Bannerman Resources says it booked an impairment of N$44 million (A$3 568 253) after testing the value of its investment in Namibia Critical Metals.
Namibia Critical Metals is developing the fully permitted Lofdal Heavy Rare Earths Project in Namibia, one of the few development projects outside China that offer substantial future production of dysprosium and terbium.
On August 15, 2022, Bannerman Resources acquired a 41.8% shareholding in Namibia Critical Metals Inc. for $1,692,674.
Bannerman Resources raised its shareholding to 42.1% on December 22, 2023.
In addition to the shares paid, Bannerman Resources provided a cash payment of $7,236,179 in June 2022.
Costs incurred implementing this transaction amounted to $64,914.
The aggregate cost to acquire the interest in Namibia Critical Metals amounted to $8,993,767.
Bannerman Resources says it performed its impairment testing on December 31, 2023, and considered the relationship between Namibia Critical Metals’ market capitalisation on the Toronto Stock Exchange and its book value when reviewing all potential indicators of impairment.
T December 31, 2023, Bannerman says, Namibia Critical Metals’ market capitalisation was below the carrying value of the investment, indicating a potential impairment.
“Consequently, following the impairment testing, Bannerman Resources adjusted the carrying value of Namibia Critical Metals and booked an impairment of A$3,568,253,” the company says.
Bannerman Resources states that objective evidence that the net investment is impaired includes observable data that the entity becomes aware of, such as a significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
