Evrima Plc - Audited Annual Results for the year ended 31 December 2022

26 June 2023

Evrima plc

AQSE: EVA

(“Evrima” or “the Company”)

Audited Annual Results for the year ended 31 December 2022

The Company is pleased to announce its final results for the year ended 31 December 2022. The financial information below has been extracted from the audited financial statements of the Company for the year ended 31 December 2022, which have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102, "The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland" (“FRS102”) and the Companies Act 2006.  The Annual Report is available from the Company’s website at www.evrimaplc.com.

The directors of Evrima accept responsibility for this announcement.  

This announcement contains information which, prior to its disclosure, was inside information as stipulated under Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 (as amended).

- Ends -

Enquiries: 

Company: 
Burns Singh Tennent-Bhohi (CEO & Director): burns@evrimaplc.com
             
Simon Grant-Rennick (Executive Chairman): simon@evrimaplc.com

Novum Securities Limited (AQSE Corporate Adviser):

David Coffman / George Duxberry: + 44 (0) 20 7399 9400

REVIEW OF BUSINESS

2022 proved to be a very challenging year for global financial markets with a visceral transition of capital leaving equity markets with global themes being focused on central banks tightening monetary policy and combatting rampant inflation with accelerated base rate increases at a pace not seen for some time. This shift in attitude and repricing of risk resulted in risk off investing returning after a strong and sustained period for equity markets.

For Evrima, this economic backdrop tends to favour commodities, this theme further supported through the performance of the S&P GSCI a benchmark for commodities which rose 26% to the year ending 2022 whilst the S&P 500 delivered a negative return of -18.01%.

Evrima remains committed to structuring well evaluated investment transactions in the natural resource industry where the Company look for investment exposure to assets ranging from exploration to development and pre-production. To date the company have executed three major investment transactions with the underlying assets independent but as a collective located in the same jurisdiction being, Botswana.

In spite of the challenges 2022 brought, Evrima had somewhat of a breakthrough year with our private investments seeing a combination of material events including; go public transaction (s), substantive capital investment & meaningful operational development at our investee's.

Below, I provide an overview of key events across each of our material investments to the year end.

Investment Interests & Progress to 31 December 2022

Premium Nickel Resources Corporation Ltd("PNRL")

Investment Interest as at Year End:

Opening Shareholding: 1,114,115

Shares Held as at Year End: 1,014,115

Shares Sold to the Year End: 100,000

Gross Proceeds Realised: $169,000 (CAD)

Average Consolidated Sales Price: $1.69

Book Cost on Shares Purchased: $0.21

Capital Gain / %-Gain on Sale: $148,000 ($1.48 p/share sold) / 704%

Warrants held in PNRL: 12,500 (Strike Price: $1.75 / Life to Expiry: October 16 2023)

Premium Nickel Resources Ltd is a mineral exploration and development company that focuses on discovering and advancing high-quality nickel, copper and cobalt resources. PNRL is a Canada-based mining company listed on the Toronto Stock Venture Exchange. The Company's Selebi Project encompass two fully permitted, Ni-Cu-Co Mine re-development projects; former BCL Selebi Mine (Selebi Main and Selebi North deposits), dubbed the "Tsholofelo Project" as well as the former Tati Nickel Mining Company (TNMC) Selkirk Mine.

Material Highlights to the Year End Include:

17 August 2022 - Premium Nickel Resources Corporation successfully completed the amalgamation with North American Nickel Inc. Resulting in the amalgamated Premium Nickel Resources Limited to commence trading on August 17 on the TSX Venture Exchange.

17 August 2022 - First assay results released from the 2022 diamond drill program including hole SMD-22-001 (lower interval): 25.65 metres of 0.95% Ni, 2.03% Cu, 0.04% Co and 7.40 ppm Ag.

22 August 2022 - Premium Nickel Resources Ltd completes the purchase of Selkirk Mine in Botswana.

22 December 2022 - Assay results released from the 2022 diamond drill program including hole SMD-22-006a-W2 (upper interval): 9.8 metres of 1.56% NiEq (0.97% Ni, 1.74% Cu, 0.03% Co)

Eastport Ventures Inc.

Investment Interest as at Year End:

Shareholding at beginning of the Year: 523,677

Shares Acquired during the Year: 3,072,946

Average Price Paid Per Share: $0.23

Resulting Holding: 3,596,623 (Representing ~7% of the Issued Share Capital of Eastport Ventures Inc.)

Warrants Held as at Year End: 1,281,265 (Strike Price: $0.30 / Life to Expiry: June 2027)

Burns Singh Tennent-Bhohi, Chief Executive Officer & Director of Evrima plc is a Founding Partner in Eastport Ventures and the current Chairman and Chief Executive Officer. Non-Executive Director, as at Year End but not as at date of this report, Guy Miller was as at year end a non-controlling, minority shareholder of Eastport Ventures Inc. The Company commissioned an independent valuation of Eastport to ensure that any investment considered or executed was externally valued as fair and reasonable.

Formed by seasoned explorers and corporate investors, Eastport Ventures is a Canadian mining house that is predicated on building and maximising value from its asset base of investments and projects. Eastport is focused on driving value in its direct asset interests through attempting to yield material discoveries. Supporting this operational model is the Company's internal investment and securities division that focuses on both private and public investment opportunities, this division was started in 2020 with ~$50,000 (CAD) in start-up cost and now commands a market value in excess of $3,000,000.

Over a four-year period, the Company has constructed a portfolio of advanced exploration assets targeting copper, nickel, uranium and diamonds. The mineral assets within Eastport's portfolio of exploration assets have seen aggregate exploration expenditures in excess of $15,000,000 USD in both historic and current capital expenditures. Cumulatively, Eastport's projects cover a licence area of over 7,816 km2.

In September 2022, Eastport entered a non-binding LOI with TSX-V listed, Auston Capital Corp (TSX-V: ASTN.P) in respect of a proposed business combination that subject to completion and all legal and regulatory approvals would result in Eastport becoming a publicly quoted company on a recognised investment exchange. Eastport continue to make positive progress in working to agree to terms with Auston.

Eastport Project Overview:

Matsitama Copper

Eastport subsidiary, Matsitama Minerals (Pty) Ltd, holds 100% of six prospecting licences that cover 1,668 km2 prospective for copper mineralisation. The licences were renewed for a further two years in January 2022.The six licences cover the majority of the Palaeo-Proterozoic Matsitama Schist Belt, a predominantly clastic sedimentary suite of rocks with minor mafic to ultramafic volcanic intrusives. Mineralisation is copper, lead, and zinc when located in major fault zones, and copper sulphide when found within the schistose rocks. Past and present mining operations within the belt have exploited both styles of mineralisation.

Over the ensuing years, the exploration programme at Matsitama will be dominated by drilling, targeting both styles of mineralisation. Early application of self-organizing maps (SOM) has identified a new large area of favourable alteration that suggests an unexplored area of copper pyrite (Cu-Py) mineralisation stratigraphically below the Thakadu deposit.

Matsitama 2022 Highlights:

- Identification of major target, Phudulooga, 1.2km strike length, Eastport first pass drilling intercepted high grade copper results including:

DS07-12: 0.44m @ 10.95% Cu

DS21-18: 0.65m @ 12.85% Cu

Historic Drilling at Phudulooga included:

DS07-011 - 4.42% Cu, 5.94 g/t Ag over 3.3m at 24.1m depth

DS07-012 - 3.36% Cu, 3.72 g/t over 3.4m at 85.8m depth

-  Identification of new exploration targets within the centre of the Matsitama Prospecting Licences ("PLs")

-  Ongoing development and evaluation of existing SAMREC compliant Copper Deposit within the Matsitama PLs

Selebi Nickel-Copper

Eastport's Selebi project is comprised of four licences that cover a total area of 2,100 km2, with favourable amphibolite geology located throughout the licence area. The neighbouring licence has historical annual production of 40,000 tonnes of copper and nickel, and is today owned by Eastport investee, TSX listed, Premium Nickel Resources Limited (TSV:PNRL).

Eastport's Selebi licences are located to the south-east of the Selebi and Phikwe sulphide deposits, which Wood Mackenzie has estimated contain a remaining in-situ resource of 33.07 million tonnes grading 0.8% nickel, and 1.18% copper.

Selebi 2022 Highlights:

-  Commencement of extensive soil sampling campaign

-  Airborne reprocessing

-  Preparation of regional stream sampling survey

-  Conclusion of Soil Sampling / Geochemistry will allow for target identification through Geophysical instruments

Keng Nickel-Copper

Eastport's Keng project is comprised of two licences that cover 1,345 km2, and which are prospective for copper, nickel, and platinum group metals (PGMs). Keng is situated on an important section of the northern edge of a mafic-ultramafic intrusive, known as the Molopo Farms Complex, and where the licences overlie the contact with "reactive" carbonate rocks. Narrow intervals of veined mineralisation, indicative of metal movements within the system, are reported in the historic drilling data.

The large, multi-lobed Molopo Farms mafic-ultramafic Complex is observed in drill core, and the complex is often cited as being analogous to the Bushveld in South Africa; a significant producer of platinum group elements that attract exploration interest from a wide-range of exploration entities.

Within the Keng licences, the Molopo Farms Complex is uncommonly near vertical dips, with structural features that suggest stacking and folding of thrust sheets, which offer open space opportunities for mineralisation. Significant nickel-in-soil anomalies are found in close proximity to these thrust sheets, providing a target for focused mineralisation. The geologic opportunity is further enhanced through the presence of broad areas of reactive carbonate-rich rocks known to destabilise mineral-rich fluids.

Keng 2022 Highlights:

-  Meetings with local authorities and interested parties initiated, securing a series of access agreements to allow for uninterrupted work

-  Reprocessing of airborne magnetic surveys

-  Historic data compilation covering; geochemistry, drilling and gravity surveys

-  Drill target (s) identification

Jwaneng Diamond Project

Eastport has two exploration licences in the Jwaneng area that span over 100 km2. The licences are located next to Debswana's Jwaneng Mine, acknowledged as "the richest diamond mine in the world by value", producing over 11 million carats per annum.

At present, three kimberlite pipes are known within Eastport's Jwaneng diamond licences, with all three implying a long history of kimberlite emplacement in the area. The diamond content of the three kimberlite pipes is largely unknown and each appears to have been historically under-sampled.

The Kgare pipe is the most well understood of the kimberlites at Jwaneng, being diamondiferous, and having returned encouraging mineral geochemistry that is comparable to indicators found in Debswana's Jwaneng mine.

Jwaneng 2022 Highlights:

-  Airborne survey acquired and reprocessed resulting in identification of new kimberlite targets

-  Upon completion of 2021 Phase 1 Drilling, ~400kg of kimberlite delivered to Canada for recovery and indicator chemistry studies

-  Agreement entered with Tier 1 mining company providing assistance with a portion of our program, with the combination of these studies leading to a grade/tonnage and value estimation for the Kgare target

Foley Uranium

Located in north-central Botswana, the Foley project covers 971.9 km2 under licence, wholly-owned by Eastport. The project borders A-Cap Energy's Letlhakane deposit, one of the world's largest undeveloped uranium deposits, with an in-situ resource of 280 million pounds (Mlbs) U3O8. Uranium was first discovered in the region in the early 1970s, and an improved understanding of the deposit type has enabled the resource to be significantly expanded.

Mining infrastructure in the region is excellent, with power, transport, and skilled labour all in close proximity. At Selebi- Phikwe the processing of sulphide ores creates the opportunity for a local acid supply for uranium ore processing.

Foley 2022 Highlights:

-  Preparation of uranium-in-water sampling in existing boreholes to aid in vectoring toward hidden mineralization

Kalahari Key Mineral Exploration Company (pty) Ltd ("Kalahari Key")

Investment Interest as at Year End:

Shares held in Kalahari Key: 3,802

Kalahari Key is a private mineral exploration company registered in Botswana, engaged in the development of its Nickel- Copper-Platinum Group Metals (Ni-Cu-PGM) project called the Molopo Farms Complex ("MFC").

The Kalahari Key opportunity developed from a recognition that no historical exploration targeting "feeder" styles of Ni-Cu- PGE mineralisation had been completed within the Molopo Farms ultramafic complex. The founder's group of four seasoned metals explorers identified a number of prospecting licences over a prospective geological feature often associated with feeder-style deposits. The exploration work conducted to date by Kalahari Key continues to support the prospectivity of the licence area and a series of exciting targets has been identified for a proposed drilling campaign.

During the year, Evrima elected to retain its interest in Kalahari Key following Power Metal Resources ("POW") conditional acquisition. POW has signed a conditional agreement to acquire an additional 58.7% interest in the share capital of Kalahari Key. Metal to acquire a further 15,002 Kalahari Key shares for £807,348. Following completion and a restructuring of the MFC Project interest Power Metal will hold 87.71% of Kalahari Key which will wholly own the Molopo Farms Complex Project on completion. Power Metal will become operator of Kalahari Key with immediate effect and will look to accelerate exploration.

Key Corporate Highlights to Year End:

Directors Compensation and Administrative Costs

The Directors of the Company were paid in aggregate £0 to the Year End in a sign of complete commitment to Evrima and its commercial strategy.

The Company effectively reduced administrative expenses to Year End by 64%.

Addition to the Board of Directors

In November 2022, the Company expanded its Board of Directors through the appointment of seasoned Corporate Financier, Duncan Gordon;

Mr. Gordon is a Canadian businessman and financier. He serves as the President of Ivy Capital Corp., a firm dedicated to providing financing services and strategic plans for companies seeking guidance through the capital raising process. He has a wide range of financial transaction experience in originating and structuring deals which range from traditional equity to debt and alternative financing options.

Mr. Gordon was formerly a Vice President and Senior Investment Advisor at Canaccord Genuity Wealth Management for over seventeen years. His dedication to his clients, passion and knowledge resulted in him being honoured with membership into the Chairman's Club, placing him as owning one of the top 20 investment advisory practices in Canada. Mr. Gordon's long-term focus and support of the junior mining arena has led to a niche specialization as a leading financier who has raised over $500M throughout his career.

Burns Singh Tennent-Bhohi CEO Direct Financing

During the year and upon Board & Shareholder approval the Company entered a Secured Convertible Loan Note Facility ("SCLN") with the Company's Chief Executive Officer & Director, Burns Singh Tennent-Bhohi. The terms of the facility were announced to market on 30 November 2022 & the facility approved by the shareholders at the Company's Annual General Meeting on 28 December 2022.

The terms of the SCLN Facility:

-  SCLN shall have a maturity of 12 months from the date of the agreement entered between both parties, with the Maturity date being 29.11.2023

-      The SCLN shall carry a coupon of 10% and will be rolled-up on draw of funds to the borrower and payable upon maturity

-  The SCLN will maintain a floating charge over the assets of the Company, upon redemption and at the election of the lender, the lender shall have the right to redeem the monies owing through cash redemption, conditional settlement by way of an issue of equity or settlement by way of a distribution of assets that reflect the monetary sum lent and outstanding, including all and any accrued interest payable to the lender.

-  Burns Singh Tennent-Bhohi has the right to serve the Directors notice and intention to convert any monies outstanding at the lower of the mid-price of Evrima as at the date of this agreement being, four pence per share (£0.04) or the 15-day volume weighted average price (VWAP) preceding the lenders intention to serve notice to convert.

PRINCIPAL RISKS AND UNCERTAINTIES

The Directors consider the key risks to the company to be that of maintaining, augmenting and realising value from its investment positions and the company's reliance on capital markets.

The company seeks to mitigate these risks through adhering to internal protocols that govern the time for which investments should be maintained and their respective liquidity profile to ensure that the company's asset profile is diverse, flexible and importantly not overexposed.

The Directors continue to review investment opportunities that have the potential to generate the company income that would reduce the company's reliance on equity and debt finance to secure the ongoing operations of the business.

Acquiring Less than Controlling Interests

The Company may acquire either less than whole voting control of, or less than a controlling equity interest in, a target, which may limit the Company's operational strategies and reduce its ability to enhance Shareholder value. In recognising the risk in non-controlling investment interests, the Company ensures to categorise an investment based on the desired exit strategy. If a clear exit for the investment is pre-determined save for time to disposal, then the Company is content to invest on the basis that non-control does not impact or create an underlying risk by virtue of percentage ownership. To further protect investment activity where this may occur the Company carefully allocate capital to investments for which the Company have no influence over.

Inability of Investee to Raise Capital Post-Investment

An investee of the company may be unable to raise capital to fund operations and achieve its commercial objectives post- investment by the Company. This may lead to devaluation of the Company's investment interest, dilution or render the investee insolvent. It may also lead the investee to seeking distressed asset funding options that could create irrecoverable damages to the Company's investment. The Company believe in evaluating investment opportunities whereby they are not the sole investor responsible for capitalising the investment ensuring that the investee has a broad shareholder base and access to a wide pool of capital. Additionally in certain circumstances when conducting and structuring investments the Company will do so using a variety of financial instruments and terms that provide protection against risks associated with an investee being unable to secure capital investment.

The Company's Relationship with the Directors and Conflicts of Interest

The Company is dependent on the Directors to identify potential acquisition opportunities and to structure and complete investments consistent with its investment strategy. The Directors are not obliged to commit their whole time to the Company's business; they will allocate a portion of their time to other businesses which may lead to the potential for conflicts of interest in their determination as to how much time to assign to the Company's affairs. The Company ensures that the Board maintains independence where conflicts may arise both internally with the Board and its advisors. In the event any conflicts should arise, the Board maintain a policy of disclosure and independent opinion.

Risks Inherent in an Investment

Although the Company and the Directors will evaluate the risks inherent in a particular investment, they cannot offer any further assistance that all of the significant risk factors can be identified or properly assessed. Furthermore, no assurance can be made that an investment in Ordinary Shares in the Company will ultimately prove to be more favourable to investors then a direct investment, if such an opportunity were available, in an investment interest. The Company believe that in holding investments through a quoted investment issuer structure the Company can provide sufficient indirect investment protection were they to own the investment directly. Furthermore, through the Company creating a basket of investment interests that in aggregate provide increased optionality in exposure to the underlying the Company is aiming to mitigate downside risk should an event impact the valuation of any of the investments.

Funding

The aim of the investment strategy is to seek capital gains on successful disposals of its investment interests rather than financial investments and instruments that generate income. The absence of income will mean that the company is reliant on the performance of the investee not just in its ability to operate but in its ability to provide the Company a material and liquid exit to ensure the company has capital to progress its investment strategy.

Impact of the business on the environment and other environmental matters

The report does not contain such information, as the nature and principal activity of the business is that of investment, the Board consider environmental matters in forming any investment they may make and ensuring that the potential investment opportunity maintains internal standards and disciplines that demonstrate competence when evaluating their underlying operations.

Within the mineral and natural resource industry, companies operating must comply with legislative and regulatory policy when undertaking such activity, including reclamation and environmental liabilities as a requisite of operating in an industry that involves the extraction of minerals from the environment and the remediation associated.

Company's employees

The employees of the company are the Board of Directors. The Board of Directors must adhere to high standards of operation consistent with managing a quoted company at all times.

Social, community and human rights issues

The report does not contain such information, as the nature and principal activity of the business is that of investment, the Board consider social, community and human right issues in forming any investment they may make and ensuring that the potential investment opportunity maintains internal standards and disciplines that demonstrate competence when evaluating their underlying operations.

Key performance indicators

The company's principal activity is to acquire investment interests in global mineral and natural resource opportunities through mechanisms including direct asset investment, indirect asset investment (including investment in quoted companies operating in the mineral/natural resource industry) and through investing in instruments such as royalties that have the ability to generate the company investment income.

For the year ending 31 December 2022, the company held three unquoted investments in private companies operating in the natural resource sector. The three companies were actively developing their underlying assets through operating exploration and development activities in base and industrial metals.

The company continue to focus on the underlying investments held generating capital returns that can enable the company to consider redeployment of capital in additional opportunities as the Directors see suitable or the distribution of profits to the shareholders of the company in the form of a cash or in-specie dividends.

The company's key investment objectives include;

1. Identification of undervalued opportunities that the Board can augment through capital and direct involvement whether at the Board or Consultancy level.

2. The generation of internal investment opportunities that can be developed through investment and creative commercial structures.

3. To evaluate opportunities that post-investment are not reliant on the company to provide consistent capital investment over a period of time that will isolate and concentrate too much of the company’s investment portfolios capital and focus.

The company's key investment disposal objectives include;

1. For the unquoted investment positions to achieve either a trade sale or consummate a go public transaction that would result in a premium realised to the cost of investment.

2. To redeploy capital where the Directors of the company identify suitable opportunities that can generate sufficient returns for the company and its shareholders.

3. To consider methods where shareholders can benefit in having exposure to the company's underlying assets through in- specie dividends

SECTION 172(1) STATEMENT

The Directors are required to make a statement which describes their attitude with regard to the matters set out in Section 172

(1) of the Companies Act 2006, namely:

Duty to promote the success of the company

(a)  The likely consequences of any decision in the long term

(b)  The interests of the company's employees

(c)  The need to maintain the company's business relationships with suppliers, customers and others

(d)  The impact of the company's operations on the community and environment

(e)  The desirability of the company maintaining a reputation for high business conduct

(f)  The need to act fairly between members of the company

Section 172 Statement

The Directors of the company commit to maintaining high operating standards and fiscal discipline and frequently communicate and engage with each other in order to consider and understand the underlying issues within the organisation. In order to enhance the standards of the business, the Board considers the global landscape that may present impediments to the business.

The Board maintains a disciplined internal evaluation process that is used to identify opportunities consistent with its underlying investment strategy that are determined as suitable investment opportunities. Thorough internal and external analysis is completed and of much significance is a pre-determined exit strategy with an associated timeframe for realisation of value.

The company is committed to the highest levels of integrity and transparency with stakeholders.

Stakeholders include, suppliers, government and regulatory agencies, service providers and shareholders. The Board, both individually and together, consider that they have acted in the way they consider would be most likely to promote the success of the Company as a whole. In order to do this, there is a process of dialogue with stakeholders to understand the uses that they might have. Communications with shareholders occur on an ongoing basis and as questions arise.

Transparency and integrity are central themes for the Company's Directors. The Directors of the company strive to provide our stakeholders with timely and informative responses.

The Board recognises its responsibilities under Section 172 as outlined above and has acted at all times in a way consistent with promoting the success of the Company with regard to all stakeholders.

POST YEAR END REVIEW

Reflecting on key moments for the Company in 2022, I am pleased to report to shareholders that despite challenging capital market conditions the Company has been able to reduce costs and only seek to release capital from its portfolio of investments for key financial obligations and to evaluate new investment opportunities. A significant outcome of this exercise has been in understanding and acknowledging that as a business the Board are committed to using its internal treasury to capitalise growth and create value for our shareholders and not to seek capital investment through equity finance that would be dilutive to our existing shareholders.

This model has required patience and sacrifice from our Board, advisors, management and our shareholders and I would like to take this opportunity to thank all for their continued support of Evrima as we continue to progress our investment mandate concurrent with considering optimal realisation strategies for our shareholders.

When considering the first half of 2023 and looking to the following six months to the year ending 2023 the key objectives at Evrima include:

-  Augmenting the treasury position of the business, primarily our portfolio of marketable securities for which is the main source of the Company's current direct liquidity position

-  To evaluate quality investment opportunities in the exploration, development and mining industry both in private and public markets

-To materialise value in our two substantive private interests being Eastport Ventures Inc. & Kalahari Key for which the Board are actively pursuing with Eastport Ventures Inc. seeking to complete its go public transaction in North America in this year

-  To consider potential market synergies that would enhance the liquidity profile for our current shareholders

ON BEHALF OF THE BOARD:

Mr B S Tennent-Bhohi - Director

Date: 23 June 2023

Statement of Comprehensive Income for the year ended 31 December 2022

Statement of Financial Position 31 December 2022

Statement of Changes in Equity for the year ended 31 December 2022

Statement of Cash Flows for the year ended 31 December 2022

Notes to the Statement of Cash Flows for the year ended 31 December 2022

2. CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts: