Ferro-Alloy Resources Limited
Annual Report
2024
Ferro-Alloy Resources Limited Annual Report 2024
Ferro-Alloy Resources Limited
Maison Allaire
Smith Street
St Peter Port
Guernsey
GY1 2NG
www.ferro-alloy.com
Contents
REVIEW OF THE YEAR
2
Operational Review
4
Feasibility Study Review
7
Financial Review
9
Sustainability Review
13
Climate Change Disclosures
17
Principal Risks and Uncertainties
GOVERNANCE
18
Governance Statement
20
Board of Directors
22
Senior Management Team
23
Directors’ Report
26
Directors’ Responsibility Statement
FINANCIAL STATEMENTS
27 Independent Auditor’s Report
33
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
34
Consolidated Statement of Financial Position
35
Consolidated Statement of Changes in Equity
36
Consolidated Statement of Cash Flows
37
Notes to the Consolidated Financial Statements
64
Company Information
Ferro-Alloy Resources Limited
Annual Report 2024
Ferro-Alloy Resources Limited is developing the giant Balasausqandiq vanadium deposit in the
Kyzylordinskaya oblast of southern Kazakhstan. Being sedimentary in nature, unlike most other primary
vanadium deposits in the world, Balasausqandiq ore does not require pre-concentration or roasting of the
ore, giving far lower capital and operating costs. With carbon as a valuable co-product, Balasausqandiq is
expected to have the lowest vanadium cash production costs in the world.
Planned output for Phase 1 is 8,000 tonnes of vanadium pentoxide, with plans to increase up to four
times more in a second phase.
“The development of Balasausqandiq has the potential to make a significant impact on the world of
vanadium. We intend to meet the rapidly expanding demand from battery storage as well as for the
steel industry faster, at lower capital costs per annual tonne, and at a lower cash production cost
than other existing or planned vanadium producers.”
Nicholas Bridgen, Chief Executive Officer
Ferro-Alloy Resources Limited Annual Report 2024 1
“A low-cost vanadium producer
emerging in Kazakhstan...”
Ferro-Alloy Resources Limited Annual Report 20242
Operational Review
The focus of the Company and its wholly owned group of subsidiary undertakings (“the Group”) has been on the completion
of the feasibility study on the Balasausqandiq vanadium deposit, expected befor
e the end of the first half of 2025. The Group
is also engaged in the business of extracting vanadium, molybdenum and nickel from purchased concentrates using the pilot-
plant that was constructed to test the metallurgical processes to be used in the main Balasausqandiq project.
This operation was intended to provide a cash flow to assist with the substantial ongoing costs of the preparation of the
feasibility study and to contribute to the construction costs of the Balasausqandiq project mining operations. However, the
scale of the operation, combined with current low metal prices, means that the expected contribution is small and the decision
was announced on 2 December 2024 to focus current operations on some important research and development (“R&D”) that
will greatly assist future operations and marketing. Notwithstanding the change of priorities, production is continuing and will
do so whenever there are high-grade, profitable, concentrates available.
Maintaining the small operation has enabled us to retain the high quality technical and operating team that developed the
metallurgical processes to be used in the main Balasausqandiq project so that they are available to assist with the feasibility
study, design and future construction and operation. As a result, the Group’s work-force is experienced and will have a high
level of technical and operational expertise prior to commissioning of the mine, significantly de-risking the project.
Production
As noted, during December 2024, we announced that the strategic focus of the Company would be on development
of the carbon black substitute product and other R&D efforts aimed at improving operations or marketing of the main
Balasausqandiq project. Accordingly, we decided that production was no longer a priority and would only continue when other
commitments allowed, and when profitable concentrates were available. Nevertheless, during 2024, the plant operated as
planned.
During the year, production of vanadium pentoxide (“V
2
O
5
”) (mainly as ammonium metavanadate) and molybdenum
(in ferro-molybdenum) amounted to 300.9 tonnes (2023: 310.5 tonnes) and 34.9 tonnes (2023: 34.4 tonnes), respectively.
Quarter
Production of
Vanadium
pentoxide
(tonnes)
Growth vs
last year
Production of
Molybdenum
(tonnes)
Growth vs
last year
Q1 81.6 +161% 7.1 +9%
Q2 87.6 -38% 6.9 -51%
Q3 52.3 +12% 7.1 +11%
Q4 79.4 -12% 13.8 +86%
2024 total 300.9 -3% 34.9 2%
The plant also produced a low-grade nickel concentrate for sale to customers during the year.
Product prices (mid-market, as published) for ferro-molybdenum have broadly remained stable during the year while the price
of vanadium pentoxide has reduced by approximately 18%, as shown in the table below:
Start of 2024
Average
for the year End of 2024
Current
(25 April 2025)
Vanadium pentoxide (US$/lb) 6.53 5.86 5.37 5.29
Ferro-molybdenum (US$/kg of Mo) 48.7 50.7 49.8 48.0
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 3
Research and Development
Electrolyte for vanadium redox flow batteries
Vanadium Redox Flow Batteries (“VRFBs”) are a means of energy storage particularly suitable for the long-duration storage
of energy from intermittent renewable sources. VRFBs have certain advantages over lithium-ion technology, including being
scalable, not degrading over time and not catching fire, which make them more suitable for bulk, longer duration, energy
storage.
The roll-out of VRFBs is well underway in China and is beginning in the rest of the world. In 2024 some 10% of world vanadium
production was used for vanadium battery electrolyte, up from around 2% in 2020. China has announced the commencement
of construction of new VRFB projects totalling more than 11 GWh of storage, implying further consumption of around 50,000
tonnes of vanadium, around 38% of 2024 global production.
The Group, therefore, intends to position itself to supply into this growing market by developing the capability to produce the
high purity product required, in the form of the specific vanadium oxides that are, ideally, used to make electrolyte.
Using grant funding from Kazakhstan’s National Scientific Council, the Group has already adapted the existing process plant to
be capable of producing high purity vanadium pentoxide. The next step is to commission the equipment needed to produce
the mixed oxides (V
2
O
4
and V
2
O
3
) required for electrolyte. Concurrently, we have installed equipment, including a test VRFB,
at the laboratory of our research partner, the Physical Technical Institute in Almaty, to test our materials, electrolyte and
performance within an operating VRFB.
After a period of testing and development, the plan is to continue to move most of our current production to these higher
value products. Offtake discussions for mixed oxides have already been held with three major VRFB manufacturing companies.
By developing the expertise and the market, the aim is to position the Group to be able to supply mixed oxides at scale into
this potentially very large market when the main Balasausqandiq project is commissioned.
Production of carbon concentrate for the substitution of carbon black in the making of rubber
The Group has previously announced the successful technical and marketing studies, using specialist consultants, for the
production of a concentrate from the carbon in the tailings at the planned major processing plant at Balasausqandiq. The
ongoing R&D work is designed to further enhance our knowledge of the production process and to develop markets.
The Group is working with the National Engineering Academy of the Republic of Kazakhstan on a technological project covering
the industrial production and usage of carbon-silica fillers in the making of rubber. The aim of the project is to construct a pilot
plant, substantially funded by government grants, on the Group’s existing processing site to concentrate the Group’s carbon
tailings to provide over ten tonnes of fine-ground carbon-silica concentrate per month for testing and marketing. All equipment
is now in place, requiring only cabling before commissioning can start. The Group is well advanced in understanding the
requirements of this market and, using consultants, has already tested the production and performance of the carbon black
substitute material in the manufacture of rubber.
Enhanced leaching research
The Group has been awarded grant funding as a private partner to a Satbayev University programme for the development of
new metallurgical technologies, particularly focused on enhanced leaching techniques which may be applicable to vanadium-
bearing ores. From these funds, the Group has set up a full lab-scale comminution circuit at the Satbayev University site in
Almaty.
Production of ferro-nickel from low grade nickel concentrates
The Company has applied for funding to research production of ferro-nickel from the low grade nickel residues currently
produced from the existing operation.
Ferro-Alloy Resources Limited Annual Report 20244
Feasibility Study Review
The Company has been carrying out a feasibility study into
the first phase (“Phase 1”) of the Balasausqandiq project, due
to be completed towards the end of the first half of this year.
In September 2024 we announced the increase in the
proposed Phase 1 annual throughput of ore at the
Balasausqandiq deposit from 1.1m tonnes to 1.65m tonnes,
reflecting the substantial increase in the estimated resource
at Ore-Body 1 (“OB1”), as well as increasing forecasts of world
vanadium demand. Phase 1 production is now expected to
be some 8,000 tonnes per year of vanadium pentoxide.
Balasausqandiq deposit
The Balasausqandiq deposit is exceptional in a number of
ways. Primarily, it is not comprised of titano-vanadiferous
magnetite, as most of the world’s vanadium deposits are. It
is a sedimentary deposit which, for the following reasons, is
expected to have significantly lower capital and operating
costs in comparison with other vanadium producers, placing
the Group at the very bottom of the curve of cash costs of
production:
• The ore is amenable to a whole-ore pressure acid leach
process which gives a higher metallurgical recovery than
conventional extraction from magnetite;
• Pre-concentration of the ore and high temperature
roasting are not required;
• There are valuable co- and by- products within the ore,
principally carbon, which can be easily recovered without
significant additional processing;
• Major infrastructure items of power, road and rail
connections already exist on site or nearby; and
• The Balasausqandiq deposit is a very large deposit and is
easily mined from an open pit. Phases 1 and 2 combined
envisage production of over 10% of 2024 world supply.
Exploration
OB1
There are six known ore-bodies in the deposit and there is
some evidence of a seventh. Of these, only OB1 has now
been explored sufficiently to declare a resource under the
Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves published by the Joint
Ore Reserves Committee (“JORC”).
A revised mineral resource estimate was issued by the
Company’s consultants SRK Consulting (Kazakhstan) Limited
(“SRK”) in April 2023 and included the following highlights:
• An Indicated Mineral Resource of 32.9 million tonnes
for OB1, at a mean grade of 0.62% V
2
O
5
, reported at a
marginal cut-off grade of 0.4% V
2
O
5
- equating to 203,364
contained tonnes of V
2
O
5
• An increase of 8.6 million tonnes (35.4%) of mineral
resource and an increase of 38,058 tonnes (23%)
of contained V
2
O
5
by comparison with the estimate
contained in the Company’s 2018 Competent Persons
Report
• The results of the previously reported infill drilling and
trenching programmes completed during 2021/22 have
been successful in converting 100% of the Resources to
Indicated for the OB1 deposit. No Measured or Inferred
Resource are stated
• A total of 75 diamond core holes and 88 trenches were
used to define the Resource (a reduction of drill section
spacing to 250 metres from the original 500 metres
increased confidence)
• Confirmation that there are reasonable prospects for
eventual economic extraction by constraining the Mineral
Resources to an optimised open pit shell (50 degree
slopes and a revenue factor of 1) using a selling price for
98% V
2
O
5
flake of US$9.82 /lb
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 5
Summary Report for April 2023 MRE OB 1 Resource
Classification Zone Tonnage (Mt) %V
2
O
5
%Mo %U %C
Indicated Oxide 1.57 0.67 0.014
0.0047 7.16
Transitional 1.25 0.66 0.014
0.0045 7.17
Fresh (Sulphide) 30.08 0.61 0.015
0.0052 8.83
Total 32.90 0.62 0.015 0.0051
8.69
OB2, 3 and 4
The drilling of OB2, 3 and 4 was completed during 2022/23. X-ray fluorescence (“XRF”) grade measurements, together with full
assays for some 5% of the samples as checks, is expected to enable an inferred resource estimate to be prepared to JORC
standards. Due to unfavourable topography, some 25% of the planned exploration area proved difficult and expensive to
access and as a result was not drilled (albeit the Company does not expect the area to create difficulties for actual mining).
The mineral resource estimate for OB2,3 and 4 will exclude the area of difficult topography, but, based on the XRF analysis
carried out on cores by the Company (and not yet verified by the 5% full assay checks), the amount drilled is expected to
provide ample ore to provide a relatively long life for the Phase 2 development.
Open pit geotechnical drilling
The open pit geotechnical study has been completed and the results will be used to confirm the open pit slope design for the
mine planning study.
Open pit hydrogeological drilling
Open pit hydrogeological drilling has been completed and the hydrogeological study will be concluded as a part of the mine
planning study.
Water supply hydrogeological drilling
A water bore drilling investigation for the project water supply has been completed and the results have been used to design
the borefield and water pipeline required to pump the water to the proposed process plant.
Tailings management
The tailings management design is in progress and is expected to conclude during April 2025, managed by SRK.
Processing
Metallurgy
Extraction of vanadium during acid leaching, following initial pilot and subsequent feasibility study testing has concluded
achieving between 94-97% vanadium extraction into solution.
Metallurgical testing including ore characterisation, grinding, engineering tests, solid liquid separation tests, impurity removal,
tailings product assessment and vanadium recovery to a saleable product has concluded at SGS Canada Inc (“SGS”) managed
by Tetra Tech Limited (“Tetra Tech”). The results of this testing program are being used by Tetra Tech to design the processing
plant and supporting services as part of the feasibility study.
Ferro-Alloy Resources Limited Annual Report 20246
Carbon black substitute (“CBS”)
Test work on the extraction of a carbon concentrate from
the vanadium bearing ore and on its subsequent use as a
substitute for carbon black has been completed.
Flotation tests show that the necessary >40% concentrate
can be made with good overall carbon recovery. Testing of
the product for use in making rubber by substitution for
carbon black has been successfully completed and rubber
made from 90% carbon black plus 10% CBS has been shown
to perform, for passenger vehicle tyre purposes, as well
as with 100% carbon black. Higher substitution levels are
expected to yield satisfactory performance in other rubber
products.
By comparing the performance of CBS with other available
reinforcing fillers, including carbon black, market consultants
have advised that a market price of between US$500 and
US$600 per tonne is appropriate for CBS.
Production of CBS from Phase 1 is expected to be over
220,000 tonnes per year, implying anticipated revenues of
over US$110 million per annum.
Conclusion
The Company expects the publication of the Phase 1
feasibility study in H1 2025 to significantly raise awareness of
the emergence of this new addition to the global vanadium
market at the time of growing investor appreciation for rising
vanadium use in both the construction and green energy
sectors. The work on CBS has proven that this product
can be produced and sold at prices that make it a genuine
co-product, bringing down the already low cash costs
attributable to the vanadium product to unprecedentedly
low levels.
Discussions with various potential investors and debt
funders have already been initiated but the publication of
the feasibility study is expected to trigger the advancement
of these discussions.
Feasibility Study Review continued
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 7
Financial Review
Earnings
The Group reported revenues of US$4.7m for the year
compared to US$5.7m in 2023, mainly reflecting the
decrease in sales prices over the period.
US$’000 2024 2023
Revenue from shipments recorded at the
price at time of dispatch
4,722 6,164
Adjustments to revenue after final price
determination and fair value changes
16 (448)
Total revenue 4,738 5,716
Revenue is recognised at the time of transfer of control of
the Group’s products to the customer but, as is common in
the industry, the final pricing determination is often based
on assay and prices after arrival of the goods at the final
port of destination, particularly with respect to the sale of
vanadium pentoxide products. The adjustments to revenue
reflect these final pricing determinations which occur after
the relevant revenue is initially recognised.
Recorded revenues for the year have decreased in
comparison to the previous year primarily due to a
continued falling market price for vanadium pentoxide, the
ultimately unsuccessful treatment of the Group’s stockpiled
nickel-rich residues as well as periods of adverse weather
conditions experienced at site.
Cost of sales increased to US$7.6m from US$6.8m in 2023,
driven by an increase in depreciation charges (as a result of
the installation of a significant item of power transmission
equipment) as well as an increased wages and salaries cost.
The largest part of the cost of sales is the purchase of raw
materials, the price for which is determined as a percentage
of the value of the content of vanadium or molybdenum at
the market prices prevailing at the time of purchase.
Administrative expenses of US$3.0m (2023: US$3.4m) have
decreased by approximately US$0.4m during the year as a
result of a decreased wages and salaries cost.
The Group recognised an impairment charge of US$0.95m
at the year end with respect to the Group’s plant and
equipment repurposed to R&D activities to optimise the
ongoing feasibility study.
The Group incurred net finance costs during the year of
US$1.98m (2023: US$0.2m) almost exclusively comprising of
interest payable on the Company’s bond financing.
The Group made an overall loss for the year of US$9.43m
(2023: loss of US$5.25m).
Cashflow
Net cash outflows from operating activities, before
changes in working capital, for the year totalled US$4.2m
(2023: US$4.3m) following adjustments for depreciation,
amortisation, impairment charges and net finance losses.
Changes in inventories decreased by US$1.1m (2023:
US$0.6m increase) as a result of the Group holding a
reduced level of raw materials on site for the existing
operation to process after the year end.
Net cash outflows from investing activities totalled US$2.3m
(2023: US$3.9m) and included US$0.21m (2023: US0.98m) of
capital expenditure associated with the processing operation’s
production facilities and US$2.1m (2023: US$2.93m) of
expenditure on the Phase 1 feasibility study capitalised as an
exploration and evaluation asset (see Note 13).
Net cash inflows from financing activities for the year were
US$8.4m (2023: US$6.52m), representing the proceeds of
the sale of two tranches of bonds under the Kazakhstan
bond programme summarised below. Other financing
activities included interest payable to the Company’s
bondholders of US$1.04m (2023: US$0.16m).
The Group held cash of US$3.78m at 31 December 2024
(2023: US$1.95m).
Balance sheet review
Total non-current assets decreased to US$12.5m from
US$14m principally due to the continued depreciation of the
Group’s fixed assets marginally offset by the capitalisation
of the Group’s feasibility study costs incurred during
the year as an exploration and evaluation asset and the
impairment charge of US$0.95m recognised against plant
and equipment, as noted above.
Current assets increased from US$6.7m to US$6.8m, driven
mainly by a US$1.8m increase in cash and cash equivalents held
by the Group at the year end following the issue and sale of
further tranches of bonds, offset by a reduction in raw materials
held for processing and finished goods at the year end
.
Total non-current liabilities increased by approximately
US$9.7m during the year from US$7.4m to US$17.2m as
a result of the issue and sale of the two tranches of bonds
noted above.
Current liabilities at the year end were US$2.4m (2023:
US$2.4m).
Ferro-Alloy Resources Limited Annual Report 20248
Corporate
During July 2023, the Company launched a phased
US$20 million exempt offer bond programme on the Astana
International Exchange (the “AIX”) in Kazakhstan (the “Bond
Programme”).
The salient features of the Bond Programme are as follows:
– the Bond Programme will comprise one or more tranches
of bonds, each listed on the AIX;
– the total nominal value of all tranches issued under the
Programme will not exceed US$20 million;
– each tranche of the Bond Programme will be offered
only to accredited investors based in Kazakhstan and
governed by the laws and regulations of the Astana
International Financial Centre;
– bonds issued under the Bond Programme will be
denominated in either US dollars or Kazakhstan tenge
with interest payable to bondholders bi-annually;
– all bonds issued will rank as unsecured debt obligations
of the Company;
– the applicable coupon rate, duration, issue price and
other relevant terms of any bonds issued under the Bond
Programme will be defined and determined by the terms
and conditions of each tranche of bonds issued; and
– the Bond Programme will be valid until 31 July 2033.
During the year, the Company issued and sold two further
tranches of bonds under the Bond Programme for gross
proceeds of US$10m. See Note 21 for further details.
Key performance indicators
The Group is in a period of development and its current
operations, the processing of bought-in secondary
vanadium-containing materials for extraction of vanadium
and other metals and corresponding R&D, are relatively
small in comparison with the main objective of the Group to
develop the Balasausqandiq deposit and processing facility.
Moreover, the current operations are themselves undergoing
a significant change which means that operations are
not in a steady state capable of meaningful inter-period
comparisons. The Board of Directors (“the Directors” or “the
Board”) are, therefore, of the opinion that key performance
indicators may be misleading if not considered in the
context of the development of the operation as a whole for
which the information for shareholders is better given in a
descriptive manner than in tabular form.
Financial Review continued
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 9
Sustainability Review
Our approach
The Company aims to maximise value for its investors
and all stakeholders from the responsible, efficient, and
low-cost production of vanadium and other commodities
from the Balasausqandiq deposit. We seek to re-use
or recycle wherever possible and to minimise the
environmental and social impacts of our operations whilst
ensuring the health and wellbeing of the Group’s workforce.
These objectives have guided the Company’s approach to
the development of the project, where we have the capability
to produce vanadium pentoxide, ferro-molybdenum and
nickel concentrates from bought-in raw materials treated in
our expanded pilot plant, and we are carrying out a feasibility
study into the much larger development of the mine and
processing plant for Balasausqandiq itself.
Balasausqandiq is a unique vanadium deposit which
also contains valuable components of carbon, uranium
and molybdenum. Vanadium and the other products to
be recovered from the Balasausqandiq ore will play an
important role in the world’s transition to clean energy and a
more sustainable future.
Development of appropriate
frameworks
We have sought to minimise our environmental impacts
whilst ensuring that all employees can work safely, avoiding
accidents and reducing the risk of long-term health hazards.
We aim to comply with all applicable laws, report accurately
where required, and implement appropriate governance
standards.
As the Group grows to become a producer of critical
commodities, it will develop a comprehensive approach
to address environmental, social, health and safety issues
within an appropriate governance framework. Such
an approach will recognise the requirements of all key
stakeholders, including local communities, governments,
employees, and investors as well as customers.
To this end, the Company has appointed independent
consultants to undertake an analysis of our existing
principles, controls, procedures, and performance metrics
by comparison to the standards they believe are reasonably
applicable to the Company and its lenders and investors, in
particular, the Equator Principles and the IFC Performance
Standards. Following their initial report, their conclusions and
recommendations have guided the direction of the Phase 1
feasibility study.
The Company has also committed to comply with the
Financial Reporting Council’s reporting recommendations
contained in their publication “Streamlined Energy and
Carbon Reporting” once sufficient internal data is available.
Minimising impacts from production
We believe that the Phase 1 feasibility study for
Balasausqandiq will confirm that any adverse environmental
impacts of our operation are likely to be significantly below
those of our peer group. We believe this can be a source
of competitive differentiation for the Company amongst
customers who are increasingly reviewing supply chain ESG
performance when sourcing vital materials.
Most of the world’s vanadium is made from titano-vanadiferous
magnetite (“TVM”). The primary production of vanadium from
TVM ore requires pre-concentration and then roasting at
approximately 1,100 degrees C to convert the vanadium into
a soluble form to enable recovery. Roasting alone accounts for
over 40% of the energy used by one major primary producer
using TVM ore. At Balasausqandiq, the ore is different, and
the proposed process does not require pre-concentration or
roasting, significantly reducing CO
2
emissions.
The proposed production process at Balasausqandiq
involves leaching in sulphuric acid which we expect to make
by processing the sulphur that is currently removed as an
impurity from oil and gas production in Kazakhstan. The
process, which produces no CO
2
, is exothermic and requires
no significant energy input. The waste heat produced will
be used to make steam for the hydrometallurgical process,
further reducing energy requirements and CO
2
emissions.
The production of carbon from the Balasausqandiq ore
for use as carbon black in making rubber is also much
more energy efficient than competitive processes. Carbon
black is usually made by the incomplete combustion
of hydrocarbons, where only some 40% of the original
hydrocarbon input is recovered. The carbon from
Balasausqandiq is naturally occurring and avoids this
combustion of hydrocarbons and the associated emissions
of CO
2
.
Ferro-Alloy Resources Limited Annual Report 202410
Social
The Group’s operations utilise land which is unsuitable
for agricultural use and the nearest human habitation is
16 kilometres away in the village of Aksumbe. Save for some
unbounded grazing, there are no competing land uses
or requirement to re-locate communities as we develop
operations. The social impact of the operations will, therefore,
be limited. The limited requirement for additional infrastructure
further reduces the impact on the local population.
Economic impact on the local community
Nearly all the Group’s employees are Kazakhstan nationals,
and, with the exception of specialists, most are hired from
the local villages and the nearby town of Shieli. The Group
currently employs an operating and management team of
over 200 employees. As the Group grows, it will enhance and
develop its employment policies and procedures.
The Group pays salary taxes for employees including income
tax, social security tax and pension contributions, VAT on
purchases and, in due course, will pay corporation tax
and withholding taxes. In addition, under the terms of the
Subsoil Use Agreement for the Balasausqandiq deposit, the
operating company is required, during the period of mining
and based on the subsoil activity, to pay:
• 1% of annual investment on education in Kazakhstan;
• 1.5% of annual investment on local development and
infrastructure; and
• 1% of annual profits on research and development.
In addition, the Group has signed an agreement with the
Satbayev University where selected post graduate students
will be given technical work experience opportunities with
respect to the Group’s operations.
Mine closure
The Company has prepared an environmental study in full
compliance with the laws of Kazakhstan and also aims to meet
international standards. As part of this study, a mine closure
plan has been prepared and the Company is required to
contribute 1% of annual mining costs to a mine closure fund
to ensure that funds are available when the time comes. The
Company will aim to back-fill the open pit with waste rock from
mining and contour surplus waste as mining progresses.
Water
Water is almost fully recycled and no discharges are made
from the site. In 2024 water consumption was 21,519 m
3
(2023: 16,985 m
3
).
A hydrogeological study has been carried out to assess the
availability and sufficiency of water for processing and human
needs. Water is currently drawn using natural pressure from a
borehole. Currently, no water is discharged from operations,
although there are losses from evaporation. The Group already
recycles as much water as possible and plans to do the same
for the Balasausqandiq project. Water for the main project will
be drawn from a bore-hole some 20 km from the operating site
and transported along a pipeline. The Balasausqandiq project
process has been designed to operate on a low liquid: solid
ratio to minimise water usage and associated reagent use.
Sustainability Review continued
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 11
Performance indicators
Health and safety
During the year, the Group had no reported health and safety incidents that led to time lost, staff requiring medical treatment
or hospitalisation and no fatalities (2023: nil).
Energy and emissions
The table below discloses the Group’s greenhouse gas emissions for 2024, including both emissions resulting from activities
for which the Group is responsible e.g. the combustion of fuel (Scope 1 emissions) and emissions resulting from the purchase
of electricity, heat or steam cooling by the Group for its own use (Scope 2 emissions).
All of the Group’s emissions have been generated outside the United Kingdom and offshore area.
Scope 1 (energy generated on site)
2024 2023
KwH
CO
2
e
(tonnes) KwH
CO
2
e
(tonnes)
Process plant
Coal for heating/steam 3,078,125 1,044 1,645,833 452
Diesel for roasting 239,121 64 3,114,103 833
Liquid gas for roasting 9,155,951 1,789 1,780,100 476
Diesel for other plant - - 23,333 6
Other
Coal for heating 1,197,500 406 1,719,167 472
Diesel (vehicles) 233,308 20 223,847 0.4
Petrol (vehicles) 419,959 105 22,341 0.8
Total scope 1 14,323,964 3,428 8,528,724 2,240
Scope 2 (purchased electricity)
2024 2023
KwH
CO
2
e
(tonnes) KwH
CO
2
e
(tonnes)
Process plant
Whole plant 3,083,166 *- 1,505,460 *-
Total scope 2 3,083,166 - 1,505,460 -
Total scope 1 and scope 2 17,407,130 **3,428 10,034,184 **2,240
* this information is currently not available in Kazakhstan
** includes Scope 1 only
Ferro-Alloy Resources Limited Annual Report 202412
Energy consumption
The Group has consumed 17,407,130 KwH (2023:
10,034,184 KwH) of energy during the year.
All of the Groups’s energy consumption has taken place
outside the United Kingdom and offshore area.
Intensity ratio
The Group will determine a suitable intensity ratio once all
relevant data is available.
Energy efficiency
The key energy efficiency adopted by the Group during the
year has been to continue to include energy saving initiatives
within the Group’s processing plant future development
planning.
Methodology
The Group has adopted the standard methodology issued by
the Kazakhstan Ministry of Ecology.
In disclosing the Group’s emissions output and energy
consumption during the year, the Company has done so on
an equity share approach. Accordingly, given that all of the
Company’s subsidiary undertakings are wholly owned by
the Company, the activities of the entire group are included
within the disclosures made.
Sustainability Review continued
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 13
Climate Change Disclosures
As a responsible corporate entity operating in the natural
resources sector, the Company is committed to the
recognition and disclosure of the potential impacts of climate
change on the Company’s and Group’s business activities.
The Company supports the initiatives and recommendations
of the Task Force on Climate-related Financial
Disclosures (“TCFD”) and has taken steps to develop
climate-related financial disclosures that it considers are
consistent and appropriate with both the recommended
disclosures of the TCFD and the current position of the
Company. The Company will review future climate change
disclosures in light of relevant IFRS issued standards.
The TCFD recommended disclosure framework comprises
four broad categories of disclosure (pillars); governance,
strategy, risk management and metrics and targets. Within
each category of recommended disclosure, the TCFD has
identified further specific disclosures that the Company
should report on. The Company has reported on this basis
below.
The Company has considered the appropriate level of detail
to be included within the various disclosures having regard
to the nature and size of the Company’s current operations
and the planned future operations following the construction
of the mine processing facilities at the Balasausqandiq
deposit.
The conclusion is that the majority of the specific disclosures
sought by the TCFD recommendations in the context of
the current operation, the purchase and treatment of
vanadium-containing concentrates, are unlikely to be
either useful or meaningful to the reader of these financial
statements but that the disclosures will have far more
relevance and applicability following the commissioning
of the main Balasausqandiq mine processing facilities.
The effects of climate change on that operation are being
considered as part of the Company’s ongoing Phase 1
feasibility study.
Accordingly, the disclosures noted below are provided
generally in the context of the operation of the bought-in
concentrate processing plant and will be expanded to cover
the main future operations upon completion of the Phase
1 feasibility study into the Company’s planned mine and
associated processing facilities.
The disclosures made below are consistent with the TCFD
recommendations and recommended disclosures.
Governance
1. Oversight of climate-related risks and
opportunities
The Board is ultimately responsible for the oversight of the
risks and opportunities that are presented by the potential
effects of climate change on the Company’s business
activities. The Company’s executive directors maintain
day-to-day responsibility for the recognition and effect of
climate change on the Company’s operations.
In advance of the start of mining operations, the Company
has constituted a sustainability committee, comprising the
chairman, the chief executive officer and a non-executive
director, that will guide and support the actions of the Board
with respect to climate-related matters.
2. Assessment and management of
climate-related risks
The Board in conjunction with the sustainability committee
will consider and set appropriate Company policies that will
govern how the Company’s management will assess and
manage climate-related risks and opportunities in advance
of the commissioning of the mine.
The Company’s executive directors and Group managers will
be responsible for the implementation and monitoring of the
policies set.
The management of the current operation is responsible
for assessing and managing climate-related risks and
opportunities at the existing plant.
Risk Management
3. Identification and assessment of
climate-related risks
With respect to the existing operation, the identification and
assessment of climate-related risks and opportunities is
carried out by management on an ad-hoc basis.
As noted above, the Company is finalising a feasibility study
on the Balasausqandiq deposit. Included within the study will
be an environmental and social impact assessment (“ESIA”)
that, once completed, will identify and assess the climate-
related risks of the project and how those risks can be
managed and mitigated.
Ferro-Alloy Resources Limited Annual Report 202414
4. Processes adopted for managing
climate-related risks
With respect to the bought-in concentrate processing plant,
no specific climate change risks have been identified. The
availability of concentrates is expected to increase in the
coming years as international regulations prohibiting the
burning of low-grade fossil fuels are implemented, requiring
more use of vanadium-containing catalysts for the refining
of oil that comprise the largest part of the Group’s existing
plant feed-stock. If a climate-related risk is identified and
assessed as likely to have an impact on the operations of the
plant, the plant’s management will implement measures to
manage the impact.
In conjunction with the ESIA, an environmental and
social management system (“ESMS”) will be designed and
developed as part of the Phase 1 feasibility study and
adopted in full once the Balasausqandiq mine has been
commissioned. The ESMS will identify the relevant processes
for the management of climate-related risks arising from the
operation of the mine.
5. Integration of climate-related risk
management into the organisation’s overall
risk management
The ESIA noted above is an integral part of the Company’s
Phase 1 feasibility study and, therefore, a key element of the
Balasausqandiq project. Accordingly, the foreseen climate-
related risks of the project (and the management / mitigation
of same) will be incorporated into the Company’s overall risk
management by virtue of the adoption of the monitoring
systems and controls recommended by the ESIA and ESMS.
Strategy
6. Climate-related risks and opportunities
Opportunities
1. Vanadium
The main climate-related opportunity presented to the
Company is the predicted expansion of the global vanadium
market as a result of the transition to a lower-carbon world
economy.
The demand for vanadium is expected to be driven by two
factors – growth of long-term energy storage solutions that
use vanadium as a key component and an increased use of
vanadium in steel making, a high carbon dioxide emitting
industry, where vanadium as an alloy material can improve
the strength of steel and consequently reduce the quantity
of steel needed.
2. Carbon
A secondary climate-related opportunity for the Company
is the carbon material found within the ore of the
Balasausqandiq deposit.
The Company’s expectation is that the carbon within the ore,
once extracted, will be capable of substituting for certain
grades of carbon black used within industries such as car
tyre manufacturing.
Carbon black is usually produced by the incomplete
combustion of hydrocarbons in specific atmospheric
conditions and typically generates significant levels of carbon
dioxide during production. The carbon in the Company’s ore
can be recovered with relatively low-level emissions which
are mostly necessary for the extraction of the principal
vanadium product. Car tyre manufacturers will, therefore, be
able to cut their supplier-related emissions by the use of this
product.
Risks
The climate-related risks of the project will be identified and
evaluated by the Company’s Phase 1 feasibility study in due
course. No significant climate-change risks to the current
operation have been identified.
7. Impact of climate-related risks and
opportunities on business, strategy and
financial planning
Climate-related risks and opportunities do not materially
impact on the business, strategy and financial planning
for the bought-in concentrate processing plant given the
relatively small size of the operation.
The impact on the Balasausqandiq deposit mining
operations will be considered by the Company’s ongoing
feasibility study.
8. Resilience of the organisation’s strategy
with respect to climate-related scenarios
With respect to the bought-in concentrate processing plant
and R&D centre, the plant’s management have not identified
any particular climate-related scenarios that would likely
have a significant impact on its ongoing operations. The
plant already operates in an environment that is subject to
extreme weather conditions and is, therefore, considered to
have a strong resilience to existing and future climate-related
scenarios.
The resilience to climate-related scenarios for the
Balasausqandiq mining operations will be identified and
evaluated during the construction and commissioning of the
mine.
Climate Change Disclosures continued
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 15
Metrics and Targets
9. Climate related risk / opportunity metrics
Given the small-scale nature of the bought-in concentrate
processing plant and R&D centre, the Company will develop
metrics to assess climate-related risks and opportunities
in line with its strategy and risk management processes
once the Balasausqandiq mining operation has been
commissioned.
10. Energy and emissions
Relevant emissions statistics are disclosed within the
Sustainability Review on page 9.
11. Climate-related risk / opportunity
performance targets
Given the small-scale nature of the bought-in concentrate
processing plant and R&D centre, the Company will develop
performance targets to manage climate-related risks and
opportunities in line with its strategy and risk management
processes once the Balasausqandiq mining operation has
been commissioned.
Ferro-Alloy Resources Limited Annual Report 202416
Alignment Status
The following table provides a summary of the Group’s current alignment with the TCFD recommendations:
TCFD pillar Recommended disclosure Current status Alignment
Governance Oversight of climate-related risks and
opportunities
Oversight provided by the board of
directors. Sustainability committee formed.
Comply
Assessment and management of
climate-related risks
Current operations: climate-related risks
assessed and managed by incumbent
management team. Main mine climate-
related risks to be determined by the board
of directors following mine commissioning.
Partial
Risk
management
Identification and assessment of
climate-related risks
Identification and assessment of climate-
related risks for current operations
completed by incumbent management.
Identification and assessment of climate-
related risks for the main mine to be
captured by the feasibility study ESIA.
Partial
Processes adopted for managing
climate-related risks
On an ad-hoc basis by the incumbent
management team with respect to current
operations. ESMS being developed for the
main mine for adoption on commissioning
of the main mine.
Partial
Integration of climate-related risk
management into the organisation’s
overall risk management
Integration to occur following the adoption
of the ESIA and ESMS.
Planned
Strategy Climate-related risks and
opportunities
Identified and considered above. Comply
Impact of climate-related risks and
opportunities on business, strategy
and financial planning
No material impact on current operations.
Impact on the main mine to be considered
by the ongoing feasibility study.
Partial
Resilience of the organisation’s
strategy with respect to climate-
related scenarios
No climate-related scenarios identified with
respect to current operations.
Resilience of the strategy with respect to
climate-related scenarios for the main mine
will be tested following construction and
commissioning.
Partial
Metrics and
targets
Climate related risk / opportunity
metrics
To be adopted following the commissioning
of the main mine.
Planned
Energy and emissions Disclosure with respect to current
operations completed.
Comply
Climate-related risk / opportunity
performance targets
To be adopted following the commissioning
of the main mine.
Planned
Climate Change Disclosures continued
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 2024 17
Principal Risks and Uncertainties
Description of principal risks,
uncertainties and how they are
managed
(a) Balasausqandiq project:
The Balasausqandiq project is primarily dependent on
long-term vanadium prices.
The project is also dependent on raising finance to meet
projected capital costs (see below) and the successful
construction and commissioning of the project’s proposed
mine processing facilities. It is not unusual for new
mining projects to experience unforeseen problems,
incur unexpected costs and be exposed to delays during
construction, commissioning, and initial production, all of
which could have a material adverse effect on the Company’s
operations and financial position. The Company has taken
steps to mitigate such potential adverse effects by engaging
globally recognised engineers and consultants to assist
with the development and design of the key elements of
the project in addition to the Group’s own highly qualified
workforce.
(b) Geopolitical situation:
While the ongoing invasion of Ukraine by Russia is not
directly impacting the Group, the Directors remain vigilant
of the situation. The continued main risk of the conflict
is to the Group’s transport routes, many of which involve
transit through Russia. Whilst these are currently operating
without issue, sanctions have been made against Russian
and Belarusian vehicles transiting through Europe (but not
against vehicles registered in other jurisdictions in the region
such as Kazakhstan). There is a risk that further sanctions
might prevent transit through Russia into Latvia, through
which the majority of the Company’s exports flow. The
Company continues to review alternative transit routes for
raw material imports and product exports through the West
of Kazakhstan, either via the Caspian Sea or overland south
of the Caspian Sea. Routes to China are working normally.
With respect to the global sanctions imposed on certain
Russian entities and individuals, the Group monitors the
implications of those sanctions on the Group’s trading
activities on an ongoing basis.
(c) Financing risk:
The Balasausqandiq project will require substantial funds to
be raised in debt and equity which will be dependent upon
market conditions at the time and the successful completion
of the Phase 1 feasibility study.
In March of 2021 the Company signed an investment
agreement with Vision Blue Resources Ltd. Under the
terms of this agreement and in addition to Vision Blue’s
participation in the 2022 equity fundraise, investments
totalling US$14.3m have already been made and Vision
Blue has the right to subscribe a further US$2.5m at the
original deal price of 9 pence per share at any time up
to two months after the announcement of the Phase 1
feasibility study. Vision Blue also has further options to
subscribe up to US$30m at higher prices to partially finance
the construction of the project.
The favourable financial and other characteristics of the
project determined by studies so far completed give the
Directors confidence that the outcome of the Phase 1
feasibility study will be successful.
(d) Climate change risk:
Refer to the Sustainability Review on page 9 and the Climate
Change Disclosures on page 13.
(e) Risks associated with the developing
nature of the Kazakh economy:
According to the World Bank, Kazakhstan has transitioned
from lower-middle-income to upper-middle-income status in
less than two decades. Kazakhstan’s regulatory environment
has similarly developed and the Company believes that
the period of rapid change and high risk is coming to an
end. Nevertheless, the economic and social regulatory
environment continues to develop and there remain some
areas where regulatory risk is greater than in developed
economies.
(f) Commodity price risk:
As already noted above, the success of the Company is
dependent upon the long-term prices of the products to
be produced by the planned mine processing facilities. As a
result of there being no formally established trading markets
for the Company’s principal products from the project,
there is a risk that price fluctuations and volatility for these
products may have an adverse impact on the Company’s
future financial performance.
Ferro-Alloy Resources Limited Annual Report 202418
General
As a result of the ordinary shares of the Company being
classified on the Official List of the London Stock Exchange,
as Equity Shares (Transition), the requirements of the
UK Corporate Governance Code, published by the Financial
Reporting Council, do not apply to the Company. The
Guernsey Finance Sector Code of Corporate Governance does
not apply to the Company since the Company is not regulated
by the Guernsey Financial Services Commission. However,
the Board recognises the importance of good corporate
governance and has implemented recognised corporate
governance practices as far as is considered appropriate
by the Board whilst considering the size and nature of the
business.
The Board is responsible for the overall corporate governance
of the consolidated Group, guiding and monitoring the
business and affairs of the Company on behalf of the
shareholders by whom they are elected and to whom they are
accountable.
Composition of the Board
Having regard to the Company’s stage of development,
the Directors believe that the size of the current board
comprising seven directors, three of whom are executive and
four are non-executive, is appropriate. The Directors intend
that there will always be at least as many non-executive
directors as there are executive directors.
Board committees
Audit
The Company has created an audit committee that is
responsible for considering all financial reporting matters
and ensuring that they are properly reported and monitored.
It is also responsible for the review and assessment of the
independence of the external auditors and approval of any
non-audit services, review of the external audit strategy and
findings, assessment of whether an internal audit function is
necessary considering the activities and size of the business
and oversight of significant financial reporting matters.
The committee is chaired by James Turian and Christopher
Thomas is a member. Mr Turian has a background in
accounting, trust and management and is a director of a
firm of accountants in Guernsey which the Board considers
to be recent and relevant experience to carry out his
responsibilities as chairman.
Remuneration
The Company has also created a remuneration committee
to consider all matters related to salary and benefits of
senior staff and executive directors. The remuneration of
non-executive directors is a matter for the Board as a whole.
No director will take part in discussions concerning his own
remuneration package. Mr Thomas is the chairman of the
committee and Mr Turian is a member.
Nomination
The Directors are of the opinion that due to the nature and
size of the Company and its current Board, the functions
often carried out by a nomination committee can be more
successfully conducted by the full board of directors and so
no such committee has been created.
Sustainability
The Company has constituted a sustainability committee
comprising the chairman, the chief executive officer and
a non-executive director that will guide and support the
actions of the Board with respect to sustainability related
matters, particularly once the Company’s Phase 1 feasibility
study has been issued and construction of the mine has
commenced.
Code of conduct
The goal of establishing the Company as a significant
mining and processing company is underpinned by its core
values of honesty, integrity, common sense and respect
for people. The Company desires to be a good corporate
citizen in all the jurisdictions within which it operates, and to
appropriately balance, protect and preserve all stakeholders’
interests. In particular, the Company gives paramount
concern to the safety of its employees and the maintenance
of high environmental standards.
Shareholder communication
The Board aims to ensure that shareholders and investors
have equal access to Company information.
The Company aims to promote effective communication
with shareholders and encourage effective participation
at general meetings through a policy of open disclosure
to shareholders, regulatory authorities and the broader
community of all material information with respect to the
Company’s affairs.
Governance Statement
Ferro-Alloy Resources Limited Annual Report 2024 19
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Internal control and risk
management systems
The Company’s accounting and finance team is relatively
small and subject to close control by the executive directors.
For this reason, the audit committee and the Board are
of the opinion that it is not yet appropriate for there to be
a separate internal control department or internal audit
function but has implemented various procedures and
internal controls to provide assurance to the Directors that
accounting and financial risks are adequately controlled.
These include:
• The preparation and regular updating of cash flow
forecasts, changes to which are closely monitored by the
executive directors who discuss necessary changes on an
almost daily basis;
• Significant contracts require approval by the Directors
and approval must follow a specified approval processes;
and
• All Group payments must be authorised by a director
and payments by the Company require two directors’
signatures on all payments over US$6,000.
Ferro-Alloy Resources Limited Annual Report 202420
Sir Mick Davis
Non-executive Chairman
Sir Mick Davis holds a number
of directorships at private
companies and is a highly
successful mining executive
accredited with building Xstrata
plc into one of the largest mining
companies in the world prior to
its acquisition by Glencore plc.
Before listing Xstrata on the LSE
as CEO he was CFO of Billiton
plc and Chairman of Billiton
Coal which he joined from the
position of Eskom CFO.
During his career in mining he
has raised almost US$40bn
from global capital markets
and successfully completed
over US$120bn of corporate
transactions, including the
creation of the Ingwe Coal
Corporation in South Africa; the
listing of Billiton on the LSE; the
merger of BHP and Billiton; as
well as numerous transactions
at Xstrata culminating in the sale
to Glencore plc.
Sir Mick Davis is a Chartered
Accountant by profession,
and holds an honours degree
in Commerce from Rhodes
University, South Africa and an
Honorary Doctorate from Bar
Ilan University, Israel.
William Callewaert
Chief Financial Officer
William graduated in 2002 from
the University of Durham with
an honours degree in Law after
which he trained as a Chartered
Accountant in audit services
with leading tax, accounting and
business advisory firm, Blick
Rothenberg. Having qualified
in 2006, William’s career
progressed within advisory
services at Grant Thornton,
KPMG and BDO in both the UK
and offshore.
William is responsible for the
overall management of the
Group’s finances, future funding
requirements and general
statutory compliance. William
is a fellow of the Institute of
Chartered Accountants in
England and Wales.
Nicholas Bridgen
Chief Executive Officer
Nick started his career in 1975
as a Chartered Accountant at
Peat Marwick Mitchell & Co (now
KPMG). In 1979, he moved to
the Rio Tinto Group, becoming
senior group accountant in
1981. He then moved to the
Business Evaluation Department
for the Group in 1985 and was
Group Planning Manager for the
RTZ Pillar Group which held the
engineering, building products
and chemical companies. Nick
spent 14 years with Rio Tinto.
In the mid-1990s, he was finance
director at Bakyrchik Gold
plc and in 1998, he founded
Hambledon Mining plc which
acquired the Sekisovskoye gold
project, listing the company
on AIM and taking the project
from exploration, through
construction and into a
producing mine.
Since 2006, Nick has been a
director and more recently,
CEO, of Ferro-Alloy Resources
Limited. In the role of CEO, Nick
is ultimately responsible for
all aspects of the Ferro-Alloy
Resources Group. He holds a
Bachelor’s degree with honours
from Exeter University, is a
Chartered Accountant and has
also studied corporate finance
at the London Business School.
He speaks Russian.
Andrey Kuznetsov
Director of Operations
Andrey started his career
in 1981 as an industrial
engineer at Kirov Engineering
Plant in Almaty. After three
years he became Chief of the
Scientific Department in the
Central Committee of Youth
(Comsomol). In 1987, Andrey
became general director of the
Almaty NTTM “Kontakt” centre.
In 1995-1996, he was the CEO
of the Kazakhstan subsidiary
of Alfa-Bank. Andrey has been
the general director of Firma
Balausa LLC since 2006. He
holds a Specialist’s degree in
electrical engineering from
Bauman Moscow State Technical
University and a PhD in informal
mathematical logic. He has
also studied management at
Coventry University.
As Director of Operations
Andrey is responsible for the
management of operations in
Kazakhstan and execution of the
Company strategy and policies
approved by the Board.
Board of Directors
Ferro-Alloy Resources Limited Annual Report 2024 21
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Christopher Thomas
Non-executive Director
(Chairman of the
remuneration committee
and member of the audit
committee)
Chris has nearly 35 years’
experience in the communications
industry. He has held various
high-level management positions
including CEO of Proximity
London from 2003 to 2006 - one
of the largest direct and digital
agencies in London. In 2006,
Chris was appointed Chairman
& CEO of BBDO and Proximity
in Asia, subsequently adding
the Middle East and Africa to his
responsibilities. He worked with
major multinational companies
across the growth markets of SE
Asia, China, India and Africa. In
May 2015, Chris moved to New
York to take up the role of CEO
of BBDO in the Americas, with
responsibility for 21 agencies
in the U.S., Canada and Latin
America. In February 2019 he
stepped down from his Americas
role to concentrate on his
entrepreneurial interests. He also
served as a non-executive director
on the board of Hambledon
Mining from 2004 to 2011.
Chris is the chairman of the
remuneration committee which
considers and approves the
remuneration of all senior
executives including that of the
executive directors. He is also a
member of the Company’s audit
committee.
Petrus Nienaber
Non-executive Director
Peet has several decades of
experience in the mining sector,
most notably spending over
24 years with what became
Xstrata plc. At Xstrata he was
initially Head of Operations,
spearheading the earliest days of
the company, including its growth
to be the largest producer
of ferrochrome. Thereafter
he spent 10 years as CEO of
Xstrata Alloys, one of the largest
producers of ferrochrome and
a leading producer of vanadium,
with some 20,000 people under
Peet’s leadership. After retiring
from the position in 2012, Xstrata
Alloys subsequently went on to
be acquired by Glencore plc.
Peet began his career as an
engineer at Iscor Ltd before
spending several years in the
ferroalloys industry at Samancor
and Anglo American plc.
James Turian
Non-executive Director
(Chairman of the audit
committee and member
of the remuneration
committee)
James started his career in
1986 and has a background
in accounting, trust and
management. James has
previously been involved with
several mining companies
in Perth, Australia, including
assisting Cooper Energy in
their restructuring in the early
2000s. From 2000 to 2011
James owned and operated
a trust company in Guernsey
which he sold to concentrate
on accountancy and currently
is a director of “Accounts For
You Limited”, a Guernsey
accountancy firm. He holds
several other directorships.
James is a Chartered Fellow of
the Securities Institute IAQ and
is a Fellow of the Institute of
Directors.
James is the chairman of the
audit committee where he is
responsible for chairing the
audit committee meetings.
Ferro-Alloy Resources Limited Annual Report 202422
Andrey Kuznetsov
Deputy Director of
Operations
Having graduated from the
Saint-Petersburg State University
with a Masters in Mathematics
and Bachelor in Economics
Andrey started his career as a
management consultant with
boutique consultancy firm,
Strategica. Andrey then joined
Danish company Dinex, in
Russia, as a finance director
for two years before moving to
Denmark to complete an MBA
at the Copenhagen Business
School.
Post MBA, Andrey joined Danish
company ECCO where he spent
almost 8 years in various roles
across Denmark, Netherlands
and Russia. Andrey’s final role
at ECCO was General Manager
East, where he was responsible
for ECCO distribution markets
in Russia, Ukraine, Georgia,
Moldova and Bulgaria.
Andrey joined the Group in
2019 as the finance director
of the Company’s Kazakhstan
subsidiary, Firma Balausa LLC.
In 2022, Andrey was appointed
deputy general director of Firma
Balausa LLC to support the
general director with operations
and the Company’s Phase 1
feasibility study.
Senior Management Team
Ferro-Alloy Resources Limited Annual Report 2024 23
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
The Directors present their report and the audited
consolidated financial statements for the year ended
31December 2024.
General
in Guernsey as a non-cellular limited company .
The Company’s registered office is Maison Allaire, Smith
principal place of business of the Group is Kazakhstan .
Principal activity
Review of business
A review of the business during the year is included within
the Operational Review at page 2.
The Group’s business and operations and the results thereof
are reflected in the attached financial statements.
The principal risks and uncertainties facing the Company are
summarised at page 17.
Results and dividend
During the 12 months ended 31 December 2024, the
Company reported a loss of US$9.4m (2023: loss of
US$5.3m).
No dividends have been declared or paid in respect of the
years ending 2024 or 2023.
Share capital and funding
The ordinary shares of the Company were listed on the
standard segment of the main market of the London Stock
Exchange on 28 March 2019 and, on a fully fungible basis, on
the Astana International Stock Exchange on 6 January 2020.
Full details of the Company’s share capital, together with
details of the movements in the Company’s issued share
capital during the year, are set out in Note 20 to the
consolidated financial statements on page 52.
Directors
The Board of Directors is comprised of three executive
directors and four non-executive directors.
Current directors
The directors of the Company who held office during the
year and to the date of this report are as follows:
Sir Mick Davis
Nicholas Bridgen
Andrey Kuznetsov
William Callewaert
Christopher Thomas
Petrus Nienaber
James Turian
The biographical details of those directors that served during
the year are set out at pages 20 to 21.
Election and re-election of directors
In accordance with the Company’s Articles of Incorporation,
any director who has been appointed by the Board since
the date of the previous annual general meeting or who
has not previously retired at the two preceding annual
general meetings shall stand for election or re-election at the
next general meeting. However, for the purposes of good
corporate governance, all directors put themselves forward
for re-election at each annual general meeting.
At the Company’s annual general meeting held on
23October 2024, all appointed directors were re-elected to
their respective roles.
Attendance at scheduled Company board
meetings
Scheduled (4)
Sir Mick Davis
l l l
Nicholas Bridgen
l l l l
Andrey Kuznetsov
l l l l
William Callewaert
l l l l
Christopher Thomas
l l l l
Petrus Nienaber
l l l
James Turian
l l l l
Directors’ Report
Ferro-Alloy Resources Limited Annual Report 202424
Remuneration
Salary/ fees
($’000)
Benefits
($’000)
Pension
($’000)
Bonus/other
($’000)
Total
($’000)
2023 2024 2023 2024 2023 2024 2023 2024 2023 2024
Sir Mick Davis - - - - - - - - - -
Nicholas Bridgen 360 271 44 47 - - - - 404 318
Andrey Kuznetsov 260 211 - - - - - - 260 211
William Callewaert 224 239 4 4 - - - - 228 243
Christopher Thomas 40
1
48 - - - - - - 40 48
Petrus Nienaber 40
1
48 - - - - - - 40 48
James Turian 40
1
48 - - - - - - 40 48
Total 964 865 48 51 - - - - 1,012 916
1
Remuneration paid to each of these directors was by a combination of cash (US$11,875) and Company shares (US$35,625).
Director’s interests in the issued share capital of the Company
The interests of the Directors in the Company’s issued share capital at 31 December 2024 and at the date of the signing of this
report are as follows:
29 Apr 2025
Number of
Ordinary
Shares
29 Apr 2025
% of
Share
Capital
31 Dec 2024
Number of
Ordinary
Shares
31 Dec 2024
% of
Share
Capital
31 Dec 2023
Number of
Ordinary
Shares
31 Dec 2023
% of Share
Capital
Sir Mick Davis
1
- -
1
- -
1
- -
Nicholas Bridgen 59,472,133 12.1 59,472,133 12.3 59,472,133 12.3
Andrey Kuznetsov 68,517,333 13.9 68,517,333 14.2 68,517,333 14.2
Christopher Thomas
2
6,840,753 1.4
2
6,456,845 1.3
2
6,456,845 1.2
James Turian 883,908 0.2 500,000 0.2 500,000 0.1
Petrus Nienaber 383,908 0.1 - - - -
1
Sir Mick Davis is the Chairman of Vision Blue Resources Limited and the beneficiary of a Trust that is a shareholder in Vision Blue Resources Limited
and, therefore, he indirectly has an interest in that company’s investment in Ferro-Alloy Resources Limited arising from the investment agreement in
place between the two entities.
2
including shares of Assiduous Group Limited which holds 5,912,133 ordinary shares. Assiduous Group Limited is an investment vehicle in which
Christopher Thomas is the sole shareholder and director.
Substantial Shareholdings
A list of shareholders who beneficially hold more than 5% of the Company’s shares at 31 December 2024 is as follows:
Name of shareholder Number of Ordinary Shares Percentage of voting rights
Vision Blue Resources Limited 111,071,783 23.0%
Andrey Kuznetsov 68,517,333 14.2%
Nicholas Bridgen 59,472,133 12.3%
Directors’ Indemnity Insurance
During the year, Director’s and Officer’s liability insurance was
maintained for the Directors and other officers of the Group.
Political Donations
The Group did not make any political donations during
theyear.
Directors’ Report continued
Ferro-Alloy Resources Limited Annual Report 2024 25
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Electronic Communications
The Directors are responsible for ensuring that the
Company’s annual report and financial statements are made
available on a website. Financial statements are published on
the Company’s website (www.ferro-alloy.com) in accordance
with applicable legislation in Guernsey governing the
preparation and dissemination of financial statements,
which may vary from legislation in other jurisdictions.
The maintenance and integrity of the Company’s website
is the responsibility of the Directors. The Directors’
responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Board Diversity
In accordance with UK Listing Rule 14.3.30, the Company has
not met the required targets with respect to board diversity
given the Company’s stage of development and size. The
Directors recognise the importance of diversity in both the
workplace and at board level and will take steps towards
achieving the requirements of UK Listing Rule 14.3.30.
Going Concern
The financial statements have been prepared on a going
concern basis.
The operations of the Group are financed from a
combination of cash flows generated by the existing
operation, bond issues and funds raised from shareholders
and strategic investors. In common with many pre-
production entities, the Group will need to raise further
funds in order to progress from the feasibility study phase
into construction and ultimately into production.
The completion of the Balasausqandiq Phase 1 feasibility
study is expected within the first half of 2025. Following
the publication of the feasibility study, the Directors are
confident based on their previous experience and success in
raising capital and the results of the feasibility study to date,
that the Company will be able to secure further funding and
will, therefore, continue as a going concern for at least the
next 12 months.
Accordingly, the Directors believe that it is appropriate that
the Company adopts the going concern basis of accounting
in preparation of these financial statements but note that
the requirement to raise further funding is considered to
be a material uncertainty. The financial statements do not
include the adjustments that would be required if the Group
was unable to continue as a going concern.
Events Occurring After the Reporting
Period
On 6 January 2025, the Company issued 1,764,983 shares
in lieu of cash for the payment of non-executive director
fees and certain Group suppliers in addition to a minor
share subscription from the Company’s Astana International
Exchange market maker. On 13 March 2024, the Company
issued 8,657,115 shares in lieu of cash for the payment of a
Group supplier.
Auditor
Crowe U.K. LLP has expressed its willingness to continue in
office as auditor and a resolution to re-appoint Crowe U.K.
LLP will be proposed at the Company’s forthcoming annual
general meeting.
During 2024, the Audit Quality Review team of the Financial
Reporting Council performed a review of the audit files
covering the year ended 31 December 2023.
Statement as to Disclosure of
Information to Auditor
The Directors who were in office at the date of the approval
of the consolidated financial statements have confirmed
that, as far as they are aware, there is no relevant audit
information of which the Company’s auditor is unaware and
that each director has taken all the steps he ought to have
taken as a director to make himself aware of any relevant
audit information and to establish that the Company’s
auditor is aware of that information.
Approved by the Board of Directors and signed on its behalf
William Callewaert
Director
29 April 2025
Ferro-Alloy Resources Limited Annual Report 202426
The Companies (Guernsey) Law, 2008 requires the Directors
to prepare financial statements for each financial period
which give a true and fair view of the state of affairs of the
Group for that period and of the profit or loss of the Group
for that period. Under that law they have elected to prepare
the financial statements in accordance with International
Financial Reporting Standards as adopted by the European
Union and applicable law.
In preparing those financial statements the Directors are
required to:
• Select suitable accounting policies and then apply them
consistently;
• Make judgements and estimates that are reasonable and
prudent;
• State whether applicable accounting standards have been
followed, subject to any material departures disclosed
and explained in the financial statements; and
• Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the Group
will continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time
the financial position of the Group and to enable them to
ensure that the financial statements have been properly
prepared in accordance with the Companies (Guernsey) Law,
2008. They are also responsible for safeguarding the assets
of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors confirm that they have complied with the
above requirements in preparing the financial statements.
To the best of the Directors’ knowledge:
a) the financial statements, prepared in accordance with
International Financial Reporting Standards as adopted
by the European Union and applicable law, give a true
and fair view of the assets, liabilities, financial position and
profit or loss of Ferro-Alloy Resources Limited and the
undertakings included in the consolidation as a whole;
and
b) the management report includes a fair review of the
development and performance of the business and
the position of Ferro-Alloy Resources Limited and the
undertakings included in the consolidation taken as a
whole, together with a description of the principal risks
and uncertainties that they face.
On behalf of the Board of Directors
William Callewaert
Director
29 April 2025
Directors’ Responsibility Statement
Ferro-Alloy Resources Limited Annual Report 2024 27
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Ferro Alloy
Resources Limited and its subsidiaries (the “Group”)
for the year ended 31 December 2024 which comprise
the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of financial
position, consolidated statement of changes in equity
and consolidate statement of cash flows and notes to the
financial statements, including material accounting policies.
The financial reporting framework that has been applied in
their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European
Union.
In our opinion, the financial statements:
• give a true and fair view of the state of the Group’s affairs
as at 31 December 2024 and of its loss for the year then
ended;
• have been properly prepared in accordance with
International Financial Reporting Standards as adopted by
the European Union;
• have been prepared in accordance with the requirements
of the Companies (Guernsey) Law 2008.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We are
independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
Material uncertainty related to going
concern
We draw attention to note 1(d) in the financial statements,
which indicates that the Group will require further funding to
continue exploration and development work, and to fund its
overheads during the going concern assessment period. At
the date of approval of the financial statements, there is no
certainty that this funding will be raised.
As stated in note 1(d), these events or conditions, along with
the other matters as set forth in note 1(d), indicate that a
material uncertainty exists that may cast significant doubt
on the Group’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the entity’s
ability to continue to adopt the going concern basis of
accounting included
• Assessing the accuracy of forecasting by comparing
previous forecasts with actual results;
• Assessing the cash flow requirements of the Group for
its exploration work, operating activities, and payment
of bond interest over the duration of the going concern
period based on budgets and forecasts;
• Understanding the forecast expenditure that is
committed, and that which could be considered
discretionary;
• Assessing management’s plans to raise the funding
required and the proposed source of funding;
• Considering the liquidity of existing assets in the
statement of financial position; and
• Considering the potential downside scenarios and the
resultant impact on available funds.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept
of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions
of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the
impact of misstatements identified.
Based on our professional judgement, we determined overall
materiality for the financial statements as a whole to be
$250,000 (2023 $300,000), based on approximately 1.3% of
total assets.
We use a different level of materiality (‘performance
materiality’) to determine the extent of our testing for the
audit of the financial statements. Performance materiality
is set based on the audit materiality as adjusted for the
Independent Auditor’s Report
to the members of Ferro-Alloy Resources Limited
Ferro-Alloy Resources Limited Annual Report 202428
judgements made as to the entity risk and our evaluation
of the specific risk of each audit area having regard to the
internal control environment. We determined performance
materiality to be $175,000 (2023 $210,000).
Where considered appropriate performance materiality
may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of $12,500 (2023: $12,500). Errors
below that threshold would also be reported to it if, in our
opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding
of the Group and its environment, including the Group’s
system of internal control, and assessing the risks of material
misstatement in the financial statements. We also addressed
the risk of management override of internal controls,
including assessing whether there was evidence of bias by
the Directors that may have represented a risk of material
misstatement.
The Group operates through the Parent Company based
in Guernsey whose main function is the incurring of
administrative costs and providing funding to the operating
entities in Kazakhstan. In addition to the Parent Company,
the subsidiary Firma Balausa LLC was considered to be a
significant component.
In establishing our overall approach to the Group audit, we
determined the type of work that needed to be performed
in respect of each component. A full scope audit of both
the Parent Company and Firma Balausa LLC subsidiary
was carried out principally in Kazakhstan by a local Crowe
network member firm, at the direction of instructions
provided by the Group auditor. The consolidation was
audited by the Group auditor. The remaining components
of the Group were considered non-significant and these
components were subject to analytical procedures
performed by the Group auditor.
A member of the Group audit team visited Kazakhstan to
meet with local management and substantiate information
and explanations provided during the audit work.
Our involvement with component auditors
For the work performed by the component auditor, we
determined the level of involvement needed in order to
be able to conclude whether sufficient appropriate audit
evidence has been obtained as a basis for our opinion
on the consolidated financial statements as a whole.
Our involvement with the component auditor included the
following:
• Detailed group instructions were sent to the component
auditor, which included the significant areas to be covered
by the audit (including areas that were deemed to be key
audit matters as detailed below), the level of component
materiality, and set out the information required to be
reported on to the Group auditor;
• A member of the Group audit team reviewed the
component auditor’s working papers at their offices in
Kazakhstan and held regular calls with the component
auditor throughout the engagement;
• We held calls and meetings with Group and component
management to discuss accounting and audit matters
arising.
Independent Auditor’s Report continued
Ferro-Alloy Resources Limited Annual Report 2024 29
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on the overall audit strategy, the allocation of resources
in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not pr
ovide a separate opinion on these
matters.
We identified going concern as a key audit matter and have detailed our response in the material uncertainty related to going
concern section above.
This is not a complete list of all risks identified in the audit.
Key audit matter How our scope addressed the key audit matter
1. Carrying value of Exploration and
Evaluation assets (note 13)
The Group carried Exploration and Evaluation
assets totalling $7.9m (2023: $7.1m) in relation
to the Balasausqandiq deposit in Kazakhstan.
These costs are capitalised in accordance with
the requirements of IFRS 6.
At each reporting date, the Directors are
required to assess whether there are any
indicators of impairment, that would require
an impairment assessment to be carried out.
The Directors concluded that there were no
indicators of impairment.
The Directors’ consideration of the impairment
indicators requires them to make certain
judgements, which makes this a key audit
matter.
We obtained and reviewed the Directors’ assessment of the indicators
of impairment, as set out in IFRS 6 “Exploration for and evaluation
of mineral resources”. The following work was undertaken to
corroborate the Directors’ assessment that there were no indications
of impairment:
• We obtained a copy of the Group’s subsoil use agreement, and
confirmed that it remains valid;
• We reviewed correspondence with the Government licensing
body during the year, including in relation to the application for
Addendum No. 5 to the subsoil use agreement;
• We made specific enquiries of the Directors and key staff involved in
the exploration work, and challenged management to demonstrate
that further exploration work in the area covered by the subsoil use
agreement was planned and had been incorporated in budgets and
forecasts;
• We reviewed the most recent Competent Person’s report on the
exploration asset and challenged management on whether the
economic assumptions of the report remain appropriate.
• We reviewed the adequacy of disclosures in the financial
statements in relation to the impairment consideration.
Based on our work performed, we consider the Directors’ assessment,
and the financial statements disclosures to be appropriate.
Ferro-Alloy Resources Limited Annual Report 202430
Independent Auditor’s Report continued
Key audit matter How our scope addressed the key audit matter
2. Carrying value of property, plant and
equipment (note 12)
The Group holds property, plant and equipment,
totalling $3.54m (2023: $5.95m), principally
relating to the pilot plant.
At each reporting date, the Directors are
required to assess whether there are any
indicators of impairment, that would require
an impairment assessment to be carried out.
The Directors concluded there were indicators
of impairment and so an assessment was
performed.
This assessment required the Directors to
assess the recoverable value of the pilot plant,
in consideration of its change in function from
production to a research and development
facility.
Given the estimates and judgements required,
this area was considered to represent a
significant audit risk and a key audit matter.
We obtained and reviewed the Directors’ impairment consideration,
including the following:
• We obtained an understanding of the Group’s processes in
preparing the impairment consideration, including how the key
assumptions are made.
• We considered how management had identified which classes of
asset connected with the pilot plant operation were impacted by
indications of impairment.
• We considered whether there was any contradictory evidence that
other classes of assets are impaired.
• We assessed management’s determination that the Plant and
Equipment assets, being the only category for which impairment
indicators were identified, should be impaired in full.
• We ensured that the impairment charge was correctly calculated
and included in the financial statements.
• We assessed whether appropriate disclosure has been made in the
financial statements in relation to the impairment consideration
performed.
Based on our work performed, we consider the Directors’ assessment
of impairment to tangible assets, and the financial statement
disclosures to be appropriate.
3. Revenue recognition (note 4)
The Group generated revenues of $4.74m
(2023: $5.72m) for the year.
In considering application of IFRS 15 “Revenue
from Contracts with Customers”, particular
attention was required to:
– The identification of performance obligations
in the contract, and the point at which
performance obligations are satisfied and
when revenue is recorded, which can be
specific to each contract.
– The accounting for variable consideration
associated with estimates of quality and
quantity for sales during the year, which are
subject to final checks post year end; and
– The accounting treatment for provisional
pricing estimates that apply under the
contracts to consider the fair value of
contract assets and liabilities.
Given the estimates and judgements required,
this area was considered to represent a
significant audit risk and a key audit matter.
We performed the following procedures:
• We assessed the Group’s contracts and revenue recognition
policy against the 5-step model of IFRS 15 to consider the
appropriateness of the accounting policy.
• We obtained and reviewed sales agreements for a sample of
customers to assess the appropriateness and application of
the accounting policy. Specific consideration was given to the
identification of performance obligations and the timing and
circumstances at which these are satisfied.
• We evaluated the appropriateness of management’s accounting
treatment for the provisional pricing clauses for open sales, and for
the estimation of quality and quantity amounts, comparing these to
actual outcomes post year end.
• We circularised the Group’s key customers regarding sales made
to them by the Group during the reporting period, and performed
alternative procedures where responses were not received.
• We agreed a sample of revenue transactions to documentation
supporting shipping and delivery of goods, ensuring that revenue
had been recognised at the appropriate point according to the
terms of the contract. For a sample of sales around the year end,
we vouched to documentation supporting their inclusion in the
correct accounting period.
• We reviewed financial statements disclosures to ensure these were
compliant with IFRS 15.
Based on our work performed, we consider that revenue has been
appropriately recognised in line with IFRS 15.
Ferro-Alloy Resources Limited Annual Report 2024 31
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Our audit procedures in relation to these matters were
designed in the context of our audit opinion as a whole.
They were not designed to enable us to express an opinion
on these matters individually and we express no such
opinion.
Other information
The directors are responsible for the other information
contained within the annual report. The other information
comprises the information included in the annual report
other than the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing
so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement
in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Matters on which we are required to
report by exception
Under The Companies (Guernsey) Law 2008, we are required
to report to you if, in our opinion:
• we have not received all the information and explanations
we require for our audit; or
• proper accounting records have not been kept; or
• the financial statements are not in agreement with the
accounting records.
We have no exceptions to report arising from this
responsibility.
Responsibilities of the directors for
the financial statements
As explained more fully in the directors’ responsibilities
statement set out on page 26, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group’s ability to continue as
a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate
the Company and Group or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the
audit of the financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not
a guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed
below:
• We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Group and the
procedures in place for ensuring compliance. These
included the Companies (Guernsey) Law 2008, and the
significant laws and regulations in Kazakhstan including
the terms of the subsoil use agreement, tax legislation
and environmental legislation.
Ferro-Alloy Resources Limited Annual Report 202432
• As part of our audit planning process, we assessed the
different areas of the financial statements, including
disclosures, for the risk of material misstatement. This
included considering the risk of fraud where direct
enquiries were made with management and those
charged with governance concerning both whether they
had any knowledge of any actual or suspected fraud
and their assessment of the susceptibility to fraud.
We considered the risk to be greater in areas involving
significant management estimation or judgement. Based
on this assessment we designed audit procedures to
focus on these specific areas.
• We tested the appropriateness of journal entries
throughout the year by vouching a risk-based sample of
journals to supporting documentation and explanations.
• A detailed review of the Group’s year end adjusting
entries was performed. Any items that appeared
unusual in nature or value were vouched to supporting
documentation.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that some material misstatements of the
financial statements may not be detected, even though the
audit is properly planned and performed in accordance with
the ISAs (UK). The potential effects of inherent limitations are
particularly significant in the case of misstatement resulting
from fraud because fraud may involve sophisticated and
carefully organized schemes designed to conceal it, including
deliberate failure to record transactions, collusion or
intentional misrepresentations being made to us.
A further description of our responsibilities for the
audit of the financial statements is available on the
Financial Reporting Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Use of our report
This report is made solely to the company’s members, as
a body, in accordance with Section 262 of the Companies
(Guernsey) Law 2008. Our audit work has been undertaken
so that we might state to the company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company’s
members as a body, for our audit work, for this report, or for
the opinions we have formed.
Stephen Bullock
For and on behalf of
Crowe U.K. LLP
Statutory Auditor
London, U.K.
Date: 29 April 2025
Independent Auditor’s Report continued
Ferro-Alloy Resources Limited Annual Report 2024 33
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Note
| 2024 | 2023 | ||
| $000 | $000 | ||
Revenue from customers (pricing at shipment) | 4 | ||
Finalpricingadjustmentsafterdelivery | 4 | ( | |
Total revenue | 4 | ||
Cost of sales | 5 | ( | ( |
Gross loss | ( | ( | |
Other income | 6 | ||
Administrative expenses | 7 | ( | ( |
Impairment loss | 12 | ( | |
Distribution expenses | ( | ( | |
Other expenses | 8 | ( | ( |
Loss from operating activities | ( | ( | |
Net finance costs | 10 | ( | ( |
Loss before income tax | ( | ( | |
Income tax | 11 | ||
Loss for the period | ( | ( | |
| Other comprehensive loss | |||
| Items that may be reclassified subsequently to profit or loss | |||
Exchange differences arising on translation of foreign operations | ( | ||
Total comprehensive loss for the period | ( | ( | |
Loss per share (basic and diluted) (US$) | 20 | ( | ( |
Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
for the year ended 31 December 2024
Ferro-Alloy Resources Limited Annual Report 202434
Note
| 31 December 2024 | 31 December 2023 | ||
| $000 | $000 | ||
| ASSETS | |||
| Non-current assets | |||
Property, plant and equipment | 12 | ||
Exploration and evaluation assets | 13 | ||
Intangible assets | 14 | ||
Prepayments | 18 | ||
Total non-current assets | |||
| Current assets | |||
Inventories | 16 | ||
Trade and other receivables | 17 | ||
Prepayments | 18 | ||
Cash and cash equivalents | 19 | ||
Total current assets | |||
Total assets | |||
| EQUITY AND LIABILITIES | |||
| Equity | |||
Share capital | 20 | ||
Additional paid-in capital | |||
Share-based payment reserve | 20 | ||
Foreign currency translation reserve | ( | ( | |
Accumulated losses | ( | ( | |
Total equity | ( | ||
| Non-current liabilities | |||
Loans and borrowings | 21 | ||
Provisions | 22 | ||
Total non-current liabilities | |||
| Current liabilities | |||
Trade and other payables | 23 | ||
Deferred income | 24 | ||
Interest payable | 21 | ||
Total current liabilities | |||
Total liabilities | |||
Total equity and liabilities |
The notes on pages 37 to 63 form part of these consolidated financial statements.
Consolidated Statement of
Financial Position
as at 31 December 2024
Ferro-Alloy Resources Limited Annual Report 2024 35
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Consolidated Statement of
Changes in Equity
for the year ended 31 December 2024
| Share- | Foreign | ||||||
| Additional | based | currency | |||||
| Share | Convertible | paid in | payment | translation | Accumulated | ||
| capital | loan notes | capital | reserve | reserve | losses | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
Balance at 1 January 2023 | ( | ( | |||||
Loss for the year | ( | ( | |||||
| Other comprehensive | |||||||
| expenses | |||||||
| Exchange differences | |||||||
arising on translation of foreign operations | |||||||
| Total comprehensive loss | ( | ( | |||||
| for the year | |||||||
Transactions with owners, recorded directly | |||||||
| in equity | |||||||
| Conversion of loan notes | ( | ( | |||||
| to equity | |||||||
| Other transactions | |||||||
recognised directly in equity | |||||||
| Balance at 31 December | ( | ( | |||||
| 2023 | |||||||
Balance at 1 January 2024 | ( | ( | |||||
Loss for the year | ( | ( | |||||
| Other comprehensive | |||||||
| expenses | |||||||
| Exchange differences | ( | ( | |||||
arising on translation of foreign operations | |||||||
| Total comprehensive loss | ( | ( | ( | ||||
| for the year | |||||||
Transactions with owners, recorded directly | |||||||
| in equity | |||||||
| Other transactions | |||||||
recognised directly in equity | |||||||
| Balance at 31 December | ( | ( | ( | ||||
| 2024 |
Ferro-Alloy Resources Limited Annual Report 202436
Note
| 2024 | 2023 | ||
| $000 | $000 | ||
| Cash flows from operating activities | |||
Loss for the year | ( | ( | |
| Adjustmentsfor: | |||
Depreciation and amortisation | 5, 7, 12 | ||
Impairment of plant and equipment | 12 | ||
Profit on sale of plant and equipment | 6, 12 | ( | |
Write-off of property, plant and equipment | 8 | ||
Write-down of inventory to net realisable value | 8 | ( | |
Write-down of prepayments | 18 | ||
Write-off of non-refundable VAT | |||
Share-based payment expense | 20 | ||
Net finance costs | 10 | ||
Cash used in operating activities before changes in working capital | ( | ( | |
Change in inventories | ( | ||
Change in trade and other receivables | ( | ||
Change in prepayments | |||
Change in trade and other payables | ( | ( | |
Change in deferred income | |||
Net cash used in operating activities | ( | ( | |
| Cash flows from investing activities | |||
Acquisition of property, plant and equipment | 12 | ( | ( |
Acquisition of exploration and evaluation assets | 13 | ( | ( |
Acquisition of intangible assets | 14 | ( | ( |
Proceeds from the disposal of plant and equipment | 6 | ||
Net cash used in investing activities | ( | ( | |
| Cash flows from financing activities | |||
Proceeds from borrowings | 21 | ||
Issue costs on borrowings | 21 | ( | |
Repayment of borrowings | 21 | ( | |
Interest paid | 21 | ( | ( |
Net cash from financing activities | |||
Net increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the year | 19 | ||
| Effect of movements in exchange rates on cash and cash | ( | ||
| equivalents | |||
Cash and cash equivalents at the end of the year |
Consolidated Statement of
CashFlows
for the year ended 31 December 2024
Ferro-Alloy Resources Limited Annual Report 2024 37
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| Company’s share | |||
Company | Location | in share capital | Primary activities |
Energy Metals Limited | UK | 100% | Dormant |
Vanadium Products LLC | Kazakhstan | 100% | Performs services for the Group |
Firma Balausa LLC | Kazakhstan | 100% | Production and sale of vanadium and |
| associated by-products | |||
Balausa Processing Company LLC | Kazakhstan | 100% | Development of processing facilities |
2 Use of estimates and judgements
Preparing the financial statements requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may
differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future periods affected.
Exploration and evaluation assets (Note 13)
The Group holds material exploration and evaluation assets and judgement is applied in determining whether impairment
indicators exist under the Group’s accounting policy. In determining that no impairment indicator exists management have
Notes to the Consolidated
Financial Statements
for the year ended 31 December 2024
Ferro-Alloy Resources Limited Annual Report 202438
Notes to the Consolidated Financial Statements continued
considered the Group’s imminent feasibility study on the asset, the strategic plans for exploration and future development
and the status of the Subsoil Use Agreement. Judgement was required in determining that the application for deferral of
obligations under the Subsoil Use Agreement (Note 26) will be granted and management anticipate such approvals being
provided given their understanding of the Kazakh market and plans for the asset.
Inventories (Note 16)
The Group holds material inventories which are assessed for impairment at each reporting date. The assessment of net
realisable value requires consideration of future cost to process and sell and spot market prices at year end less applicable
discounts. The estimates are based on market data and historical trends.
3 Material accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial
statements and have been applied consistently by Group entities, except for the implementation of new standards and
interpretations.
Ferro-Alloy Resources Limited Annual Report 2024 39
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 202440
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 41
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 202442
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 43
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Ferro-Alloy Resources Limited Annual Report 202444
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 45
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| 2024 | 2023 | |
| $000 | $000 | |
Sales of vanadium products | 3,076 | 3,308 |
Sales of ferro-molybdenum | 1,517 | 2,698 |
Sales of gravel and waste rock | - | 143 |
Service revenue | 129 | 15 |
Total revenue from customers under IFRS 15 | 4,722 | 6,164 |
Other revenue - change in fair value of customer contracts | 16 | (448) |
Total revenue | 4,738 | 5,716 |
| 2024 | 2023 | |
| $000 | $000 | |
Materials | 4,729 | 4,832 |
Wages, salaries and related taxes | 1,401 | 1,128 |
Depreciation | 783 | 425 |
Electricity | 139 | 94 |
Other | 498 | 290 |
7,550 | 6,769 |
6 Other income
| 2024 | 2023 | |
| $000 | $000 | |
Currency conversion gain | 5 | 8 |
Other (sales of equipment) | 45 | 12 |
50 | 20 |
Ferro-Alloy Resources Limited Annual Report 202446
| 2024 | 2023 | |
| $000 | $000 | |
Wages, salaries and related taxes | 1,688 | 2,023 |
Professional services | 332 | 315 |
Taxes other than income tax | 71 | 18 |
Listing and reorganisation expenses | 163 | 155 |
Audit | 124 | 125 |
Materials | 48 | 48 |
Rent | 37 | 40 |
Irrecoverable debts | - | 52 |
Repairs and maintenance | 1 | 58 |
Depreciation and amortisation | 70 | 51 |
Insurance | 45 | 44 |
Staff training | 69 | 15 |
Research and development costs | - | 10 |
Bank fees | 18 | 23 |
Travel expenses | 44 | 89 |
Utilities | 4 | 5 |
Communication and information services | 16 | 30 |
Other | 292 | 270 |
3,022 | 3,371 |
8 Other expenses
| 2024 | 2023 | |
| $000 | $000 | |
Currency conversion loss | 49 | 59 |
Write-down of inventory to net realisable value | (71) | 254 |
Write-down of obsolete assets | 2 | 1 |
Write-down of prepayments | 273 | - |
Share-based payment expense | 22 | 15 |
Other | 146 | 142 |
563 | 471 |
9 Personnel costs
| 2024 | 2023 | |
| $000 | $000 | |
Wages, salaries and related taxes | 3,640 | 3,232 |
3,640 | 3,232 |
During 2024 personnel costs of US$1,401,000 (2023: US$1,128,000) have been charged to cost of sales, US$1,688,000 (2023:
US$2,023,000) to administrative expenses and US$551,000 (2023: US$81,000) were charged to cost of inventories which were
not yet sold as at the year end.
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 47
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| 2024 | 2023 | |
| $000 | $000 | |
Net foreign exchange costs / (gain) | 337 | (83) |
Unwinding of discount on bonds | 302 | – |
Interest expense on financial liabilities (bonds) | 1,340 | 266 |
Net finance costs | 1,979 | 183 |
11 Income tax
The Group’s applicable tax rates in 2024 are an income tax rate of 20% for Kazakhstan registered subsidiaries (2023: 20%) and
0% (2023: 0%) for Guernsey registered companies. The Kazakh tax rate has been applied below as this is most reflective of the
Group’s trading operations and tax profile.
During the years ended 31 December 2024 and 2023 the Group incurred tax losses and, therefore, did not recognise any
current income tax expense.
Unrecognised deferred tax assets are described in Note 15.
Reconciliation of effective tax rate:
2024 | 2023 | |||
$000 | % | $000 | % | |
Loss before tax (Group) | (9,429) | 100 | (5,251) | 100 |
Income tax at the applicable tax rate | (1,886) | 20 | (1,050) | 20 |
Effect of unrecognised deferred tax assets / (of losses carried forward) | 822 | (7) | 1,417 | (27) |
| Net non-deductible expenses/non-taxable income | 1,064 | (13) | (367) | 7 |
| or loss | - | - | - | - |
Ferro-Alloy Resources Limited Annual Report 202448
12 Property, plant and equipment
| Land and | Plant and | Construction | |||||
| buildings | equipment | Vehicles | Computers | Other | in progress | Total | |
| $000 | $000 | $000 | $000 | $000 | $000 | $000 | |
| Cost | |||||||
Balance at 1 January 2023 | 1,959 | 2,723 | 458 | 43 | 174 | 3,448 | 8,805 |
Additions | - | 104 | 56 | 6 | 96 | 716 | 978 |
Transfers | 3,010 | 962 | - | - | - | (3,972) | - |
Disposals | - | (19) | - | - | (17) | - | (36) |
| Foreign currency | 46 | 52 | 8 | - | 3 | 50 | 159 |
| translation difference | |||||||
| Balance at 31 December | 5,015 | 3,822 | 522 | 49 | 256 | 242 | 9,906 |
| 2023 | |||||||
Balance at 1 January 2024 | 5,015 | 3,822 | 522 | 49 | 256 | 242 | 9,906 |
Additions | - | 64 | - | 2 | 50 | 88 | 204 |
Transfers | 62 | 186 | - | - | - | (248) | - |
Disposals | - | (104) | (2) | (3) | (3) | - | (112) |
| Foreign currency | (667) | (520) | (68) | (6) | (36) | (16) | (1,313) |
| translation difference | |||||||
| Balance at 31 December | 4,410 | 3,448 | 452 | 42 | 267 | 66 | 8,685 |
| 2024 | |||||||
Depreciation and impairment | |||||||
| Balance at 1 January 2023 | 708 | 2,256 | 322 | 28 | 57 | - | 3,371 |
Depreciation for the period | 130 | 341 | 33 | 5 | 47 | - | 556 |
Disposals | - | (18) | - | - | (17) | - | (35) |
| Foreign currency | 13 | 42 | 6 | - | 2 | - | 63 |
| translation difference | |||||||
| Balance at 31 December | 851 | 2,621 | 361 | 33 | 89 | - | 3,955 |
| 2023 | |||||||
Balance at 1 January 2024 | 851 | 2,621 | 361 | 33 | 89 | - | 3,955 |
Depreciation for the period | 432 | 438 | 33 | 6 | 52 | - | 961 |
Impairment charge | - | 954 | - | - | - | - | 954 |
Disposals | - | (102) | (2) | (3) | (2) | - | (109) |
| Foreign currency | (75) | (463) | (51) | (5) | (17) | - | (611) |
| translation difference | |||||||
| Balance at 31 December | 1,208 | 3,448 | 341 | 31 | 122 | - | 5,150 |
| 2024 | |||||||
| Carrying amounts | |||||||
At 1 January 2023 | 1,251 | 467 | 136 | 15 | 117 | 3,448 | 5,434 |
At 31 December 2023 | 4,164 | 1,201 | 161 | 16 | 167 | 242 | 5,951 |
At 31 December 2024 | 3,202 | - | 111 | 11 | 145 | 66 | 3,535 |
During 2024 a depreciation expense of US$783,000 (2023: US$425,000) has been charged to cost of sales, excluding cost of
finished goods that were not sold at year end, US$70,000 (2023: US$51,000) to administrative expenses, and US$189,000 has
been charged to cost of finished goods that were not sold at the year end (2023: US$80,000).
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 49
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Impairment
On 2 December 2024, the Company announced that save where profitable concentrates could be sourced and treated, the
Company’s existing plant would be switched to research and development activities to complete and optimise the ongoing
feasibility study, including the development of markets for the Company’s carbon black substitute product.
IAS 36 stipulates that an entity shall assess at the end of each reporting period whether ther
e is any indication that an asset
may be impaired. If any such indication exists, the entity shall estimate the recoverable amount of the asset.
With reference to IAS 36, the Directors consider the change in purpose of the existing plant, from full time concentrate
processing to research and development activities to optimise the ongoing the ongoing feasibility study, to be an impairment
indicator given that the existing plant will not meet the classification as a cash generating unit under the standard. Accordingly,
the Directors have determined that the plant and equipment elements of the Company’s property, plant and equipment i.e.
those assets attributable to the existing operation, should be impaired in full until such time that the existing operation reverts
back to operating as a full time concentrate processing plant or other cash generating commercial activities. As a result, the
Company has recognised an impairment charge at the year end against plant and equipment of US$954,000 (2023: nil).
13 Exploration and evaluation assets
The Group’s exploration and evaluation assets (“E&EA”) relate to the Balasausqandiq deposit. During the year, the Group
capitalised the cost of technical design, sample assaying and project management costs, all r
elating to the Company’s
Stage 1 feasibility study. As at 31 December 2024 the carrying value of exploration and evaluation assets was US$7.9m
(2023: US$7.1m).
| 2024 | 2023 | |
| $000 | $000 | |
Balance at 1 January | 7,145 | 4,208 |
Additions (Stage 1 feasibility study) | 1,619 | 2,931 |
Foreign currency translation difference | (765) | 6 |
Balance at 31 December | 7,999 | 7,145 |
Ferro-Alloy Resources Limited Annual Report 202450
Notes to the Consolidated Financial Statements continued
14 Intangible assets
| Mineral | Computer | |||
| rights | Patents | software | Total | |
| $000 | $000 | $000 | $000 | |
| Cost | ||||
Balance at 1 January 2023 | 83 | 32 | 3 | 118 |
Additions | - | 1 | - | 1 |
Foreign currency translation difference | 1 | 1 | - | 2 |
Balance at 31 December 2023 | 84 | 34 | 3 | 121 |
Balance at 1 January 2024 | 84 | 34 | 3 | 121 |
Additions | - | 2 | 1 | 3 |
Foreign currency translation difference | (11) | (5) | (1) | (17) |
Balance at 31 December 2024 | 73 | 31 | 3 | 107 |
| Amortisation | ||||
Balance at 1 January 2023 | 83 | 13 | 3 | 99 |
Amortisation for the year | - | 1 | - | 1 |
Foreign currency translation difference | 1 | - | - | 1 |
Balance at 31 December 2023 | 84 | 14 | 3 | 101 |
Balance at 1 January 2024 | 84 | 14 | 3 | 101 |
Amortisation for the year | - | 1 | - | 1 |
Foreign currency translation difference | (11) | (2) | - | (13) |
Balance at 31 December 2024 | 73 | 13 | 3 | 89 |
| Carrying amounts | ||||
At 1 January 2023 | - | 19 | - | 19 |
At 31 December 2023 | - | 20 | - | 20 |
At 31 December 2024 | - | 18 | - | 18 |
| 2024 | 2023 | |
| $000 | $000 | |
Temporary deductible differences | 599 | 912 |
Tax losses carried forward | 23,791 | 16,887 |
Unrecognised tax deferred tax assets | (24,390) | (17,799) |
- | - |
Ferro-Alloy Resources Limited Annual Report 2024 51
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Expiry year | $000 |
2025 | 201 |
2026 | 708 |
2027 | 424 |
2028 | 455 |
2029 | 1,898 |
2030 | 2,991 |
2031 | 1,392 |
2032 | 3,489 |
2033 | 2,695 |
2034 | 10,137 |
| 24,390 |
16 Inventories
| 2024 | 2023 | |
| $000 | $000 | |
Raw materials and consumables | 516 | 1,456 |
Finished goods | 287 | 517 |
Work in progress | 71 | 10 |
874 | 1,983 |
During 2024 inventories expensed to profit and loss amounted to US$4.7m (2023: US$4.9m).
| 2024 | 2023 | |
| $000 | $000 | |
| Current | ||
Trade receivables from third parties | 319 | 264 |
Due from employees | - | 66 |
VAT receivable | 781 | 1,049 |
Other receivables | 195 | 4 |
1,295 | 1,383 | |
Expected credit loss provision for receivables | (58) | (67) |
1,237 | 1,316 |
Ferro-Alloy Resources Limited Annual Report 202452
| 2024 | 2023 | |
| $000 | $000 | |
| Non-current | ||
Prepayment for E&EA | 964 | 470 |
Other prepayments | 7 | 418 |
971 | 888 | |
| Current | ||
Prepayments for goods and services | 853 | 762 |
853 | 762 |
19 Cash and cash equivalents
| 2024 | 2023 | |
| $000 | $000 | |
Cash at current bank accounts | 209 | 1,488 |
Cash at bank deposits | 3,567 | 417 |
Petty cash | 1 | 47 |
Cash and cash equivalents | 3,777 | 1,952 |
| Ordinary shares | ||
| 31 December | 31 December | |
| 2024 | 2023 | |
Par value | - | - |
Outstanding at beginning of year | 483,222,238 | 449,702,150 |
Shares issued | - | 33,520,088 |
Outstanding at end of year | 483,222,238 | 483,222,238 |
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 53
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| 2024 | |
| share | |
| options | |
Outstanding at the beginning of the year | 1,000,000 |
Granted during the year | - |
Exercised during the year | - |
Expired / cancelled during the year | - |
Outstanding at the year end | 1,000,000 |
| Number of | Exercise price | |||
| Grant date | options | Exercise date | per share (US$) | Expiry date |
29 June 2022 | 250,000 | 29 June 2025 | 0.162 | 29 June 2027 |
22 September 2022 | 250,000 | 22 September | 0.151 | 22 September |
| 2025 | 2027 | |||
12 September 2023 | 500,000 | 12 September | 0.116 | 12 September |
| 2026 | 2028 | |||
| 1,000,000 |
| Share-based | |
| payment | |
| reserve (US$) | |
At 1 January 2024 | 19,863 |
Exercise of share options | - |
Issue of options | - |
Payment expense recognised for the year | 22,447 |
At 31 December 2024 | 42,310 |
Ferro-Alloy Resources Limited Annual Report 202454
| 2024 | 2023 | |
| $000 | $000 | |
Loss for the year, attributable to owners of the Company | (9,429) | (5,251) |
Loss attributable to ordinary shareholders | (9,429) | (5,251) |
2024 | 2023 | |
Issued ordinary shares at 1 January (after subdivision) | 483,222,238 | 449,702,150 |
Effect of shares issued (weighted) | - | 3,857,106 |
Weighted-average number of ordinary shares at 31 December | 483,222,238 | 453,559,256 |
Loss per share of common stock attributable to the Company (basic and diluted) (US$) | (0.020) | (0.012) |
| 2024 | 2023 | |
| $000 | $000 | |
| Non-current liabilities | ||
Bonds payable | 17,134 | 7,393 |
17,134 | 7,393 | |
| Current liabilities | ||
Bonds payable | - | - |
Interest payable | 432 | 134 |
432 | 134 |
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 55
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| Effective | Nominal | Actual | |||||
| interest | amount | amount | Coupon | Coupon | |||
USD | Currency | rate | $000 | $000 | rate | paid | Interest |
Bonds payable | USD | 9.2% | 3,000 | 2,898 | 9% | 270 | 274 |
Bonds payable | USD | 10.4% | 5,000 | 4,874 | 10% | 358 | 500 |
Bonds payable | USD | 11.0% | 5,000 | 5,003 | 11% | 413 | 505 |
Bonds payable | USD | 13.5% | 5,000 | 5,000 | 13.5% | - | 61 |
18,000 | 17,775 | 1,041 | 1,340 |
| 2024 | 2023 | |
| $000 | $000 | |
| Loans and borrowings | ||
At 1 January | 7,527 | 1,127 |
| Cash flows: | ||
– Interest paid | (1,041) | (157) |
– Repayment of loans and borrowings | - | (1,112) |
– Proceeds from loans and borrowings | 10,003 | 7,784 |
Total | 16,489 | 7,642 |
| Non-cash flows | ||
– Interest accruing in period | 1,340 | 273 |
– Bond discount / premium | (263) | (388) |
At 31 December | 17,566 | 7,527 |
| 2024 | 2023 | |
| $000 | $000 | |
Balance at 1 January | 31 | 33 |
Change in estimate | (3) | (2) |
Foreign currency translation difference | (4) | - |
Balance at 31 December | 24 | 31 |
Non-current | 24 | 31 |
24 | 31 |
Ferro-Alloy Resources Limited Annual Report 202456
23 Trade and other payables
| 2024 | 2023 | |
| $000 | $000 | |
Trade payables | 1,273 | 1,781 |
Debt to directors/key management (Note 29) | - | 79 |
Debt to employees | 188 | 192 |
Other taxes | 310 | 72 |
Advances received | 72 | 17 |
1,843 | 2,141 |
24 Deferred income
| 2024 | 2023 | |
| $000 | $000 | |
Government grants | 102 | 102 |
102 | 102 |
During 2023, the Group was awarded grant funding by the Kazakhstan National Scientific Council for the development of
technology for the production of mixed vanadium oxides for use in vanadium redox flow batteries.
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 57
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| Carrying amount | ||
| 2024 | 2023 | |
| $000 | $000 | |
Trade and other receivables, excluding amounts due from employees and VAT receivable | 319 | 268 |
Cash and cash equivalents | 3,777 | 1,905 |
4,096 | 2,173 |
| Carrying amount | ||
| 2024 | 2023 | |
| $000 | $000 | |
Kazakhstan | 319 | 268 |
319 | 268 |
| Carrying amount | ||
| 2024 | 2023 | |
| $000 | $000 | |
| Trade receivables: | ||
Wholesale customers | 319 | 264 |
| Other receivables: | ||
Other | - | 4 |
319 | 268 |
| Gross | Impairment | Net | Gross | Impairment | Net | |
| 2024 | 2024 | 2024 | 2023 | 2023 | 2023 | |
| $000 | $000 | $000 | $000 | $000 | $000 | |
Not past due | 319 | - | 319 | 268 | - | 268 |
Past due more than 180 days | 58 | (58) | - | 67 | (67) | - |
377 | (58) | 319 | 335 | (67) | 268 |
Ferro-Alloy Resources Limited Annual Report 202458
| 2024 | 2023 | |
| $000 | $000 | |
Balance at beginning of the year | 47 | 36 |
Expected gain change | 11 | 31 |
Balance at end of the year | 58 | 67 |
| Carrying | Contractual | 6 months - | ||||
| amount | cash flows | On demand | 0-6 mths | 1 year | 1-3 years | |
| $000 | $000 | $000 | $000 | $000 | $000 | |
| Financial liabilities | ||||||
Trade and other payables | 1,273 | 1,273 | - | 1,273 | - | - |
Loans and borrowings | 17,566 | 21,970 | - | 1,430 | 998 | 19,542 |
18,839 | 23,243 | - | 2,703 | 998 | 19,542 |
| Carrying | Contractual | 6 months - | ||||
| amount | cash flows | On demand | 0-6 mths | 1 year | 1-3 years | |
| $000 | $000 | $000 | $000 | $000 | $000 | |
| Financial liabilities | ||||||
Trade and other payables | 1,781 | 1,781 | - | 1,781 | - | - |
Loans and borrowings | 7,527 | 7,527 | - | 134 | - | 7,393 |
9,308 | 9,308 | - | 1,915 | - | 7,393 |
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 59
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
| US$- | GBP- | EUR- | RUB- | KZT- | |
| denominated | denominated | denominated | denominated | denominated | |
| 2024 | 2024 | 2024 | 2024 | 2024 | |
| $000 | $000 | $000 | $000 | $000 | |
Cash and cash equivalents | 3,500 | 142 | - | 5 | 130 |
Trade and other payables | (959) | - | (98) | (43) | (895) |
Loans and borrowings | (17,566) | - | - | - | - |
Net exposure | (15,025) | 142 | (98) | (38) | (765) |
| US$- | GBP- | EUR- | RUB- | KZT- | |
| denominated | denominated | denominated | denominated | denominated | |
| 2023 | 2023 | 2023 | 2023 | 2023 | |
| $000 | $000 | $000 | $000 | $000 | |
Cash and cash equivalents | 1,257 | 115 | - | - | 580 |
Trade and other payables | (1,104) | - | (113) | (50) | (875) |
Loans and borrowings | (7,527) | - | - | - | - |
Net exposure | (7,374) | 115 | (113) | (50) | (295) |
Average rate | Reporting date spot rate | |||
| in US$ | 2024 | 2023 | 2024 | 2023 |
KZT 1 | 0.0021 | 0.0022 | 0.0019 | 0.0022 |
GBP 1 | 1.2784 | 1.2429 | 1.2589 | 1.2704 |
RUB 1 | 0.0108 | 0.0119 | 0.0095 | 0.0111 |
EUR 1 | 1.0818 | 1.0810 | 1.0438 | 1.1049 |
Ferro-Alloy Resources Limited Annual Report 202460
| 2024 | 2023 | |
| $000 | $000 | |
| Financial assets (includes cash) | ||
Trade and other receivables | 319 | 268 |
Cash at amortised cost | 3,777 | 1,905 |
4,096 | 2,173 | |
| Financial liabilities – measured at amortised cost | ||
Trade and other payables at amortised cost | 1,273 | 1,781 |
Loans and borrowings at amortised cost | 17,566 | 7,527 |
18,839 | 9,308 |
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 61
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Year | Tonnes |
| 2023 | 567,700 |
| 2024 | 788,100 |
| 2025 | 1,102,300 |
| 2026 | 1,102,300 |
| 2027 | 1,102,300 |
| 2028 | 1,102,300 |
| 2029 onwards | 1,102,300 |
Ferro-Alloy Resources Limited Annual Report 202462
28 Segment reporting
The Group’s operations are split into three segments based on the nature of operations: processing, subsoil operations (being
operations related to exploration and mining) and corporate segment for the purposes of IFRS 8: Operating Segments. The
Group’s assets are primarily concentrated in the Republic of Kazakhstan and the Group’s revenues are derived from operations
in, and connected with, the Republic of Kazakhstan.
| Processing | Subsoil | Corporate | Total | |
| 2024 | $000 | $000 | $000 | $000 |
Revenue | 4,738 | - | - | 4,738 |
Cost of sales | (7,550) | - | - | (7,550) |
Other income | 49 | - | 1 | 50 |
Administrative expenses | (1,132) | (40) | (1,850) | (3,022) |
Impairment charge | (954) | - | - | (954) |
Other expenses | (541) | - | (22) | (563) |
Distribution expenses | (149) | - | - | (149) |
Finance costs | 394 | - | (2,373) | (1,979) |
Loss before tax | (5,145) | (40) | (4,244) | (9,429) |
| Processing | Subsoil | Corporate | Total | |
| 2023 | $000 | $000 | $000 | $000 |
Revenue | 5,716 | - | - | 5,716 |
Cost of sales | (6,769) | - | - | (6,769) |
Other income | 15 | - | 5 | 20 |
Administrative expenses | (1,130) | (41) | (2,200) | (3,371) |
Other expenses | (456) | - | (15) | (471) |
Distribution expenses | (193) | - | - | (193) |
Finance costs | (139) | - | (44) | (183) |
Loss before tax | (2,956) | (41) | (2,254) | (5,251) |
Included in revenue arising from processing are revenues of US$4,500,000 (2023: US$5,200,000) which arose from sales to
four of the Group’s largest customers. No other single customer contributes 10 per cent or more to the Group’s revenue.
All of the Group’s assets are attributable to the Group’s processing operations.
Notes to the Consolidated Financial Statements continued
Ferro-Alloy Resources Limited Annual Report 2024 63
REVIEW OF THE YEAR CORPORATE GOVERNANCE FINANCIAL STATEMENTS
Sales to the Group’s largest customers in 2024 were as follows:
Customer A US$1.5m (31%) (2023: US$3.3m (57%))
Customer B US$1.9m (40%) (2023: US$1.6m (28%))
Customer C US$0.4m (9%) (2023: US$0.3m (5%))
Customer D US$0.7m (14%) (2023: US$ nil (0%))
| 2024 | 2023 | |
| $000 | $000 | |
Wages, salaries and related taxes | 1,053 | 1,114 |
30 Subsequent events
On 6 January 2025, the Company issued 1,684,160 ordinary shares of nil par value in the capital of the Company in lieu of cash
for the payment of non-executive director fees and certain Group suppliers.
On 13 March 2025, the Company issued a total of 8,657,115 ordinary shares of nil par value in the capital of the Company in
lieu of cash for the payment of a Group supplier.
Ferro-Alloy Resources Limited Annual Report 202464
Ferro-Alloy Resources Limited
Company Registration Number 63449
Registered Office Maison Allaire
Smith Street
St Peter Port
Guernsey
GY1 2NG
Directors Sir Mick Davis
Nicholas Bridgen
Andrey Kuznetsov
William Callewaert
Christopher Thomas
Petrus Nienaber
James Turian
Corporate Brokers
Shore Capital Stockbrokers Limited
57 St James’s Street, Cassini House
London, SW1A 1LD
Panmure Liberum Limited
Ropemaker Place, Level 12
25 Ropemaker Street
London, EC2Y 9LY
Tengri Partners Investment Banking (Kazakhstan) JSC
17 Al-Farabi Avenue
Almaty, 050059
Kazakhstan
Auditors Crowe U.K. LLP
55 Ludgate Hill
London, EC4M 7JW
Registrar Computershare Investor Services (Guernsey) Limited
1
st
Floor, Tudor House
Le Bordage
St Peter Port
Guernsey, GY1 1DB
Financial Press Relations and Investor
Relations
BlytheRay Limited
4-5 Castle Court
London, EC3V 9DL
Company Information
Contents
REVIEW OF THE YEAR
2
Operational Review
4
Feasibility Study Review
7
Financial Review
9
Sustainability Review
13
Climate Change Disclosures
17
Principal Risks and Uncertainties
GOVERNANCE
18
Governance Statement
20
Board of Directors
22
Senior Management Team
23
Directors’ Report
26
Directors’ Responsibility Statement
FINANCIAL STATEMENTS
27 Independent Auditor’s Report
33
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
34
Consolidated Statement of Financial Position
35
Consolidated Statement of Changes in Equity
36
Consolidated Statement of Cash Flows
37
Notes to the Consolidated Financial Statements
64
Company Information
Ferro-Alloy Resources Limited
Annual Report 2024
Ferro-Alloy Resources Limited
Annual Report
2024
Ferro-Alloy Resources Limited Annual Report 2024
Ferro-Alloy Resources Limited
Maison Allaire
Smith Street
St Peter Port
Guernsey
GY1 2NG
www.ferro-alloy.com