Premier African Minerals Limited (the "Company" or “Premier”) is committed to maintaining the highest standards in corporate governance throughout its operations and to ensure all its practices are conducted transparently, morally and efficiently. Therefore, and in accordance with the AIM Rules for Companies (March 2018), Premier will continue to comply with the provisions of The UK Corporate Governance Code July 2016, as published by the Financial Reporting Council Limited, to the extent the Board of Directors (“Board”) consider appropriate, given the Company's size, stage of development and resources (the "Code"). Throughout the past year, the Company has continued to adhere to this Code and the following statement sets out how the Company complies or otherwise departs from the principles of the Code.

Premier constantly seeks to maintain the highest levels of corporate governance whereby the Company ensures that a periodic review of the Company’s corporate governance is done. Following this recent review, there have been no corporate governance issues identified by Premier.

Accordingly, the Company has established specific committees and implemented certain policies, to ensure that:

  • it is led by an experienced Board which is collectively responsible for the long-term success of the Company;
  • the Board and the committees have the appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively;
  • the Board establish a formal and transparent arrangement for considering how it applies the corporate reporting, risk management and internal control principles and for maintaining an appropriate relationship with the Company's auditors; and
  • there is a dialogue with shareholders based on the mutual understanding of objectives.

In addition, the Company has adopted a comprehensive suite of policies including:

  • anti-corruption and bribery;
  • health and safety;
  • environment and community;
  • IT, communications and systems; and
  • social media.

The Code followings 5 Main Principles, which are herein assessed in accordance with Premier commitment to maintain the highest levels of corporate governance.

  1. Leadership

The Role of the Board of Directors

The Board is responsible for the management of the business of the Company, setting its strategic direction and establishing appropriate policies. It is the Directors’ responsibility to oversee the financial position of the Company and monitor its business and affairs on behalf of the Shareholders, to whom they are accountable. The primary duty of the Board is always to act in the best interests of the Company. The Board also addresses issues relating to internal control and risk management. The Non-executive Director bring a wide range of skills and experience to the Company, as well as independent judgment on strategy, risk and performance. The Non-executive Director is considered by the Board to be independent at the date of this report. To achieve its objectives, the Board strictly adheres to the Code.

The Board meets at least three times a year with supplementary meetings held as required. The agenda for the Board meetings is prepared jointly by the Chairman and CEO. The Board maintains annual rolling plan (“Agenda”) of items for discussion to ensure that all matters reserved for the Board, with other items as appropriate, are addressed. The Agenda, with all accompanying documents, generally includes the following:

  • Review of previous minutes;
  • Discussion on various project activities and market conditions;
  • Management Accounts and Financial position;
  • Corporate Matters; and
  • Other business matters that Board members can freely raise beyond the defined Agenda.

The Annual Accounts of Premier best reflects the Board key types of decisions that the Board are required to take in their pursuant of maintaining the highest levels of corporate governance. The following matters are reserved for the Board;

  • Strategy, Policy and Management;
  • Group Structure and capital requirements;
  • Financial reporting and controls;
  • Internal and External controls;
  • Transactions and Commercial Contracts including delegation authority;
  • Board structure; and
  • Corporate governance matters.

Premier has established varies committees to assist the Board in maintain the highest levels of corporate governance. Of these committees, the following two strongly assist the decision making of the Board;

Audit Committee

The Audit Committee (“AC”), which comprises of Michael Foster and Godfrey Manhambara, and is chaired by Godfrey Manhambara, is responsible for the appointment of auditors and the audit fee, and for ensuring that the financial performance of the Company is properly monitored and reported. The Audit Committee, inter alia, meets with the Company's external auditor and its senior financial management to review the annual and interim financial statements of the Company, oversees the Company's accounting and financial reporting processes, the Company's internal accounting controls and the resolution of issues identified by the Company's auditors.

Other key aspects of the AC include:

  • reviewing the Company's accounting policies and reports produced by internal and external audit functions;
  • considering whether the Company has followed appropriate accounting standards and made appropriate estimates and judgements, considering the views of the external auditor;
  • reporting its views to the board of directors if it is not satisfied with any aspect of the proposed financial reporting by the Company;
  • reviewing the adequacy and effectiveness of the Company’s internal financial controls and internal control and risk management systems;
  • reviewing the adequacy and effectiveness of the Company's anti-money laundering systems and controls for the prevention of bribery and receive reports on non-compliance; and
  • overseeing the appointment of and the relationship with the external auditor.

 

Remuneration Committee

 

The Remuneration Committee comprises of Godfrey Manhambara and Michael Foster and is chaired by Godfrey Manhambara. The Remuneration Committee assumes general responsibility for assisting the Board in respect of remuneration policies for Premier. The Committee reviews and recommends remuneration strategies for the Company and proposals relating to compensation for the Company's officers, directors and consultants and assesses the performance of the officers of the Company in fulfilling their responsibilities and meeting corporate objectives. It has the responsibility for, inter alia, administering share and cash incentive plans and programmes for Directors and employees and for approving (or making recommendations to the Board on) share and cash awards for Directors and employees.

 

The Division of Responsibility of the Board of Directors

It is important that the Board itself contains the right mix of skills and experience to deliver the strategy of the Company. The roles of the Chairman and Chief Executive Officer (“CEO”) are not exercised by the same person.  There is no one individual or group of individuals on the Board that have unfettered powers of discretion nor is there any undue influence in the collective decision-making ability of the Board.

The responsibilities of the Chairman, CEO and Non-executive director are set out in writing and are review by the Board annually to ensure that it remains relevant and accurate. In brief summary, they are responsible as followings;

  • The Chairman’s role is to lead and manage the Board and play a role in facilitating the discussion of the Company’s strategy, as set by the Board. And to effectively promote the success of the Company.
  • The CEO’s role, including the role of the Technical Director, is the responsibility of the day-to-day management of the Company’s operational activities, and for the proper execution of the stagey as set by the Board.
  • The Non-executive directors, act as a member of the unitary Board, however, they are required to constructively challenge performance of management and help develop proposals on strategy, agreeing of goals and the Company key objectives.

 

  1. Effectiveness

The Composition of the Board

The Board and its committees should have the appropriate balance of skills, experience, independence and knowledge of the Company to enable them to discharge their respective duties and responsibilities effectively.

 As such, the Board has been structured to ensure that correct mix of skills and experience are in place to allow it to operate effectively:

  • a Chairman (Michael Foster), whose primary responsibility to lead and manage the Board. This remain vital in the delivery of the Company's corporate governance model. The Chairman has a clear separation from the day-to-day business of the Company which allows him to make independent decisions.
  • a CEO (George Roach), whose primary focus is communicating, on behalf of the Company, with shareholders, government entities, and the public. Leading the development of the Company's short- and long-term strategy.
  • a Technical Director (Wolfgang Hampel), whose is responsible for leading, co-ordinating and optimising the performance of the both mining and exploration services. With a further responsibility for geological and mine planning activities, his role is critical in ensuring the quality and efficiency of Premier geology, and
  • one independent Non-Executive Directors (Godfrey Manhambara).

 

The Code requires that a smaller company (and which the Company is under the Code) should have at least two independent non-executive directors. Godfrey Manhambara is independent under the Code. The Board also regards Michael Foster as independent, notwithstanding that he participates in the Company’s share option plan and had an interest in Casa Mining. The Board is satisfied that Michael Foster acts independently irrespective of these interests. The Board also notes that no single individual will dominate decision making and further notes that there has been sufficient challenge of executive management at meetings of the Board thereby confirming that the Board is capable of operating effectively.

The Board has not appointed a senior Finance Director but is actively seeking for the appropriate candidate. Additionally, the Company has a Company Secretary in the UK who assists the Chairman and CEO in preparing for and running effective board meetings, including the timely dissemination of appropriate information. The Company Secretary provides advice and guidance to the extent required by the Board on the legal and regulatory environment.

The Nomination Committee (“NC”) has been established to regularly review and ensure that the Board has the appropriate balance of skills, experience and knowledge of the Company. NC meets as required to consider the composition of and succession planning for the Board, and to lead the process of appointments to the Board. The Committee is made up of George Roach and Godfrey Manhambara and is chaired by George Roach.

Other key aspects of the NC include:

  • regularly reviewing the structure, size and composition (including the skills, knowledge, experience and diversity) of the board and make recommendations to the board about any changes, succession planning and vacancies; and
  • identifying suitable candidates from a wide range of backgrounds to be considered for positions on the board.

 

Appointments to the Board

The appointment of new Directors to the Board is led by the NC who has the responsibility for nominating candidates for appointment. Both the NC and Board considers the need for diversity, including equality, and that the new directors must exhibit the required skills, experience, knowledge and independence.

The Board acknowledges that the Company is not in compliance with the Code whereby the NC should comprise a majority of independent directors. The Board considers that the NC has a strong enough independent component with Godfrey Manhambara.

Commitment

The Board requires that all directors should be able to allocate sufficient time to the Company to discharge their responsibilities in accordance their letter of appointment. The Company maintains records of each letter of appointment, which can be inspected at an agreed time, at the Company’s registered office.

The NC is responsible for considering on an annual basis, whether each director is able to devote sufficient time to their duties.

Development

All directors are required to familiarise themselves with the Board and should regularly update and refresh their skills and knowledge. The Company provides each joining director with an induction on the Company. Each induction is tailored to the specific background and requirements of the new director. In general, the induction contains information on:

  • Structures and operations;
  • Board procedures;
  • Corporate Governance; and
  • Details regarding their duties and responsibilities.

Information and Support

As Premier constantly seeks to maintain the highest levels of corporate governance, it is imperative that information is supplied to the Board in a in form and of a quality appropriate to enable the Board to discharge its duties in a timely manner. The supply of the information is done by the Chairman with the assistance of the Company Secretary.

Premier encourage all Board members to seek independent professional advice (at the reasonable expense of the Company) in the furtherance of their duties. The Board is given sufficient opportunity to meet with any manager, consultant or contractor to gain further insight into Premier.

Evaluation

The Board recognises that it should undertake a formal and rigorous annual evaluation of its own performance, that of its committees and individual directors. The evaluation of the Board’s performance is an assessment of the following key factors:

  • The Board structure;
  • The Board’s performance;
  • The Board business strategy;
  • Financial reporting and controls;
  • Performance monitoring; and
  • Supporting and advisory roles.

The Board does is not in compliance with the Code as the evaluation process is usually conducted internally due to the size and complexity of the operations of the Company. Furthermore, the Board believes that internal assessment best help identify the key strength and weaknesses to allow for effective evaluation. The Board will continue to assess the internal review process against the growth of the Company as should the Company grow in size it may consider getting an independent assessment.

The Chairman meets annually with the Non-executive directors without the executive directors to discuss the Board balance, monitor the powers of individual executive directors and raise any other appropriate issues. A similar review is also undertaken of the Chairman whereby the senior executive director meets with the Non-executive directors.

Re-election

The Board believe that all directors should be submitted for re-election at regular intervals, subject to the continued satisfactory performance of the Company.

The Director longest in office since their last appointment is required to retire by rotation or stand for reappointment at the Annual General Meeting (“AGM”).

  1. Accountability

Financial and Business reporting

A key duty of the Board is to oversee the financial affairs of the Company. The Financial Statements is the Board’s primary means of presenting a fair, balanced and understandable assessment of the Company’s positions that also best provides the information necessary to allow shareholders to assess the Company’s performance, business model and strategy for that period.

You can view Premier Annual Report and Financial Statements on the Company’s webpage at the following address, www.premierafricanminerals.com. Under the Strategic Review section of the Company’s Annual Report and Financial Statements for the year ending December 2017, the Board set outs the strategic objectives of the Company, how these will be delivered, Premier business model and how the Company will generate and preserve value over the longer term for shareholders.

The Board have a reasonable expectation that the Group has adequate resources to continue in operations or existence for the foreseeable future thus continues to adopt the going concern basis in preparing its Annual Report and Financial Statements.

Risk Management and Internal Control

The Board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives. The Board manages the risk through the implementation of internal control systems.

The Board has identified the following as some of the risks and their mitigation:

  • Credit Risk: Credit risk is the risk of potential loss to the Company if counterparty to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its liquid financial assets, including cash, receivables, and balances receivable from the government. The Company limits the exposure to credit risk in its cash by only investing its cash with high-credit quality financial institutions in business and savings accounts, guaranteed investment certificates and in government treasury bills which are available on demand by the Company for its programs.
  • Liquidity Risk: Liquidity risk is the risk that the Company will not have the resources to meet its obligations as they fall due. The Company manages this risk by closely monitoring cash forecasts and managing resources to ensure that it will have enough liquidity to meet its obligations.
  • Operating Risks: The activities of the Company are subject to all of the hazards and risks normally incidental to exploring and developing natural resource projects. These risks and uncertainties include, but are not limited to environmental hazards, industrial accidents, labour disputes, geo-political risks, encountering unusual or unexpected geologic formations or other geological or grade problems, unanticipated changes in rock formation characteristics and mineral recovery, encountering unanticipated ground or water conditions, land slips, flooding, periodic interruptions due to inclement or hazardous weather conditions and other acts of God or un-favourable operating conditions and losses. The Company manages the risk by closing monitoring operations and maintaining adequate insurance cover.
  • Early-stage Business Risk: The Board manages this risk by monitoring cash levels and reviewing cash flow forecasts on a regular basis.
  • Market Risk (exchange rates, commodity and equity): Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. The Company manages the risk by closing monitoring exchange rates, commodity and equity markets. The Company further engages consultants to undertake commodity forecast.
  • Interest Rate Risk: The Company is exposed to interest rate risk to the extent that its cash balances bear variable rates of interest. The interest rate risks on cash and short-term investments and on the Company’s, obligations are not considered significant and is not mitigated at this time.
  • Foreign Currency Risk: The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates against the Company’s functional currency, which is the United States dollar (“USD”).  The Company has not hedged its exposure to currency fluctuations.
  • Environmental Risks and Hazards: All phases of the Company’s operations are subject to environmental regulation in the areas in which it operates. The Board manages this risk by working with environmental consultants and by engaging with the relevant governmental departments and other concerned stakeholders.
  • Licencing Risk: The Company’s exploration and development activities are dependent upon the grant of appropriate licences, concessions, leases, permits and regulatory consents which may be withdrawn or made subject to limitations or performance criteria. Such licences and permits are as a practical matter subject to the discretion of the applicable Government or Government office. The Group must comply with known standards, existing laws and regulations that may entail greater or lesser costs and delays depending on the nature of the activity to be permitted. The interpretations, amendments to existing laws and regulations, or more stringent enforcement of existing laws and regulations could have a material adverse impact on the Group’s results of operations and financial condition. Whilst the Company continually seeks to do everything within its control to ensure that the terms of each licence are met and adhered to, third parties may seek to exploit any technical breaches in licence terms for their own benefit. There is a risk that negotiations with a Government in relation to the grant, renewal or extension of a licence may not result in the grant, renewal or extension taking effect prior to the expiry of the previous licence period, and there can be no assurance of the terms of any extension, renewal or grant.
  • Political and Regulatory Risk: The Company operating activities in Africa, notably in Zimbabwe, and Togo, are subject to laws and regulations governing expropriation of property, health and worker safety, employment standards, waste disposal, protection of the environment, mine development, land and water use, prospecting, mineral production, exports, taxes, labour standards, occupational health standards, toxic wastes, the protection of endangered and protected species and other matters. The Group is dependent on the political and economic situation in these countries and may be adversely impacted by political factors such as expropriation, war, terrorism, insurrection and changes to laws governing mineral exploration and operations.
  • Internal Control and Financial Risk Management: The Board has overall responsibility for the Group’s systems of internal control and for reviewing their effectiveness. The Group maintains systems which are designed to provide reasonable but not absolute assurance against material loss and to manage rather than eliminate risk.

The Board has overall responsibility for maintaining and reviewing the Group’s system of internal control and ensuring that the controls are robust and effective in enabling risks to be appropriately assessed and managed.

On behalf of the Board, the AC conducts an annual review of the effectiveness of the systems of internal control including financial, operational and compliance controls and risk management systems.

Audit Committee and Auditors

The functions of the AC are clearly described as part of the Leadership function in this note.

Whilst the Board sets the Company risk appetite, it reviews the operations and effectiveness of the Company’s risk management activities through the AC, which undertake the day-to-day oversight of the risk management framework on behalf of the Board. The Chairman of the AC regularly provides an update on the work carried out by the AC to the board.

It is noted that the AC follow the recommendations of the Code whereby they monitor and review the effectiveness of the internal audit activities. However, at this time, the Board have determined that the appointment of internal auditor is not required due to the size of the Company.

  1. Remuneration

The Level and Components of Remuneration

Executive directors’ remuneration should be designed to promote the long-term success of the Company. Performance-related elements should be transparent, stretching and rigorously applied. The Board delegates the responsibility for setting the appropriate levels of remuneration for its directors to the Remuneration Committee.

The levels of Remuneration to directors are disclosed to shareholders in Premier Annual Report and Financial Statements. Both the Board and Remuneration Committee seek to provide appropriate reward for the skill and time commitment required so at to retain the right calibre of director at a cost to the Company and which reflects the current market rates.

Procedure

The Board have a formal and transparent procedure for developing policy on the executive remuneration and for fixing the remuneration packages of individual directors. As strict policy, no director is involved in deciding their own remuneration.

The Remuneration Committee consider and approves the remuneration and where applicable, incentives and benefits, and makes recommendations to the Board. The Committee will also govern employee share schemes. The Chairman of the Committee will be consulted by the CEO in respect of the Company and director’s performance approvals, compensation and in respect of any appointment/departures from roles.

The remuneration of non-executive directors shall be a matter for the executive members of the Board.

The Company has adopted a share dealing code to ensure directors and certain employees do not abuse, and do not place themselves under suspicion of abusing inside information of which they are in possession and to comply with its obligations under MAR which applies to the Company by virtue of its shares being traded on AIM. Furthermore, the Company's share dealing code is compliant with the AIM Rules for Companies published by the London Stock Exchange (as amended from time to time).

Under the share dealing code, the Company must:

  • disclose all inside information to the public as soon as possible by way of market announcement unless certain circumstances exist in which the disclosure of the inside information may be delayed;
  • keep a list of each person who is in possession of inside information relating to the Company;
  • procure that all persons discharging managerial responsibilities and certain employees are given clearance by the Company before they are allowed to trade in Company securities; and
  • procure that all persons discharging managerial responsibilities and persons closely associated to them notify both the Company and the Financial Conduct Authority of all trades in Company securities that they make.

 

Additionally, under the share dealing code, no person discharging managerial responsibilities is permitted to deal in Company securities (whether directly or through an investment manager) during a closed period; being the period either: from the end of the relevant financial year up to the release of the preliminary announcement of the Company’s annual results; from the end of the relevant financial period up to the release of the Company’s half-yearly financial report or; 30 calendar days before the release of each of the Company’s first quarter report and third quarter report.

  1. Relations with Shareholders

Dialogue with shareholders

The Company recognises that maintaining strong communications with its shareholders promotes transparency and will drive value in the medium to long-term. Accordingly, the Company has an established programme to communicate with shareholders. This done by providing regular updates on the progress of the Company, detailing recent business and strategy developments, in news releases which will be posted on the Company's website and through certain social media channels. The Board has also engaged an internal Investor Relations Officer (Fuad Sillem) who assist in maintaining the strong levels communication with shareholders.

The Disclosure Committee which comprises of Michael Foster and Godfrey Manhambara and is chaired by Godfrey Manhambara is in place to assist the Board with the dialogue between the Company and its shareholders. The Disclosure Committee assumes general responsibility for approval and monitoring compliance with the Company’s disclosure controls and procedures. It has the responsibility, inter alia, determining whether information is inside information, deciding whether the inside information is to be announced as soon as possible and reviewing the scope, content and accuracy of disclosure. The Company has adopted a share dealing code governing the share dealings of the Directors and applicable employees during close periods and is in accordance with Rule 21 of the AIM Rules.

The Chairman and CEO are contactable via email. Their email address can be obtained at either the Company’s registered office or by requesting them at the below address. To continually improve transparency, the Board would be delighted to receive feedback from shareholders. Communications should be directed to This email address is being protected from spambots. You need JavaScript enabled to view it.. The CEO has been appointed to manage the relationship between the Company and its shareholders and will review and report to the Board on any communications received.

Constructive Use of General Meetings

The Company holds AGM each year, whereby all of the directors aim to attend the AGM and value the opportunity of welcoming individual shareholders and other investors to communicate directly and address their questions.

In addition to the mandatory information required and procedures to calling a general meeting, which can found under the Company’s constitutional documents on the webpage, the Board ensure that a full, fair and balanced explanation of business of all general meetings is sent in advance to shareholders.

The information contained herein was last reviewed on 28 September 2018.