Corporate Governance

The Board recognises the importance of effective corporate governance and the need to communicate this to shareholders and other stakeholders. Accordingly, this statement sets out the key features of the URU governance policy and structures and explains how we seek to ensure that this provides a framework for creating sustainable growth over the medium to long term.

The Company has formally adopted the Quoted Companies Alliance Corporate Governance (“QCA Code”). The Board considers that the Group complies with the QCA Code so far as it is practicable having regard to the size, nature and current stage of development of the Company. The Board recognises that the Company does not fully comply with all 10 principles and general provisions of the QCA Code but does use it as a benchmark in assessing its corporate governance standards.

QCA Principles

The QCA Code sets out 10 principles that should be applied. These are listed below together with a short explanation of how the Company applies each of the principles and where it departs from these principles:

Principle One

Business Model and Strategy

The Board has concluded that the highest medium and long-term value can be delivered to its shareholders by the adoption of a single strategy for the Company:

URU Metals’ mission is to identify and invest in quality mineral exploration and development projects to become a leading mineral exploration and development company.

In the immediate future, URU will endeavour to achieve this by continuing to explore and develop its flagship Zebedelia Nickel Property. The Company will continue to look for additional acquisition and/or investment opportunities as they arise.

Our Strategy

The key pillars of our strategy are:

1. Advancing the Company’s 100% owned Zebedelia project. URU Metals plans to delineate a compliant mineral resource estimate. The Company will then look to advance the project through feasibility studies and into production and cash flow generation; and
2. Strategic Investments. Where appropriate, URU Metals will act as an active investor and will strive to advance corporate actions that deliver value–adding outcomes (for example, project development to increase company valuation or to achieve a listing).

The Company operates in an inherently high risk and heavily regulated sector and this is reflected in the principal risks and uncertainties identified in the Company’s annual report In executing the Company’s strategy and operational plans, management will typically confront a range of day-to-day challenges associated with these risks and uncertainties and will seek to deploy the identified mitigation steps to manage these risks as they manifest themselves. These key challenges, as well as mitigating actions the Board takes to secure a long-term future for the Company, can be found in the Risk Management Section below.

Principle Two

Understanding Shareholder Needs and Expectations

The Board is committed to maintaining good communication and having a constructive dialogue with its shareholders. Institutional shareholders and analysts have the opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are encouraged to attend the Company’s Annual General Meeting. Investors also have access to Annual Reports, Regulatory News Service announcements and other information on the Company though its website, www.urumetals.com. 

As part of the Governance Review in 2019, the Company instructed UK legal counsel, in conjunction with BVI advisers, to update the Company’s memorandum and articles of association, and introduce certain obligations on the Company to make it more accountable to shareholders, and more effective in the way it communicates with them. The new Memorandum and Articles adopted changes including (but not limited to):

• A requirement for the Company to hold an annual general meeting once in each calendar year;
• A requirement for each Director to stand for re-election (i) at the AGM in the year of their respective election, or (ii) if already appointed, in the first year after the Memorandum and Articles are adopted, and thereafter not less than every three year;
• Protection consistent with Rule 9 of the UK City Code on Takeovers and Mergers to prevent shareholders (and parties acting in concert with such parties) from acquiring, without consent, an interest in shares of the Company equal to or greater than 30 per cent.; and
• Capping the right of the Company to issue unlimited new shares for cash other than on a pre-emptive basis (the exact thresholds for standing authorities remain to be determined and agreed between the board and advisers and a further announcement in this regard will be made in due course). 

The Board believes the changes outlined above enables the Company to further satisfy our shareholders’ needs and expectations by providing more opportunities to engage with the governance of the Company.

Principle Three

Considering wider stakeholder and social responsibilities

The Board recognises that the long-term success of the Company is reliant upon the efforts of the employees of the Company and its contractors, suppliers, regulators and other stakeholders. The Board has put in place a range of processes and systems to ensure that there is close oversight and contact with its key resources and relationships.

The Board has identified URU’s stakeholders to include employees and consultants working for the Company, the local communities in countries in which it operates, local governments, suppliers, customers and partners. The Company’s CEO contacts these stakeholders regularly in order to gain their feedback on URU’s operations. Any concerns raised are communicated to the Board and dealt with appropriately.

Principle Four

Risk Management

The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the risk management objectives and policies to the Audit Committee.

In addition to its other roles and responsibilities, the Audit Committee is responsible to the Board for ensuring that procedures are in place and are being implemented effectively to identify, evaluate and manage the significant risks faced by the Company. The risk assessment matrix below sets out those risks and identifies their ownership and the controls that are in place. This matrix is updated as changes arise in the nature of risks or the controls that are implemented to mitigate them. The Audit Committee reviews the risk matrix and the effectiveness of scenario testing on a regular basis. The following principal risks and controls to mitigate them, have been identified:

Principal Risks and Uncertainties

URU Metals is exposed to a number of risks and uncertainties that could have a material financial, operational and reputational impact on its long-term performance and on the Company’s ability to develop its project portfolio. The risks that management has assessed as “high” are summarised below.

The Directors have established procedures, as represented by this statement, for the purpose of providing a system of internal control, including the Audit Committee mentioned above. An internal audit function is not considered necessary or practical due to the size of the Company and the close day to day control exercised by the Executive directors. However, the Board will continue to monitor the need for an internal audit function. The Board works closely with and has regular ongoing dialogue with the Company financial controller and has established appropriate reporting and control mechanisms to ensure the effectiveness of its control systems.

Principle Five

A Well Functioning Board of Directors

The Board comprises Kyle Appleby as Non-executive Chairman; CEO John Zorbas; and, independent Non-executive Director Avi Robinson, Biographical details of the current Directors are set out within Principle Six below.

The Board meets at least six times per annum. It has established an Audit Committee and a Remuneration & Nominations Committee, particulars of which appear hereafter. Non-executive Directors are considered to be part time but are expected to provide as much time to the Company as is required. The Board considers that this is appropriate given the Company’s current stage of operations. It shall continue to monitor the need to match resources to its operational performance and costs and the matter will be kept under review going forward. Kyle Appleby and Avi Robinson are considered to be independent Directors.

Attendance at Board and Committee Meetings

The Company shall report annually on the number of Board and committee meetings held during the year and the attendance record of individual Directors. To date in the current financial year the Directors have a 100% record of attendance at such meetings. In order to be efficient, the Directors meet formally and informally both in person and by telephone. Therein the new financial year there have been at least bi-monthly meetings of the Board. The volume and frequency of such meetings is expected to continue at this rate.

Principle Six

Appropriate Skills, Experience and Capabilities of the Directors

The Board currently consists of three Directors. The administrative functions of the Company are carried out internally, by experienced Executive assistants working with the Executive team. The finance function is handled internally. The Company believes that the current balance of skills on the Board as a whole, reflects a very broad range of commercial and professional skills across geographies and industries and each of the Directors has experience in public markets.

The Board recognises that it currently has limited diversity and this will form a part of any future recruitment consideration.

The Board shall review annually the appropriateness and opportunity for continuing professional development whether formal or informal.

In order to keep each Director’s skillset up to date . In addition to their general Board responsibilities, Non-executive Directors are encouraged to be involved in specific workshops or meetings, in line with their individual areas of expertise. The Board shall review annually the appropriateness and opportunity for continuing professional development, whether formal or informal.

Board of Directors

John Zorbas

Chief Executive Officer

Mr. John Zorbas is a resource entrepreneur with a proven track record in the metals exploration and development industry. He has held senior advisory positions in various facets of business including operations, marketing, sales, strategic planning and structured finance. Mr. Zorbas has been the Company’s CEO since 2 June 2014. He was appointed Non-Executive Chairman of Management Resource Solutions PLC in April 2017. In addition he is the CEO and Director of Captor Capital Corp. He also served as the President of MGM Productions Group Inc., as well as Director of both ZorCorp Capital Holdings and Starline Capital Holdings Infrastructure Fund. He served as the Chief Executive Officer and a Director of Monchhichi PLC (former: Mercom Capital PLC) until 23 December 2016. Mr. Zorbas also served as a Director of Millennial Esports Corp. until 20 October 2016 and Stratton Capital Corp. He is a founding shareholder of Asian Coast Development Ltd. Mr Zorbas holds an Honours Bachelors in Economics from the University of Toronto.

Kyle Appleby

Non-Executive Chairman

Mr. Kyle Appleby, CA, CPA, has over 16 years’ experience in public accounting and has been providing Chief Financial Officer and other financial accounting and compliance services to both public and private companies since 2007. He is a member in good standing of the Canadian Institute of Chartered Accountants and the Institute of Chartered Accountants of Ontario. He obtained his Chartered Accountant designation in 2001. Mr. Appleby graduated from York University with a Bachelor of Arts in Economics.

Avi Robinson

Non-Executive Director

Avi brings a wealth of AIM, corporate and commercial experience to the board. He is a qualified chartered accountant and was a Partner at Cairn Financial Advisers, a nominated adviser, between 2010 and 2016. Since then, he has served as Regional Managing Director at Servy, an enterprise self-service platform for travel and hospitality, overseeing operations and leading business development across EMEA and APAC. He is also a non-executive director of Seed Capital Solutions plc.

Principle Seven

Evaluation of Board Performance

Internal evaluation of the Board, the Committees and individual Directors is undertaken on an annual basis in the form of peer appraisal, and discussions to determine the effectiveness and performance of the Board as well as the Directors’ continued independence take place to ensure that:

– their contribution is relevant and effective;

– that they are committed; and

– where relevant, they have maintained their independence.

The results and recommendations that come out of the appraisals for the directors shall identify the key corporate and financial targets that are relevant to each Director and their personal targets in terms of career development and training. Progress against previous targets shall also be assessed where relevant.

The Company intends to continually review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient manner, as well as reviewing the effectiveness of each Committee.

The Directors consider that the Company and Board are not yet of a sufficient size for a full Board evaluation to make commercial and practical sense. Therefore, the Board accepts that the Company does not comply with this aspect of the QCA Code. However, during Board meetings the Directors are welcome to discuss any areas where they feel a change would be beneficial for the Company, and the Company Secretary remains on hand to provide impartial advice. The need for a formal Board evaluation will be kept under review as the Board and Group develops. 

Principle Eight

Corporate Culture

The Board recognises that its decisions regarding strategy and risk will impact the corporate culture of the Company as a whole and that this will impact the performance of the Company. The Board is very aware that the tone and culture set by the Board will greatly impact all aspects of the Company as a whole and the way that employees behave. The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Company’s operations. These values are enshrined in the written policies and working practices throughout the Company. An open culture is encouraged within the Group, with regular communications to staff regarding progress and feedback regularly sought. The Executive team regularly monitors the Group’s cultural environment and seeks to address any concerns than may arise, escalating these to Board level as necessary. The Group is committed to providing a safe environment for its staff and all other parties for which the Group has a legal or moral responsibility in this area. The Company has adopted Health & Safety policies at all its project sites in line with industry best standards.

A large part of the Company’s activities is centred upon what needs to be an open and respectful dialogue with employees, consultants, clients and other stakeholders, including shareholders. Pressure from different groups, to provide more finance, technical support, to deliver results, work faster, shout more loudly, make the culture of the Company key to its success – being consistent over a period of time, adopting a methodical approach in the face of pressure to behave differently. The Company is conservative – believing long-term shareholder value will only be achieved by technical results and deep understanding of the resource projects the Company invests in or operates, informing decisions regarding future expenditure. It is a fine balance but one the Company strives to get right.

Principle Nine

Maintenance of Governance Structures and Processes

The Board is committed to, and ultimately responsible for, high standards of corporate governance, and has chosen to adopt the QCA Code. The Board reviews the Company’s corporate governance arrangements regularly and expect them to evolve over time, in line with the Company’s growth. The Board delegates responsibilities to Committees and individuals as it sees fit.

The Chairman’s principal responsibilities are to ensure that the Company and its Board are acting in the best interests of shareholders. His leadership of the Board is undertaken in a manner which ensures that the Board retains integrity and effectiveness, including creating the right Board dynamic and ensuring that all important matters, in particular strategic decisions, receive adequate time and attention at Board meetings.

The Chairman and the other Non-executive Director are tasked with constructively challenging the decisions of the CEO, and satisfying themselves that the systems of business risk management and internal financial controls are robust.

The CEO has, through powers delegated by the Board, the responsibility for leadership of the management team in the execution of the Group’s corporate strategies and for the day-to-day management of the business. The CEO is also the principle contact for liaison with shareholders and all other stakeholders.

Ultimate authority for all aspects of the Company’s activities rests with the Board, the respective responsibilities of the Chairman, CEO arising as a consequence of delegation by the Board. The Board has adopted appropriate delegations of authority which set out matters which are reserved for Board decision-making. The independent Non-executive Chairman I am responsible for the effectiveness of the Board, while management of the Company’s business and primary contact with shareholders has been delegated by the Board to the CEO.

Audit Committee

The Audit Committee comprises of Jay Viera and Kyle Appleby (chair). This Committee has primary responsibility for monitoring the quality of internal controls and ensuring that the financial performance of the Company is properly measured and reported. It receives reports from the Executive management and auditors relating to the interim and annual accounts and the accounting and internal control systems in use throughout the Company. The Audit Committee shall meet not less than twice in each financial year and it has unrestricted access to the Company’s auditors.

Remuneration and Nomination Committee

The Remuneration and Nomination Committee comprises Kyle Appleby and Avi Robinson (chair). The Remuneration and Nomination Committee (previously two separate committees) meets as and when necessary. It keeps under review the skill requirements of the Board and the knowledge, experience, length of service and performance of the Directors. It also reviews their external interests with a view to identifying any actual, perceived or potential conflicts of interests, including the time available to commit to their duties to the Group. It sets and reviews the scale and structure of the Executive Directors’ remuneration packages, including share options and the terms of the service contracts. The remuneration and the terms and conditions of the Non-Executive Directors are determined by the CEO with due regard to the interests of the shareholders and the performance of the Group. The Committee also makes recommendations to the Board concerning the allocation of share options to employees.

The Committee also monitors the independence of each Non-Executive Director and makes recommendations concerning such to the Board. The results of these reviews are important when the Board considers succession planning and the re-election and reappointment of directors. Members of the Committee take no part in any discussions concerning their own circumstances.

The Committee is also responsible for keeping under review the senior management team of the organisation to ensuring the continued ability of the organisation to compete effectively in the marketplace.

Non-Executive Directors

The Board has adopted guidelines for the appointment of Non-Executive Directors which have been in place and have been observed throughout the year. These provide for the orderly and constructive succession and rotation of the Non-Executive Directors insofar as the Non-Executive Directors will be appointed for an initial term of three years and may, at the Board’s discretion believing it to be in the best interests of the Company, be appointed for subsequent terms.

The Chairman and Board continue to monitor and evolve the Company’s corporate governance structures and processes, and maintain that these will evolve over time, in line with the Company’s growth and development.

Principle Ten

Shareholder Communication

The Board is committed to maintaining effective communication and having constructive dialogue with its shareholders. The Company intends to have close ongoing relationships with its private shareholders, institutional shareholders and analysts, and for them to have the opportunity to discuss issues and provide feedback at meetings with the Company.

Investors also have access to current information on the Company’s website, www.urumetals.com, which is kept up to date and contains details of relevant developments, publications and presentations, as well as historic annual reports and other governance-related material, including notices of all general meetings over the last five years.

Going forward the Company intends to include reports from the Audit and Remuneration Committee.