Financial Statements

Consolidated statement of total comprehensive loss

for year ended 31 December 2021

Loss and total comprehensive loss for the year is attributable to the equity holders of the Parent Company and are from continuing operations.

The notes form an integral part of the financial statements.

Consolidated statement of financial position

for year ended 31 December 2021

The notes form an integral part of the financial statements.

These financial statements were approved by the Board of Directors on 30 June 2022 and were signed on its behalf by:

Mr Clifford Elphick

Director

Consolidated statement of changes in equity

for year ended 31 December 2021

Consolidated cash flow statement

for year ended 31 December 2021

The notes form an integral part of the financial statements.

Notes to the financial statements

1 Business information and going concern basis of preparation

Background

Zanaga Iron Ore Company Ltd (the "Company"), was incorporated on 19 November 2009 under the name of Jumelles Holdings Limited. The Company changed its name on 1 October 2010. The Company is incorporated in the British Virgin Islands ("BVI") and the address of its registered office, is situated at 2nd Floor, Coastal Building, Wickham's Cay II, Road Town, P.O. Box 2221, Tortola, British Virgin Islands. On 18 November 2010, the Company's share capital was admitted to trading on the AIM Market ("AIM") of the London Stock Exchange ("Admission"). The Company's principal place of business as an investment holding vehicle is situated in Guernsey, Channel Islands.

At 31 December 2010 the Company held 100% of the share capital of Jumelles Limited subject to the then Call Option.

On 14 March 2011 the Company incorporated and acquired the entire share capital of Zanaga UK Services Limited for US$2, a company registered in England and Wales which provides investor management and administrative services.

In 2007, Jumelles became the special purpose holding company for the interests of its then ultimate 50/50 founding shareholders, Garbet Limited ("Garbet") and Guava Minerals Limited ("Guava"), in MPD Congo which, owns and operates 100% of the Zanaga Project in the RoC (subject to a minimum 10% free carried interest in MPD Congo in favour of the Government of the RoC).

In December 2009 Garbet and Guava contributed their then respective 50/50 joint shareholding in Jumelles to the Company.

Guava is majority owned by African Resource Holdings Limited ("ARH"), a BVI company that specialises in the investment and development of early stage natural resource projects in emerging markets. Guava owns approximately 27.39% of the share capital of the Company.

At the time that Garbet was a shareholder in the Company, it was majority owned by Strata Limited ("Strata"), a private investment holding company based in Guernsey, which specialises in the investment and development of early stage natural resource projects in emerging markets, predominately Africa. Until 3 April 2017 Garbet owned approximately 41.49% of the share capital of the Company. Pursuant to a transaction effected on 2 April 2017 Garbet ceased to hold any shares in the Company. As part of such transaction the shares in the Company which were held by Garbet were transferred directly or indirectly to Garbet's shareholders and the shareholders of Garbet's holding company, Strata.

Jumelles has three subsidiary companies, namely Jumelles M Limited, Jumelles Technical Services (UK) Limited and MPD Congo.

Transactions involving Xstrata and Glencore

·    As a result of transactions entered into on 16 October 2009 and 3 December 2009, Xstrata acquired a majority stake in Jumelles in return for providing funding towards ongoing exploration of the Zanaga exploration licence area, the preparation of a pre-feasibility study (the "PFS") and a feasibility study (the "FS"). In addition a joint venture agreement which regulated the respective rights of the Company, Jumelles and Xstrata in relation to Jumelles was entered into. >Subsequently:

o  Xstrata merged with the Glencore group on 2 May 2013 to form Glencore Xstrata and the holding company of the merged group subsequently changed its name to Glencore.

o  the Feasibility Study was completed in March 2014 and paid for.

Relationship between Jumelles and its shareholders since February 2011

The Company, Jumelles and Xstrata Projects agreed to regulate their respective rights in relation to the Project following exercise of the Call Option under the terms of the joint venture agreement ("JVA"). Under the terms of the JVA (as amended), all significant decisions regarding the conduct of Jumelles' business (other than certain protective rights which require the agreement of shareholders holding at least 95% of the voting rights in Jumelles) are made by the Board of Directors.

Glencore has the right to appoint three directors to the Jumelles Board while ZIOC has a right to appoint two directors. At any Jumelles Board meeting, the directors nominated by Glencore have between them such number of votes as represents Glencore's voting rights in the general meetings of Jumelles and the directors nominated by ZIOC have between them such number of votes as represents ZIOC's voting rights in the general meetings of Jumelles.

As a consequence of the provisions of the JVA (in its original version and as subsequently amended), , Glencore controls Jumelles at both a shareholder and director level and therefore controls what was the Company's sole mineral asset, the Zanaga Project. Going forward the Company accounted for this as an Investment in Associate in respect of the Project with Glencore.

Since the acquisition by Glencore of its majority stake in Jumelles, the principal business of the Company has been to manage its 50% less one share interest in the Project and to work with Glencore and the Zanaga Project team in the promotion of the development of the Project and the raising of finance.

Future funding requirements and going concern basis of preparation

The Directors have prepared the accounts on a going concern basis. At 31 December 2021 the Company had cash reserves of US$0.4m.

On 29 June 2022, Glencore and ZIOC have agreed a 2022 Project Work Programme and Budget for the Project of up to US$1.3m plus US$0.1m of discretionary spend. ZIOC has agreed to contribute towards this work programme and budget an amount comprising US$0.09m; the remaining budget amount will be funded via a loan facility provided directly to Jumelles Ltd by Glencore thus requiring less funding by ZIOC over the next 12 months compared to the historical levels observed. On 29 June 2022, Glencore and the group signed a side letter to the Jumelles loan facility confirming that there will be no dilution of the group's holding in Jumelles as a result of this change in funding structure.

The Company had cash reserves of US$0.3m as at 29 June 2022. In order to raise additional funding the Company entered a Subscription Agreement with SMC (as described above - see the Company's release of 26 June 2020.) The financing structure with SMC enables the Company to access funding for the costs that the Company is expected to meet in the near future. Due to the fact that SMC have 3,000,000 shares still to be placed into the market, for illustrative purposes only, if the average price at which SMC places the remaining 3,000,000 shares was 2.05 pence (being ZIOC's mid-market closing share price on 27 June 2022), the net proceeds received by ZIOC from such sales would be approximately £0.06m. Based on the current cost base at the Zanaga Project, the direct loan facility to Jumelles Ltd, the current low corporate overheads of ZIOC, the agreed cash preservation plan adopted by the Company (described below), the Company's existing cash reserves and (on the basis of cautious assumptions made by the Company in its funding model) the funds expected to be obtained from the funding facility established by the Subscription Agreement with SMC, the board of directors of ZIOC (the "Board") believes that the Company will be adequately positioned to support its operations going forward in the near future. As the final cash amounts to be received for each tranche of issued shares, and the timing of this receipt, are dependent on SMC successfully selling the shares prior to transferring funds to the Company, the Board is of the view that the going concern basis of accounting is appropriate. However, the Board acknowledges that there is a material uncertainty which could give rise to significant doubt over the Company's ability to continue as a going concern and, therefore, that the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, based on and taking into account the foregoing factors, the Board are satisfied the Company will have sufficient funds to meet its own working capital requirements up to, and beyond, twelve months from the approval of these accounts.

The Company continues to review the costs of its operational activities with a view to conserving its cash resources. As part of such ongoing review, and in order to preserve the cash position of the Company, it has been agreed with the Directors (since January 2019) and Management (since September 2019) that fees are deferred. Additionally, the Directors and management have indicated to the Company that they will assist the cash preservation plan of the Company. The way in which this could be achieved is being progressed.

In common with many exploration and development companies in the mining sector, the Company raises funding in phases as its project develops. As the Zanaga Project is still in the development stage and the cash resources of the Company are diminishing, the Company recognises that steps will need to be taken to raise additional investment either at the corporate level or at the Zanaga Project level, or a combination of the two. The raising of additional funds is linked to the progress that is made in relation to the development of the Zanaga Project. The initiatives that are being undertaken in relation to the development of the Zanaga Project have been described earlier in this announcement. There are a range of options for raising funds which the Company is pursuing. It is recognised that there is a risk that the Company may be unable to obtain debt and/or equity financing in the amounts required, in a timely manner, on favourable terms or at all and should this occur, it is highly likely to pose challenges for the Company and could adversely have an impact upon the proposed development of the Zanaga Project and the proposed timeline for its development.

If construction of the mine and related infrastructure proceeds (including any preparatory steps associated with the construction of the mine and related infrastructure), and the Company elects to fund its pro rata equity share of construction capital expenditure, it will need to raise further funds. There is no certainty as to the Company's ability to raise the required finance or the terms on which such finance may be available.

In addition, any decision of the Jumelles Board to proceed with construction of the mine and related infrastructure (or any variant such as a low-cost small scale start-up) is itself dependent upon the ability of Jumelles to raise the necessary debt and equity to finance such construction and the initial operation of the mine. Jumelles itself may be unable to obtain debt and/or equity financing in the amounts required, in a timely manner, on favourable terms or at all and should this occur, it is highly likely to pose challenges to the proposed development of the Zanaga Project and the proposed timeline for its development.

The Company still believes that once the proposed staged development of the Zanaga Project occurs, the Project offers high grade ore at competitive cost, thereby offering an attractive rate of return, at an acceptable level of risk. However, in order to carry out such staged development, it is still the case that substantial capital expenditure will be required both at the prospective mine site and in respect of transportation and other associated infrastructure and for working capital. Revenues from mining are dependent upon such development being financed and taking place.

At a time when the staged development of the Project takes place (or, if viable, a small-scale start-up takes place) the Company will need to obtain additional funding should it decide to elect to fund its share of any such development of the mine. If such staged development continues to be deferred due to unfavourable market conditions, the Company will need at the appropriate time to explore options to raise additional funding, pending the staged development (or, if viable, a small-scale start-up) taking place.

Volatility in currencies

Various factors, including the Brexit process and its aftermath as well as the impact that COVID-19 has had on global markets has resulted in increased volatility in currency rates applicable to Pounds Sterling. Such volatility is likely to continue. As the Company's cash resources are held in Pounds Sterling, such volatility could adversely affect the Company's financial position and results where it is obliged to make payments of sums denominated in other currencies. This particularly applies to contributions made by the Company to funding the Jumelles group as these amounts are calculated in United States dollars.

2 Accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

Basis of preparation

These financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union ("Adopted IFRS"). Adopted IFRS comprises standards and interpretations approved by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC") as adopted by the European Union.

The financial statements consolidate those of the Company and its subsidiary Zanaga UK Services Limited (together, the "Group") and the Company's investment in an associate which is accounted for using the equity method.

The company's presentation currency and functional currency is US dollars.

New standards, amendments and interpretations

The following IFRSs standards and amendments are effective from 1 January 2021:

·    Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16). These amendments are not expected to have any material impact upon the finan-cial statements.

The above listed standards and amendments have been adopted by the Company. The amendments do not have a material impact on the Company's business or on the Company's financial statements and as such there are no presentation or measurement changes within the financial statements. .

New and revised IFRS Standards in issue but not yet effective

The following amendments are in issue,  adopted by the European Union but are not effective for the current period:

·    Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16)

·    Reference to the Conceptual Framework (Amendments to IFRS 3)

·    Property, Plant and Equipment - Proceeds before Intended Use (Amendments to IAS 16)

·    Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)

·    Annual Improvements to IFRS Standards 2018-2020

No material impact upon the Company's financial statements are anticipated from these amendments.

Measurement convention

These financial statements have been prepared on the historical cost basis of accounting.

The preparation of financial statements in conformity with Adopted IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.

Basis of consolidation

Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the financial statements from the date that control commences until the date that control ceases.

Associates

Investments in associates are recorded using the equity method of accounting whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition changes in the Group's share of the net assets of the associate. The Group profit or loss and other comprehensive income includes the Group's share of the associate's profit or loss and other comprehensive income. The investment is considered for impairment annually.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from the intra-group transactions, are eliminated in preparing the financial statements.

Foreign currency

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in equity.

Share-based payments

The Group makes equity-settled share-based payments to certain employees and similar persons as part of LTIP (a long-term incentive plan). The fair value of the equity-settled share-based payments is determined at the date of the grant and expensed, with a corresponding increase in equity, on a straight line basis over the vesting period, based on the Group estimate of the awards that will eventually vest, save for any changes resulting from any market-performance conditions.

Where awards were granted to employees of the Group's associate and similar persons, the equity-settled share-based payments were recognised by the Group as an increase in the cost of the investment with a corresponding increase in equity over the vesting period of the awards. In equity accounting for the Group's share of its associate, the Group has accounted for the cost of equity settled share-based payments as if it were a subsidiary.

The shares issued under the 2010 LTIP were acquired by an Employee Benefit Trust which subscribed for the shares at zero value. These shares are held by the Employee Benefit Trust until the vesting conditions have been met and the share options are exercised. During Q4 2017, all the outstanding share options were exercised and a small number of surplus shares held by the Employee Benefit Trust were distributed to beneficiaries of the Trusts. The Employee Benefit Trust has now been discontinued.

Subsequent awards of share options have been structured as standard share options and did not involve the use of an employee benefit trust.

Information on the share awards is provided in Note 11 to these financial statements.

Share-based payments to non-employees

Where the Group received goods or services from a third party in exchange for its own equity instruments and the amount of equity instruments is fixed, the equity instruments and related goods or services are measured at the fair value of the goods or services received and are recognised as the goods are obtained or the services rendered. Equity instruments issued under such arrangements for the receipt of services are only considered to be vested once provision of services is complete. Such awards are structured as standard share options.

Non-derivative financial instruments

Financial assets and financial liabilities are recognised in the Group's consolidated statement of financial position when the Group becomes a party to the contractual provisions of the instrument in accordance with IFRS 9.

Financial assets are initially recognised at their fair value, including, in the case of instruments not recorded at fair value through profit or loss, directly attributable transaction costs. Financial assets are subsequently measured at amortised cost, at fair value through other comprehensive income (FVTOCI) or at fair value through profit or loss (FVTPL) depending upon the business model for managing the financial assets and the nature of the contractual cash flow characteristics of the instrument.

Financial liabilities, other than derivatives, are initially recognised at fair value of consideration received net of transaction costs as appropriate and subsequently carried at amortised cost.

Non-derivative financial instruments in the balance sheet comprise other receivables, cash and cash equivalents, and trade and other payables.

 (i) Impairment of financial assets

A loss allowance for expected credit losses is determined for all financial assets, other than those at FVTPL, at the end of each reporting period. The expected credit loss recognised represents a probability-weighted estimate of credit losses over the expected life of the financial instrument.

The expected credit loss allowance is determined on the basis of twelve month expected credit losses and where there has been a significant increase in credit risk, lifetime expected credit losses. Financial assets are credit impaired when there is no realistic likelihood of recovery.

(ii) Derecognition of financial assets and financial liabilities

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or have expired.

On derecognition of a financial asset/financial liability in its entirety, the difference between the carrying amount of the financial asset/financial liability and the sum of the consideration received and receivable/paid and payable is recognised in profit and loss.

Other receivables

Other receivables include receivables from related parties. Where financial assets are included within this line item, these are managed within a business model to collect the contract cashflows, which represent solely payments of principal and interest. Other receivables are subsequently measured at amortised cost.

Trade and other payables

Trade and other payables are initially recognised at the fair value of consideration received net of transaction costs as appropriate and subsequently measured at amortised cost.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances and call deposits. These are managed within a business model to collect the contract cashflows, which represent solely payments of principal and interest These are subsequently measured at amortised cost and are determined to have a low credit risk due to being held with highly credit rated financial institutions. As such, these balances are not assessed to determine whether there has been a significant increase in credit risk.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity.

When share capital recognised as equity is repurchased, the amount of consideration paid, including directly attributable costs, is recognised as a change in equity. Repurchased shares are cancelled.

Impairment of investment in associate

The carrying amounts of the Group's investment in associate are reviewed at each reporting period end to determine whether there is any indication of impairment. The investment is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that investment. If any such indication exists, the investment's recoverable amount is estimated.

An impairment loss is recognised whenever the carrying amount of the investment or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the income statement.

(i) Calculation of recoverable amount

The recoverable amount of the Group's investments carried at amortised cost is calculated as the present value of estimated future cash flows, discounted at the original effective interest rate (i.e. the effective interest rate computed at initial recognition of these financial assets).

(ii) Reversals of impairment

An impairment loss is reversed when there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount.

An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Financing income and expenses

Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method.

Taxation

Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the end of each reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of each reporting period.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

Segmental Reporting

The Group has one operating segment, being its investment in the Project, held through Jumelles. Financial information regarding this segment is provided in Note 6b.

Subsequent events

Post year-end events that provide additional information about the Group's position at the end of each reporting period (adjusting events) are reflected in the financial statements. Post year-end events that are not adjusting events are disclosed in the notes to financial statements where material. Please see note 17.

3 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 2, the directors are required to make judgements (other than those involving estimations) that have a significant impact on the amounts recognised and to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

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

Key source of estimation uncertainty - Carrying value of Investment in Associate

The value of the Group's investment in Jumelles depends very largely on the value of Jumelles' interest in the Project. Jumelles assesses at least annually whether or not its exploration projects may be impaired. This assessment can involve significant estimation uncertainty as to the likelihood that a project will continue to show sufficient commercial promise to warrant the continuation of exploration and evaluation activities. It is reasonably possible, on the basis of existing knowledge, that changes in assumptions within the next financial year could require a material adjustment to the carrying amount of the Investment in Associate.

The long-term iron ore price and discount rate assumptions for the Zanaga project were $58/tonne (CFR IODEX 62% Fe forecast with adjustments for quality, deleterious elements, moisture and freight) and 11.34%, respectively. A 1.5% reduction in the long-term iron ore price or a 0.4% increase in the discount rate applied would result in the remaining carrying value being fully impaired. A movement in the opposite direction of the long-term iron ore price and discount rate by the same percentages would result in a reversal of the impairment recorded to the original carrying value of $100 million. The Group's share of these outcomes would be limited to 49.99% of the amount recognised at the Jumelles level. . It should be noted that the current 62% Fe IODEX price is $123/tonne, signifcantly higher than the price assumptions used in the estimation.

4 Note to the comprehensive income statement

Operating loss before tax is stated after charging/(crediting):

Other than the Company Directors, the Group did not directly employ any staff in 2021 (2020: nil). The Directors received a total of US$nil remuneration for their services as Directors of the Group (2020: US$nil. The amounts paid as Directors' fees are shown in the Directors' Remuneration Report in the 2021 Annual Report. The Directors' interests in the share capital of the Group are shown in the Directors' Remuneration Report in the 2021 Annual Report.

5 Taxation

The Group is exempt from most forms of taxation in the BVI, provided the Group does not trade in the BVI and does not have any employees working in the BVI. All dividends, interest, rents, royalties and other expense amounts paid by the Company, and capital gains are realised with respect to any shares, debt obligations or other securities of the Company, are exempt from taxation in the BVI.

The effective tax rate for the Group is Nil % (2020: Nil %).

6a Property, Plant and Equipment

There are no assets held under lease contracts.

6b Investment in Associate

At 31 December 2021, the investment represents a 50% less one share shareholding in Jumelles being 2,000,000 shares of the total share capital of 4,000,001 shares. Originally recorded at cost, the investment has been adjusted for changes in the Company's share of the net assets of the associate, less impairment. The investment has been impaired down to the Company's share of the impaired value of the Project declared in the accounts of the associate.

The additions to the investment during the year were due to the additional US$0.60m of investment agreed in accordance with the 2021 Funding Agreement (2020 US$0.58m).

The Company's investment in Jumelles continues to be accounted for as an associate using the equity method of accounting as Glencore has control of the business as described in note 1.

As at 31 December 2021, Jumelles had aggregated assets of US$81m (2020: US$81.4m) and aggregated liabilities of US$0.6m (2020: US$0.8m). For the year ended 31 December 2021 there was no impairment charge (2020: US$nil) and Jumelles incurred a loss before tax of US$1.3m (2020: US$1.4m). There was no tax charge for 2021 (2020: US$nil). Currency translation of the underlying Congolese asset generated a translation loss of US$nil (2020: US$nil).

Summarised financial information in respect of the Group's associate, reflecting 100% of the underlying associate's relevant figures is set out below.

7 Other receivables

8 Cash and cash equivalents

9 Trade and other payables

No amounts payable are due in more than 12 months (2020: US$nil due in more than 12 months).

10 Share capital

The Company is able to issue an unlimited number of no par value shares. The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. No dividends have been paid or declared in 2021 or in the current year (2020: US$nil).

Share capital changes in 2021

14,000,000 shares were issued in 2021 as part of the SMC transaction as described in note 1. There were no share repurchases.

11 Share-based payments

Employees

No awards were issued in 2021.

Awards currently in operation are as follows:

Award 1 (fully vested)

These awards vested on the publication of the results of the VEE, which was achieved in October 2011.

Award 2 (fully vested)

These awards fully vested in 2012 on the expiry of two years following Admission.

Award 6 (fully vested)

These awards have fully vested.

Award 8 (fully vested)

These awards vested on the date of grant in July 2014.

Award 9 (fully vested)

These awards have fully vested.

Details of current awards are as follows:

* Sterling amounts have been converted into US Dollars at the grant dates exchange rates of: Awards 1,2, US$1.547:£1.00, Subsequent awards US$ 1.6944:£1.00.

** Excepting 199,076 share options with expiry date 7 July 2023

The following information is relevant in the determination of the fair value of options granted during 2010 and 2014 which has applied option valuation principles during the year under the above equity-settled schemes:

* Sterling amounts have been converted into US Dollars at the grant dates exchange rates of: Awards 1,2, US$1.547:£1.00, Subsequent awards US$ 1.6944:£1.00.

The volatility assumption of awards 1 & 2 were measured by reference to the historic volatility of comparable companies based on the expected life of the option. Subsequent awards referenced the volatility of the Company's own history since the 2010 flotation.

Non-employees

In August 2019 the Group entered into a new incentive plan which granted share options in the Group to two non employee individuals and Harris Geoconsult Limited who all provide consulting services to the Group. On 29 August 2019, 13,633,335 options were granted under this scheme. The scheme will be settled in equity instruments of the Group and is therefore treated as an equity-settled share-based payment arrangement. The options vest in multiple tranches based on the Group achieving key performance milestone including:

(a)  The approval by Jumelles of the Early Production Project (EPP), including its potential technical and financial feasibility, as the basis for advancing the development of the Zanaga Project;

(b)  Raising finance either for the Group or separately for the development phase of the Zanaga Project; or

(c)  The completion of a significant merger or acquisition involving the Group or any member of the Jumelles Group acquiring a material interest (as determined by the Group board) in a third party or a third party acquiring a material interest (as determined by the Group board) in the Group or a member of the Jumelles Group.

All unvested options will also vest on the occurrence of certain events, such as a change of control of the Company. Once vested all options will also vest on the occurrence of certain events, such as a change of control of the Company. Once vested all options are exercisable within seven years of the grant date of award. The options have a nominal exercise price of 0.01p (one hundredth of one penny). The number of share options are as follows:

The services to be provided in exchange for the options are unidentifiable at the date of the grant and therefore the Group has measured the fair value of the services with reference to the fair value of the options granted. The fair value is measured using a Black Scholes model. Measurement inputs and assumptions as follows:

As the options are effectively nil-cost options the expected volatility and risk free rate does not impact the fair value under the Black Scholes model and therefor been excluded from the model inputs. The share options are granted with a number of non-market performance conditions relating to achievement of specific performance milestones for the Group as set out above. In addition, the option holders must continue to provide consulting services to the Group as at the vesting date. Such conditions are not taken into account in the grant date value measurements of services received. The achievement of the non-market performance conditions are estimated by management to determine expected vesting period over which to spread the equity-settled share-based payment charge. As at year end the expected vesting date of each tranche of options is between 30 June 2020 and 31 December 2021 resulting in a weighted average option life of 2.4 years.

The total expenses recognised for the year relating to equity-settled share-based payments is US$547k.

In addition, there are 1,600,000 options outstanding which were issued to a consultant in 2014 at 18.5p that have vested but have not yet been exercised.

12 Loss per share

There are potential ordinary shares outstanding, refer to Notes 10 and 11 for details of these potential ordinary shares. The effects of these potential shares are not considered in the calculation of diluted loss per share.

13 Financial instruments

Financial Risk Management

The Group's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (comprising currency risk and interest rate risk). The Group seeks to minimise potential adverse effects of these risks on the Group's financial performance. The Board has overall responsibility for managing the risks and the framework for monitoring and coordinating these risks. The Group's financial risk management policies are set out below:

(a)  Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group receivables related parties. The Group has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. At 31 December, the Group's maximum exposure to credit risk was as follows:

Significant concentrations of credit risk manifest with the Group's banking counterparties with which the cash and cash equivalents are held, and accounts receivable from Jumelles.

 (b) Liquidity risk

Liquidity risk is the risk that the Group is unable to meet its payment obligations when due, or that it is unable, on an ongoing basis, to borrow funds in the market on an unsecured or secured basis at an acceptable price to fund actual or proposed commitments. Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and availability of adequate committed funding facilities.

The Group evaluates and follows continuously the amount of liquid funds needed for business operations, in order to secure the funding needed for business activities and loan repayments. The availability and flexibility of the financing is needed to ensure the Group's financial position, as detailed in Note 1.

The maturity profile of the Group's financial liabilities based on the contractual terms is as follows:

(c) Market risk

(i) Foreign currency risk

The functional currency of the Group is the US dollar. Currency risk is the risk of loss from movements in exchange rates related to transactions and balances in currencies other than the U.S. dollar. The foreign currency denominated financial assets and liabilities are not hedged, thus the changes in their value are charged or credited to profit and loss.

As at 31 December 2021 the foreign currency denominated assets include cash balances held in Sterling of US$387,322 (2020: US$351,772), other receivables denominated in Sterling of US$232,972 (2020: US$58,440), and payables of US$153,283 (2020: US$184,459) denominated in Sterling.

The following significant exchange rates applied during the year:

(ii) Sensitivity analysis

A 10% weakening of the following currencies against the US Dollar at 31 December 2021 would have increased/(decreased) equity and profit or loss by the amounts shown below. This calculation assumes that the change occurred at the end of each reporting period and had been applied to risk exposures existing at that date. This analysis assumes that all other variables, in particular other exchange rates and interest rates, remain constant.

A 10% strengthening of the above currencies against the US Dollar at 31 December would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

(iii) Capital management

The Board's policy is to maintain a stable capital base so as to maintain investor and market confidence. Capital consists of share capital and retained earnings. The Directors do not intend to declare or pay a dividend in the foreseeable future but, subject to the availability of sufficient distributable profits, intend to commence the payment of dividends when it becomes commercially prudent to do so.

The Company has a share incentive programme which is now administered by the Board. The share incentive programme is discretionary and the Board will decide whether to make share awards under the share incentive programme at any time. In Q4 2017 all then outstanding share options over already issued shares in the LTIP split interest scheme were exercised, a small number of surplus shares were distributed to beneficiaries of the Employee Benefit Trust involved in the scheme and the LTIP split interest scheme was then discontinued.

14 Commitments for expenditure

The Group had no capital commitments or off-balance sheet arrangements at 31 December 2021 (31 December 2020: nil). Subsequently, Glencore and ZIOC have agreed a 2022 Project Work Programme and Budget for the Project of up to US$1.2m plus US$0.1m of discretionary spend. ZIOC has agreed to contribute towards  this work programme and budget an amount comprising US$0.1m, the remaining funds will be provided by a Glencore loan facilty into Jumelles.

15 Related parties

The Group's relationships with Jumelles and Glencore are described in Note 1.

The following transactions occurred with related parties during the period:

16 Transactions with key management personnel

The Directors have no material interest in any contract of significance subsisting during the financial year, to which the Group is a party.

17 Subsequent Events

Jumelles Loan Facility

On 29 June 2022, Glencore and ZIOC agreed a 2022 Project Work Programme and Budget for the Project of up to US$1.3m plus US$0.1m of discretionary spend. ZIOC has agreed to contribute towards this work programme and budget an amount comprising US$0.09m; the remaining budget amount will be funded via a loan facility provided directly to Jumelles Ltd by Glencore thus requiring less funding by ZIOC over the next 12 months compared to the historical levels observed. On 29 June 2022, Glencore and the group signed a side letter to the Jumelles loan facility confirming that there will be no dilution of the group's holding in Jumelles as a result of this change in funding structure.

*** End of Financial Statements ***

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