1,447
572
Trade and other payables
32,553
32,553
\u2013
\u2013
124,498
70,948
52,978
572
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2021 based on the gross contractual undiscounted payments:
Between
Less than two and five More than
Total one year years five years
Financial liabilities $\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
151,914
73,342
78,572
\u2013
Lease liabilities
2,684
1,207
1,317
160
Trade and other payables
32,768
32,768
\u2013
\u2013
187,366
107,317
79,889
160
As disclosed in Note 20, the Group has bank loans that contain loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Under the loan agreement, the covenants are monitored on a regular basis by Group finance and regularly reported to management and the Lenders to ensure compliance with the agreement. Furthermore, the Group has authorised and committed expenditure on operations-related capital projects amounting to $11.5 million (2021: $18.9 million) as disclosed in Note 26. Risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group\u2019s performance to developments affecting a particular industry. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Details of concentration of revenue are included in Note 2. Market risk Market risk is risk that changes in market prices, foreign exchange rates and interest rates will affect the Group\u2019s income statement. The objective of market risk management is to manage and control market risk exposures while optimising returns. Currency risk The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional currency of all Group entities is US Dollars. The presentational currency of the Group is US Dollars. Sales and bank loans are denominated in US Dollars, which significantly reduces the exposure of the Group to foreign currency risk. Payable transactions are denominated in Mozambican Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi. Exposure to currency risk The Group\u2019s gross exposure to currency risk as at 31 December 2022 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
12,172
756
489
72
88
\u2013
Cash and cash equivalents
1,397
12,894
892
1,129
17
34
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,255)
\u2013
\u2013
\u2013
Trade and other payables
(20,367)
(2,178)
(502)
(10)
\u2013
\u2013
Net exposure
(6,798)
11,472
(376)
1,191
105
34
The Group\u2019s exposure to currency risk as at 31 December 2021 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
2,717
1,275
928
55
364
\u2013
Cash and cash equivalents
1,030
2,337
479
338
6
36
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,528)
\u2013
\u2013
\u2013
Trade and other payables
(14,082)
(1,905)
(2,395)
(35)
(68)
\u2013
Net exposure
(10,335)
1,707
(2,516)
358
302
36
Sensitivity analysis A reasonably possible strengthening or weakening of the Mozambique Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi by 10% against the US Dollar would have affected profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant. Profit or loss
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
31 December 2022
Strengthening
(680)
1,147
(38)
119
11
3
Weakening
680
(1,147)
38
(119)
(11)
(3)
31 December 2021
Strengthening
(1,030)
170
(250)
40
30
4
Weakening
1,030
(170)
250
(40)
(30)
(4)
Interest rate risk The loan facilities are arranged at variable rates and expose the Group to cash flow interest rate risk. Variable rates are based on six-month LIBOR. The borrowing rate at financial year end was 9.2% (2021: 5.8%). The interest rate profile of the Group\u2019s loan balances at the financial year end was as follows:
2022 2021
$\u2019000 $\u2019000
Variable rate debt
80,795
151,914
Under the assumption that all other variables remain constant, a reasonable possible change of 1% in the six-month LIBOR rate results in a $0.8 million (2021: $1.5 million) change in finance costs for the financial year. The above sensitivity analyses are estimates of the impact of market risks assuming the specified change occurs. Actual results in the future may differ materially from these results due to developments in the global financial markets, which may cause fluctuations in interest rates to vary from the assumptions made above and therefore should not be considered a projection of likely future events. Interest rate benchmark reform A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d), including LIBOR (the London Interbank Offered Rate). The Group had, at the reporting date, exposure to US LIBOR on its debt facilities. Pursuant to an Amendment and Restatement Agreement entered into on 9 March 2023 in respect of the Group\u2019s debt facilities, the basis on which interest is calculated in respect of those facilities were amended with effect from 11 March 2023. As a result of the amendment, interest rates for interest periods commencing from 11 March 2023 onwards are no longer determined by reference to US LIBOR; instead they are determined on the basis of the applicable Term SOFR Rate. While US LIBOR represented an inter-bank lending rate, Term SOFR is a published screen rate derived from SOFR, being the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York. As SOFR represents a risk-free rate, a credit adjustment spread is applied in addition, which spread varies according to the length of the relevant interest period. The six-month SOFR rate set on 11 March 2023 relating to the next interest period to 11 September 2023 was 5.4%. The credit adjustment spread of 0.4% plus the margin of 5.4% results in an interest rate of 11.2% on the Term Loan. The Group has concluded that the new basis for determining cashflows is economically equivalent to the previous basis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-358": { "value": "
2022
2021
Carrying Carrying
amount Fair value amount Fair value
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Financial assets at fair value through
profit and loss
Trade receivables
31,188
31,188
Level 2
37,086
37,086
Level 2
Financial assets at fair value
through OCI
Trade receivables
43,065
43,065
Level 2
14,539
14,539
Level 2
Financial assets not measured
at fair value
Trade receivables
30,717
30,717
Level 2
14,579
14,579
Level 2
Cash and cash equivalents
108,271
108,271
Level 2
69,057
69,057
Level 2
213,241
213,241
135,261
135,261
Financial liabilities not measured
at fair value
Bank loans
78,578
80,795
Level 2
148,099
148,827
Level 2
1 2 3 1 Relates to trade receivables which will be discounted through the Barclay\u2019s Bank facility. 2 Relates to trade receivables which may be factored through the Absa facility. 3 Relates to trade receivables which will not be discounted or factored. The carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy are detailed above. The table does not include fair value information for other receivables, prepayments, trade payables and accruals as these are not measured at fair value as the carrying amount is a reasonable approximation of their fair value. Trade receivables which are factored through the Absa Bank facility or letters of credit which are discounted through the Barclays Bank facility are initially measured at fair value and subsequently measured at fair value through profit or loss (FVTPL). Trade receivables or letters of credit where it is not known at initial recognition if they will be factored are classified as fair value through other comprehensive income (FVOCI). Trade receivables which will not be factored and for which balances will be recovered under the sale contract credit terms are classified and subsequently measured at amortised cost. In the case of factored receivables, the Group derecognises the discounted receivable to which the arrangement applies when payment is received from the bank as the terms of the arrangement are non-recourse. The payment to the bank by the Group\u2019s customers are considered non-cash transactions for the purposes of the consolidated statement of cashflows The valuation technique used in measuring Level 2 fair values is discounted cash flows, which considers the expected receipts or payments discounted using adjusted market discount rates or where these rates are not available estimated discount rates. The Group has exposure to credit risk, liquidity risk and market risk arising from financial instruments. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-359": { "value": "Risk management framework The Board is ultimately responsible for risk management within the Group. It has delegated responsibility for the monitoring of the effectiveness of the Group\u2019s risk management and internal control systems to the Audit & Risk Committee. The Board and Audit & Risk Committee receive reports from Executive management on the key risks to the business and the steps being taken to mitigate such risks. The Audit & Risk Committee is assisted in its role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit & Risk Committee. Credit risk Credit risk is the risk of financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s trade receivables from customers. The carrying amount of financial assets represents the maximum credit exposure. The Group\u2019s exposure to credit risk is influenced by the individual circumstances of each customer. The Group also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Group reduces its exposure to customers perceived to have a higher credit risk through a letter of credit trade facility. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The Group\u2019s customers have been transacting with the Group for a significant number of years, and no customers\u2019 balances have been written off or are credit impaired at the financial year end. In monitoring customer credit risk, customers are regularly reviewed individually and the Group has not identified any factors that would merit reducing exposure to any particular customer. The Group does not require collateral in respect of trade receivables. The gross exposure to credit risk for trade receivables by geographic region was as follows:
2022 2021
$\u2019000 $\u2019000
China
19,009
37,120
Asia (excluding China)
17,243
5,127
Europe
45,806
15,410
USA
22,776
8,547
Africa
136
\u2013
Total
104,970
66,204
At 31 December 2022, $35.4 million (2021: $41.3 million) is due from the Group\u2019s three largest customers. A summary of the Group\u2019s exposure to credit risk for trade receivables is as follows:
2022 2021
$\u2019000 $\u2019000
External credit ratings at least Baa3 (Moody\u2019s)
31,188
37,535
External credit ratings Ba3 to Ba1 (Moody\u2019s)
\u2013
19,051
Other
75,316
10,042
Total gross carrying amount
106,504
66,628
Loss allowance
(1,534)
(424)
Total
104,970
66,204
The following table provides ageing information relevant to the exposure to credit risk for trade receivables from individual customers. No balances were considered credit impaired at 31 December 2022 or 31 December 2021. Current $\u2019000
More than More than More than
30 days 60 days 90 days
past due past due past due Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
2022
104,962
\u2013
\u2013
8
104,970
2021
66,133
\u2013
\u2013
71
66,204
Expected credit loss assessment of trade receivables For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, financial statements and available market information about customers) and applying experienced credit judgement. The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s) long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating. At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled in cash payments. The Group\u2019s objective when managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due. The Group monitors Mine payment forecasts, both operating and capital, which assist it in monitoring cash flow requirements and optimising its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities. The Group monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade and other payables. The Group has a trade finance facility with Absa Bank for three of the Group\u2019s largest customers. In accordance with this facility, the bank purchases certain customers\u2019 receivables without recourse. The facility is for a maximum amount of $30 million with limits on the maximum amount that can be factored for each of the customers named in the facility. During the period, no trade receivables were factored under this agreement. At the year end, trade receivables amounting to $43.1 million (2021: $14.5 million) may be factored under this facility and are therefore included in trade receivables measured at fair value through OCI as at 31 December 2022. The cost of this facility for the period, which amounted to $0.2 million (2021: $0.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The Group has a trade facility with Barclays Bank for customers which it sells to under letter of credit terms. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. Barclays Bank can also discount these letters of credit thereby providing early payment of receivables to the Group. There is no limit under the Barclays Bank facility. During the period, trade receivables of $201.4 million (2021: $224.4 million) were discounted under this facility. At the year end, there were $31.2 million (2021: $37.1 million) of trade receivables which will be discounted under this facility. The cost of this facility for the period, which amounted to $2.0 million (2021: $1.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2022 based on the gross contractual undiscounted payments: Financial liabilities
Between
Less than two and five More than
Total one year years five years
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
89,536
38,005
51,531
\u2013
Lease liabilities
2,409
390
1,447
572
Trade and other payables
32,553
32,553
\u2013
\u2013
124,498
70,948
52,978
572
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2021 based on the gross contractual undiscounted payments:
Between
Less than two and five More than
Total one year years five years
Financial liabilities $\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
151,914
73,342
78,572
\u2013
Lease liabilities
2,684
1,207
1,317
160
Trade and other payables
32,768
32,768
\u2013
\u2013
187,366
107,317
79,889
160
As disclosed in Note 20, the Group has bank loans that contain loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Under the loan agreement, the covenants are monitored on a regular basis by Group finance and regularly reported to management and the Lenders to ensure compliance with the agreement. Furthermore, the Group has authorised and committed expenditure on operations-related capital projects amounting to $11.5 million (2021: $18.9 million) as disclosed in Note 26. Risk concentration Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group\u2019s performance to developments affecting a particular industry. The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate in largely independent markets. Details of concentration of revenue are included in Note 2. Market risk Market risk is risk that changes in market prices, foreign exchange rates and interest rates will affect the Group\u2019s income statement. The objective of market risk management is to manage and control market risk exposures while optimising returns. Currency risk The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional currency of all Group entities is US Dollars. The presentational currency of the Group is US Dollars. Sales and bank loans are denominated in US Dollars, which significantly reduces the exposure of the Group to foreign currency risk. Payable transactions are denominated in Mozambican Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi. Exposure to currency risk The Group\u2019s gross exposure to currency risk as at 31 December 2022 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
12,172
756
489
72
88
\u2013
Cash and cash equivalents
1,397
12,894
892
1,129
17
34
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,255)
\u2013
\u2013
\u2013
Trade and other payables
(20,367)
(2,178)
(502)
(10)
\u2013
\u2013
Net exposure
(6,798)
11,472
(376)
1,191
105
34
The Group\u2019s exposure to currency risk as at 31 December 2021 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
2,717
1,275
928
55
364
\u2013
Cash and cash equivalents
1,030
2,337
479
338
6
36
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,528)
\u2013
\u2013
\u2013
Trade and other payables
(14,082)
(1,905)
(2,395)
(35)
(68)
\u2013
Net exposure
(10,335)
1,707
(2,516)
358
302
36
Sensitivity analysis A reasonably possible strengthening or weakening of the Mozambique Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi by 10% against the US Dollar would have affected profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant. Profit or loss
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
31 December 2022
Strengthening
(680)
1,147
(38)
119
11
3
Weakening
680
(1,147)
38
(119)
(11)
(3)
31 December 2021
Strengthening
(1,030)
170
(250)
40
30
4
Weakening
1,030
(170)
250
(40)
(30)
(4)
Interest rate risk The loan facilities are arranged at variable rates and expose the Group to cash flow interest rate risk. Variable rates are based on six-month LIBOR. The borrowing rate at financial year end was 9.2% (2021: 5.8%). The interest rate profile of the Group\u2019s loan balances at the financial year end was as follows:
2022 2021
$\u2019000 $\u2019000
Variable rate debt
80,795
151,914
Under the assumption that all other variables remain constant, a reasonable possible change of 1% in the six-month LIBOR rate results in a $0.8 million (2021: $1.5 million) change in finance costs for the financial year. The above sensitivity analyses are estimates of the impact of market risks assuming the specified change occurs. Actual results in the future may differ materially from these results due to developments in the global financial markets, which may cause fluctuations in interest rates to vary from the assumptions made above and therefore should not be considered a projection of likely future events. Interest rate benchmark reform A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d), including LIBOR (the London Interbank Offered Rate). The Group had, at the reporting date, exposure to US LIBOR on its debt facilities. Pursuant to an Amendment and Restatement Agreement entered into on 9 March 2023 in respect of the Group\u2019s debt facilities, the basis on which interest is calculated in respect of those facilities were amended with effect from 11 March 2023. As a result of the amendment, interest rates for interest periods commencing from 11 March 2023 onwards are no longer determined by reference to US LIBOR; instead they are determined on the basis of the applicable Term SOFR Rate. While US LIBOR represented an inter-bank lending rate, Term SOFR is a published screen rate derived from SOFR, being the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York. As SOFR represents a risk-free rate, a credit adjustment spread is applied in addition, which spread varies according to the length of the relevant interest period. The six-month SOFR rate set on 11 March 2023 relating to the next interest period to 11 September 2023 was 5.4%. The credit adjustment spread of 0.4% plus the margin of 5.4% results in an interest rate of 11.2% on the Term Loan. The Group has concluded that the new basis for determining cashflows is economically equivalent to the previous basis. ", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialRiskManagementExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-371": { "value": "Credit risk Credit risk is the risk of financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group\u2019s trade receivables from customers. The carrying amount of financial assets represents the maximum credit exposure. The Group\u2019s exposure to credit risk is influenced by the individual circumstances of each customer. The Group also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry and country in which customers operate. The Group reduces its exposure to customers perceived to have a higher credit risk through a letter of credit trade facility. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. The Group\u2019s customers have been transacting with the Group for a significant number of years, and no customers\u2019 balances have been written off or are credit impaired at the financial year end. In monitoring customer credit risk, customers are regularly reviewed individually and the Group has not identified any factors that would merit reducing exposure to any particular customer. The Group does not require collateral in respect of trade receivables. The gross exposure to credit risk for trade receivables by geographic region was as follows:
2022 2021
$\u2019000 $\u2019000
China
19,009
37,120
Asia (excluding China)
17,243
5,127
Europe
45,806
15,410
USA
22,776
8,547
Africa
136
\u2013
Total
104,970
66,204
At 31 December 2022, $35.4 million (2021: $41.3 million) is due from the Group\u2019s three largest customers. A summary of the Group\u2019s exposure to credit risk for trade receivables is as follows:
2022 2021
$\u2019000 $\u2019000
External credit ratings at least Baa3 (Moody\u2019s)
31,188
37,535
External credit ratings Ba3 to Ba1 (Moody\u2019s)
\u2013
19,051
Other
75,316
10,042
Total gross carrying amount
106,504
66,628
Loss allowance
(1,534)
(424)
Total
104,970
66,204
The following table provides ageing information relevant to the exposure to credit risk for trade receivables from individual customers. No balances were considered credit impaired at 31 December 2022 or 31 December 2021. Current $\u2019000
More than More than More than
30 days 60 days 90 days
past due past due past due Total
$\u2019000 $\u2019000 $\u2019000 $\u2019000
2022
104,962
\u2013
\u2013
8
104,970
2021
66,133
\u2013
\u2013
71
66,204
Expected credit loss assessment of trade receivables For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, financial statements and available market information about customers) and applying experienced credit judgement. The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s) long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating. At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-382": { "value": "Expected credit loss assessment of trade receivables For trade receivables measured at fair value through OCI and trade receivables measured at amortised cost, the Group allocates to each customer a credit risk grade based on data that is determined to be predictive of the risk of loss (including but not limited to external ratings, financial statements and available market information about customers) and applying experienced credit judgement. The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2022. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Other
2.0%
75,316
1,534
No
The following table provides information about the exposure to credit risk and expected credit losses as at 31 December 2021. Equivalent to Moody\u2019s credit rating
Gross
Weight carrying Impairment
average loss amount loss allowance Credit
rate $\u2019000 $\u2019000 impaired
Baa3 to AAA
0.30%
25
\u2013
No
Ba3 to Ba1
1.30%
19,051
248
No
Other
1.75%
10,042
176
No
29,118
424
The movement in expected credit losses in respect of trade receivables where measured at amortised cost or fair value through other comprehensive income during the year was as follows:
2022 2021
$\u2019000 $\u2019000
Balance at 1 January
424
199
Net remeasurement of loss allowance
1,110
225
Balance at 31 December
1,534
424
The credit risk on cash and cash equivalents is limited because funds are deposited with banks with high credit ratings assigned by international credit rating agencies. For deposits in excess of $75 million the Group requires that the institution has an A- (S&P)/A3 (Moody\u2019s) long-term rating. For deposits in excess of $50 million, the Group requires that the institution has a BB- (S&P)/Ba3 (Moody\u2019s) long-term rating. At 31 December 2022 and 2021 cash was deposited with the following banks:
2022
2021
Long-term credit rating
Long-term credit rating
$ million
S&P
Moody\u2019s
$ million
S&P
Moody\u2019s
Barclays Bank Plc
81.4
A Positive
A\u20131 Stable
60.8
A Positive
A\u20131 Stable
FirstRand Bank Limited
\u2013
BBB \u2013 Positive
Ba2 Stable
5.1
BBB\u2013 Stable
Ba2 Negative
HSBC Bank Plc
1
AA \u2013 Stable
A1 \u2013 Stable
0.8
A+ Stable
A1 Stable
Absa Bank Limited
20.5
BB \u2013 Stable
Ba2 Negative
2.0
BBB\u2013 Stable
Ba2 Negative
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-372": { "value": "Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled in cash payments. The Group\u2019s objective when managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when they are due. The Group monitors Mine payment forecasts, both operating and capital, which assist it in monitoring cash flow requirements and optimising its cash return on investments. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities. The Group monitors the level of expected cash inflows on trade receivables together with expected cash outflows on trade and other payables. The Group has a trade finance facility with Absa Bank for three of the Group\u2019s largest customers. In accordance with this facility, the bank purchases certain customers\u2019 receivables without recourse. The facility is for a maximum amount of $30 million with limits on the maximum amount that can be factored for each of the customers named in the facility. During the period, no trade receivables were factored under this agreement. At the year end, trade receivables amounting to $43.1 million (2021: $14.5 million) may be factored under this facility and are therefore included in trade receivables measured at fair value through OCI as at 31 December 2022. The cost of this facility for the period, which amounted to $0.2 million (2021: $0.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The Group has a trade facility with Barclays Bank for customers which it sells to under letter of credit terms. Under this facility, Barclays Bank confirms the letter of credit from the issuing bank and therefore assumes the credit risk. Barclays Bank can also discount these letters of credit thereby providing early payment of receivables to the Group. There is no limit under the Barclays Bank facility. During the period, trade receivables of $201.4 million (2021: $224.4 million) were discounted under this facility. At the year end, there were $31.2 million (2021: $37.1 million) of trade receivables which will be discounted under this facility. The cost of this facility for the period, which amounted to $2.0 million (2021: $1.2 million), is included in finance costs in the statement of comprehensive income and in net cash from operating activities in the statement of consolidated cash flows. The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2022 based on the gross contractual undiscounted payments: Financial liabilities
Between
Less than two and five More than
Total one year years five years
$\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
89,536
38,005
51,531
\u2013
Lease liabilities
2,409
390
1,447
572
Trade and other payables
32,553
32,553
\u2013
\u2013
124,498
70,948
52,978
572
The table below summarises the maturity profile of the Group\u2019s financial liabilities at 31 December 2021 based on the gross contractual undiscounted payments:
Between
Less than two and five More than
Total one year years five years
Financial liabilities $\u2019000 $\u2019000 $\u2019000 $\u2019000
Bank loans
151,914
73,342
78,572
\u2013
Lease liabilities
2,684
1,207
1,317
160
Trade and other payables
32,768
32,768
\u2013
\u2013
187,366
107,317
79,889
160
As disclosed in Note 20, the Group has bank loans that contain loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. Under the loan agreement, the covenants are monitored on a regular basis by Group finance and regularly reported to management and the Lenders to ensure compliance with the agreement. Furthermore, the Group has authorised and committed expenditure on operations-related capital projects amounting to $11.5 million (2021: $18.9 million) as disclosed in Note 26. ", "dimensions": { "concept": "ifrs-full:DisclosureOfLiquidityRiskExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-374": { "value": "
Risk concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical
region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in
economic, political or other conditions. Concentrations indicate the relative sensitivity of the Group\u2019s performance to developments affecting
a particular industry.
The Group evaluates the concentration of risk with respect to trade receivables as low, as its customers are located in several jurisdictions
and industries and operate in largely independent markets. Details of concentration of revenue are included in Note 2.
", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfRiskConcentration", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-373": { "value": "
Market risk
Market risk is risk that changes in market prices, foreign exchange rates and interest rates will affect the Group\u2019s income statement.
The objective of market risk management is to manage and control market risk exposures while optimising returns.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-375": { "value": "
Currency risk
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales,
purchases, receivables and borrowings are denominated and the respective functional currencies of Group companies. The functional
currency of all Group entities is US Dollars. The presentational currency of the Group is US Dollars. Sales and bank loans are denominated
in US Dollars, which significantly reduces the exposure of the Group to foreign currency risk. Payable transactions are denominated in
Mozambican Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi.
Exposure to currency risk
The Group\u2019s gross exposure to currency risk as at 31 December 2022 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
12,172
756
489
72
88
\u2013
Cash and cash equivalents
1,397
12,894
892
1,129
17
34
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,255)
\u2013
\u2013
\u2013
Trade and other payables
(20,367)
(2,178)
(502)
(10)
\u2013
\u2013
Net exposure
(6,798)
11,472
(376)
1,191
105
34
The Group\u2019s exposure to currency risk as at 31 December 2021 is as follows.
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
Trade and other receivables
2,717
1,275
928
55
364
\u2013
Cash and cash equivalents
1,030
2,337
479
338
6
36
Bank loans
\u2013
\u2013
\u2013
\u2013
\u2013
\u2013
Leases
\u2013
\u2013
(1,528)
\u2013
\u2013
\u2013
Trade and other payables
(14,082)
(1,905)
(2,395)
(35)
(68)
\u2013
Net exposure
(10,335)
1,707
(2,516)
358
302
36
Sensitivity analysis A reasonably possible strengthening or weakening of the Mozambique Metical, South African Rand, Euro, Sterling, Australian Dollar and Renminbi by 10% against the US Dollar would have affected profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant. Profit or loss
Mozambican South African Australian
Metical Rand Euro Sterling Dollar Renminbi
$\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000 $\u2019000
31 December 2022
Strengthening
(680)
1,147
(38)
119
11
3
Weakening
680
(1,147)
38
(119)
(11)
(3)
31 December 2021
Strengthening
(1,030)
170
(250)
40
30
4
Weakening
1,030
(170)
250
(40)
(30)
(4)
", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfCurrencyRisk", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-376": { "value": "Interest rate risk The loan facilities are arranged at variable rates and expose the Group to cash flow interest rate risk. Variable rates are based on six-month LIBOR. The borrowing rate at financial year end was 9.2% (2021: 5.8%). The interest rate profile of the Group\u2019s loan balances at the financial year end was as follows:
2022 2021
$\u2019000 $\u2019000
Variable rate debt
80,795
151,914
Under the assumption that all other variables remain constant, a reasonable possible change of 1% in the six-month LIBOR rate results in a $0.8 million (2021: $1.5 million) change in finance costs for the financial year. The above sensitivity analyses are estimates of the impact of market risks assuming the specified change occurs. Actual results in the future may differ materially from these results due to developments in the global financial markets, which may cause fluctuations in interest rates to vary from the assumptions made above and therefore should not be considered a projection of likely future events. Interest rate benchmark reform A fundamental reform of major interest rate benchmarks is being undertaken globally, including the replacement of some interbank offered rates (IBORs) with alternative nearly risk-free rates (referred to as \u201cIBOR reform\u201d), including LIBOR (the London Interbank Offered Rate). The Group had, at the reporting date, exposure to US LIBOR on its debt facilities. Pursuant to an Amendment and Restatement Agreement entered into on 9 March 2023 in respect of the Group\u2019s debt facilities, the basis on which interest is calculated in respect of those facilities were amended with effect from 11 March 2023. As a result of the amendment, interest rates for interest periods commencing from 11 March 2023 onwards are no longer determined by reference to US LIBOR; instead they are determined on the basis of the applicable Term SOFR Rate. While US LIBOR represented an inter-bank lending rate, Term SOFR is a published screen rate derived from SOFR, being the secured overnight financing rate (SOFR) administered by the Federal Reserve Bank of New York. As SOFR represents a risk-free rate, a credit adjustment spread is applied in addition, which spread varies according to the length of the relevant interest period. The six-month SOFR rate set on 11 March 2023 relating to the next interest period to 11 September 2023 was 5.4%. The credit adjustment spread of 0.4% plus the margin of 5.4% results in an interest rate of 11.2% on the Term Loan. The Group has concluded that the new basis for determining cashflows is economically equivalent to the previous basis. ", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfInterestRateRisk", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-325": { "value": "25. Capital management The Group\u2019s capital management objective is to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balances. The principal activity of the Group is the operation of the Mine. The Group therefore manages its capital to ensure existing operations are adequately funded and, based on planned mine production levels, that the Mine will continue to achieve positive cash flows allowing returns to shareholders. At 31 December 2022, the Group had total debt facilities in place of $150 million (2021: $150 million), details of which are set out in Note 20. The Board periodically reviews the capital structure of the Group, including the cost of capital and the risks associated with each class of capital. The Group manages and, if necessary, adjusts its capital structure taking account of the underlying economic conditions. Any material adjustments to the Group\u2019s capital structure in terms of the relative proportions of debt and equity are approved by the Board. The Group is not subject to any externally imposed capital requirements. The definition of capital/capital structure of the Group consists of debt (which includes bank borrowings as disclosed in Note 20 and leases as disclosed in Note 12) and equity attributable to equity holders of the Company, comprising issued capital, reserves, retained profits and other reserves as disclosed in Notes 16 to 19", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-377": { "value": "26. Capital commitments
2022 2021
$\u2019000 $\u2019000
Contracts for future expenditure authorised by the Board:
Capital authorised and contracted
11,535
18,921
Capital authorised and not contracted
12,439
6,370
Capital authorised and contracted represents the amount authorised and contracted at 31 December of the relevant financial year to be spent on Mine operations-related approved capital projects. Capital authorised not contracted represents the amount not contracted but authorised at 31 December of the relevant financial year to be spent on Mine operations-related approved capital projects ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-326": { "value": "26. Capital commitments
2022 2021
$\u2019000 $\u2019000
Contracts for future expenditure authorised by the Board:
Capital authorised and contracted
11,535
18,921
Capital authorised and not contracted
12,439
6,370
Capital authorised and contracted represents the amount authorised and contracted at 31 December of the relevant financial year to be spent on Mine operations-related approved capital projects. Capital authorised not contracted represents the amount not contracted but authorised at 31 December of the relevant financial year to be spent on Mine operations-related approved capital projects . ", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-378": { "value": "
27. Related party transactions
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures.
2022 2021
$\u2019000 $\u2019000
Short-term employee benefits
2,295
2,571
Post-employment benefits
104
110
Share-based payments
778
\u2013
Total benefits
3,177
2,681
Further information about the remuneration of individual Directors and payments to former Directors is provided in the Directors\u2019 Annual
Report on remuneration on pages 122-134 and is deemed to be incorporated in this Note to the financial statements .
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-327": { "value": "27. Related party transactions Remuneration of key management personnel The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
2022 2021
$\u2019000 $\u2019000
Short-term employee benefits
2,295
2,571
Post-employment benefits
104
110
Share-based payments
778
\u2013
Total benefits
3,177
2,681
Further information about the remuneration of individual Directors and payments to former Directors is provided in the Directors\u2019 Annual Report on remuneration on pages 122-134 and is deemed to be incorporated in this Note to the financial statements ", "dimensions": { "concept": "ifrs-full:DisclosureOfTransactionsBetweenRelatedPartiesExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-360": { "value": "Remuneration of key management personnel The remuneration of the Directors, who are the key management personnel of the Group, is set out below in aggregate for each of the categories specified in IAS 24 Related Party Disclosures.
2022 2021
$\u2019000 $\u2019000
Short-term employee benefits
2,295
2,571
Post-employment benefits
104
110
Share-based payments
778
\u2013
Total benefits
3,177
2,681
Further information about the remuneration of individual Directors and payments to former Directors is provided in the Directors\u2019 Annual Report on remuneration on pages 122-134 and is deemed to be incorporated in this Note to the financial statements . ", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-328": { "value": "
28. Kenmare Resources plc
Kenmare Resources Public Company Limited is a public limited company. The place of registration is Ireland and the registered office
address is Styne House, Hatch Street Upper, Dublin 2. The registered number is 37550.
", "dimensions": { "concept": "kenmareresourcesplc:DisclosureOfKenmareResourcesPlc", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-330": { "value": "
29. Events after the statement of financial position date
On 21 March 2023, the Board proposed a final dividend of USc43.33 per share. This proposed dividend is subject to approval by the
shareholders at the Annual General Meeting. These financial statements do not reflect this dividend.
In February 2023, power lines nearby the Mine were subject to a direct lightning strike of unusually high intensity resulting in severe
disruption to mining operations. The Group is working to establish and mitigate the capital and operating cost impacts of the disruptions
and a reliable estimate cannot be made at this time. Insurance cover is in place and the Group is liaising with its insurers to process claims in
relation to the lightning strike.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } }, "fact-329": { "value": "
30. Approval of financial statements
The financial statements were approved by the Board on 6 April 2023.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:635400ETHWP1EKJMDO16", "period": "2022-01-01T00:00:00/2023-01-01T00:00:00" } } } }