AfriTin Mining : Annual Report

2022 ANNUAL REPORT

TABLE OF CONTENTS

CHAIRMAN'S STATEMENT .................................................................................................................................	5
CHIEF EXECUTIVE OFFICER'S STATEMENT ...............................................................................................	7
FINANCIAL REVIEW ..............................................................................................................................................	11
DIRECTORS' REPORT ............................................................................................................................................	15
CORPORATE GOVERNANCE REPORT ..........................................................................................................	23
STATEMENT OF DIRECTORS' RESPONSIBILITIES ....................................................................................	29
INDEPENDENT AUDITOR'S REPORT ...............................................................................................................	31
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..........................................................	40
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................	41
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................	42
CONSOLIDATED STATEMENT OF CASH FLOWS .....................................................................................	44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ..............................................................	45
NOTICE OF ANNUAL GENERAL MEETING ...................................................................................................	85
COMPANY INFORMATION ...................................................................................................................................	89

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	GLEN PARSONS	CHAIRMANS' STATEMENT
	CHAIRMAN
		CHIEF
		REVIEW
The year in review marks a significant milestone	FINANCIAL
for AfriTin and the team. I congratulate all of our
employees on this achievement. The fundamentals
in this financial year have been strong for tin,
coupled with the ever-increasing demand for	DIRECTORS'
the transition to a greener world. Our team has
REPORT

successfully returned Uis to its rightful state as a producing mine. I congratulate all of our employees on this achievement.

CHAIRMAN'S

STATEMENT

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Since attaining our Namibian licences, we remain confident in the fundamentals of producing a saleable tin concentrate and further unlocking future revenue streams. Against the backdrop of surpassing nameplate production in November 2020 and building on this throughout 2021, AfriTin is well on its way to becoming a globally significant producer of high demand strategic commodities. We look forward to building on our existing platform through our various expansion projects and complimentary metal streams.

As per most companies globally, AfriTin was not immune to the effects and disruptions of the COVID-19 pandemic. While our teams were presented with multiple logistical challenges, acts performed to overcome these are a testament to the resilience and flexibility of our employees and management. The health and safety of our staff, partners and stakeholders has been, and always will be of paramount importance to the Board.

Afritin's commitment to strong Environmental, Social and Governance (ESG) principles has been entrenched in our philosophy since inception and is strongly supported by the Board and the entire organisation. We recognise the need and duty to entrench good governance and ESG principles as early as possible in our business development plan and to adopt necessary monitoring and change to sustainably achieve these.

Looking to the future of AfriTin, we remain confident in our pursuit of producing saleable commodities at Uis as well as our other license areas. The positive, global momentum shift in the green tech revolution and a step-change in demand for these strategic materials is the global opportunity that presents itself to AfriTin. AfriTin's ability to economically deliver these saleable products to what we believe is a pent up and ongoing future

demand for these minerals remains our focussed objective.

AfriTin is particularly proud of developing Uis in Namibia in conjunction with our majority Namibian workforce at site, our local communities and local and national government. Namibia is one of Africa's leading mining jurisdictions according to the Policy Perspective Index, and we are proud to play our part in its continued development. Listing on the Namibian Stock Exchange in March 2022 solidifies our commitment to the country and our desire to share our success locally with those who played a part in it.

We consider AfriTin today to be a significantly different company to what it was a year ago due to the change achieved and accelerated development progress at Uis. There are considerable future strategic milestones we have set for our teams, and whilst our tin success at Uis provides a proven underpinning foundation on which to build, we are not resting on this.

I applaud the work completed and the foundations laid to secure our future and would like to thank my fellow Board members, management teams, all stakeholders and most of all our people and their families.

GLEN PARSONS

Chairman

31 August 2022

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INDEPENDENTDIRECTORS' OF STATEMENTCORPORATE REPORT AUDITOR'SRESPONSIBILITIESREPORT GOVERNANCE

FINANCIAL STATEMENTS

ANNUAL OF NOTICE MEETING GENERAL

COMPANY INFORMATION

CHIEF EXECUTIVE OFFICER'S STATEMENT

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ANTHONY VILJOEN

CHIEF EXECUTIVE OFFICER

AfriTin has had another successful year, serving as the foundation for the rapid deployment of the Company's various growth initiatives over the coming months. I believe AfriTin is poised to become a leading supplier of technology metals, targeting a more diversified portfolio of production in the near future. We find ourselves a part of a small, unique group of global tin producers, with a differentiating factor being the prospect of underexplored lithium and tantalum in the region, as well as additional historical open pit mines which all form part of our exciting mining operations at our flagship Uis asset.

The market fundamentals for tin provided the perfect backdrop for a mine ramping up its production. Our positive production results coincided with a period of unprecedented tin price highs triggered by low stocks and no sign of relief from a constrained physical supply chain. The Company ended the financial year with cash and cash equivalents of £7.365m (2021: £1.351m). A £4.5 million senior secured term loan agreed with Standard Bank Namibia marked a strong endorsement of the Company and the expansion of our tin production. Our focus now turns to leveraging these cashflows from the tin production, to bring the significant lithium and tantalum revenue streams into production.

The Phase 1 pilot plant at Uis has performed strongly and provided a perfect platform to propel AfriTin from a single commodity producer to a multi-tech metal Company over the next five years. Production at our flagship asset exceeded nameplate capacity with an annual production of 804 tonnes of tin concentrate. A Definitive Feasibility Study for the expansion of the Phase 1 mining and processing facility was published during the year which served as confirmation of the highly attractive economics associated with the low-cost modular expansion of the current Phase 1 plant. The Phase 1 expansion project is currently in progress and is estimated to increase tin concentrate production by 67% by way of a modular expansion of the existing processing facility. The bulk of the civil construction and steel

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fabrication has been completed, with on-site steel construction currently in progress.

In line with our vision of diversification of our tech- metal exposure through by-product production, raising equity funds of £13 million before expenses has put the Company in a position to expedite the Phase 1 expansion and further investigate lithium and tantalum by-product potential and exploration. By-product production as well as the introduction of ore sorting technology, which upgrades feed to the concentrator by up to four times the ROM grade, could transform the overall economics and unit cost of production for Phase 1. The Company is proceeding with the design and procurement of a pilot lithium beneficiation facility as well as the implementation of a tantalum concentrating circuit and ore sorting test circuit. By implementing the pilot phase development of these additional products, the Company aims to take advantage of the burgeoning technology metals market by fast- tracking the by-product streams into production.

Turning to Phase 2, the results of the Phase 2 Preliminary Economic Assessment (PEA) were announced during the year and demonstrated the economics and returns for the expansion (see announcement dated 26 April 2022). Phase 2 should see AfriTin produce globally significant volumes of tin, lithium, and tantalum, which the Directors believe are vital in meeting the demands of the transition to a new efficient and greener technology future.

The Directors consider the Damara region to be

CHAIRMANS' STATEMENT

FINANCIAL CHIEF REVIEW

DIRECTORS' REPORT

INDEPENDENTDIRECTORS' OF STATEMENTCORPORATE REPORT AUDITOR'SRESPONSIBILITIESREPORT GOVERNANCE

FINANCIAL STATEMENTS

ANNUAL OF NOTICE MEETING GENERAL

COMPANY INFORMATION

CHAIRMANS' STATEMENT

a metallogenic jewel with huge, underexplored potential. The ore reserve declared at Uis represents a small portion of the historically drilled area in the mining licence property. As a route to expanding our footprint within the extended Uis project area, an exploration drilling campaign commenced during the year with the aim of verifying the historic resources and upgrading the resources to comply with the JORC (2012) Codes. This could see the resource increase significantly from 1.54 Mt, however, at this stage there can be no guarantee what that resource will be. We look forward to providing updates as we progress. The Company's other licence areas in the region encompass additional historical mining areas and there is potential for these to deliver sustained long-term value by reopening a global significant- tech metals province for AfriTin. The exploration of these remains a high priority for the Company. To this end, an exploration programme is in progress to confirm the historical tin and tantalum resource and to investigate the spodumene (lithium) discovery announced in March 2022 (after the period under review) at our B1/C1 mining licence. In addition, an aggressive confirmatory drilling program at the historic Brandberg West tin and tungsten mining operation, aims to verify the historical drilling database at this site.

Our fully funded Phase 1 expansion project and the extensive exploration programme currently underway are the fundamental building blocks to positioning AfriTin as a globally significant tech metals producer. While the volatility in the tin prices post year-end posed a challenge for the Group, we are at the advanced stages of securing funding to continue with our growth ambitions. A subsidiary of the Group has entered into a conditional, credit approved, term sheet for a lending facility with the DevelopmentBankofNamibiaLimited("Development Bank of Namibia") to fund the Uis Phase 1 Stage II Continuous Improvement Project. As announced on 5 July 2022, a Proposed Lending Facility comprising a NAD 100 million (approximately £5.5 million) Senior Secured Lending Facility has been signed with the Development Bank of Namibia. Although the Lending Facility has been approved by the credit committee

and board of the Development Bank of Namibia, there are certain conditions precedent that need to be adhered to, including the completion of the final legal documentation. At this stage there can be no guarantee the Lending Facility will be entered into, or that any money will be drawn down, but AfriTin Management have every confidence that it will be. The Company has previously announced that the terms of this proposed lending facility expired at the end of July 2022 but the Directors confirm that this has now been extended such that completion is anticipated around the end of September 2022. A further update will be provided at that time.

As an acknowledgment of our commitment to developing Namibia and its capital markets further, AfriTin announced its dual listing on the NSX market of the Namibian Stock exchange. We are acutely aware of the influence and impact we can wield, and it is for this reason that the leadership team places great emphasis on creating value for the wider community, our shareholders, investors, and other stakeholders. Central to all decisions is the commitment to reducing carbon emissions and limiting the environmental impact of our operations. An Environmental, Social and Governance (ESG) system was implemented during the course of the year, and we hope to present a strategy to the market in H2 2022.

I would like to congratulate and thank our management teams, staff, and stakeholders for their outstanding efforts, continued support, and for all that we have achieved over the past year. In addition, I would like to thank the other Directors for their guidance and advice. We are committed to expanding and developing Uis, as well as our other Namibian exploration assets as we embark on the route to becoming a significant African multi-commodity tech metals producer. I look forward to updating the market on our progress.

ANTHONY VILJOEN

Chief Executive Officer

31 August 2022

FINANCIAL CHIEF REVIEW

DIRECTORS' REPORT

INDEPENDENTDIRECTORS' OF STATEMENTCORPORATE REPORT AUDITOR'SRESPONSIBILITIESREPORT GOVERNANCE

FINANCIAL STATEMENTS

ANNUAL OF NOTICE MEETING GENERAL

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COMPANY INFORMATION