AfriTin Mining : Annual Report 2021

2021 ANNUAL REPORT

TABLE OF CONTENTS

CHAIRMAN'S STATEMENT .................................................................................................................................	5
CHIEF EXECUTIVE OFFICER'S STATEMENT ...............................................................................................	7
FINANCIAL REVIEW ............................................................................................................................................	11
DIRECTORS' REPORT ..........................................................................................................................................	15
CORPORATE GOVERNANCE REPORT .........................................................................................................	23
STATEMENT OF DIRECTORS' RESPONSIBILITIES ....................................................................................	31
INDEPENDENT AUDITOR'S REPORT .............................................................................................................	33
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..........................................................	42
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ....................................................................	43
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ......................................................................	44
CONSOLIDATED STATEMENT OF CASH FLOWS .....................................................................................	46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ..............................................................	47
NOTICE OF ANNUAL GENERAL MEETING .................................................................................................	85
COMPANY INFORMATION .................................................................................................................................	89

CHAIRMAN'S STATEMENT

GLEN PARSONS

CHAIRMAN

In reviewing our financial year, I first want to thank AfriTin's staff, shareholders and broader stakeholder groups for their continued support of and belief in this Company. No corner of the globe has escaped the COVID-19 pandemic during this period, and we are particularly appreciative of our staff's efforts during these difficult and testing times.

Given this backdrop, what we have achieved this year as a Company has been all the more admirable. I would like to congratulate the AfriTin Mining team for their cohesive efforts on behalf of those same stakeholders and the non-executive directors. Despite the challenges of 2020, the Company has had a transformative year at the Uis Tin Mine, as demonstrated by the achievements and ramp-up of the Uis Phase 1 pilot plant.

To ramp up production and surpass nameplate production capacity is a testament to the hard work carried out on site, and to the team's resolve and determination to deliver.

Since November 2020, Uis continues to grow total monthly production which has exceeded the planned production of 60 tonnes of tin concentrate per month.

Having achieved the tin production goals of the Uis Phase 1 pilot plant, the senior management team, led by Anthony Viljoen, is now focussed on a number of key initiatives:

• The expansion of Phase 1 to increase production to 120 tonnes of concentrate per month;
• Exploration work to potentially increase Mineral Resources and Mineral Reserves;
• Fast tracking test work to assess the potential of unlocking two additional by-product revenue streams, namely lithium and tantalum.

These are exciting developments for AfriTin, and we look forward to seeing the results of the test work and providing further updates.

The safety of all our staff remains a priority for the Company. We continue to implement the strictest measures to combat the pandemic and protect our employees, while also supporting the communities in which they live.

The Company continues to successfully transition from developer to producer, which can only be achieved through the focus and dedication of our team, management, my fellow directors, and of course, our shareholders, all of whom I thank.

We have built an excellent platform to continue our growth story, and I look forward to our future.

GLEN PARSONS

Chairman

21 July 2021

5

CHIEF EXECUTIVE OFFICER'S STATEMENT

ANTHONY VILJOEN

CHIEF EXECUTIVE OFFICER

The year under review has been transformative for AfriTin Mining, especially at our flagship Uis Tin Mine in Namibia. These achievements are even more impressive given the immense challenges that everyone has faced as a result of the global COVID-19 pandemic.

After navigating these difficult circumstances, the financial year culminated in the Company announcing the first material revenue numbers from the mine of £5m. Total production for the year amounted to 473t of tin concentrate (311.7t of contained tin metal). This is a monumental first step and we believe it's just a precursor of what is to ensue as the plant cost base becomes more efficient and the expansion plans are implemented. The post balance sheet date equity raise also allowed for the extinguishing of all the loan note obligations, providing a robust balance sheet for the next growth phase of the Company. We are incredibly proud of our team for efficiently accomplishing this ramp-up in production, while maintaining an exemplary safety record. This basis from which AfriTin will grow underpins our ambition of becoming a significant multi-commodity tech metals producer out of Africa.

The historical mining heritage of the Erongo province resided primarily in its tin production with no meaningful uses for lithium and tantalum. Forty years on since the mine closure, tin has become a new technology metal and the demand for lithium and tantalum has transformed the economics of the historical operation. We believe this province will become a globally significant metallogenic province for new technology metals, allowing for increased revenues and economies of scale within AfriTin's licence areas.

Despite challenges resulting in project delays, AfriTin's production has come on stream at a time when tin prices have reached highs that have not been seen in the last decade. This is mainly due to an increase in demand from new technologies, especially electric vehicles and semi-conductors, at a time when there have been supply issues that are likely to persist after decades of underspending on exploration and mine development. The lithium market has matched this buoyancy and AfriTin is well placed to take advantage of this growth phase. The Uis JORC (2012) resource of 95 539t of tin, 6 091t of tantalum and 450 265t of lithium oxide establishes a globally significant resource from the currently exploited V1 and V2 pegmatites.

We are now planning to grow the Company's revenue streams by expanding the throughput of the pilot plant and introducing tantalum and lithium by-product revenue streams. The metallurgical test work to develop the process design has been a key priority to unlocking the significant potential of AfriTin.

In December 2020, it was a pleasure to confirm that the Company's existing offtake partner, Thaisarco, renewed and extended its tin concentrate offtake agreement for three years. This deal further cements the Company's future and allows us to supply what has become a highly demanded product. We were also delighted to conclude a maiden tantalum concentrate offtake agreement with AfriMet Resources AG, demonstrating the commercial viability of AfriTin's plans. We believe these deals are substantive votes of confidence in AfriTin, its strategy, and its vision, from two leaders in the global and African metal markets.

In an attempt to direct all of the Company's attention to the investment-friendly jurisdiction of Namibia, and to unlocking the metallogenic jewel that is the Erongo region, a decision was made to relinquish and impair the Company's South African asset base. Namibia continues to be an incredibly gracious host country within which to conduct business. An overarching theme in all decisions and corporate strategy is the safety, health and wellbeing of all our employees and the people in the surrounding communities where we operate. We remain sensitive to the environment and its people and are committed to mitigating the impact of our operations. This philosophy will continue to be built into our corporate DNA as we strive to become the new technology metals champion of Africa.

7

POST-PERIOD ACTIVITIES

Subsequent to the period under review, we reached two further significant milestones: publication of the Definitive Feasibility Study for Phase 1 ("DFS") and declaration of a JORC (2012) Ore Reserve estimate over the V1 and V2 pegmatites. The robust economics of the DFS provide us with an opportunity to increase the revenue and profit margin of the current operation, while importantly de-risking the expansion of the project into the much larger Phase 2 operation.

In addition to the above, on 12 May 2021 the Company announced the placing of 216 666 667 ordinary shares to raise £13m (before expenses). This puts the Company into a position to expedite the Phase 1 expansion of our flagship Uis Tin Mine and develop the inherent value of our Namibian licence portfolio through the unlocking of its metallurgy and exploration potential. This includes further test work on the lithium and tantalum by-product potential.

I would like to congratulate and thank our management teams, staff, and stakeholders for their outstanding efforts and continued support in what has been a challenging time globally. In addition to this, I would like to thank the Board of Directors for their guidance and advice over the past year. We are committed to expanding and developing Uis and our other Namibian exploration assets as we look to become a significant African multi-commodity tech metals producer. I look forward to updating the market on our progress.

This report was approved by the Board of Directors on 21 July 2021.

ANTHONY VILJOEN

Chief Executive Officer

21 July 2021

8