Aterian : Annual Report and Accounts Dec 2022

Aterian PLC

Company Number: 07496976

Aterian PLC

("ATN" or "Aterian")

(formerly known as Eastinco Mining and Exploration PLC)

Annual Report

and

Consolidated Financial Statements

For the year ended 31 December 2022

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Aterian PLC

	CONTENTS
	Page
General Information	1
Strategic Report	2
Directors' Report	21
Statement of Directors' Responsibilities	28
Corporate Governance Report	30
Directors' Remuneration Report	37
Independent Auditor's Report	43
Consolidated Statement of Comprehensive Income	52
Consolidated and Company Statements of Financial Position	53
Consolidated Statement of Changes in Equity	55
Company Statement of Changes in Equity	56
Consolidated and Company Statements of Cash Flows	57
Notes to the Consolidated and Company Financial Statements	58

Aterian PLC

COMPANY INFORMATION

The Board of Directors	C Bray
	S Rollason
	D Marais
	K Pezeshki (appointed 24 October 2022)
	A Masterton-Hume (appointed 24 October 2022)
Company registration number	07496976
Registered office	27-28 Eastcastle Street
	London
	W1W 8DH
Independent Auditor	MHA Macintyre Hudson
	Chartered Accountants & Statutory Auditors
	2 London Wall Place
	Barbican
	London
	EC2Y 5AU
Corporate Advisor and Broker	Novum Securities Limited
	2nd Floor
	Lansdowne House
	57 Berkeley Square
	London
	W1J 6ER
Company Secretary	MSP Corporate Secretaries Ltd
	27-28 Eastcastle Street
	London
	W1W 8DH
Registrars	Share Registrars Ltd
	The Courtyard
	17 West Street
	Farnham
	GU9 7DR

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Aterian PLC

STRATEGIC REPORT

YEAR ENDED 31 DECEMBER 2022

Dear Shareholder,

2022 marked a year of significant positive change for the Company. On 24 October 2022, we completed the acquisition of 15 copper-silver and base metal exploration projects in the Kingdom of Morocco, moved the market listing to the Main Market of the London Stock Exchange ("LSE''), and changed the name of the Company from Eastinco Mining and Exploration Plc to Aterian Plc. This transaction has transformed the Company into a multi-jurisdiction,multi-commodity, critical and strategic metals focussed exploration and development company, and we are excited to welcome Elemental Altus Royalties as a significant shareholder.

The rationale for this acquisition was to acquire exciting prospective assets that fit into our strategy of targeting critical and strategic metals to exploration. Currently, the renewable energy, automotive and electronic manufacturing sectors are driving the requirement to develop secure supply chains of critical and strategic metals. This is the energy transformation from carbon-based sources to renewable sources and storage systems. The exploration conducted on the Moroccan assets highlights the strong potential for the discovery of strategic metal deposits, in particular copper and silver. We firmly believe the market fundamentals for copper are excellent and specifically linked to the nascent growing demand for renewable energy and the related electrification of transportation globally. We are keen to invest in Morocco to demonstrate the potential of our assets there and we are keen to demonstrate the full potential of our assets in Rwanda following a very positive shift in focus from Musasa to the southern projects.

Importantly, the listing on the LSE will provide us with exposure to a broader investor profile and greater liquidity in our shares, providing a more solid platform to support the Company's continued growth.

We continue to work towards our objective of becoming an ethical, integrated exploration, development, and trading company across multiple mineral assets and jurisdictions.

Business Review and Future Developments

Morocco Acquisition - Aterian Resources Limited

On 24 October 2022, the Company completed the acquisition of 15 mineral exploration projects covering 762 km2 in the Kingdom of Morocco from Altus Strategies PLC (now called Elemental Altus Royalties Corp). The completion of the acquisition coincided with a move to the Main Market of the LSE from the AQSE Growth Market, and a change in name from Eastinco Mining and Exploration PLC to Aterian PLC, shortly thereafter. The name change demonstrates the change taking place and pays homage to the geological potential offered by the Moroccan assets acquisition.

As consideration for the Moroccan assets held by the UK-registered company Aterian Resources Limited, the Company issued to Altus 241,173,523 ordinary shares and issued warrants representing 10% of the enlarged share capital of the Company, at the time of admission to the LSE. Warrants representing 5% of the enlarged share capital of the Company have an exercise price of £0.01 whilst the balance of the warrants has a £0.02 exercise price. All the warrants are exercisable for a period of five years from the admission date. The amount of assets recognised on the acquisition was £3,241,000.

Aterian Resources Limited owns two Morocco registered subsidiaries which hold the title to 50 permits, over 15 separate projects with a combined land area of c.762 km2. The licences are considered highly prospective for copper, silver, tin, and base metals.

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Aterian PLC

STRATEGIC REPORT (continued)

YEAR ENDED 31 DECEMBER 2022

Rwanda Exploration

The main operational focus in 2022 shifted from the Musasa project to the southern projects, where the geological team has identified 22 zones of potential tantalum, niobium, and lithium-hosting lithium- hosting pegmatite, making this a very strong exploration play.

Work has targeted the HCK-1 prospect, where shallow exploration pitting has outlined a potential target zone of c.2,500 m in strike length.

The width of the target zone is uncertain but, in several locations, pitting intersected pegmatite over a horizontal distance of c.100 m. A further positive outcome from our work is that 800 m of the identified pegmatite target zone occurs in a "greenfield" environment to the southeast of the main ridgeline hosting HCK-1. This can be described simply as an area where there are no observed artisanal workings, pegmatite outcrop, or surface expressions, where the pegmatite remains blind to the surface, covered by soil and regolith of variable thickness up to 4.50 m. A drone survey has been flown over HCK-1, covering an area of 360 hectares, to provide detailed imagery with topographic data and a current view of the earlier artisanal workings.

A post-period event is the completion of a detailed ground-based geophysical survey over HCK-1. The multi-method survey of Induced Polarisation ("IP"), Electrical IP Tomography, and ground magnetics was designed to provide additional information allowing for a determination of the geological contacts of the main pegmatite zone with the schistose country rock, controlling geological structures and an approximation of the depth of weathering. The final report of this work is pending, and it is expected that a limited scout drilling programme will be planned based on the outcome of this work, providing an opportunity to test the fresh bedrock for the underlying lithium potential.

At the end of June 2022, we suspended operations on our Musasa Project based on the recommendation of Quiver Ltd, our processing consultants. Their assessment was to i) reconfigure the wash plant and ii) undertake additional metallurgical test work to improve overall metal recoveries. The Company's view is to refocus our activities to the southern projects and suspend further investment in production until such time as the new licence at Musasa is granted and then reassess the situation. The original application was made in May 2021. While suspending production was a disappointment, we are excited at the prospect of potentially expanding our potential exploration licence area. As a result, management made the decision to fully impair the carrying value of goodwill and property, plant and assets related to the Group's Musasa Project amounting to £2,168,000 and £877,000 respectively. Appropriately, following the decision to cease work on the Musasa Project the Eastinco Limited Managing Director and Rwandan country manager, Daniel Hogan resigned.

Fieldwork undertaken at Musasa has been limited to geological examination of the Kassava prospect. Kassava is one of five identified mineralized LCT pegmatite targets occurring on the project, where historic artisanal miners have excavated a 20 m x 30 m wide cut to a depth of c. 13 m, close to the centre of the prospect. Field observations indicate Kassava to be a lens-shaped body, with a maximum horizontal width of 80 m, with the exploration pits covering a strike length of 250 m.

Financial Review

During the year under review the Group made a loss before taxation of £4,383,0000 (2021: loss £1,351,000). The prudent impairment of both the goodwill of £2,168,00 and property, plant and equipment of £877,000 relating to the Musasa project in Rwanda accounts for the majority of the 2022 loss.

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