(ABN 49 112 609 846)
AND CONTROLLED ENTITIES
ANNUAL REPORT 2023
For the year ended 31 December 2023
Annual Report for the year ended 31 December 2023
CONTENTS
CORPORATE DIRECTORY _________________________________________________________________________________________________ 2
DIRECTORS’ REPORT ______________________________________________________________________________________________________ 3
AUDITOR’S INDEPENDENCE DECLARATION ___________________________________________________________________________ 30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME _________________________________________________________ 31
CONSOLIDATED STATEMENT OF FINANCIAL POSITION _______________________________________________________________ 32
CONSOLIDATED STATEMENT OF CASH FLOWS _______________________________________________________________________ 33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _______________________________________________________________ 34
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ___________________________________________________________ 35
DIRECTORS’ DECLARATION_____________________________________________________________________________________________ 77
INDEPENDENT AUDITOR’S REPORT ____________________________________________________________________________________ 78
ADDITIONAL INFORMATION ___________________________________________________________________________________________ 82
1
Annual Report for the year ended 31 December 2023
CORPORATE DIRECTORY
DIRECTORS
Mr Jeff Dowling
Non-Executive Chair
Mr David Flanagan
Managing Director
Mr Tommy McKeith
Non-Executive Director
Mr Alwyn Vorster
Non-Executive Director
COMPANY SECRETARY
Ms Catherine Grant-Edwards
Ms Melissa Chapman
PRINCIPAL & REGISTERED OFFICE
Suite 5, 63 Hay Street
Subiaco WA 6008
Telephone
(08) 9383 3330
Email
info@arrowminerals.com.au
AUDITORS
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
BANKERS
National Australia Bank Limited
Level 14, 100 St Georges Terrace
Perth WA 6000
SHARE REGISTRY
Automic
Level 5, 126 Phillip Street
Sydney NSW 2000
Telephone
1300 288 664
STOCK EXCHANGE LISTING
Arrow Minerals Limited shares (AMD) are listed on the Australian Securities Exchange (ASX)
2
Annual Report for the year ended 31 December 2023
DIRECTORS’ REPORT
The Directors of Arrow Minerals Limited (Arrow or the Company) submit their report, together with the consolidated financial
statements comprising Arrow and its controlled entities (together the Group) for the year ended 31 December 2023.
In December 2022, the Board resolved to change the Company’s financial year end from 30 June to 31 December. This change was
made in accordance with section 323D(2A) of the Corporations Act 2001 (Cth) to align the financial year end of the Company with
the financial year end of its West African subsidiaries and associated entities. This Annual Report represents the twelve-month
financial year to 31 December 2023. The previous Annual Report represented the six-month transitional financial year beginning on
1 July 2022 and ending on 31 December 2022, which reflect the comparatives in this Annual Report.
INFORMATION ON DIRECTORS
The names and particulars of the Directors of the Company during or since the end of the year are as follows. Directors have been
in office since the start of the year to the date of this report unless otherwise stated.
Jeff Dowling
Non-Executive Chairman (Appointed 15 February 2024)
Experience
Mr Dowling has more than 45 years’ experience across professional services with Ernst and Young
and various mining companies. He served as a director of Atlas Iron during a period of rapid
growth and cost cutting. He was also Chair of Sirius Resources prior to its takeover by
Independence Group.
Directorships of listed
Fleetwood Limited
companies held within the
S2 Resources Limited
July 2017 to present
May 2015 to present
last three years
NRW Holdings Limited
August 2013 to present
Waratah Minerals Limited (previously
January 2018 to September 2023
Battery Minerals Ltd)
David Flanagan
Managing Director (Appointed 15 February 2024)
Experience
Mr Flanagan has 30 years’ experience in the mining and mineral exploration industry in Australia,
Indonesia, and Africa. Mr Flanagan was the founder and Manging Director of Atlas Iron Limited
where the company discovered and acquired substantial iron ore resources and reserves and
developed substantial export infrastructure in the Pilbara region of Western Australia. Mr Flanagan
was also Chair of Battery Minerals and Executive Chair of Delta Lithium.
Directorships of listed
Delta Lithium Limited
August 2022 to September 2023
companies held within the
Waratah Minerals Limited (previously
July 2019 to September 2023
last three years
Battery Minerals Ltd)
September 2021 to October 2022
MACA Limited
CZR Resources Limited
April 2020 to September 2021
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Annual Report for the year ended 31 December 2023
Thomas McKeith
Non-Executive Director (Transitioned from Non-Executive Chair to Executive Chair effective 7
November 2023, then to Non-Executive Director effective 15 February 2024)
Experience
Mr McKeith is a geologist with over 30 years’ experience in exploration, development and mining.
He was formerly Head of Growth for Gold Fields Ltd and CEO of Troy Resources. Mr McKeith led
teams that discovered and developed several significant discoveries (near mine and greenfields)
in Australia, Mali, Ghana, Peru and Chile. He has been instrumental in several major operating
mine and resource project acquisitions in Australia, Canada, Brazil, Venezuela, and Burkina Faso.
Mr McKeith is also a Fellow of the Australasian Institute of Mining and Metallurgy (AusIMM).
Directorships of listed
Evolution Mining Limited
February 2014 to present
companies held within the
CleanTech Lithium PLC (AIM-listed)
June 2023 to present
last three years
Genesis Minerals Limited
November 2018 to September 2022
Prodigy Gold NL
June 2016 to September 2021
Alwyn Vorster
Non-Executive Director
Experience
Mr Vorster has extensive corporate, marketing and project development experience in the bulk
commodities arena (particularly iron ore) having previously been Managing Director for BCI
Minerals and Iron Ore Holdings, as well as holding senior roles with Aquila Resources, Rio Tinto
Iron Ore and Kumba Resources. Mr Vorster has a proven track record of creating shareholder value
from the discovery of bulk mineral deposits, through studies, approvals, funding, offtake,
infrastructure solutions and development, with projects including Hope Downs, Iron Valley,
Buckland and Mardie Salt & Potash. Mr Vorster’s qualifications include BSc (Hons) Geology, MSc
Mineral Economics and MBA degrees.
Directorships of listed
ChemX Materials Ltd
October 2022 to present
companies held within the
Lindian Resources Ltd
August 2023 to present
last three years
Alien Metals Ltd (AIM-listed)
August 2023 to March 2024
BCI Minerals Limited
September 2016 to September 2022
Hugh Bresser
Managing Director (Resigned 7 November 2023)
Experience
Mr Bresser has a career in exploration spanning more than 30 years. He has served in executive
roles with Billiton, BHP Billiton and Birimian Ltd and has previously held board positions in several
listed companies.
Mr Bresser has significant experience in mineral exploration, executive management, mergers and
acquisitions, governance, government and community relations in the global resources industry.
He holds a BSc (Hons – First Class) in geology from James Cook University and an MBA from
Melbourne Business School, Mt Eliza. Mr Bresser is a Member of the AusIMM and AIG.
Directorships of listed
None
companies held within the
last three years
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Annual Report for the year ended 31 December 2023
Frazer Tabeart
Non-Executive Director (Resigned 15 February 2024)
Experience
Dr Tabeart is a graduate of the Royal School of Mines with a PhD and Honours in Mining Geology.
He has over 30 years’ experience in international exploration and mining projects, including 16
years with WMC Resources and 17 years with the Mitchell River Group of Companies. Dr Tabeart
is a member of the Australian Institute of Geoscientists (AIG) and a member of the Society of
Economic Geologists.
Directorships of listed
Alma Metals Limited
November 2007 to present
companies held within the
PolarX Ltd
July 2017 to present
last three years
JOINT COMPANY SECRETARY
Ms Catherine Grant‐Edwards (Chartered Accountant (CA)) and Ms Melissa Chapman (Certified Practicing Accountant (CPA),
AGIA/ACIS, GAICD) are directors of Bellatrix Corporate Pty Ltd (Bellatrix), a company that provides company secretarial and
accounting services to a number of ASX listed companies. Between them, Ms Chapman and Ms Grant‐Edwards have over 30 years’
experience in the provision of accounting, finance and company secretarial services to public listed resource and private companies
in Australia and the UK, and in the field of public practice external audit.
REVIEW OF OPERATIONS
GUINEA
Simandou North Iron Project
During 2023 Arrow continued the Company’s strategic focus on delivering long-term value to shareholders through the discovery
and development of economic mineral deposits in West Africa. The primary focus during the period was the Simandou North Iron
Project where the Company is earning up to 100% through various expenditure and development milestones as announced to ASX
on 13 July 2022 and 30 August 2023. The Company was drawn to the project by the highly prospective nature of the geology
combined with the pending completion of the multi-user railway linking the Simandou Iron Project (under development by
Winning1/Simfer(RIO/Chalco) with the Morebaya Port (Figure 1). The combined investment by all the parties totalling USD $27Bn
in port, rail and mine, make this the largest mining project under development in Africa and the largest high grade iron ore project
in the world2,3. The Company sees substantial opportunity for shareholder value delivered by both access to shared infrastructure
and the prospectivity for economic iron ore. JV4 participant Rio Tinto has advised the railway (Figure 1) will be commissioned during
calendar year 2025.
1 Winning Consortium refers to 1.8B t of Reserves grading 65% Fe on its website www.wcsglobal.com/en/csr_part/project-description.
2 Refer ASX Release Rio Tinto Resources and Reserves Estimate for Simandou published 6 December 2023 and Simandou Iron ore project
update published 6 December 2023. Combined resources being the largest high grade deposit in the world refers to Simfer JV plus the
Winning Consortium as per Rio announcement.
3 SimferJV portion of capital spend published at 42.5% is USD $11.6Bn therefore 100% total spend is USD $27.3Bn.
4 Trans-Guinean rail and port infrastructure Joint Venture between Simfer (Rio Tinto), Winning Consortium Simandou and the Government
of the Republic of Guinea.
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Annual Report for the year ended 31 December 2023
Figure 1: Map of Guinea showing project location in proximity to neighbouring Simandou Iron Project and multi-user rail
The Simandou North Iron Project (Figure 2) is located immediately to the north of the Simandou Iron Project, the largest undeveloped
high grade iron ore project comprising combined resources and reserves of 4.6Bn at 65% Fe5,6. The Company is focused on the
timely advancement of the Simandou North Iron Project, which is located approximately 15 kilometres north of the Winning
Consortium, high grade iron deposit (1.8Bnt at 65% Fe) and just 25 kilometres from the multi-user railway.
5 Refer ASX Release Rio Tinto Resources and Reserves Estimate for Simandou published 6 December 2023 and Simandou Iron ore project
update published 6 December 2023. Combined resources being the largest high grade deposit in the world refers to Simfer JV plus the
Winning Consortium as per Rio announcement.
6 Winning Consortium refers to 1.8B t of Reserves grading 65% Fe on its website www.wcsglobal.com/en/csr_part/project-description.
6
Annual Report for the year ended 31 December 2023
Figure 2: Map of Simandou North Iron Project tenement in proximity to railway and mining operations currently under
construction by the Winning Consortium and Rio Tinto.
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Annual Report for the year ended 31 December 2023
Key Milestones achieved during 2023 included comprehensive remodelling and interpretation of geophysical data, geological
mapping and rock chip sampling that combined identifying up to 40 kilometres of strike of the prospective Simandou Iron formation.
and drilling of Sixteen (16) diamond holes were also completed during mid-2023 as part of an initial programme of scout drilling.
Rock chip sampling completed as part of this field work comprised of a total of 253 rock chip samples, which highlighted 4 target
areas for follow up work; being Dalabatini, Kowouleni, Diassa, and Kalako.
Prior to commencing drilling works, extensive community consultation work was completed throughout the project area introducing
the Company and its planned exploration activities.
On completing community consultation the Company’s geologists completed first pass scout drilling at the Dalabatini and Kowouleni
prospects, with 5 and 11 holes respectively at each prospect respectively for a total 826 metres of drilling (Figure 3). Drilling was
completed with a MAN man-portable diamond drill rig, and produced a combination of HQ3 core in oxidised and enriched
lithologies, and NQ and HQ core in fresh lithologies at depth. The geology intersected was highly encouraging and confirmed the
presence of sub surface iron enrichment associated with, and hosted by within the Simandou Iron Formation.
Results achieved from scout drilling (ASX Announcement 3 October 2023) include:
▪ DALDDH001:
o
12 metres at 55% Fe from 2 metres;
▪ DALDDH002:
o
4 metres at 59.8% Fe from surface;
▪ DALDDH003:
o
o
o
12 metres at 60.1% Fe from 2 metres;
4 metres at 57.2% Fe from 38 metres; and
4 metres at 56.2% Fe from 44 metres;
▪
KOWDDH008:
o
o
o
2 metres at 54.1% Fe from surface;
2 metres at 56.7% Fe from 12 metres; and
4 metres at 55% Fe from 34 metres.
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Annual Report for the year ended 31 December 2023
Figure 3: Map showing the location of the Dalabatini, Kowouleni, Diassa, and Kalako prospects with drill holes, significant
intercepts and mapped surface enrichment.
Importantly, in concluding this drilling programme in conjunction with the results of mapping and rock chip sampling, the Company
has identified approximately 25 kilometres of combined strike, enriched in iron within the tenement and the Simandou Iron
Formation. As shown in Figure 4 below, the scale of the mapped enrichment provides extensive targets for drill testing across strike
approximating 25 kilometres. Appropriately, the Company sought to raise sufficient funds to commence a systematic campaign of
exploration across the project.
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Annual Report for the year ended 31 December 2023
Figure 4: Interpreted extent of the Simandou iron formation, mapped surface enrichment and limited drilling completed to
date.
As disclosed to the market on 13 December 2023 and in subsequent releases to the ASX and further in subsequent events listed in
this report, the Company has undertaken to restructure the board, raise substantial funds ($14M) in order to recommence drilling
and acquire 100% of the beneficial and legal ownership of the Simandou North Iron Project. Drilling recommenced on site on 9
February 2024.
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Annual Report for the year ended 31 December 2023
BURKINA FASO
Arrow has suspended all field activities in Burkina Faso due to ongoing security concerns. The Company informed the Government
of Burkina Faso of ‘Force Majeure’. The Company maintains a limited presence in the country to monitor the situation and is taking
appropriate steps to seek to maintain and protect its project interests in Burkina Faso.
WESTERN AUSTRALIA
On the 7 of August 2023 the Company announced it had entered into an agreement to divest the Li mineral rights to tenements
E47/3476 & E47/3478 in exchange for $250,000 in cash and 250,000 in shares. Arrow Minerals retains a 1% NSR royalty on the
tenements and in the event that Arrow wishes to divest the royalty Raiden retains a first right of refusal.
Competent Persons Statement
The information in this report that relates to Exploration Results collected since December 2023 is based on information compiled
by Marcus Reston, a Competent Person who is a Fellow of The Australasian Institute of Mining and Metallurgy. Mr Reston has
sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Reston is employed by EGSS Pty Ltd, and provides technical consultancy services
to the Company. Mr Reston is entitled to options over shares in the Company, the granting conditions of which were dependent on
successful completion of consultancy services related to the Simandou North Iron Project. Mr Reston consents to the inclusion in
the report of the matters based on his information in the form and context in which it appears.
Confirmation
The information in this report that relates to Exploration Results completed prior to December 2023 is extracted from the report
titled ‘‘Scout Diamond Drilling Confirms High-Grade Iron Potential’ dated 3 October 2023 (ASX Announcement), and is available to
view on the Company’s website, and on the Australian Securities Exchange website.
https://arrowminerals.com.au/asx-announcements/
https://www.asx.com.au/markets/company/AMD/
The Company confirms that it is not aware of any new information or data that materially affects the information included in that
report. The Company confirms that the form and context in which the Competent Person's findings are presented have not been
materially modified from that report.
CORPORATE
The following significant transactions and events occurred during the year:
Placement for $2,695,000
On 15 February 2023, the Company announced it had received firm commitments to raise $2,695,000 via a placement of 490,000,002
ordinary shares (Placement A Shares) to sophisticated and institutional investors at an issue price of $0.0055 per share (Issue Price),
together with a one for two (1:2) unlisted option, exercisable at a 50% premium to the Issue Price on or before 22 February 2024
(Placement A Options) (Placement A).
Placement A includes participation by Directors of the Company, who subscribed for 17,272,728 Shares (value of $95,000), subject
to receipt of shareholder approval (Director Placement A Shares).
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Annual Report for the year ended 31 December 2023
Placement A was managed by Euroz Hartleys Limited (Euroz Hartleys). Pursuant to a mandate executed between the parties, Euroz
Hartleys are entitled to receive a 6% equity raising fee on Placement proceeds raised from investors introduced by Euroz Hartleys,
and a management fee of 2% on all other proceeds. In addition, Euroz Hartleys were entitled to receive unlisted options on a one
for twelve (1:12) basis of shares issued under Placement A (excluding Director A Placement Shares), exercisable at a 50% premium
to the Issue Price on or before on 22 February 2024 (Broker Options A). Euroz Hartleys were also entitled to receive 40,000,000
unlisted options exercisable at $0.007 on or before 22 February 2026 (Adviser Options A).
Placement A was completed via two tranches as follows:
•
Tranche 1 – consisting of 374,545,455 Shares (Tranche 1 Placement A Shares) raising $2,060,000. The Tranche 1 securities
were issued on 23 February 2023 and 3 March 2023 using the Company’s existing placement capacity under ASX Listing
Rule 7.1 and ASX Listing Rule 7.1A, and included the Tranche 1 Placement A Shares, Tranche 1 Placement A Options,
Adviser Options A, and the portion of Broker Options A linked to the Tranche 1 proceeds; and
•
Tranche 2 – consisting of 115,454,547 Shares (Tranche 2 Placement A Shares) to raise $635,000. Shareholder approval for
the issue of the Tranche 2 Placement A Shares, (including the Director Placement A Shares), the Tranche 2 Placement A
Options, and the balance of the Broker Options A was received at the Company’s General Meeting held on 5 April 2023,
and the securities were issued on 17 April 2023.
Rights to Earn a 100% Interest in Amalgamated Minerals Pte. Ltd (via milestones)
Under the terms of the Definitive Binding Agreement (referred to in the previous Annual Report) Arrow holds a beneficial 33.3%
interest (at 31 December 2023) in the Simandou North Iron Project in Guinea, West Africa (Project), via its 33.3% shareholding in
Amalgamated Minerals Pte. Ltd (Amalgamated) a private Singaporean registered company, and can increase this to a 60.5%
controlling interest (see ASX announcement 24 October 2022).
On 30 August 2023 the Company announced it had executed a binding term sheet to acquire the remaining 39.5% interest in
Amalgamated, providing a mechanism, which would give Arrow a 100% interest in the Project.
Key commercial milestones are:
•
•
80% ownership through the completion of a Pre-Feasibility Study or expenditure of A$15,000,000, whichever is less;
90% ownership through the completion of a Feasibility Study or expenditure of an additional A$22,500,000, whichever is
less;
•
100% ownership following Amalgamated reaching a decision to mine in exchange for a US$1/tonne royalty.
Refer to “Subsequent Events” section for details of a revised agreement reached regarding the 100% interest.
Sale of Residual Mineral Rights, Western Australia
On 7 August 2023 the Company announced that it entered into a binding option and earn-in agreement with Raiden Resources
Limited (ASX:RDN) (Raiden) for the sale of Arrow’s lithium-caesium-tantalum (Li-Cs-Ta) mineral rights in tenements E47/3476 &
E47/3478 located in the Pilbara, Western Australia (Mineral Rights).
Under the terms of the agreement, Raiden may either:
•
•
Purchase a 100% interest, for $550,000 (cash and shares) within 3 months, with Arrow retaining a 1% NSR royalty; or
earn up to an 85% interest through staged payments totalling $750,000 and meeting exploration expenditure commitments
of $8,000,000.
On 6 November 2023 the Company announced that Raiden had elected to exercise the Upfront Option to acquire 100% of the
Mineral Rights. Pursuant to the terms of the Agreement, Arrow received $300,000 in cash and $250,000 in RDN shares.
Arrow retains a 1% Net Smelter Royalty (NSR) over the Mineral Rights, with Raiden retaining the first right of refusal if Arrow wishes
to sell the NSR.
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Annual Report for the year ended 31 December 2023
Recapitalisation and Board Restructure
On 13 December 2023, the Company announced a recapitalisation and Board restructure aimed at unlocking the potentially
significant value of its Simandou North iron project in Guinea, West Africa. Refer to the “Subsequent Events” section for further
details of the recapitalisation and board restructure plan.
Under the plan, Tranche 1 of the Placement raising $450,000 (before costs) was completed on 22 December 2023 under Arrow’s
existing Listing Rule 7.1 placement capacity.
CHANGES IN CAPITAL STRUCTURE
Movements in the securities of the Company during the year is summarised as follows:
Shares
The following shares were issued during the year:
▪
▪
490,000,002 shares were issued (being the Placement A Shares); and
450,000,000 shares were issued (being the Tranche 1 Placement B Shares).
Convertible Notes
There were no movements in the number of Convertible Notes on issue during the year.
Unlisted Options
During the year the Company issued the following unlisted options:
▪
▪
▪
245,000,002 unlisted options exercisable at $0.00825 expiring 22 February 2024 to investors that participated in Placement
A;
39,393,939 unlisted options exercisable at $0.00825 expiring 22 February 2024 to brokers in relation to Placement A; and
40,000,000 unlisted options exercisable at $0.007 expiring 22 February 2026 to advisors in relation to Placement A.
The following unlisted options expired during the year:
▪
▪
37,500,000 unlisted options with an exercise price of $0.0145 expired on 22 August 2023; and
2,850,000 unlisted options with an exercise price of $0.01 expired on 11 December 2023.
There were no unlisted options exercised during the year.
Performance Rights
There were no performance rights issued during the year.
The following performance rights expired or lapsed during the year:
▪
▪
▪
▪
69,682,300 performance rights (Class C7) expired;
15,000,000 performance rights (Tranche 1) lapsed;
15,000,000 performance rights (Tranche 2) lapsed; and
15,000,000 performance rights (Tranche 3) lapsed.
7 Class C Performance Rights Milestone: Announcement by Arrow of a JORC 2012 compliant Inferred, Indicated and Measured
Resource collectively of at least 1,000,000oz of gold located on the Tenements (Burkina Faso).
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Annual Report for the year ended 31 December 2023
Securities on Issue at 31 December 2023
Quoted Securities
Ordinary shares on issue (ASX:AMD)1
Unquoted Securities
Options exercisable at $0.00825 on or before 22/02/2024
Options exercisable at $0.009 on or before 11/10/20242
Options exercisable at $0.009 on or before 25/11/2024
Options exercisable at $0.006 on or before 05/08/20252
Options exercisable at $0.006 on or before 05/08/2025
Options exercisable at $0.007 on or before 24/10/2025
Options exercisable at $0.011 on or before 25/11/2025
Options exercisable at $0.007 on or before 22/02/2026
Performance Rights (Tranche 1) expiring on 31/12/20263
Performance Rights (Tranche 2) expiring on 31/12/20264
Performance Rights (Tranche 3) expiring on 31/12/20265
Convertible Notes6
3,473,765,096
284,393,941
4,300,000
8,000,000
9,900,000
40,000,000
5,000,000
5,000,000
40,000,000
17,000,000
17,000,000
17,000,000
1,000,000
1 Includes 72,791,666 shares subject to escrow until 12 June 2024 and 435,000,000 shares subject to escrow until 12 June 2025.
2 Pursuant to ESIP
3 Tranche 1 Performance Rights Milestone: Release of an ASX announcement confirming a JORC compliant resource equal to or in
excess of 50Mt at no lower than 60% Fe by 31 December 2024.
4 Tranche 2 Performance Rights Milestone: Release of an ASX announcement of a positive Scoping Study that recommends moving
to pre-feasibility study (PFS) by 31 December 2025.
5 Tranche 3 Performance Rights Milestone: AMD’s share price (calculated at the 5-day VWAP) exceeding five (5) times the 30-day
VWAP (calculated at 24 October 2022) (Share Price Hurdle) over a consecutive 20-day period (trading days) by 31 December 2025.
Based on a calculation date of 24 October 2022, the Share Price Hurdle has been determined to be $0.026.
6 Conversion price of $0.00125.
Shares under Options
No options were exercised during the year and no shares have been issued from the exercise of options since year-end to the date
of this report. No person entitled to exercise any option has or had, by virtue of the option, a right to participate in any share issue
of any other body corporate. The names of all holders of options are entered into the Company’s register, inspection of which may
be made free of charge.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the period continued to be mineral exploration. During the period, the Company has
divested its remaining interests in Australian exploration projects, moving its focus to West African projects.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no changes in the state of affairs of the Group other than those disclosed elsewhere in the Directors’ Report.
RESULTS OF OPERATIONS
The net loss after tax for the twelve months ended 31 December 2023 was $ 745,377 (six months ended 31 December 2022:
$8,342,675).
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Annual Report for the year ended 31 December 2023
SUMMARY OF FINANCIAL POSITION
At 31 December 2023, the Group’s cash reserves were $701,139 (2022: $617,313). The overall increase in cash is mainly attributable
to outflows from operating activities of $1,155,441 (six months ended 31 December 2022: $739,015), exploration expenditure of
$184,533 (six months ended 31 December 2022: $363,876), funding via loan to advance the Simandou North Iron Project $2,306,222
(six months ended 31 December 2022: $156,627), and inflows from other investing activities of $832,285 (six months ended 31
December 2022: $1,300,000). There were $3,145,000 cash inflows from the issue of shares during the year (six months ended 31
December 2022: $350,000). Net assets of the Group at 31 December 2023 were $4,543,661 (2022: $2,382,450).
ENVIRONMENTAL ISSUES
The Group is subject to and compliant with all aspects of environmental regulation of its exploration activities. The Directors are
not aware of any environmental law that is not being complied with.
FUTURE DEVELOPMENTS
Arrow Minerals is focused on creating value for shareholders through the discovery and development of multiple economic iron ore
deposits at its Simandou North Iron Project in Guinea, West Africa. Arrow is rapidly advancing exploration and other evaluation. The
Company also aims to fully realise the value of the project by accessing multi-user rail infrastructure. Arrow is seeking to maintain
its project interests in Burkina Faso and is continuing to monitor the situation in Burkina Faso following the 30 September 2022
coup and elevated security concerns in the country.
SUBSEQUENT EVENTS
Recapitalisation and Board Restructure
On 13 December 2023, the Company announced a recapitalisation and Board restructure aimed at unlocking the potentially
significant value of its Simandou North iron project in Guinea, West Africa. Under the plan, highly regarded iron ore executive David
Flanagan would be appointed Managing Director.
A summary of the recapitalisation and board restructure plan, is as follows:
Placement
Arrow advised its intention to raise $3,500,000 (before costs) via a two-tranche share placement at 0.1c per share (Placement B).
Tranche 1 of the Placement for raising $450,000 (before costs) was completed on 22 December 2023 under Arrow’s existing Listing
Rule 7.1 placement capacity. Tranche 2 of the Placement to raise $3,050,000 was subject to shareholder approval.
Share Purchase Plan (SPP)
Subject to shareholder approval, existing Arrow shareholders would have the opportunity to participate in a Share Purchase Plan
(SPP) to raise up to an additional $500,000 at the same price as Placement B.
Convertible Note
Arrow reached agreement with holders of its existing $1m Convertible Note (CN) whereby, subject to shareholder approval, the CN
holders will convert $500,000 (50%) of the CN into Arrow ordinary shares at a 25% premium to the equity raising price, resulting in
an issue of 400m new shares. In consideration for the early exercise, the CN holders will receive 778m unlisted zero strike price
options in Arrow.
David Flanagan (Proposed Managing Director)
Mr Flanagan has been engaged as part-time consultant to Arrow until his appointment as Managing Director on 15 February 2024.
Mr Flanagan has the right to be issued (subject to shareholder approval) 775m zero strike price options, and 90m zero strike price
options which will have vesting hurdles tied to a 50Mt JORC Resource of at least 60% Fe, Arrow increasing its interest in the
15
Annual Report for the year ended 31 December 2023
Simandou North Iron Project up to 60.5%, and completion of a pre-feasibility study on the Simandou North Iron Project. All zero
strike options will have a 6 month escrow from signing of the consulting agreement.
Jeff Dowling (Proposed Non-Executive Chairman)
Experienced corporate director Mr Jeff Dowling joined the Board as Non-Executive Chairman of Arrow on 15 February 2024. Mr
Dowling’s current directorships include NRW Holdings Limited and Fleetwood Limited. Mr Dowling (or his nominee) will have the
right to be issued 100m zero strike price options (subject to shareholder approval).
Existing Board of Directors
Former Executive Chair Mr Tommy McKeith transitioned to Non-Executive Director on 15 February 2024 and will have the right to
be issued 100m zero strike price options, escrowed for 6 months, for his role in originating and facilitating the recapitalisation.
Mr Alwyn Vorster has remained as Non-Executive Director while Dr Frazer Tabeart resigned from the board on 15 February 2024 on
completion of the recapitalisation.
On 15 February 2024 the shareholders approved the plan, as a result Arrow:
•
Issued 3,050,000,000 ordinary shares to institutional and sophisticated investors and related parties (Directors) raising
$3,050,000 (before costs) additional equity (shares were issued 23 February 2024) (being Tranche 2 of Placement B).
•
Issued 500,000,000 ordinary shares under the Share Purchase Plan raising $500,000 additional equity (shares were issued
1 March 2024).
• Granted 975,000,000 options to the directors, with zero exercise price, no vesting conditions and expiring after three years
(options were issued 15 February 2024) (875,000,000 of these options are subject to escrow until 12 June 2024).
• Granted 90,000,000 options to a director, with zero exercise price, various vesting conditions and expiring after four years
(options were issued 15 February 2024) (these options are subject to escrow until 12 June 2024).
•
•
•
Issued 80,000,000 ordinary shares to the lead manager (shares were issued 23 February 2024).
Issued 80,000,000 ordinary shares to the corporate advisor (shares were issued 23 February 2024).
Issued 400,000,000 ordinary shares and the grant of 778,000,000 options (as consideration for early conversion), with zero
exercise price, no vesting conditions and expiring after three years, to the Noteholders to convert $500,000 of the debt to
equity (500,000 notes were converted and 400,000,000 shares issued 5 March 2024; options were issued on 5 March 2024).
The Company provided irrevocable bank guarantees for the repayment of the remaining $500,000 convertible note debt.
David Flanagan was appointed Managing Director, Jeff Dowling was appointed Non-Executive Chair, Thomas McKeith transitioned
to Non-Executive Director, and Frazer Tabeart resigned from the Board of Directors.
$10m Capital Raising
On 13 March 2024 the Company announced a $10 million capital raising via a placement of 2,000,000,000 shares (Placement C).
On 21 March 2024 the Company issued 1,895,941,273 ordinary shares raising $9,479,706 additional equity (before costs). The issue
of a further 104,058,727 ordinary issues to raise $520,294 is subject to shareholder approval. The Company has agreed to issue
120,000,000 options with an exercise price of $0.009 expiring three years from date of issue to corporate advisers as part of fees in
connection with the placement, subject to receipt of shareholder approval.
Acquisition of 100% Interest in Amalgamated
On 13 March 2024 the Company announced it had reached revised agreement to acquire the remaining 66.7% interest in
Amalgamated Minerals Pte Ltd, which holds the Simandou North Iron Project, taking legal and beneficial interest to 100%
(Agreement).
16
Annual Report for the year ended 31 December 2023
Key terms of the Agreement are:
•
•
Arrow to pay the vendors $2,000,000 in cash within 30 days of signing the Agreement;
Arrow agrees to make a deferred payment of $500,000 in cash or shares on or before 30 June 2025 (at the Company’s
election); and
•
The vendor retains a USD $1/tonne royalty.
This Agreement effectively replaces the previously announced agreement (ASX Announcement 30 August 2023) which provided a
pathway to reach 100% over various milestones.
Arrow completed its accelerated acquisition of the remaining 66.7% interest on 26 March 2024, taking 100% legal and beneficial
interest in Amalgamated Minerals Pte. Ltd.
Other movements in securities
On 15 February 2024 a total of 15,000,000 performance rights lapsed in accordance with their terms. On 22 February 2024 a total
of 284,393,941 options with an exercise price of $0.00825 expired.
This note should be read together with the ASX Announcements. No other matters or circumstances have arisen since 31 December
2023 which significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state
of affairs of the Group in future periods.
Securities on Issue at Date of this Report
The capital structure of Arrow, as at date of this report is set out below:
Quoted Securities
Ordinary shares on issue (ASX:AMD)1
Unquoted Securities
Options exercisable at $0.009 on or before 11/10/2024
Options exercisable at $0.009 on or before 25/11/2024
Options exercisable at $0.006 on or before 05/08/2025
Options exercisable at $0.007 on or before 24/10/2025
Options exercisable at $0.011 on or before 25/11/2025
Options exercisable at $0.007 on or before 22/02/2026
Options exercisable at $0.00 on or before 15/02/2027
Options exercisable at $0.00 on or before 05/03/2027
Options exercisable at $0.00 on or before 15/02/2028
Performance Rights (Tranche 1) expiring on 31/12/2026
Performance Rights (Tranche 2) expiring on 31/12/2026
Performance Rights (Tranche 3) expiring on 31/12/2026
Convertible Notes2
9,479,706,369
4,300,000
8,000,000
49,900,000
5,000,000
5,000,000
40,000,000
975,000,000
778,000,000
90,000,000
12,000,000
12,000,000
12,000,000
500,000
1 Includes 72,791,666 shares subject to escrow until 12 June 2024 and 435,000,000 shares subject to escrow until 12 June 2025.
2 Conversion price of $0.00125.
DIVIDENDS PAID OR RECOMMENDED
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to the
date of this report.
17
Annual Report for the year ended 31 December 2023
REMUNERATION REPORT (AUDITED)
Remuneration of Directors and executives is referred to as compensation throughout this report. The term ‘key management
personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the
Group including Directors of the Company and other executives.
The following were key management personnel of the Group at any time during the year and have been in office for the entire
period unless indicated otherwise:
Mr Thomas McKeith
Executive Chair (Transitioned to Non-Executive Director 15 February 2024)
Mr Hugh Bresser
Dr Frazer Tabeart
Mr Alwyn Vorster
Managing Director (Resigned 7 November 2023)
Non-Executive Director (Resigned 15 February 2024)
Non-Executive Director
Compensation levels for Directors and key management personnel of the Group are competitively set to attract and retain
appropriately qualified and experienced directors and executives.
The Board is responsible for compensation policies and practices. The Board, where appropriate, seeks independent advice on
remuneration policies and practices, including compensation packages and terms of employment. No independent advice was
obtained during the period to provide recommendations in respect of remuneration.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the achievement of
strategic objectives, and achieve the broader outcome of creation of value for shareholders. The compensation structures take into
account a number of factors, including length of service, particular experience of the individual concerned, and overall performance
of the Group.
Remuneration
Details of the remuneration of the key management personnel (KMP) of the Group are set out in the following table. Currently,
Directors are responsible for the management of the Group.
31 December
Short-term
Post
Annual Leave
Equity settled
Total
Performance-
2023
Benefits
Employment
($)
share-based
($)
related
(12-months)
Salary & Fees
Benefits ($)
payments ($)
remuneration
H Bresser1
T McKeith
F Tabeart2
A Vorster3
Total
($)
264,000
43,439
36,000
36,000
-
4,670
-
-
379,439
4,670
-
-
-
-
-
41,947
18,039
18,253
12,010
305,947
66,148
54,253
48,010
90,249
474,358
(%)
14%
27%
34%
25%
19%
1 Mr Hugh Bresser resigned as Managing Director on 7 November 2023. He remained with the Company post year end as a key
management personnel and therefore the remuneration in the above table is for the year ended 31 December 2023.
2 Director fees for Dr Frazer Tabeart were paid to Geogen Consulting Pty Ltd, a related entity of Dr Frazer Tabeart.
3 Director fees for Mr Alwyn Vorster were paid to Earthstone Resources Pty Ltd, a related entity of Mr Alwyn Vorster.
18
Annual Report for the year ended 31 December 2023
31 December
Short-term
Post
Annual Leave
Equity settled
Total
Performance-
2022
Benefits
Employment
($)
share-based
($)
related
(6-months)
Salary & Fees
Benefits ($)
payments ($)
remuneration
H Bresser1
T McKeith
F Tabeart2
A Vorster3
Total
($)
158,400
18,385
22,000
6,600
-
1,930
-
-
205,385
1,930
-
-
-
-
-
16,234
174,634
5,484
5,052
1,797
25,799
27,052
8,397
28,567
235,882
(%)
9%
21%
19%
21%
12%
1 Mr Hugh Bresser was eligible to a cash bonus of $26,400 linked to the achievement of KPIs during the period under the Short-
term Incentive. This amount is included within the Short-term Benefits in this table.
2 Director fees for Dr Frazer Tabeart were paid to Geogen Consulting Pty Ltd, a related entity of Dr Frazer Tabeart.
3 Director fees for Mr Alwyn Vorster were paid to Earthstone Resources Pty Ltd, a related entity of Mr Alwyn Vorster.
19
Annual Report for the year ended 31 December 2023
Share holdings
The number of ordinary shares in the Company held during the year by key management personnel of the Group, including their personally related parties, are set out below:
31 December 2023 (12-months)
Opening Balance Granted as remuneration
Net change other
Closing balance
H Bresser
Managing Director1
T McKeith
Executive Chair2,3
F Tabeart
Non-Exec. Director4
A Vorster
Non-Exec. Director5
Total
No.
18,000,000
167,834,673
2,166,667
9,066,666
197,068,006
No.
-
-
-
-
-
No.
(18,000,000)
19,272,727
2,727,273
8,636,364
12,636,364
No.
-
187,107,400
4,893,940
17,703,030
209,704,370
1 On 17 April 2023, Mr Bresser purchased 3,636,364 shares pursuant to a placement for $20,000. On 3 May 2023, Mr Bresser purchased a further 363,636 shares on-market for $1,818. Mr Hugh
Bresser’s interest in shares at 7 November 2023 (date of resignation) comprises:
-
-
18,000,000 shares held indirectly by Milagro Ventures Pty Ltd of which Mr Bresser is a director of; and
4,000,000 shares held indirectly by Mr Hugh Alan Bresser + Ms Heather Dianne Branchi , a family trust associated with Mr Bresser.
2 On 10 January 2023, Mr McKeith purchased 4,000,000 shares on-market for $20,000. On 6 April 2023, Mr McKeith purchased a further 8,000,000 shares on-market for $37,502. On 17 April
2023, Mr McKeith purchased 7,272,727 shares pursuant to a placement for $40,000.
3 Mr Thomas McKeith’s interest in shares at 31 December 2023 comprises:
-
-
-
23,345,056 shares held indirectly by McKeith Super Pty Ltd of which Mr McKeith is a beneficiary;
32,595,674 shares held indirectly by Mr Thomas David McKeith which holds 87,500,000 ordinary shares
(indirectly held). Mr David Flanagan is a family trust associated with Mr Flanagan which holds
87,500,000 ordinary shares and 865,000,000 options (indirectly held). The options are subject to escrow until 12 June 2024.
2 Mr Dowling is a director of Starwood Holding Pty Ltd which holds 100,000,000 options
(indirectly held).
3 Mr McKeith is a director of GenGold Resource Capital Pty Ltd which holds 131,166,670 ordinary shares (indirectly held). Mr
McKeith is a beneficiary of McKeith Super Pty Ltd which holds 23,345,056 ordinary shares
(indirectly held). Mr Thomas David McKeith is a family trust associated with Mr McKeith which
holds 182,595,674 ordinary shares, 109,000,000 options and 21,000,000 performance rights (indirectly held). 100,000,000 of
the options are subject to escrow until 12 June 2024.
4 Mr Vorster holds 9,066,666 ordinary shares directly. Mr Alwyn Petrus Vorster is a family trust
associated with Mr Vorster which holds 8,636,364 ordinary shares, 5,000,000 options and 15,000,000 performance rights
(indirectly held).
MEETINGS OF DIRECTORS
The following table sets out the number of Directors’ meetings held during the year and the number of meetings
attended by each Director.
Board
Audit Committee
Risk Committee
Remuneration
Committee
Eligible
Attended
Eligible
Attended
Eligible
Attended
Eligible
Attended
T McKeith
H Bresser
F Tabeart
A Vorster
8
6
8
8
8
6
8
8
-
-
2
2
-
-
2
2
2
-
2
2
2
-
2
2
1
-
1
1
1
-
1
1
INDEMNIFICATION OF AUDITORS AND OFFICERS
During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers of
the Company covered by the insurance policy include the Directors named in this report.
The Directors’ and Officers’ Liability Insurance provides cover against all costs and expenses that may be incurred in
defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against
the officers in their capacity as officers of the Company or a related body corporate.
26
Annual Report for the year ended 31 December 2023
The insurance policy does not contain details of the premium paid in respect of individual officers of the Company.
Disclosure of the nature of the liability cover and the premium paid is subject to a confidentiality clause under the
insurance policy.
The Company has entered into an agreement with the Directors and certain Officers to indemnify these individuals
against any claims and related expenses which arise as a result of work completed in their respective capabilities.
The Company nor any of its related bodies corporate have provided any insurance for any auditor of the Company
or a related body corporate.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or Group are important.
Details of the amount paid or payable to the auditor HLB Mann Judd (WA Partnership) or its associates for audit
services provided during the year are set out in note 30 to the financial report. There were no non-audit services
provided by HLB Mann Judd (WA Partnership) or its associates during the year.
AUDITOR INDEPENDENCE
The auditor’s independence declaration for the year ended 31 December 2023 has been received and is included in
this annual report.
27
Annual Report for the year ended 31 December 2023
PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purpose of taking
responsibility on behalf of the Group for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Group with leave of the Court under section
237 of the Corporations Act 2001.
Signed in accordance with a resolution of the Directors
David Flanagan
Managing Director
Perth, 28 March 2024
28
Annual Report for the year ended 31 December 2023
CORPORATE GOVERNANCE STATEMENT
The Board of Arrow is responsible for the corporate governance of the consolidated entity. The Board guides and
monitors the business and affairs of Arrow on behalf of the shareholders by whom they are elected and to whom
they are accountable.
Arrow’s corporate governance practices were in place throughout the year ended 31 December 2023 and were
compliant with the ASX Governing Council’s best practice recommendations, unless otherwise stated. Information on
Corporate Governance is available on the Company’s website at: https://arrowminerals.com.au/company-
information/corporate-governance/
29
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Arrow Minerals Limited for the
year ended 31 December 2023, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
28 March 2024
B G McVeigh
Partner
30
Annual Report for the year ended 31 December 2023
CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
Continuing Operations
Income
Net (loss) / gain on financial assets/liabilities measured at fair
value through profit or loss
Employee benefits expenses
Occupancy costs
Amortisation of right of use assets
Impairment of exploration and evaluation assets
Exploration and evaluation expenditure
Finance costs
Depreciation
Share-based payments expense
Administration and other expenses
Share of equity accounting profit
Loss before tax
Income tax expense
Loss after tax
Note
31 December 2023
31 December 2022
(12-months)
(6-months)
$
$
2(a)
870,002
663,881
2(b)
10(a)
2(c)
23(a)
2(d)
12
3(a)
(246,372)
(332,953)
(36,444)
(14,803)
151,551
(220,790)
(24,189)
(7,462)
-
(8,522,931)
(184,533)
(115,951)
(24,958)
(103,191)
(564,063)
7,889
-
(53,685)
(12,944)
(52,073)
(264,033)
-
(745,377)
(8,342,675)
-
-
(745,377)
(8,342,675)
Other comprehensive income
Items that may be classified subsequently to profit or loss
Movement in foreign currency translation reserve
(241,592)
(277,236)
Share of foreign currency translation reserve relating to
equity accounted investment
Other comprehensive income/(loss) for the period
Total comprehensive loss for the period attributable to
(8,883)
-
(250,475)
(277,236)
members of the Company
(995,852)
(8,619,911)
Loss per share for the period attributable to the members
of Arrow Minerals Limited
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
19
19
(0.025)
(0.025)
(0.412)
(0.412)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
31
Annual Report for the year ended 31 December 2023
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
Note
31 December 2023
31 December 2022
$
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Financial assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation assets
Right of use assets
Property, plant and equipment
Investment in associate
Receivables
Deferred fair value adjustment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Right of use lease liabilities
Other financial liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Right of use lease liabilities
Other financial liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
4
6
7
5
10
9
11
12
13
13
14
15
16
15
16
17
18
701,139
44,511
90,563
83,223
617,313
39,422
110,443
246,750
919,436
1,013,928
-
6,165
27,195
2,405,256
2,011,565
403,070
-
20,968
50,453
2,406,250
156,627
-
4,853,251
2,634,298
5,772,687
3,648,226
230,153
6,693
992,180
1,229,026
246,211
15,566
-
261,777
-
-
-
6,693
997,306
1,003,999
1,229,026
1,265,776
4,543,661
2,382,450
51,606,728
2,744,491
48,713,599
2,760,442
(49,807,558)
(49,091,591)
4,543,661
2,382,450
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
32
Annual Report for the year ended 31 December 2023
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest income received
Government grant
Note
31 December 2023
31 December 2022
(12-months)
(6-months)
$
8,883
$
-
(1,172,336)
(758,452)
8,012
-
1,937
17,500
Net cash (used in) operating activities
4(a)
(1,155,441)
(739,015)
Cash Flows from Investing Activities
Proceeds from the sale of mineral rights
Proceeds from sale of financial assets
Payment for exploration and evaluation activities
Advance of loan funding (Simandou North Iron Project)
Net cash (used in)/from investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Capital raising transaction costs
Principal payments on lease liabilities
4(b)
Interest paid on convertible notes
Net cash from financing activities
Net increase in cash and cash equivalents
Effect of exchange rate movements
Cash and cash equivalents at the beginning of the year
300,000
532,285
(184,533)
(2,306,222)
(1,658,470)
3,145,000
(120,538)
(15,566)
(111,159)
2,897,737
83,826
-
617,313
600,000
700,000
(363,876)
(156,627)
779,497
350,000
-
(7,416)
(40,110)
302,474
342,956
2,538
271,819
Cash and cash equivalents at the end of the year
4
701,139
617,313
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
33
Annual Report for the year ended 31 December 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
Issued
Capital
Share-Based
Payment
Reserve
(Shares)
$
$
Share-Based
Payment
Reserve
(Options /
Performance
Rights)
$
Accumulated
Losses
Total
Foreign
Currency
Translation
Reserve
$
$
$
Balance at 1 January 2023
48,713,599
2,084,407
918,056
(242,021)
(49,091,591)
2,382,450
Loss after tax for the year
Other comprehensive loss
Total comprehensive loss for the year
-
-
-
Issue of Shares
Issue of Options
Share-based payments
2,893,129
-
-
Total transactions with equity holders
2,893,129
Writing back change in expenditure –
convertible note
-
-
-
-
-
-
-
-
-
-
-
-
-
131,333
103,191
234,524
-
-
(250,475)
(250,475)
(745,377)
-
(745,377)
(745,377)
(250,475)
(995,852)
-
-
-
-
-
-
-
-
-
2,893,129
131,333
103,191
3,127,653
29,410
29,410
Balance at 31 December 2023
51,606,728
2,084,407
1,152,580
(492,496)
(49,807,558)
4,543,661
Issued
Capital
$
Share-Based
Payment
Reserve
(Shares)
$
Share-Based
Payment
Reserve
(Options)
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
$
$
Balance at 1 July 2022
45,957,349
2,082,668
867,722
35,215
(40,748,916)
8,194,038
Loss after tax for the period
Other comprehensive loss
Total comprehensive loss for the
period
Issue of Shares
Issue of Options
Issue of Performance Rights
Share-based payments
-
-
-
2,756,250
-
-
-
Total transactions with equity holders
2,756,250
-
-
-
-
-
-
1,739
1,739
-
-
-
-
43,417
6,917
-
50,334
-
(277,236)
(8,342,675)
-
(8,342,675)
(277,236)
(277,236)
(8,342,675)
(8,619,911)
-
-
-
-
-
-
-
-
-
-
2,756,250
43,417
6,917
1,739
2,808,323
Balance at 31 December 2022
48,713,599
2,084,407
918,056
(242,021)
(49,091,591)
2,382,450
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
34
Annual Report for the year ended 31 December 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
1.
a)
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
Arrow Minerals Limited (the Company or Arrow) is a limited company incorporated in Australia. The consolidated
financial report of the Company for the year ended 31 December 2023 comprises the Company and its subsidiaries
(together referred to as the Group).
In December 2022, the Board resolved to change the Company’s financial year end from 30 June to 31 December.
This change has been made in accordance with section 323D(2A) of the Corporations Act 2001 (Cth) to align the
financial year end of the Company with the financial year end of its West African subsidiaries and associated entities.
This Annual Report represents the twelve-month financial year to 31 December 2023. The previous Annual Report
represented the six-month transitional financial year beginning on 1 July 2022 and ending on 31 December 2022.
The financial report was authorised for issue by the Directors on 28 March 2024.
The nature of the operation and principal activities of the Group are described in the attached Directors’ Report.
The accounting policies set out below have been applied consistently to all periods presented in the consolidated
financial report and by all entities in the Group.
These are for-profit general purpose financial statements and have been prepared in accordance with Australian
Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian
Accounting Interpretations and the Corporations Act 2001.
Compliance with IFRS
The consolidated financial statements of the Group also comply with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
Basis of Preparation
Historical cost convention
These financial statements have been prepared on an accruals basis and are based on historical costs except where
stated otherwise in the notes. Cost is based on the fair values of the consideration given in exchange for assets.
b)
Going concern
The financial report has been prepared on a going concern basis which contemplates the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the normal course of business.
The Group has incurred a net loss after tax for the year ended 31 December 2023 of $745,377 (six months ended 31
December 2022: $8,342,675) and a net cash outflows from operating and investing activities of $2,813,911 (six months
ended 31 December 2022: net inflow $40,482). Net assets of the Group as at 31 December 2023 were $4,543,661
(31 December 2022: $2,382,450). Cash and cash equivalents as at 31 December 2023 were $701,139 (31 December
2022: $617,313).
The ability of the Group to continue as a going concern is dependent on it being able to successfully raise further
debt or capital funding in the next 12 months for its current exploration strategy and commitments. Management
will continue to explore the tenements and the Directors are confident that the Group will be able to continue to
meet its current liabilities as and when they fall due in the next 12 months. The Directors consider the basis of going
concern to be appropriate given the Group’s market capitalisation and the underlying prospects for the Group to
35
Annual Report for the year ended 31 December 2023
raise further funds from the capital markets. Accordingly, the Directors believe it is appropriate to adopt that basis of
accounting in the preparation of the financial report.
On this basis no adjustments have been made to the financial report relating to the recoverability and classification
of the carrying amount of assets or the amount and classification of liabilities that might be necessary should the
Group not continue as a going concern. Accordingly, the financial report has been prepared on a going concern
basis.
Should the Group be unable to raise further debt or capital within the next 12 months, then there exists a material
uncertainty that may cast significant doubt on whether the Group will be able to continue as a going concern and
whether it will be required to realise assets and extinguish liabilities other than in the ordinary course of business
with the amounts realised being different from those shown in the financial statements.
c)
New standards, interpretations and amendments adopted by the Group
In the year ended 31 December 2023, the Directors have reviewed all the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the year end reporting period
beginning on or after 1 January 2023. No changes were required.
As a result of this review, the Directors have applied all new and amended Standards and Interpretations that were
effective as at 1 January 2023 with no material impact on the amounts or disclosures included in the financial report.
d)
New accounting standards and interpretations not yet effective
There are no other standards that are not yet effective and that would be expected to have a material impact on the
Group in the current or future reporting periods and on foreseeable future transactions.
e)
Basis of Consolidation
The consolidated financial statements are those of the Group, comprising the financial statements of Arrow, the parent
entity, and of all subsidiary entities which the parent entity controls. The Group controls an entity when it is exposed,
or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using
consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies, which may
exist.
Acquisition of an asset or a group of assets that does not constitute a business
The Group has to identify and recognise the individual identifiable assets acquired (including intangible assets) and
liabilities assumed. The cost of the group being acquired is allocated to the individual identifiable assets and liabilities
on the basis of their relative fair values at the date of purchase. These transactions and events do not give rise to
goodwill.
Transactions eliminated on consolidation
Intragroup balances and any unrealised gains and losses or income and expenses arising from intragroup transactions
are eliminated in preparing the consolidated financial statements. Subsidiaries are eliminated from the date on which
control is established and are de-recognised from the date that control ceases.
Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence
of impairment.
36
Annual Report for the year ended 31 December 2023
f)
Foreign Currency Transactions and Balances
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency
and the presentation currency of the Group.
Translation of foreign operations:
As at the reporting date the assets and liabilities of foreign operations are translated into the presentation currency
at the rate of exchange ruling at the reporting date and the statement of comprehensive income, statement of cash
flows and statement of changes in equity are translated at the average exchange rates for the year. The exchange
differences arising on the retranslation are recognised in other comprehensive income and accumulated balances are
carried forward as a separate component of equity. On disposal of a foreign operation, the deferred cumulative
amount recognised in equity relating to that particular foreign operation is recognised in the income statement.
Translation of foreign loans:
Loans from the parent entity to its Burkina Faso foreign operations are denominated in Central African Francs (XOF).
They are initially recognised in the parent entity Statement of Financial Position at the spot rate on the date of
transaction. Loan balances are translated into the presentation currency at the exchange rate ruling at each reporting
date, and exchange differences arising on the translation of intercompany loans is recognised in the Statement of
Comprehensive Income.
g)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST except:
-
-
Where the GST incurred on the purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
Receivable and payable are stated with the amount of GST included.
The amount of GST recoverable from the taxation authority is included as part of the receivables in the Statement of
Financial Position. The amount of GST payable to the taxation authority is included as part of the payables in the
Statement of Financial Position.
Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
h)
Income Tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based on
the notional income tax rate for each jurisdiction adjusted for by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the
financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted
for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences
arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation
to these temporary differences if they arose in a transaction, other than a business combination, that at the time of
the transaction did not affect either accounting profit or taxable profit or loss.
37
Annual Report for the year ended 31 December 2023
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
For the purposes of income tax legislation, the Company and its 100% controlled Australian entities have elected to
form a tax consolidated group. As a consequence, these entities are taxed as a single entity and the deferred tax
assets and liability of these entities are set off in the consolidated financial statements.
i)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are
shown within borrowings in current liabilities in the Consolidated Statement of Financial Position.
j)
Trade and Other Receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision
for expected credit losses. Trade receivables are due for settlement no more than 120 days from the date of
recognition.
The Group applies the AASB 9 Financial Instruments simplified approach to measure expected credit losses which
uses a lifetime expected loss allowance for all trade receivables.
To measure the expected credit, trade receivables have been grouped based on shared credit risk characteristics and
the days past due. The expected loss rates are based on the Group’s past history, existing market conditions and
forward-looking estimates at the end of each reporting period.
k)
Investments and Other Financial Assets
The Group determines the classification of its financial instruments at initial recognition and carries its financial
instruments at fair value. Financial assets and financial liabilities are recognised when the entity becomes a party to
the contractual provisions to the instrument. For financial assets, this is the equivalent to the date that the entity
commits itself to either the purchase or sale of the asset.
Financial assets at FVTPL
With the exception of loans and receivables, financial assets are measured at fair value. Fair value is determined
based on current bid prices for all quoted investments. If there is not an active market for a financial asset fair value
is measured using established valuation techniques.
Loans and receivables
Loans and receivables are measured at amortised cost using the effective rate method. Changes in fair value are
taken to profit or loss. Refer note 13.
38
Annual Report for the year ended 31 December 2023
l)
Non-Current assets or disposal groups classified as held for sale
Non-current assets are classified as held for sale and measured at the lower of their carrying amount and fair value
less costs to sell if their carrying amount will be recovered principally through a sale transaction instead of use. They
are not depreciated or amortised. For an asset to be classified as held for sale, it must be available for immediate
sale in its present condition and its sale must be highly probable. Management must be committed to the plan to
sell the asset and the sale expected to be completed within one year from the date of the classification.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value less costs to sell.
A gain is recognised for any subsequent increases in fair value less costs to sell of an asset, but not in excess of any
cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale
of the non-current asset is recognised at the date of derecognition.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
m)
Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Financial Liabilities
Initial recognition and measurement
All financial liabilities are recognised initially at fair value adjusted for transaction costs, except where the instrument
is classified as fair value through profit or loss (FVTPL), in which case transaction costs are immediately recognised as
expenses in profit or loss.
Classification of financial liabilities
Financial liabilities classified as held-for-trading, contingent consideration payable by the group for the acquisition of
a business, and financial liabilities designated at FVTPL, are subsequently measured at fair value. All other financial
liabilities recognised by the group are subsequently measured at amortised cost.
The Group’s financial liabilities include trade and other payables, and convertible note payables (refer note 16).
Convertible notes have embedded derivatives within them. Embedded derivatives are separated from the host contract
and accounted for separately if the economic characteristics and risks of the host contract and the embedded
derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet
the definition of a derivative, and the combined instrument is not measured at fair value through profit or loss.
The convertible note is valued as a financial liability (Host Debt) with an embedded derivative feature (Embedded
derivative).
Subsequent Measurement
Subsequent measurement for Host Debt is at amortised costs. Subsequent measurement for Embedded derivative is
at fair value through profit and loss.
n)
Interest in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where
unanimous decisions about relevant activities are required.
Separate joint venture entities providing joint ventures with an interest to net assets are classified as a joint venture
and accounted for using the equity method.
39
Annual Report for the year ended 31 December 2023
Joint operations represent arrangements whereby joint operators maintain direct interests in each asset and exposure
to each liability of the arrangement. The Group’s interests in assets, liabilities, revenue and expenses of joint operations
are included in the respective line items of the consolidated financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’ interests.
When the Group makes purchases from a joint operation, it does not recognise its share of the gains and losses from
the joint arrangement until it resells those goods/assets to a third party.
As at the reporting date 31 December 2023, the Group does not have any Joint Arrangements as defined in this
policy.
o)
Investment in Associates
Associates are entities over which the Group has significant influence but not control or joint control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in Associates in the
consolidated financial statements are accounted for using the equity method of accounting. On initial recognition
investments in associates are recognised at cost. Under this method, the Group’s share of the post-acquisition profits
or losses of Associates are recognised in profit or loss, and its share of post-acquisition movements in reserves is
recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the
carrying amount of the investment.
When the Group’s share of losses in an Associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or
made payments on behalf of the associate.
p)
Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment losses. Where parts
of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of
property, plant and equipment.
Subsequent Costs
The Group recognises in the carrying amount of an item of property, plant and equipment the cost of replacing part
of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the
item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in the
statement of comprehensive income as an expense as incurred.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each part of an
item of property, plant and equipment. The estimated useful lives in the current and comparative periods are as
follows:
Office equipment/improvements
straight-line
over 3 to 10 years
Motor vehicles
straight-line
over 4 years
The residual value, the useful life and the depreciation method applied to an asset are reassessed at least annually.
De-recognition
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds
and the carrying amount of the item) is included in profit or loss in the period the item is derecognised.
40
Annual Report for the year ended 31 December 2023
q)
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure, including the costs of acquiring the licences, are capitalised as exploration
and evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to
explore an area are recognised in profit or loss.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
1.
the expenditures are expected to be recouped through successful development and exploitation or from sale of
the area of interest; or
2.
activities in the area of interest have not, at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if:
1.
2.
sufficient data exists to determine technical feasibility and commercial viability, and
facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes
of impairment testing, exploration and evaluation assets are allocated to cash-generating units to which the
exploration activity relates. The cash generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified to mining property and development assets within property, plant and equipment.
When an area of interest is abandoned or the Directors decide that it is not commercial, any accumulated costs in
respect of that area are written off in the financial period the decision is made.
r)
Impairment of Non-Financial Assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows
(cash generating units).
s)
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial
year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
t)
Leases
At the commencement date of a lease (other than leases of 12-months or less and leases of low value assets), the
Group recognises a lease asset representing its right to use the underlying asset and a lease liability representing its
obligation to make lease payments.
Lease assets
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the lease liability,
any lease payments made at or before the commencement date of the lease, less any lease incentives received, any
initial direct costs incurred by the Group, and an estimate of costs to be incurred by the Group in dismantling and
41
Annual Report for the year ended 31 December 2023
removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement of the associated
lease liability), less accumulated depreciation and any accumulated impairment loss.
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the underlying asset,
consistent with the estimated consumption of the economic benefits embodied in the underlying asset.
Lease liabilities
Lease liabilities are initially recognised at the present value of the future lease payments (i.e., the lease payments that
are unpaid at the commencement date of the lease). These lease payments are discounted using the interest rate
implicit in the lease, if that rate can be readily determined, or otherwise using the Group’s incremental borrowing
rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining lease payments
(i.e. the lease payments that are unpaid at the reporting date). Interest expense on lease liabilities is recognised in
profit or loss (presented as a component of finance costs). Lease liabilities are remeasured to reflect changes to lease
terms, changes to lease payments and any lease modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an expense when
incurred.
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for which a lease
asset and a lease liability has not been recognised) are recognised as an expense on a straight-line basis over the
lease term.
u)
Current / Non-Current Distinction
The Group presents current and non-current assets, and current and non-current liabilities, as separate classifications
in its statement of financial position.
Assets
The Group classifies an asset as current when:
▪
▪
▪
▪
it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;
it holds the asset primarily for the purpose of trading;
it expects to realise the asset within twelve months after the reporting period; or
the asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle
a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
Liabilities
The Group classifies a liability as current when:
▪
▪
▪
it expects to settle the liability in its normal operating cycle;
it holds the liability primarily for the purpose of trading;
the liability is due to be settled within twelve months after the reporting period; or
42
Annual Report for the year ended 31 December 2023
▪
it does not have an unconditional right to defer settlement of the liability for at least twelve months after
the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement
by the issue of equity instruments do not affect its classification.
All other liabilities are classified as non-current.
v)
Share-based Payments
Equity-settled share-based payments with employees and others providing similar services are measured at the fair
value of the equity instrument at the grant date. Fair value of shares is measured by reference to the quoted market
price. Fair value of options is measured by use of valuation techniques. The expected life used in the model has
been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and
behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-
line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest, with a
corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number
of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in
profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the
equity settled employee benefits reserve.
w)
Measurement of Contingent Consideration
When the fair values of financial assets and financial liabilities recorded in the Consolidated Statement of Financial
Position cannot be measured based on quoted prices in active markets, their fair value is measured using valuation
techniques including the Black-Scholes option pricing model. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values.
Contingent consideration, resulting from asset acquisitions, is valued at fair value at the acquisition date as part of
the asset acquisition. When the contingent consideration meets the definition of a financial liability, it is subsequently
remeasured to fair value at each reporting date. The determination of the fair value is based on a probability weighted
pay-out approach. The key assumptions take into consideration the probability of meeting each performance target
(refer to note 16).
x)
Earnings/Loss Per Share
Basic Earnings/Loss per Share – is calculated by dividing the profit or loss attributable to equity holders of the
Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial period, adjusted for bonus elements in ordinary shares issued during
the period.
Diluted Earnings/Loss per Share – adjusts the figures used in the determination of basic earnings/loss per share to
take into account the after-income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in
relation to dilutive potential ordinary shares.
y)
Critical accounting judgements, estimates and assumptions
The preparation of financial statements require management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
43
Annual Report for the year ended 31 December 2023
Significant accounting judgments
In the process of applying the Group’s accounting policies, management has made the following judgments, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements.
Exploration and evaluation expenditure
The Group’s accounting policy for exploration and evaluation expenditure is set out at note 1(q). The application of
this policy necessarily requires management to make certain estimates and assumptions as to future events and
circumstances. Any such estimates and assumptions may change as new information becomes available. If, after
having capitalised expenditure under the policy, it is concluded that the expenditures are unlikely to be recovered by
future exploitation or sale, then the relevant capitalised amount will be written off to profit or loss.
Share-based payments
Options
The Group measures the cost of equity settled share-based payments at fair value at the grant date using the Black
Scholes model taking into account the exercise price, the term of the option, the impact of dilution, the share price
at grant date, the expected volatility of the underlying share, the expected dividend yield and risk-free interest rate
for the term of the option.
Performance Rights
The Group measures the cost of equity settled share-based payments at fair value at the grant date:
▪
In respect of non-market performance milestone performance rights: valued using a probability-based
valuation methodology with reference to the share price at grant date; and
▪
In respect of market performance milestone performance rights: valued using the Hoadleys Hybrid Model
(a Monte Carlo simulation model) prepared by an independent valuer.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of certain assets and liabilities within the next annual reporting period are:
(i)
Impairment of assets
In determining the recoverable amount of assets, in the absence of quoted market prices, estimations are made
regarding the present value of future cash flows using asset-specific discount rates and the recoverable amount of
the asset is determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number
of key estimates.
(ii)
Benefit from carried forward tax losses
The future recoverability of the carried forward tax losses are dependent upon the Group’s ability to generate taxable
profits in the future in the same tax jurisdiction in which the losses arise. This is also subject to determinations and
assessments made by the taxation authorities. The recognition of a deferred tax asset on carried forward tax losses
(in excess of taxable temporary differences) is dependent on management’s assessment of these two factors. The
ultimate recoupment and the benefit of these tax losses could differ materially from management’s assessment.
44
Annual Report for the year ended 31 December 2023
(iii)
Valuation of share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instrument at the date at which they are granted (as detailed above). The accounting estimates and assumptions
relating to equity settled share-based payments would have no impact on the carrying amount of assets and liabilities
within the next annual reporting period but may impact profit or loss and equity (refer to note 23).
(iv)
Loan to associate
In determining the carrying value of the interest free loan to Amalgamated Minerals Pte. Ltd estimations are made
regarding the appropriate interest rate to use in determining the present value of the loan and the expected timing
of settlement of the loan. The interest rate is based on what an equivalent loan would be expected to be loaned out
at. The timing is based on management’s assessment on when the loan is expected to be settled based on the
expected transactions of the Group (refer to note 13).
2.
REVENUE AND EXPENSES
a)
Income
Interest income
Profit on sale of financial asset (refer note 28)
Profit on sale of tenement interests
Government grant
b)
Employee benefits expense
Employee benefits, including Directors’ fees
Superannuation expenses
c)
Finance costs
Bank fees
Brokerage fees
Lease interest expense
Insurance interest expense
Convertible note – amortised interest cost on host debt
d)
Administration and other expenses
Consultants, advisers, and auditors
Insurance
Legal costs
Public company costs
Overheads
Travel costs
Foreign exchange (gain)/loss
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
$
219,216
100,786
550,000
-
870,002
318,785
14,168
332,953
8,972
5,872
899
3,291
96,917
115,951
210,409
64,249
145,943
98,812
256,138
10,277
1,937
644,444
-
17,500
663,881
214,717
6,073
220,790
3,299
93
797
-
49,496
53,685
115,279
22,277
101,544
59,709
164,621
64,296
(221,765)
(263,693)
564,063
264,033
45
Annual Report for the year ended 31 December 2023
3.
INCOME TAX EXPENSE
a)
The components of tax expense / (benefit) comprise:
Current tax benefit / (expense)
Deferred tax benefit / (expense)
Offset against DTA not recognised
Under / (over) provision in prior years
b)
Reconciliation of prima facie tax on continuing operations to
income tax benefit:
Loss before tax for the period
Australian tax benefit @ 30% (31 December 2022: 30%)
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
-
-
-
-
-
$
-
-
(799,177)
799,177
-
(745,377)
(8,342,675)
(130,215)
(2,502,803)
Burkina Faso income tax benefit at 28% (31 December 2022: 28%)
(103,051)
-
Adjustments for:
Non-assessable income
Capital (gain)/loss
Effect of differences in foreign tax rates
Legal fees
Other non-deductible expenses
Share-based payments
Unrecognised DTA on tax losses
Under provision in prior period
Income tax expense / (benefit) attributable to profit/(loss)
c)
Components of deferred tax assets
Deferred tax assets
Tax losses
Provisions & accruals
Plant and equipment under lease
Capital & borrowing costs
Business related costs
(65,765)
(45,465)
-
-
43,783
319,266
30,957
(94,975)
-
-
-
106,859
25,894
152,912
15,622
1,447,804
799,177
-
11,605,531
9,099,196
17,099
2,008
94,259
-
31,015
6,678
59,537
5,271
Offset against deferred tax liability / not recognised
(11,718,897)
(9,201,697)
Deferred tax liabilities
Prepayments
Investments
Exploration expenditure
Deferred tax assets not recognised
-
(15,216)
-
15,216
(4,695)
(9,189)
-
13,884
Net deferred tax assets / (liability)
-
-
46
Annual Report for the year ended 31 December 2023
d)
Deferred tax assets / liabilities not brought to account
Temporary differences
Capital losses
Operating tax losses
31 Dec 2023
31 Dec 2022
$
$
96,300
-
11,670,781
11,767,081
82,327
-
9,099,196
9,181,523
The tax benefits of the above deferred tax assets will only be obtained if:
-
-
-
the Group derives future assessable income of a nature and of an amount sufficient to enable the
benefits to be utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
no changes in income tax legislation adversely affect the Group in utilising the benefits.
e)
Deferred income tax (revenue)/expense included in Income Tax expense comprises:
(Increase) / decrease in deferred tax assets
(Decrease) / increase in deferred tax liabilities
Under provision in prior period
Deferred tax assets not recognised
f)
Deferred income tax related to items charged or credited directly
to equity
Decrease / (increase) in deferred tax assets
Deferred tax assets not recognised
g)
Tax Consolidation
79,412
(3,108)
-
(76,304)
-
75,561
(75,561)
-
189,620
(3,078,069)
(799,177)
3,687,626
-
-
-
-
For the purposes of income tax legislation, the Company and its 100% controlled Australian entities have
elected to form a tax consolidated group.
47
Annual Report for the year ended 31 December 2023
4.
CASH AND CASH EQUIVALENTS
31 Dec 2023
31 Dec 2022
$
$
Cash at bank and on hand
701,139
617,313
(a)
Reconciliation of loss for the year to operating cash flows
Loss for the period
(745,377)
(8,342,675)
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
$
Cashflows excluded from profit attributable to operating activities
Finance costs on interest bearing liabilities
Adjustments for non-cash items:
Impairment of exploration & evaluation assets
Share-based payments expense
Depreciation expense
Amortisation expense
Gain on disposal of financial asset
Gain on disposal of mineral rights
Revaluation of financial assets
Revaluation of embedded derivative
Interest on convertible note (unwind)
Revaluation of contingent consideration (performance shares)
FX revaluation
Fair value adjustment on loan to associate
Non-cash interest income booked on loan
Movement in working capital items:
(Increase) in trade and other receivables
Decrease / (Increase) in prepayments
(Decrease) / increase in trade and other payables
Increase / (decrease) in payroll liabilities
-
-
103,191
24,958
14,803
(100,786)
(250,000)
(17,972)
-
9,356
-
(250,475)
259,418
(211,204)
(5,089)
19,880
(16,058)
9,914
1,714
8,522,931
52,073
12,944
7,462
(644,444)
-
(138,650)
1,036
9,204
(13,936)
(260,663)
-
-
(8,214)
(70,951)
141,875
(8,721)
Net cash used in operating activities
(1,155,441)
(739,015)
48
Annual Report for the year ended 31 December 2023
(b)
Changes in liabilities arising from financing activities
Convertible notes
Right of Use Lease
Balance at 30 June 2022
Net cash from/(used in) financing activities
Acquisition of leases
Other changes
Balance at 31 December 2022
Net cash from/(used in) financing activities
Acquisition of leases
Other changes
Balance at 31 December 2023
$
987,066
-
-
10,240
997,306
-
-
(5,126)
992,180
$
29,675
(7,416)
-
-
Total
$
1,016,741
(7,416)
-
10,240
22,259
1,019,565
(15,566)
(15,566)
-
-
6,693
-
(5,126)
998,873
(c)
Non-cash investing activities
Arrow issued a total of 662,500,000 shares forming its cost of investment in associate, representing a non-
cash payment of $2,406,250 during the prior period. Refer note 12(b) for further information.
5.
FINANCIAL ASSETS
Financial assets at fair value through profit or loss:
Current:
Listed Investment (Level 1) – Dreadnought Resources Ltd (refer note 27)
-
246,750
31 Dec 2023
31 Dec 2022
$
$
Listed Investment (Level 1) - Raiden Resources Ltd (refer note 28)
6.
TRADE AND OTHER RECEIVABLES
Bonds
Deposits
GST receivable
7.
PREPAYMENTS
Prepaid expenses
83,223
83,223
-
246,750
31 Dec 2023
31 Dec 2022
$
$
6,135
3,550
34,826
44,511
6,135
7,954
25,333
39,422
31 Dec 2023
31 Dec 2022
$
$
90,563
90,563
110,443
110,443
49
Annual Report for the year ended 31 December 2023
8.
HELD FOR SALE ASSETS
Exploration assets – Strickland Copper Gold Project
Movements:
Balance at beginning of period
Sale of tenement interest (refer note 27)
Balance at end of period
9.
RIGHT OF USE ASSETS
Right of use assets
Cost
Accumulated amortisation
Movements:
Balance at beginning of period
Additions
Amortisation for the period
Balance at end of period
31 Dec 2023
31 Dec 2022
$
-
-
-
-
$
-
705,750
(705,750)
-
31 Dec 2023
31 Dec 2022
$
$
44,449
(38,284)
6,165
44,449
(23,481)
20,968
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
$
20,968
-
(14,803)
6,165
28,430
-
(7,462)
20,968
(a) On 1 June 2021, the Group entered into a lease arrangement for its office in Subiaco, Australia, which expires
on 31 May 2024, with an option to extend for a further three-year period, no option to purchase at the expiry
of the lease period.
At the commencement date of a lease (other than leases of 12 months or less and leases of low value assets),
the Group recognises a lease asset representing its right to use the underlying asset and a lease liability
representing its obligation to make lease payments.
50
Annual Report for the year ended 31 December 2023
10.
EXPLORATION AND EVALUATION ASSETS
Exploration and evaluation phase
Movements:
Balance at the beginning of the period
Expenditure incurred during the period
Sale of subsidiary
Impairment recognised during the period (a)
Transferred to assets classified as held for sale (a)
Balance at the end of the period
The asset balance comprises the following areas of interest:
- Burkina Faso Gold Projects
Impairment expense recognised in respect of the following:
- Burkina Faso Projects
- Strickland Copper Gold Project
31 Dec 2023
31 Dec 2022
$
-
$
-
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
-
-
-
-
-
-
-
-
-
-
-
$
8,179,606
343,325
-
(8,522,931)
-
-
-
-
(8,437,757)
(85,174)
(8,522,931)
(a) The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on
successful development and commercial exploitation of each area of interest.
The impairment expense totalling $8,522,931 recognised in the period ended 31 December 2022 relates to:
▪
▪
Burkina Faso Projects ($8,437,757); and
Strickland Project ($85,174) (divested during the period, refer to note 27).
In response to the escalating armed activity throughout the country, on 30 September 2022 Burkina Faso
was subject to a military lead coup, the second within a 12 month period. As a result of the continued
deterioration in the security situation, Arrow has ceased all exploration field activities and has no current
plans to resume exploration activities until the security situation is resolved. The Company continues to
monitor the political and security situation in Burkina Faso.
Additionally, reference is made to Trevali Mining Corporation (Trevali), Arrow’s joint venture partner and
owner of several exploration tenements forming part of the Vranso Project. The Judicial Tribunal of
Commerce in Burkina Faso has granted an order providing for the liquidation of Trevali’s 90%-owned
subsidiary Nantou Mining Burkina Faso S.A. (Nantou Mining). A liquidator has been appointed and has
assumed responsibility for the management of the affairs of Nantou Mining. Trevali no longer exercises
operational control over Nantou Mining or the Perkoa Zinc Mine. Nantou Mining funded exploration
activities through an intercompany loan to Nantou Exploration and Sanguie Exploration with the exploration
permits from both companies being used as collateral for the loan. Nantou Exploration and Sanguie
Exploration have no source of funding or capacity to complete statutory reporting requirements to enable
permit extensions. Sanguie Exploration has already failed to apply for permit extensions on the three
51
Annual Report for the year ended 31 December 2023
exploration permits held under that company; it is anticipated that renewals for the permits held by Nantou
Exploration will also not be applied for.
As a result of these developments, in the prior period the Company wrote down the carrying value of all
Burkina Faso exploration assets to $nil at 31 December 2022, resulting in an impairment expense of
$8,437,757 being recognised in the period.
The Company is taking appropriate steps to seek to maintain and protect its project interests in Burkina
Faso.
11.
PLANT AND EQUIPMENT
Motor vehicle
- At cost
- Accumulated depreciation
Total motor vehicle
Caravan
- At cost
- Accumulated depreciation
Total Caravan
Office Improvements
- At cost
- Accumulated depreciation
Total Office Improvements
31 Dec 2023
31 Dec 2022
$
$
124,906
(102,223)
22,683
45,764
(45,764)
-
124,906
(90,775)
34,131
45,764
(45,764)
-
156,176
156,176
(151,664)
(139,854)
4,512
16,322
Total plant and equipment
27,195
50,453
52
Annual Report for the year ended 31 December 2023
Movements in carrying amounts:
Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the
current financial period:
Motor Vehicle
Office
$
Equipment/
Improvements
$
Total
$
Balance at 30 June 2022
38,802
22,871
61,673
Additions
Disposals
Depreciation expense
FX revaluation
Balance at 31 December 2022
Additions
Disposals
Depreciation expense
FX revaluation
Balance at 31 December 2023
-
-
(5,699)
1,028
34,131
-
-
(12,579)
1,131
22,683
-
-
-
-
(7,245)
(12,944)
696
16,322
-
-
1,724
50,453
-
-
(12,379)
(24,958)
569
4,512
1,700
27,195
12.
INVESTMENT IN ASSOCIATE
(a) Reconciliation of carrying amount of investments accounted for using the equity method
Beneficial Interest
31 Dec 2023
31 Dec 2022
31 Dec 2023
31 Dec 2022
$
$
Amalgamated Minerals Pte. Ltd^ (b)
33.3%
33.3%
2,405,256
2,406,250
Movements in carrying amount:
Balance at beginning of period
Initial cost of investment in associate (c)
Share of profit of associate (d)
Share of foreign currency translation
reserve
Balance at end of period
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
2,406,250
$
-
-
2,406,250
7,889
(8,883)
-
-
2,405,256
2,406,250
^Amalgamated Minerals Pte. Ltd holds a 100% interest in subsidiary entity Mineralfields Guinea SARLU.
Mineralfields Guinea SARLU is the holder of Simandou North Iron Project (Permit 22967).
53
Annual Report for the year ended 31 December 2023
(b) Definitive Binding Agreement to Acquire up to 60.5% in Amalgamated and Stage 1 Completion
On 13 July 2022, the Company announced that it had executed a non-binding term sheet (Term Sheet) to acquire
up to a 60.5% controlling interest in Amalgamated Minerals Pte. Ltd. (Amalgamated), a private Singaporean
registered company, which holds a 100% interest in the Simandou North Iron Project in Guinea, West Africa.
Pursuant to the Term Sheet, Arrow issued 81,250,000 fully paid ordinary shares for a three-month exclusivity
option to acquire up to a 60.5% interest in the Simandou North Project through Amalgamated (Exclusivity
Consideration Shares).
Arrow engaged the services of CH-Qorum GmbH (an unrelated party) (Facilitator) to introduce and engage
Amalgamated in relation to the Simandou North Project and act as an exclusive facilitator to Arrow in connection
with the proposed transaction. For purposes of facilitating an introduction to Amalgamated and assisting in
securing a successful transaction and investment by Arrow in the Simandou North Project, the Facilitator was
entitled to be issued 81,250,000 fully paid ordinary shares in Arrow (Facilitator Fee Shares).
On 24 October 2022, the Company announced that, following the successful completion of due diligence on the
Simandou North Iron Project, which included visits to the project area in Guinea by Arrow directors, as well as
reviews from reputable legal firms in Australia, Singapore and Guinea, Arrow executed a binding agreement
(Definitive Agreement) formalising the terms outlined in the Company’s ASX Announcement of 13 July 2022.
On 31 December 2022, the Company formally acquired its initial 33.3% beneficial interest in Amalgamated,
representing completion of Stage 1 of the transaction. On 31 December 2022 Arrow issued 500,000,000 ordinary
shares (being the Stage 1 Consideration Shares) to ROPA Investments (Gibraltar) Limited and its nominees.
Shareholder approval for the issue of the Stage 1 Consideration Shares was received at the Company’s Annual
General Meeting (AGM) held 30 November 2022.
Other key terms of the Definitive Agreement include the following:
o
After completion of Stage 1, Arrow has agreed to use its best endeavours to fund, by way of an unsecured,
interest-free shareholder loan, $2.5 million of exploration expenditure funding for the Simandou North
Iron Project within 24 months from Stage 1 completion (Expenditure Commitment), which will be
repayable in cash by Amalgamated on or before the date that is 15 years after the date on which any part
of the loan is first advanced to Amalgamated or such other date as agreed between Arrow and
Amalgamated (Loan). The Loan will not be convertible into additional shares in Amalgamated; and
o
If the Expenditure Commitment is satisfied by Arrow and subject to certain conditions precedent, including
Arrow obtaining all necessary shareholder approvals, Arrow may purchase a further 27.2% interest in
Amalgamated for $1,000,000, either through the issue of Arrow shares based on a 10-day VWAP or cash,
at the sole discretion of Arrow, to receive a controlling 60.5% interest in Amalgamated (Stage 2).
Rights to Earn a 100% Interest in Amalgamated (via milestones)
On 30 August 2023 the Company announced it had executed a binding term sheet to acquire the remaining
39.5% interest in Amalgamated Minerals Pte. Ltd. (Amalgamated), a private Singaporean registered company.
Key commercial milestones are:
o
o
o
80% ownership through the completion of a Pre-Feasibility Study or expenditure of A$15,000,000,
whichever is less;
90% ownership through the completion of a Feasibility Study or expenditure of an additional
A$22,500,000, whichever is less;
100% ownership following Amalgamated reaching a decision to mine in exchange for a US$1/tonne
royalty.
54
Annual Report for the year ended 31 December 2023
Refer to Note 29 (“Subsequent Events”) for details of a further agreement reached regarding 100% interest.
(c)
Initial cost of investment in associate
Exclusivity Shares1
Facilitator Fee Shares2
Stage 1 Consideration Shares3
Cost of Investment $
203,125
203,125
2,000,000
2,406,250
1Fair value calculated based on 81,250,000 shares issued at $0.0025 per share (being the share price on date of
execution of Term Sheet).
2Fair value calculated based on 81,250,000 shares at $0.0025 per share (being the share price on date of execution
of Term Sheet).
3Fair value calculated based on 500,000,000 shares at $0.004 per share (being the share price on date of
shareholder approval was received to issue the shares).
(d) Summarised financial information of associate
The tables below provide summarised consolidated financial information for Amalgamated and its wholly
owned subsidiary Mineralfields Guinea SARLU (Mineralfields). The information disclosed reflects the amounts
presented in the financial statements of the associate (in which AMD holds a 33.3% beneficial interest).
Summarised statement of financial position as at 31 December 2023:
$
$
31 Dec 2023
31 Dec 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Exploration and evaluation assets
Property, plant and equipment
Total Non-Current Assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
Non-Current Liabilities
Loan payable to Arrow Minerals Ltd
Total Non-Current Liabilities
Total Liabilities
NET LIABILITIES
40,569
22,722
63,291
2,298,114
49,839
2,347,953
2,411,244
35,841
35,841
2,414,635
2,414,635
2,450,476
18,772
216
18,988
147,795
-
147,795
166,783
46,406
46,406
156,627
156,627
203,033
(39,232)
(36,250)
55
Annual Report for the year ended 31 December 2023
Summarised statement of comprehensive income:
31 Dec 2023
31 Dec 2022
Revenue
Expenses
Profit/(Loss) before income tax
Income tax expense
Profit/(Loss) after income tax
Other comprehensive income
Total comprehensive income
Group’s share of net profit/(loss)
13.
RECEIVABLES (NON-CURRENT)
Loan to Amalgamated (a)
Balance at beginning of year/period
Additional loans during the year/period
Less: discount
Interest
Balance at end of year/period
Deferred loss
Balance at beginning of year/period
Discount
Less: amortisation
Balance at end of year/period
$
48,214
(24,544)
23,670
-
23,670
(26,653)
(2,983)
7,889
$
-
-
-
-
-
-
-
-
31 Dec 2023
31 Dec 2022
$
156,627
2,306,222
(662,488)
1,800,361
211,204
2,011,565
-
662,488
(259,418)
403,070
$
-
156,627
-
156,627
-
156,627
-
-
-
-
(a) As detailed at note 12(b), Arrow has agreed to use its best endeavours to fund, by way of an unsecured, interest-
free shareholder loan, $2.5 million of exploration expenditure funding for the Simandou North Iron Project within
24 months from Stage 1 completion (Expenditure Commitment), which will be repayable in cash by
Amalgamated on or before the date that is 15 years after the date on which any part of the loan is first advanced
to Amalgamated or such other date as agreed between Arrow and Amalgamated (Loan). As at 31 December
2023, Arrow had advanced Amalgamated a total of $2,462,849 (2022 $156,627) under this arrangement. The loan
facility is interest-free, however Accounting Standard AASB 9 requires an interest component to be imputed, and
as a result, a Deferred Fair Value Adjustment of $403,070 has been calculated. This amount will be expensed on
a straight-line basis over the term of the loan. The loan has been discounted using an imputed interest rate of
20% over the directors’ expected term of the loan being the period up to 31 December 2024.
56
Annual Report for the year ended 31 December 2023
14.
TRADE AND OTHER PAYABLES
Trade creditors and accruals
GST and withholding tax payable
Payroll liabilities
Trade creditors are generally settled on 30 to 90 day terms.
15.
RIGHT OF USE LEASE LIABILTIES
Current
Lease liability
Non-Current
Lease liability
31 Dec 2023
31 Dec 2022
$
$
170,650
175
59,328
230,153
157,005
30,114
59,092
246,211
31 Dec 2023
31 Dec 2022
$
$
6,693
15,566
-
6,693
Total Current and Non-Current
6,693
22,259
16.
OTHER FINANCIAL LIABILITIES
Current
Convertible note liability (a)
Contingent consideration (b)
Non-Current
Convertible note liability (a)
(a) Convertible Note
31 Dec 2023
31 Dec 2022
$
992,180
-
992,180
$
-
-
-
-
-
997,306
997,306
As previously disclosed, on 26 August 2020 the Company issued 1,000,000 unsecured convertible notes at A$1.00
each, raising $1,000,000 (before costs of $60,000). The notes have a 48 month Maturity Date, unless converted prior.
Conversion can occur at any time up to the Maturity Date, unless redeemed prior through a Change in Control of
the Company or by an Event of Default. The Company also holds the right to redeem the convertible notes after 36
months and prior to the Maturity Date. There are no specific financial covenants within the Event of Default, although
failure to pay any material amounts under the agreement (e.g. interest) and insolvency are Events of Default. The
convertible notes have an interest rate of 8% and allow the holder to convert the $ amount held (Outstanding
Amount) into the equivalent amount of shares based on the lower of $0.0075 cents per share (being 1.25 times the
price of shares issued to the market pursuant to the equity raising on 24 June 2020 (First Equity Raising)) and (if
lower than $0.006) 1.25 times the price of a subsequent capital raising. The debt instrument contains an embedded
forward, being the conversion feature based on the lower of $0.0075 and 1.25 times the prevailing price of shares
(Subsequent Equity Raising), resulting in a variable number of shares.
57
Annual Report for the year ended 31 December 2023
In February 2023, the Company completed an equity raising at an issue price of $0.0055 per share (being Placement
A). In accordance with the terms of the Convertible Note, the undertaking of this placement triggered a re-pricing of
the Conversion Price of the Convertible Notes from $0.0075 (previous conversion price) to $0.006875 (first revised
conversion price). Further, in December 2023, the Company completed Tranche 1 of an equity raising at an issue
price of $0.001 per share (being Placement B). In accordance with the terms of the Convertible Note, the undertaking
of this placement triggered a re-pricing of the Conversion Price of the Convertible Notes to $0.00125 (second revised
conversion price).
Key Terms:
Amount Issued
1,000,000 unlisted and unsecured convertible notes of A$1.00 face value
Maturity Date
48 months after deed date
Interest
8% per annum simple interest until conversion or redemption
Minimum Amount 100,000 notes (or $100,000)
Conversion
The notes convert into Conversion Shares on the following formula:
Number of Conversion Shares =
Amount Converted ($)*
Conversion Price
* has to be greater than the Minimum Amount
Conversion Price Means either:
(i) 1.25 multiplied by the price a Company Share is issued under the First Equity Raising; or
(ii) 1.25 multiplied by a price a Company Share is issued under a Subsequent Lower Priced
Equity Raising (if any).
The financial liability has been accounted for as a derivative financial liability with an embedded derivative feature
(the Embedded Derivative).
Measurement
The instrument was initially valued as the total fair value of the embedded derivative and host debt contract at issue
date, resulting in the following impact to the Financial Statements during the six month period ended 31 December
2022.
Initial Valuation
31 Dec 2023
31 Dec 2022
$
$
$
Embedded derivative – financial liability at fair value through
(6,988)
(6,988)
(2,062)
profit/loss
Host debt contract – financial liability at amortised cost^
(933,012)
(985,192)
(995,243)
Total value of Convertible Note in Statement of Financial Position
(940,000)
(992,180)
(997,305)
^ The host debt contract implicit interest rate is 9.75%.
58
Annual Report for the year ended 31 December 2023
(b) Contingent Consideration
As part of the accounting for the acquisition of Boromo Gold Ltd (completed in August 2019), contingent consideration
with an estimated fair value of $730,955 was recognised as a current liability at the acquisition date. During the year
the final Class C performance rights expired. Movement in the financial liability is as follows:
Opening Balance
(Gain) / loss on revaluation
Closing Balance
17.
ISSUED CAPITAL
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
-
-
-
$
13,937
(13,937)
-
31 Dec 2023
31 Dec 2022
$
$
Ordinary shares issued and fully paid
51,606,728
48,713,599
(a) Movements in issued capital
31 Dec 2023
(12-months)
31 Dec 2022
(6-months)
Note
No.
$
No.
$
Balance at beginning of period
2,533,765,094
48,713,599 1,823,931,760
45,957,349
Placement
Exclusivity Consideration Shares
Facilitator Fee Shares
Stage 1 Consideration Shares
(i)
(ii)
(ii)
(ii)
ESP share buy-back and cancellation
(iii)
-
-
-
-
-
-
-
-
-
-
Placement
Placement
Costs of capital raising
(iv)
(v)
490,000,002
450,000,000
-
2,695,000
450,000
(251,871)
58,333,334
81,250,000
81,250,000
350,000
203,125
203,125
500,000,000
2,000,000
(11,000,000)
-
-
-
-
-
-
-
Balance at end of period
(vi)
3,473,765,096
51,606,728 2,533,765,094
48,713,599
(i)
In July 2022, the Company completed a non-brokered private placement to qualified sophisticated and professional
investors to raise $350,000 via the issue of 58,333,334 shares in the Company at an issue price of $0.006 per share
(July 2022 Placement).
(ii) Refer note 12(c) for details.
(iii) On 19 August 2022, the Company bought back, for no consideration, 11,000,000 shares previously issued under
the ESP in accordance with the terms of the ESP plan.
(iv) On 15 February 2023, the Company announced a placement to sophisticated and institutional investors to raise
$2,695,000 via the issue of 490,000,002 shares in the Company at an issue price of $0.0055 per share (being
Placement A). Final securities issued in relation to this placement were issued 14 April 2023.
(v)
In December 2023, the Company completed tranche 1 of a placement to raise $450,000 via the issue of 450,000,000
shares in the Company at an issue price of $0.001 per share (being Tranche 1 of Placement B). Tranche 2 of the
Placement B was completed in February 2024.
59
Annual Report for the year ended 31 December 2023
(vi) Shares subject to escrow or restriction at 31 December 2023 include:
▪
▪
72,791,666 shares escrowed until 12 June 2024; and
435,000,000 shares escrowed until 12 June 2025.
Terms and conditions of ordinary shares
Ordinary shares have the right to receive dividends as declared, and in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid upon
shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(b) Unexpired share options
The following unlisted options over ordinary shares of the Company existed at reporting date:
Expiry Date
11 October 20241
25 November 20241
5 August 20251
5 August 20252
24 October 20253
25 November 20251
22 February 20241
22 February 20261
1Vested.
Exercise Price ($)
$0.009
$0.009
$0.006
$0.006
$0.007
$0.011
$0.00825
$0.007
Number
4,300,000
8,000,000
9,900,000
40,000,000
5,000,000
5,000,000
284,393,941
40,000,000
396,593,941
2Options shall vest upon satisfaction of service condition on 5 August 2023 (50%) and 5 August 2024 (50%).
3Options shall vest upon satisfaction of service condition on 24 October 2023 (50%) and 24 October 2024 (50%).
Refer note 23(f) for further details.
(c) Performance rights
The following performance rights over ordinary shares of the Company existed at reporting date:
Class
Tranche 11
Tranche 22
Tranche 33
Expiry Date
31/12/2026
31/12/2026
31/12/2026
No.
17,000,000
17,000,000
17,000,000
51,000,000
1 Tranche 1 Performance Rights Milestone: Release of an ASX announcement confirming a JORC compliant resource
equal to or in excess of 50Mt at no lower than 60% Fe by 31 December 2024.
2 Tranche 2 Performance Rights Milestone: Release of an ASX announcement of a positive Scoping Study that
recommends moving to pre-feasibility study (PFS) by 31 December 2025.
3 Tranche 3 Performance Rights Milestone: AMD’s share price (calculated at the 5-day VWAP) exceeding five (5) times
the 30-day VWAP (calculated at 24 October 2022) (Share Price Hurdle) over a consecutive 20-day period (trading days)
by 31 December 2025. Based on a calculation date of 24 October 2022, the Share Price Hurdle has been determined
to be $0.026.
Refer note 23(d) for further details.
60
Annual Report for the year ended 31 December 2023
18.
RESERVES
Share-based payments reserve (shares) (a)
Share-based payments reserve (options and performance rights) (b)
Foreign currency translation reserve (c)
31 Dec 2023
31 Dec 2022
$
$
2,084,407
1,152,580
(492,496)
2,744,491
2,084,407
918,056
(242,021)
2,760,442
(a) The share-based payments reserve (shares) relates to shares granted by the Company to its employees. The
movement relates to the share-based payments expense recognised during the period in respect of the ESP.
(b) The share-based payments reserve (options and performance rights) relates to options and performance rights
granted by the Company to its employees and Directors. The movement relates to the share-based payments
expense recognised during the period in respect of the ESIP options, Director options, and performance rights.
(c) Exchange differences relating to the translation of the results and net assets of the Group’s foreign operations
from their functional currencies to the Group’s presentation currency (i.e. Australian dollars) are recognised
directly in other comprehensive income and accumulated in the foreign currency translation reserve. Exchange
differences previously accumulated in the foreign currency translation reserve (in respect of translating the net
assets of foreign operations) are reclassified to profit or loss on the disposal of the foreign operation.
19.
LOSS PER SHARE
The following data reflects the income and share numbers used in calculation of the basic and diluted loss per
share:
Unit
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
Weighted average number of shares
No.
2,945,765,019
2,022,681,761
(Loss) used in calculation of basic and diluted loss per share
$
(745,377)
(8,342,675)
Basic and diluted (loss) per share:
cents
(0.025)
(0.412)
20.
CONTINGENT ASSETS AND LIABILITIES
Contingent Assets
There were no contingent assets at 31 December 2023.
Contingent Liabilities
In September 2021 Arrow announced that it had secured the Tombi-Ouest Minerals Exploration Permit (Tombi-Ouest)
in Burkina Faso for a total consideration of CFA 70,000,000 (equivalent to approximately AUD $170,000)
(Consideration) and a 1% NSR. The Consideration is to be paid via three instalments; the first payment of CFA
20,000,000 (paid in prior period); second payment of CFA 20,000,000 (paid in current period); and third payment of
CFA 30,000,000 due on or before the 2 year anniversary of earn-in commencement date (September 2023); whereby
the third payment is contingent on AMD electing to remain a party to the earn-in arrangement at this future date. A
notice of force majeure was issued and all expenditure ceased therefore the 2 year anniversary payment was not paid
by the Company.
61
Annual Report for the year ended 31 December 2023
The Group had no other contingent assets or liabilities at reporting date.
21.
COMMITMENTS
(a) Commitments of Group
Exploration & evaluation commitments – Burkina Faso
The Group has certain minimum obligations in pursuance of the terms and conditions of tenement licences in the
forthcoming year. Whilst these obligations are capable of being varied from time to time, in order to maintain current
rights of tenure to mining tenements, the Group will be required to outlay $138,745 in 2024. Exploration commitments
does not include requirements under earn-in arrangements for tenements held by other entities, as the Company is
not currently obligated to spend under these arrangements, and further commitment to spend is subject to exploration
results, the outcome of which is not certain.
The expenditure commitment for the Group for later than 2 years but not later than 5 years is uncertain as the
tenements require re-application prior to this date of which the outcome is not certain.
Up to 1 year
Between 1 and 5 years
Later than 5 years
Expenditure Commitment – Guinea
31 Dec 2023
31 Dec 2022
$
138,745
60,583
-
199,328
$
231,305
167,353
-
398,658
Pursuant to the terms of the Definitive Agreement, in order to move to Stage 2 (whereby Arrow may purchase a
further 27.2% interest in Amalgamated), Arrow must first satisfy $2,500,000 of exploration expenditure funding for the
Simandou North Iron Project within 24 months from date of completion of the Stage 1 (being the Expenditure
Commitment). Refer note 12(b) for details. Noting that $2,406,256 (2022 $156,627) of the Expenditure Commitment
has been satisfied at 31 December 2023 (refer note 13), the remaining commitment at 31 December 2023 is $93,744
(2022 $2,343,373).
(b) Commitments of Associate
Exploration & evaluation commitments – Guinea
Mineralfields Guinea SARLU (100% subsidiary of associate Amalgamated Minerals Pte. Ltd) has minimum expenditure
obligations in respect of the Simandou North Iron Project permit. Whilst these obligations are capable of being
varied from time to time, in order to maintain current rights of tenure under the permit, Mineralfields will be required
to spend the following.
Up to 1 year
Between 1 and 5 years
Later than 5 years
31 Dec 2023
31 Dec 2022
$
2,541,754
-
-
$
-
4,694,491
-
2,541,754
4,694,491
62
Annual Report for the year ended 31 December 2023
22.
RELATED PARTY & KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Parent and subsidiaries
The parent entity and the ultimate parent entity of the Group is Arrow Minerals Limited, a company listed on the
Australian Securities Exchange. The components of the Group are:
Parent
Arrow Minerals Limited
Controlled entities
Boromo Gold Pty Ltd
Gengold Resources Burkina
Gold Square Resources SASU
Black Star Resources Africa SASU
Farafina Resources SASU
Fofora Resources SASU
Arrow (Strickland) Pty Ltd
Arrow (Leasing) Pty Ltd
Arrow (Deralinya) Pty Ltd
Arrow (Plumridge) Pty Ltd
Arrow (Pardoo) Limited
Edurus Resources SA
Incorporated
31 Dec 2023
31 Dec 2022
Extent of control
Australia
-
-
Australia
Cayman Islands
Burkina Faso
Burkina Faso
Burkina Faso
Burkina Faso
Australia
Australia
Australia
Australia
Australia
South Africa
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(b) Key management personnel disclosures
The key management personnel compensation includes employee benefits and director compensation expenses as
follows:
Short-term employee benefits
Post-employment benefits
Equity compensation benefits
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
379,439
4,670
90,249
474,358
$
205,385
1,930
28,567
235,882
Further information regarding key management personnel has been provided in the Remuneration Report.
(c) Transactions with key management personnel
The Company entered into a service agreement with Mitchell River Group Pty Ltd effective 6 July 2016 for the provision
of exploration database management services. Mitchell River Group Pty Ltd is a related party of Director Dr Tabeart.
During the year, an amount of $24,244 (6-months ended 31 December 2022: $6,039) was paid or payable in relation
to these services. An amount of $nil (31 December 2022: $nil) was payable at the end of the year.
GenGold Resources Capital Pty Ltd (GenGold) has, via arrangement, contracted the services of its geological team to
Arrow during the year. Mr McKeith is a related party of GenGold. During the year, an amount of $59,490 (6-months
63
Annual Report for the year ended 31 December 2023
ended 31 December 2022: $20,990) was paid or payable in relation to services. An amount of $nil (31 December
2022: $nil) was payable at the end of the year.
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties.
Unlisted Options issued to Directors
There were no options issued to Directors (or their nominees) as part of remuneration packages during the year.
Options issued to Directors (or their nominees) as part of remuneration packages during the prior period were as
follows:
Director
Mr Thomas McKeith
Mr Hugh Bresser
Mr Frazer Tabeart
Mr Alwyn Vorster
Unlisted Options
Unlisted Options
at $0.006 Expiring
at $0.007 Expiring
05-Aug-2025
24-Oct-2025
7,500,000
25,000,000
7,500,000
-
40,000,000
-
-
-
5,000,000
5,000,000
Performance Rights issued to Directors
There were no Performance Rights issued to Directors (or their nominees) as part of remuneration packages during
the year.
Performance Rights issued to Directors (or their nominees) as part of remuneration packages during the prior period
were as follows:
Director
Mr Thomas McKeith
Mr Hugh Bresser1
Mr Frazer Tabeart
Mr Alwyn Vorster
Performance Rights
Performance Rights
Performance Rights
Expiring 31-Dec-2026
Expiring 31-Dec-2026
Expiring 31-Dec-2026
Tranche 1
Tranche 2
Tranche 3
7,000,000
15,000,000
5,000,000
5,000,000
32,000,000
7,000,000
15,000,000
5,000,000
5,000,000
32,000,000
7,000,000
15,000,000
5,000,000
5,000,000
32,000,000
1Lapsed on 7 November 2023 upon resignation of Director.
64
Annual Report for the year ended 31 December 2023
23.
SHARE-BASED PAYMENTS EXPENSE
(a)
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Options – Directors (b)
Options – Employee Securities Incentive Plan (ESIP) (c)
Performance Rights – Directors (d)
Shares – Employee Share Plan (ESP) (e)
31 Dec 2023
(12-months)
31 Dec 2022
(6-months)
$
77,523
12,943
12,725
-
103,191
$
29,706
13,711
6,917
1,739
52,073
Share-based payments are provided to Directors, consultants and other advisors.
The issue to each individual Director, consultant or advisor is controlled by the Board and the ASX Listing Rules.
Terms and conditions of the payments, including the grant date, vesting date, exercise price and expiry date are
determined by the Board, subject to shareholder approval where required.
(b) Options – Directors
During the prior period, the Company issued the following securities:
▪
▪
40,000,000 unlisted options with an exercise price of $0.006 expiring 5 August 2025 were issued to Directors
(or their nominee) (Director A Options); and
5,000,000 unlisted options with an exercise price of $0.007 expiring 24 October 2025 were issued to Directors
(or their nominee) (Director B Options).
These securities were valued by applying a Black-Scholes option pricing model taking into account the terms and
conditions upon which the options were granted. The following table details the inputs to the valuations for each
option class:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Marketability discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
Director A Options
Director B Options
Nil
100%
3.27%
$0.006
Nil
2.68
$0.004
$0.0021
Nil
100%
3.27%
$0.007
Nil
2.90
$0.004
$0.0020
(c)
Employee Securities Incentive Plan (ESIP)
Relates to securities issued to employees pursuant to the Company’s Employee Securities Incentive Plan (ESIP). The
ESIP was approved by shareholders on 11 November 2019.
During the period, the Company issued the following securities:
▪
9,900,000 unlisted options with an exercise price of $0.006 expiring 5 August 2025 employees pursuant to
the shareholder-approved Employee Securities Incentive Plan (ESIP) (ESIP Options).
65
Annual Report for the year ended 31 December 2023
These securities were valued by applying a Black-Scholes option pricing model taking into account the terms and
conditions upon which the options were granted. The following table details the inputs to the valuations for each
option class:
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Marketability discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
(d) Performance Rights
ESIP Options
Nil
100%
3.08%
$0.006
Nil
3
$0.004
$0.0022
During the prior period, the Company issued a total of 96,000,000 performance rights to Directors (or their nominees),
as follows:
Performance
No.
Expiry Date
Performance
Performance Milestone
Rights
Milestone
Deadline
Tranche 1
32,000,000
31 December 2026 31 December 2024 Release of an ASX announcement
confirming a JORC compliant resource equal
to or in excess of 50Mt at no lower than
60% Fe by 31 December 2024
Tranche 2
32,000,000
31 December 2026 31 December 2025 Release of an ASX announcement of a
positive Scoping Study that recommends
moving to pre-feasibility study (PFS) by 31
December 2025
Tranche 3
32,000,000
31 December 2026 31 December 2025 AMD’s share price (calculated at the 5-day
VWAP) exceeding five (5) times the 30-day
VWAP (calculated at 24 October 2022)
(Share Price Hurdle) over a consecutive 20-
day period (trading days) by 31 December
2025. Based on a calculation date of 24
October 2022, the Share Price Hurdle has
been determined to be $0.026.
The Tranche 1 and Tranche 2 performance rights (with non-market performance milestone) were valued using a
probability-based valuation methodology with reference to the share price at grant date. The fair value of each
Tranche 1 and Tranche 2 performance right is $0.004 (being share price on date of grant).
The Tranche 3 performance rights (with market performance milestone) were valued using the Hoadleys Hybrid Model
(a Monte Carlo simulation model) prepared by an independent valuer. Based on valuation inputs and assumptions
(as detailed in the Company’s Notice of AGM for the meeting held 30 November 2022), the fair value of each Tranche
3 performance right was determined to be $0.0029.
66
Annual Report for the year ended 31 December 2023
(e)
Shares
Relates to securities issued to directors and employees pursuant to the Company’s existing shareholder-approved
Employee Share Plan (ESP). There were no new shares issued pursuant to the ESP during the period. A total of
11,000,000 shares were bought back during the prior period for no consideration, in accordance with the ESP. There
are no remaining ESP shares on issue.
(f) Options
Overview of options:
The Group provides benefits to employees, contractors, consultants and Directors of the Group in the form of share-
based payment transactions, whereby employees, contractors, consultants and Directors render services in exchange
for options to acquire ordinary shares.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary
share of the Company with full dividend and voting rights. Set out below is a summary of the options granted.
31 Dec 2023
31 Dec 2023
31 Dec 2022
31 Dec 2022
(12-months)
(12-months)
(6-months)
(6-months)
No. Options
WAEP
No. Options
WAEP
112,550,000
324,393,941
-
(40,350,000)
396,593,941
371,593,941
0.0128
0.0081
-
0.0142
0.0079
0.008
187,800,000
54,900,000
-
(130,150,000)
112,550,000
57,650,000
0.0174
0.0061
-
0.0194
0.0095
0.0128
Outstanding at the beginning of the
period
Granted
Exercised
Lapsed / expired
Outstanding at end of the period
Exercisable at end of the period
Additional information:
There were no unlisted options exercised during the year (6-months ended 31 December 2022: $nil).
Unlisted options outstanding at 31 December 2023 had a weighted average exercise price of $0.0079 (2022:
$0.0095) and a weighted average remaining contractual life of 217 days (2022: 674 days).
The weighted average fair value of options granted during the year was $0.0081 per option (6 months ended 31
December 2022: $0.0061).
(g) Options – Brokers and Advisors
During the year, the Company issued the following securities:
▪
▪
40,000,000 unlisted options with an exercise price of 0.7¢ expiring 22 February 2026 were issued to Advisors
(or their nominee) (Advisor Options); and
39,393,939 unlisted options with an exercise price of 0.825¢ expiring 22 February 2024 were issued to Brokers
(or their nominee) (Broker Options).
These securities were valued by applying a Black-Scholes option pricing model taking into account the terms and
conditions upon which the options were granted. The valuation of $130,544 has been recorded through equity (costs
of capital raising). The following table details the inputs to the valuations for each option class:
67
Annual Report for the year ended 31 December 2023
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Marketability discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
24.
OPERATING SEGMENTS
Advisor Options
Broker Options
Nil
100%
2.99%
0.7¢
Nil
2.97
0.45¢
0.24¢
Nil
100%
3.57%
0.825¢
Nil
1.14
0.4¢
0.09¢
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
Board in assessing performance and determining the allocation of resources. The Group operates in two segments
in the current period, being mineral exploration and evaluation in Western Australia and West Africa. The Company
is domiciled in Australia. Segment revenues are allocated based on the country in which revenue was earned. Segment
assets are allocated to the country where the assets are located.
Year Ended 31 December 2023 (12-months)
Other income
Total segment income
Australia
West Africa
Consolidated
$
870,002
870,002
$
-
-
$
870,002
870,002
Total (loss) from continuing operations before tax
(385,227)
(360,150)
(745,377)
As at 31 December 2023
Segment assets
Total assets of the Group
Segment liabilities
Total liabilities of the Group
Period Ended 31 December 2022 (6-months)
Other income
Total segment income
Total comprehensive (loss) from continuing
3,312,015
2,460,672
1,186,480
42,546
5,772,687
5,772,687
1,229,026
1,229,026
663,881
663,881
-
-
663,881
663,881
operations before tax
211,477
(8,554,152)
(8,342,675)
As at 31 December 2022
Segment assets
Total assets of the Group
Segment liabilities
Total liabilities of the Group
1,133,902
2,514,324
1,213,508
52,268
3,648,226
3,648,226
1,265,776
1,265,776
68
Annual Report for the year ended 31 December 2023
25.
FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
- credit risk
- liquidity risk
- market risk
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. The Board has overall responsibility for
the establishment and oversight of the risk management framework. Management monitors and manages the
financial risks relating to the operations of the Group through regular reviews of the risks.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to
meet its contractual obligations and arises principally from receivables from customers and cash and cash equivalents.
Substantial cash balances are held with recognised institutions with credit rating A-3 or above as a way of limiting
the exposure to credit risk. There are no formal credit approval processes in place.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Cash and cash equivalents
Trade and other receivables
Financial assets are neither past due nor impaired.
(b) Liquidity risk
31 Dec 2023
31 Dec 2022
$
701,139
44,511
745,650
$
617,313
39,422
656,735
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and
actual cash flows.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period
of 60 days, including the servicing of financial obligations.
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place.
69
Annual Report for the year ended 31 December 2023
The maturity profile of the Group’s financial assets and liabilities are:
31 December 2023
Cash and cash equivalents
Trade and other receivables
Receivable (Loan)1
Lease liabilities
Trade and other payables
Convertible note liability2
31 December 2022
Cash and cash equivalents
Trade and other receivables
Receivable (Loan)1
Lease liabilities
Trade and other payables
Convertible note liability2
Carrying
Amount
$
701,139
44,511
2,011,565
(6,693)
(230,153)
(992,180)
1,528,189
Carrying
Amount
$
617,313
39,422
156,627
(22,259)
(246,212)
(997,305)
(452,414)
Up to 6
6-12 months
1-2 years
2+ years
months
$
701,139
44,511
-
(6,693)
(230,153)
(992,180)
(483,376)
$
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
$
-
-
2,011,565
-
-
-
2,011,565
Up to 6
6-12 months
1-2 years
2+ years
months
$
617,313
39,422
-
$
-
-
-
$
-
-
-
(8,268)
(8,197)
(6,793)
-
-
(40,000)
(1,040,000)
(246,212)
(39,890)
362,365
$
-
-
156,627
-
-
-
(48,197)
(1,046,793)
156,627
1 As referred to at note 13(a), the Loan is repayable in cash on or before the date that is 15 years after Loan is first
advanced to Amalgamated.
2 Assumes convertible notes are redeemed at maturity for $1,000,000.
The maturity profile disclosed are the contractual undiscounted cashflows.
(c) Price risk
The Group is exposed to equity securities price risk. This arises from investments held and classified in the statement
of financial position at fair value through profit and loss. The Group’s equity investments at 31 December 2023 are
publicly traded on the Australian Securities Exchange (ASX) and are recognised as financial assets carried at fair value
through profit and loss.
(d) Market risk
Market risk is the risk that changes in market prices will affect the Group’s income or the value of its holdings of
financial instruments.
Foreign currency risk:
The Group is exposed to foreign exchange risk through funding of exploration activities in West Africa in Guinea
Francs (GNF), Central African Francs (XOF) (pegged to the EUR), and USD denominated payments. The exposure is
not considered material.
70
Annual Report for the year ended 31 December 2023
Interest rate risk:
Exposure to interest rate risk
The Group’s maximum exposure to interest rates at the reporting date was:
Range of
effective
interest rate
Carrying
Variable
Fixed interest
amount
interest rate
rate
31 December 2023
Financial Assets – Current
Cash and cash equivalents
0.95 – 1.35
701,139
701,139
%
$
$
$
-
Total
$
701,139
Financial Liabilities – Current
Lease liabilities
6.47
6,693
Financial Liabilities – Non-Current
Lease liabilities
Convertible note liability
6.47
8.00
-
992,180
-
-
-
6,693
6,693
-
-
992,180
992,180
Range of
effective
interest rate
Carrying
Variable
Fixed interest
amount
interest rate
rate
Total
31 December 2022
Financial Assets – Current
Cash and cash equivalents
0 – 0.36
617,313
617,313
-
617,313
Financial Liabilities – Current
Lease liabilities
6.47
15,566
Financial Liabilities – Non-Current
Lease liabilities
Convertible note liability
6.47
8.00
6,693
997,305
-
-
-
15,566
15,566
6,693
997,305
6,693
997,305
The Group holds the majority of its cash and cash equivalents within a current account attracting a weighted interest
rate of 1.27% pa (2022: 0.2747% pa).
Movement of 100 basis points on interest rate (considered a reasonably possible change) would not have a material
impact on the Group’s loss or equity.
Fair value of financial instruments
The Directors consider the carrying amount of the financial instruments (including cash and cash equivalents, trade and
other receivables, and other financial assets) to be a reasonable approximation of their fair value at 31 December 2023.
The Directors consider the carrying amount of the financial instruments (including lease liabilities, trade and other
payables, and convertible note liability) to be a reasonable approximation of their fair value at 31 December 2023.
Fair value hierarchy
AASB 13: Fair Value Measurement requires disclosure of fair value measurements by level of the fair value hierarchy, as
follows:
▪
▪
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices)
71
Annual Report for the year ended 31 December 2023
▪
Level 3: inputs for the asset or liability that is not based on observable market data (unobservable inputs)
The Group’s convertible notes embedded derivative component is not traded on an active market. The fair value is
based on significant observable inputs (level 3) at the end of the reporting period. These instruments are included in
level 3. The significant observable inputs used includes the historical volatility rate and interest rate.
The fair value of the Group's contingent consideration is measured using management’s weighted probability of
performance milestones being achieved (refer note 17(c) for performance milestones attaching the Performance Rights).
These instruments are included in level 3.
31 December 2023
Date of
valuation
Total
$
Quoted prices
Significant
Significant
in active
observable
unobservable
markets
inputs
inputs
(Level 1)
(Level 2)
(Level 3)
Assets measured at fair value:
Financial assets (Listed Investment)
31-Dec-23
83,223
83,223
Liabilities measured at fair value:
Convertible notes embedded derivative
31-Dec-23
6,988
Contingent consideration
31-Dec-23
-
-
-
31 December 2022
Date of
valuation
Total
$
Quoted prices
Significant
Significant
in active
observable
unobservable
markets
inputs
inputs
(Level 1)
(Level 2)
(Level 3)
Assets measured at fair value:
Financial assets (Listed Investment)
31-Dec-22
246,750
246,750
Liabilities measured at fair value:
Convertible notes embedded derivative
31-Dec-22
2,062
Contingent consideration
31-Dec-22
-
-
-
1 Refer note 16(b) for details of movement in Level 3 instrument (contingent consideration).
(d) Capital management policy
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business.
There were no changes in the Group’s approach to capital management during the period. Neither the Company nor
any of its subsidiaries are subject to externally imposed capital requirements. The Group defines capital as cash and
cash equivalents plus equity. The Board monitors capital on an ad-hoc basis. No formal targets are in place for return
on capital or gearing ratios as the Group has not derived any income from their mineral exploration.
72
$
$
$
-
-
-
$
-
6,988
-
$
-
-
-
$
-
2,062
-1
Annual Report for the year ended 31 December 2023
26.
PARENT ENTITY INFORMATION
(a)
Financial Position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
(b)
Statement of Comprehensive Income
(Loss) for the period
Other comprehensive income
Total comprehensive (loss)
(c)
Commitments
31 Dec 2023
31 Dec 2022
$
$
807,993
4,922,147
5,730,140
709,557
2,886,402
3,595,959
1,186,479
-
1,186,479
209,510
1,003,999
1,213,509
4,543,661
2,382,450
51,606,728
48,713,599
3,236,987
3,002,464
(50,300,054)
(49,333,613)
4,543,661
2,382,450
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
$
(966,441)
(8,619,912)
-
-
(966,441)
(8,619,912)
Parent entity commitments are as disclosed within note 21.
(d)
Contingent assets / liabilities
The parent entity does not have any contingent assets or contingent liabilities.
27.
DIVESTMENT OF STRICKLAND COPPER GOLD PROJECT, WA
On 13 July 2022, the Company announced that it has executed a tenement sale and purchase agreement (via its subsidiary)
with Dreadnought Resources Ltd (ASX:DRE) (Dreadnought) by which Dreadnought would acquire a 100% interest in the
Strickland Copper Gold Project (comprising E16/495, E30/493, E30/494, E77/2403, E77/2416, E77/2432, E77/2634) in Western
Australia. Settlement of this transaction occurred on 1 August 2022.
Pursuant to the terms of the agreement, Arrow received total cash consideration of $600,000 and was issued 2,350,000 fully
paid ordinary shares in Dreadnought (escrowed until 31 January 2023).
73
Annual Report for the year ended 31 December 2023
Arrow continues to retain upside exposure to the success of the Strickland Copper Gold project through the terms of the
sale and purchase agreement that provides for a $1,000,000 cash payment upon the identification and reporting of JORC
compliant inferred mineral resource of >500,000oz gold equivalent. Arrow also retains a total 1% Net Smelter Return royalty
in relation to minerals mined by or on behalf of Dreadnought on the Strickland Copper Gold Project.
28.
SALE OF RESIDUAL MINERALS RIGHTS, WA
On 7 August 2023 the Company announced that it had entered into a binding option and earn-in agreement with Raiden
Resources Limited for the sale of Arrow’s lithium-caesium-tantalum (Li-Cs-Ta) mineral rights in tenements E47/3476 &
E47/3478 located in the Pilbara, Western Australia. On 6 November 2023 the Company advised that Raiden Resources Limited
elected to exercise the upfront option to acquire 100% of the lithium-caesium-tantalum (Li-Cs-Ta) mineral rights in tenements
E47/3476 & E47/3478 located in the Pilbara, Western Australia. Pursuant to the terms of the agreement, the Company
received $300,000 in cash and $250,000 in Raden Resources Limited shares.
29.
SUBSEQUENT EVENTS
Recapitalisation and Board Restructure
On 13 December 2023, the Company announced a recapitalisation and Board restructure aimed at unlocking the potentially
significant value of its Simandou North iron project in Guinea, West Africa. Under the plan, highly regarded iron ore executive
David Flanagan would be appointed Managing Director.
A summary of the recapitalisation and board restructure plan, is as follows:
Placement
Arrow advised its intention to raise $3,500,000 (before costs) via a two-tranche share placement at 0.1c per share (Placement
B).
Tranche 1 of the Placement for raising $450,000 (before costs) was completed on 22 December 2023 under Arrow’s existing
Listing Rule 7.1 placement capacity. Tranche 2 of the Placement to raise $3,050,000 was subject to shareholder approval.
Share Purchase Plan (SPP)
Subject to shareholder approval, existing Arrow shareholders would have the opportunity to participate in a Share Purchase
Plan (SPP) to raise up to an additional $500,000 at the same price as Placement B.
Convertible Note
Arrow reached agreement with holders of its existing $1m Convertible Note (CN) whereby, subject to shareholder approval,
the CN holders will convert $500,000 (50%) of the CN into Arrow ordinary shares at a 25% premium to the equity raising
price, resulting in an issue of 400m new shares. In consideration for the early exercise, the CN holders will receive 778m
unlisted zero strike price options in Arrow.
David Flanagan (Proposed Managing Director)
Mr Flanagan has been engaged as part-time consultant to Arrow until his appointment as Managing Director on 15 February
2024. Mr Flanagan has the right to be issued (subject to shareholder approval) 775m zero strike price options, and 90m
zero strike price options which will have vesting hurdles tied to a 50Mt JORC Resource of at least 60% Fe, Arrow increasing
its interest in the Simandou North Iron Project up to 60.5%, and completion of a pre-feasibility study on the Simandou North
Iron Project. All zero strike options will have a 6 month escrow from signing of the consulting agreement.
74
Annual Report for the year ended 31 December 2023
Jeff Dowling (Proposed Non-Executive Chairman)
Experienced corporate director Mr Jeff Dowling joined the Board as Non-Executive Chairman of Arrow on 15 February 2024.
Mr Dowling’s current directorships include NRW Holdings Limited and Fleetwood Limited. Mr Dowling (or his nominee) will
have the right to be issued 100m zero strike price options (subject to shareholder approval).
Existing Board of Directors
Former Executive Chair Mr Tommy McKeith transitioned to Non-Executive Director on 15 February 2024 and will have the
right to be issued 100m zero strike price options, escrowed for 6 months, for his role in originating and facilitating the
recapitalisation.
Mr Alwyn Vorster has remained as Non-Executive Director while Dr Frazer Tabeart resigned from the board on 15 February
2024 on completion of the recapitalisation.
On 15 February 2024 the shareholders approved the plan, as a result Arrow:
•
Issued 3,050,000,000 ordinary shares to institutional and sophisticated investors and related parties (Directors)
raising $3,050,000 (before costs) additional equity (shares were issued 23 February 2024) (being Tranche 2 of
Placement B).
•
Issued 500,000,000 ordinary shares under the Share Purchase Plan raising $500,000 additional equity (shares were
issued 1 March 2024).
• Granted 975,000,000 options to the directors, with zero exercise price, no vesting conditions and expiring after three
years (options were issued 15 February 2024) (875,000,000 of these options are subject to escrow until 12 June
2024).
• Granted 90,000,000 options to a director, with zero exercise price, various vesting conditions and expiring after four
years (options were issued 15 February 2024) (these options are subject to escrow until 12 June 2024).
•
•
•
Issued 80,000,000 ordinary shares to the lead manager (shares were issued 23 February 2024).
Issued 80,000,000 ordinary shares to the corporate advisor (shares were issued 23 February 2024).
Issued 400,000,000 ordinary shares and the grant of 778,000,000 options (as consideration for early conversion),
with zero exercise price, no vesting conditions and expiring after three years, to the Noteholders to convert $500,000
of the debt to equity (500,000 notes were converted and 400,000,000 shares issued 5 March 2024; options were
issued on 5 March 2024).
The Company provided irrevocable bank guarantees for the repayment of the remaining $500,000 convertible note debt.
David Flanagan was appointed Managing Director, Jeff Dowling was appointed Non-Executive Chair, Thomas McKeith
transitioned to Non-Executive Director, and Frazer Tabeart resigned from the Board of Directors.
$10m Capital Raising
On 13 March 2024 the Company announced a $10 million capital raising via a placement of 2,000,000,000 shares (Placement
C). On 21 March 2024 the Company issued 1,895,941,273 ordinary shares raising $9,479,706 additional equity (before costs).
The issue of a further 104,058,727 ordinary issues to raise $520,294 is subject to shareholder approval. The Company has
agreed to issue 120,000,000 options with an exercise price of $0.009 expiring three years from date of issue to corporate
advisers as part of fees in connection with the placement, subject to receipt of shareholder approval.
Acquisition of 100% Interest in Amalgamated
On 13 March 2024 the Company announced it had reached revised agreement to acquire the remaining 66.7% interest in
Amalgamated Minerals Pte Ltd, which holds the Simandou North Iron Project, taking legal and beneficial interest to 100%
(Agreement).
75
Annual Report for the year ended 31 December 2023
Key terms of the Agreement are:
•
•
Arrow to pay the vendors $2,000,000 in cash within 30 days of signing the Agreement;
Arrow agrees to make a deferred payment of $500,000 in cash or shares on or before 30 June 2025 (at the
Company’s election); and
•
The vendor retains a USD $1/tonne royalty.
This Agreement effectively replaces the previously announced agreement (ASX Announcement 30 August 2023) which
provided a pathway to reach 100% over various milestones.
Arrow completed its accelerated acquisition of the remaining 66.7% interest on 26 March 2024, taking 100% legal and
beneficial interest in Amalgamated Minerals Pte. Ltd.
Other movements in securities
On 15 February 2024 a total of 15,000,000 performance rights lapsed in accordance with their terms. On 22 February 2024
a total of 284,393,941 options with an exercise price of $0.00825 expired.
This note should be read together with the ASX Announcements. No other matters or circumstances have arisen since 31
December 2023 which significantly affected or may significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in future periods.
30.
AUDITOR’S REMUNERATION
Auditor’s remuneration - for audit or review of financial report
HLB Mann Judd (WA Partnership)
Auditor’s remuneration - for other services
HLB Mann Judd (WA Partnership)
31 Dec 2023
31 Dec 2022
(12-months)
(6-months)
$
$
58,071
58,071
29,517
29,517
-
-
76
Annual Report for the year ended 31 December 2023
DIRECTORS’ DECLARATION
In accordance with a resolution of the Board of Directors, I state that:
In the opinion of the Directors:
1.
The consolidated financial statements and accompanying notes are in accordance with the Corporations Act
2001, including:
a) giving a true and fair view of the Group’s financial position at 31 December 2023 and of its performance
for the year ended on that date: and
b) complying with Accounting Standards and Corporations Regulations 2001;
2.
Subject to the matters described in note 1(b), there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable;
3.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the year ended 31 December 2023; and
4.
The consolidated financial statements and notes are also in compliance with International Financial Reporting
Standards as disclosed in note 1(a).
On behalf of the Board
David Flanagan
Managing Director
Perth, 28 March 2024
77
INDEPENDENT AUDITOR’S REPORT
To the Members of Arrow Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Arrow Minerals Limited (“the Company”) and its controlled entities
(“the Group”), which comprises the consolidated statement of financial position as at 31 December 2023,
the consolidated statement of comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, notes to the financial statements, including
material accounting policy information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
(a) giving a true and fair view of the Group’s financial position as at 31 December 2023 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(b) in the financial report, which indicates that a material uncertainty exists that
may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified
in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be the key audit matters to be communicated in our report.
78
Key Audit Matter
How our audit addressed the key audit matter
Investment in, and loan to, associate
Refer to Notes 12 and 13.
As at 31 December 2023, the Group recorded an
investment in associate of $2,405,256 (2022:
$2,406,250) reflecting a 33.3% interest in
Amalgamated Minerals Pte Ltd, which holds a
100% interest in the Simandou North Iron Project
in Guinea, West Africa.
As part of an ongoing transaction to acquire a
further interest in the asociate, the Group was
required to also provide an interest-free loan to
the associate. At 31 December 2023, the loan
was carried at $2,011,565 (2022: $156,627).
This was determined to be a key audit matter as it
required a significant portion of our effort as well
as the judgement and significant estimates
involved in determining the appropriate carrying
value of the investment in the associate, as well
as the fair value of the loan to the associate.
Our procedures included but were not limited to:
- Assessing the existence of significant influence
over
the associate under AASB 128
Investments in Associates and Joint Ventures;
the
associate’s financial statements and ensuring
that the Group took up the appropriate portion
of the profit generated during the period;
- Carrying out audit procedures over
- Reviewing the assets and liabilities of the
associate and ensuring that there was no
indication of impairment of its exploration assets
under AASB 128 or AASB 6 Exploration for and
Evaluation of Mineral Resources;
- Reviewing management’s accounting treatment
and calculation of the present value of the
interest-free loan under AASB 9 Financial
Instruments; and
- Reviewing the disclosures made in the financial
report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 31 December 2023, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report, or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
79
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
− Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
−
− Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
−
We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats
or safeguards applied.
80
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended 31
December 2023.
In our opinion, the Remuneration Report of Arrow Minerals Limited for the year ended 31 December 2023
complies with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 March 2024
B G McVeigh
Partner
81
Annual Report for the year ended 31 December 2023
ADDITIONAL INFORMATION
Shareholder Information
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public
companies.
Information as at 21 March 2024:
1.
Shares on Issue
Total number of issued fully paid ordinary shares is 9,479,706,369.
2.
Distribution of Holders
Spread
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
>10,000
Total
3.
Unmarketable Parcels
No. of Holders
No. of Shares
% Issued Capital
93
75
77
862
1,892
2,999
10,785
207,564
591,178
46,381,699
9,432,515,143
9,479,706,369
0.00%
0.00%
0.01%
0.49%
99.50%
100%
The number of holders of less than a marketable parcel of fully paid shares is 949.
4.
Substantial Shareholders
Shareholders who hold 5% or more of the issued capital of the Company as per substantial shareholder notices
lodged with ASX are listed below.
Name
Bernadine Holdings Pty Ltd
5.
Restricted Securities
Shares subject to voluntary escrow include:
▪
▪
72,791,666 shares escrowed until 12 June 2024; and
435,000,000 shares escrowed until 12 June 2025.
Number of Shares
Held
556,583,333
There are a total of 965,000,000 options on issue that are subject to escrow until 12 June 2024.
6.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by
proxy has one vote on a show of hands.
Options
82
Annual Report for the year ended 31 December 2023
There are no voting rights attached to any class of options that is on issue.
7.
On-market Buy-Back
Currently there is no on-market buy-back of the Company’s securities.
8.
Top 20 Holders – Ordinary Shares
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
13
14
BERNADINE HOLDINGS PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
EQUITY TRUSTEES LIMITED
BUDWORTH CAPITAL PTY LTD
MR THOMAS DAVID MCKEITH
SEASCAPE CAPITAL PTY LTD
GENGOLD RESOURCE CAPITAL PTY LTD
MR CUNTONG CHENG
AGILIS PTY LTD
CHIFLEY PORTFOLIOS PTY LTD
R & K WATSON PTY LTD
VORSTER SUPER PTY LTD
BOND STREET CUSTODIANS LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
15 MR DAVID NATHAN FLANAGAN
15
16
17
18
18
19
20
SYNTHAFIFAX PTY LTD
HYDE SUPERANNUATION PTY LTD
ZENIX NOMINEES PTY LTD
CHIFLEY PORTFOLIOS PTY LTD
DIAMOND VALLEY CAPITAL PTY LTD
QUICKSILVER ASSET PTY LTD
STRATA INVESTMENT HOLDINGS PLC
Totals: Top 20 holders of Arrow ORDINARY FULLY PAID
Total Remaining Holders Balance
Total Holders Balance
9.
Unquoted Securities
Units
% of Units
on issue
507,791,666
334,209,376
250,493,641
217,255,181
170,000,000
166,595,674
150,000,000
131,166,670
123,734,878
119,000,000
107,941,273
100,995,670
100,000,000
100,000,000
91,577,968
87,500,000
87,500,000
85,000,000
80,000,000
75,000,000
75,000,000
74,000,000
73,000,000
5.36%
3.53%
2.64%
2.29%
1.79%
1.76%
1.58%
1.38%
1.31%
1.26%
1.14%
1.07%
1.05%
1.05%
0.97%
0.92%
0.92%
0.90%
0.84%
0.79%
0.79%
0.78%
0.77%
3,307,761,997
6,171,944,372
9,479,706,369
34.89%
65.21%
100%
As at 21 March 2024 the following securities over un-issued shares were on issue:
•
•
•
•
•
•
•
4,300,000 unlisted options exercisable at $0.0090 on or before 11 October 2024
8,000,000 unlisted options exercisable at $0.0090 on or before 25 November 2024
49,900,000 unlisted options exercisable at $0.0060 on or before 5 August 2025
5,000,000 unlisted options exercisable at $0.0070 on or before 24 October 2025
5,000,000 unlisted options exercisable at $0.0110 on or before 25 November 2025
40,000,000 unlisted options exercisable at $0.0070 on or before 22 February 2026
975,000,000 unlisted options exercisable at $0.00 on or before 15 February 2027
83
Annual Report for the year ended 31 December 2023
•
•
•
•
•
•
778,000,000 unlisted options exercisable at $0.00 on or before 5 March 2027
90,000,000 unlisted options exercisable at $0.00 on or before 15 February 2028
12,000,000 Tranche 1 Performance Rights expiring 31 December 2026
12,000,000 Tranche 2 Performance Rights expiring 31 December 2026
12,000,000 Tranche 3 Performance Rights expiring 31 December 2026
500,000 Convertible Notes
10. Unquoted Equity Security Holders with Greater than 20% of an Individual Class
As at 21 March 2024 the following classes of unquoted securities had holders with greater than 20% of that class
on issue as set out below (excluding securities issued under an employee incentive scheme):
% Interest
Options exercisable at $0.009 on or before 25 November 2024
Howard Golden + Ellen Louise Grote
Milagro Ventures Pty ltd
Options exercisable at $0.006 on or before 5 August 2025
Milagro Ventures Pty ltd
Options exercisable at $0.007 on or before 24 October 2025
Alwyn Vorster
Options exercisable at $0.011 on or before 25 November 2025
Howard Golden + Ellen Louise Grote
Milagro Ventures Pty ltd
Options exercisable at $0.007 on or before 22 February 2026
Zenix Nominees Pty Ltd
Options exercisable at $0.00 on or before 15 February 2027
Mr David Flanagan
Options exercisable at $0.00 on or before 5 March 2027
Budworth Capital Pty ltd
Seascape Capital Pty Ltd
Options exercisable at $0.00 on or before 15 February 2028
Mr David Flanagan
Tranche 1 Performance Rights expiring 31 December 2026
Mr Thomas David McKeith
Mr Alwyn Petrus Vorster
Tranche 2 Performance Rights expiring 31 December 2026
Mr Thomas David McKeith
Mr Alwyn Petrus Vorster
Tranche 3 Performance Rights expiring 31 December 2026
Mr Thomas David McKeith
Mr Alwyn Petrus Vorster
Convertible Notes
31.3%
31.3%
62.5%
100.0%
50.0%
50.0%
100.0%
79.5%
42.5%
37.5%
100.0%
58.3%
41.7%
58.3%
41.7%
58.3%
41.7%
84
Annual Report for the year ended 31 December 2023
Budworth Capital Pty Ltd ATF Budworth Capital Trust
Seascape Capital Pty Ltd ATF Williams Trading Trust
42.5%
37.5%
11. Company Secretary
The names of the Joint Company Secretary are Catherine Grant-Edwards and Melissa Chapman.
12. Registered Address
The address of the principal registered office is: Suite 5, 63 Hay Street, Subiaco WA 6008.
13. Registers
The registers of securities are held at the following address:
Automic, Level 5, 125 Phillip Street, Sydney NSW 2000
85
Annual Report for the year ended 31 December 2023
Tenement Schedule as at 27 March 2024
Tenement ID
Permit 22967
Country
Project
Holder
Interest Note
Guinea
Simandou North
Mineralfields Guinea SARLU
100%
(a)
2020-084/MMC/SG/DGCM
Burkina Faso Hounde South & Nako Gold Square Resources Sasu
100%
2020-161/MMC/SG/DGCM
Burkina Faso Hounde South & Nako Gold Square Resources Sasu
100%
2020-162/MMC/SG/DGCM
Burkina Faso Hounde South & Nako Gold Square Resources Sasu
100%
2020-190/MMC/SG/DGCM
Burkina Faso Divole East & West
Gold Square Resources Sasu
100%
2020-192/MMC/SG/DGCM
Burkina Faso Divole East & West
Gold Square Resources Sasu
100%
2020-193/MMC/SG/DGCM
Burkina Faso Divole East & West
Gold Square Resources Sasu
100%
19/047/MMC/SG/DGCM
Burkina Faso Divole East & West
Farafina Resources Sasu
100%
Note:
(a) Simando North Iron Project (Permit 22967) is owned by Mineralfields Guinea SARL. Mineralfields Guinea SARL
is a wholly owned subsidiary of Amalgamated Minerals Pte. Ltd. Arrow holds a 100% beneficial interest in
Amalgamated Minerals Pte. Ltd.
86