A N N U A L
R E P O R T
2020
Company information
Contents
Company information
Company profile
Chairman's message
Overview of projects
Great White Kaolin Project
Mt Hope Kaolin Project
Halloysite Intellectual Property Joint Venture
Drummond Epithermal Gold Project
Moonta Copper Gold Project
Pilbara Gold Project
Eyre Peninsula Gold Project
Schedule of tenements
Competent person
and JORC 2012 compliance statements
Corporate governance
Statutory reports
Directors' report
Remuneration report
Auditor's independence declaration
Consolidated statement of profit or loss and
other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the financial statements
Directors' declaration
Independent auditor's report
Investor information
Additional shareholder information
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69
DIRECTORS
Rhod Grivas
James Marsh
Nick Harding
Joe Ranford
Andrew Shearer
Non-Executive Chairman
Managing Director
Executive Director and
Company Secretary
Operations Director
Non-Executive Director
REGISTERED AND PRINCIPAL OFFICE
69 King William Road
Unley, South Australia 5061
CONTACT DETAILS
Telephone: +61 8 8271 0600
Facsimile: +61 8 8271 0033
Postal:
admin@andromet.com.au
www.andromet.com.au
PO Box 1210 Unley BC SA 5061
SHARE REGISTRY
Computershare Investor Services Pty Ltd
Level 5, 115 Grenfell Street
Adelaide, South Australia 5000
GPO Box 1903, Adelaide SA 5000
Enquiries (within Australia):
Enquiries (outside Australia):
1300 556 161
+61 3 9415 4000
AUDITORS
Deloitte Touche Tohmatsu
11 Waymouth Street
Adelaide, South Australia 5000
SOLICITORS
Minter Ellison Lawyers
25 Grenfell Street
Adelaide, South Australia 5000
BANKERS
Westpac Banking Corporation
155 Unley Road
Unley, South Australia 5061
STOCK EXCHANGE LISTING
Australian Securities Exchange Limited
ASX code: ADN
ABN/ACN
75 061 503 375 / 061 503 375
Front cover photo
Night sky with Adromeda Galaxy superimposed.
2
ANDROMEDA METALS LIMITED
Company profile
Andromeda Metals Limited is an emerging industrial
minerals company listed on the Australian Securities
Exchange (ASX: ADN) based in Adelaide, South
Australia and has a vision of becoming the world’s
leading supplier of high grade halloysite-kaolin. The
Company first listed in 1996 under the name Adelaide
Resources and up until early 2018, the focus was
directed towards predominantly gold and copper
exploration at projects located in South Australia, the
Northern Territory, Queensland and Western Australia.
From 2018, Andromeda Metals has directed its
primary focus away from the exploration for gold
and copper deposits to the evaluation and potential
future development of halloysite-kaolin through the
acquisition of a significant interest in the Great White
Kaolin Project (previously the Poochera Halloysite-
Kaolin Project) in South Australia and its planned
advancement towards production.
Andromeda Metals’ Board of Directors comprises a
team of five individuals with years of experience in the
minerals industry, and with a strongly complementary
range of technical, financial, managerial and
directorship skills.
The Chairman, Rhod Grivas, is a geologist with
substantial resource industry and board experience.
He possesses a strong combination of equity
market, M&A, commercial, strategic and executive
management capabilities. Rhod previously was
Managing Director of ASX and TSX listed gold miner
Dioro Exploration NL where he oversaw the discovery
and development of a gold resource through feasibility
into production. He is currently also Non-Executive
Chairman of ASX listed companies Golden Mile
Resources Limited, Aldoro Resources Limited and
Okapi Resources Limited.
Managing Director, James Marsh is an industrial
chemist and holds tertiary qualifications in chemistry
and physics. He has extensive experience across
a wide range of industrial minerals spanning over
a 25 year period, including senior technical and
marketing roles with two global market leaders. James
has been instrumental in developing and launching
industrial minerals products into established and
new applications globally and has a successful track
record in general management and sales.
Executive Director Nick Harding, who also acts as
Company Secretary and Chief Financial Officer, is
an accountant with over 30 years’ experience in the
resources industry. Nick has previously held senior
financial roles with WMC Resources Limited, Normandy
Mining Limited and Newmont Australia and has gained
extensive experience in mine operations and project
evaluations across a number of significant mining
operations within Australia and overseas.
Operations Director Joe Ranford is a mining
engineer with significant experience gained in
senior management roles held with both domestic
and international mining companies. Most recently,
Joe held the role of Chief Operating Officer for
Nordic Gold Inc. where he re-established mining
operations for the Laiva Gold Mine in Finland from
care and maintenance. He has also been Operations
Manager for Terramin Australia where he managed all
operational and technical aspects of the Angas Zinc
Mine and championed the evaluation and approval
processes for the Bird in Hand Gold Project, both
in the community sensitive Adelaide Hills district of
South Australia.
Non-executive director Andrew Shearer has been
involved in the mining and finance industries for 23
years. With a geoscientific and finance background
he has experience in the resources industry from
exploration through to development. Andrew brings
strong professional skills and experiences in equity
research, investor relations, valuations and capital
markets through his previous role as a Senior Resource
Analyst with PAC Partners Pty Ltd. He is also currently
Executive Director of ASX listed Okapi Resources
Limited and a Non-Executive Director of Resolution
Minerals Limited and Investigator Resources Limited.
With the collective skills and experience of the Board
of Directors and the quality of the halloysite-kaolin
Project at Great White (Poochera) and other prospects,
the Board is of the view that Andromeda Metals’ vision
to be a sustainable industrial minerals producer of
high-quality halloysite-kaolin is achievable and thus
providing shareholders with substantial financial return
on their investment in the Company.
Gold
DRUMMOND
Gold
PILBARA
Halloysite-Kaolin
CAMEL LAKE
Halloysite-Kaolin
POOCHERA
Halloysite-Kaolin
MOUNT HOPE
Copper Gold
MOONTA
Gold
EYRE PENINSULA
3
ANNUAL REPORT 2020 Chairman's message
I want to start this message in acknowledging the Board and staff of Andromeda Metals, led by our Managing
Director James Marsh. Without their combined exceptional and unflagging efforts, our Company would not have
achieved the success made over the course of this year. It is their tireless work that has continued to propel
Andromeda beyond our own expectations. While we continue to grow the size of our market capitalisation, we are
also continuing to grow the Board, workforce, consultants and advisors who have seamlessly complemented the
small dedicated Andromeda team I drew your attention to in my last address.
Fellow Shareholders, your support has been extraordinarily positive, engaging and much appreciated. The
attendance at last year’s AGM was an all-time high and in my experience a rare display of support for a junior
resource company. Last year I reflected on the share price and market capitalisation growth of Andromeda. I
suspect readers of this message are also reflecting on that growth this year. However, we as a Company do
not intend to rest on our laurels but reset our focus for the next 12 months to consolidate Shareholder value and
continue to grow it further.
We aim to continue to become a multifaceted development company specialising in ‘All Things Halloysite’ by not
only pursuing organic growth of our Mineral Resources, converting those Resources into Ore Reserves, improving
the quality of the feasibility studies and building a producing mine in South Australia, but to also encourage
different uses for Halloysite in multiple applications, some at the forefront of science and in areas that are likely to
play a part in reducing the global impact on the environment.
Building a sustainable company is not without its challenges and we recognise over the next 12 months there are
goals that need to be met with respect to the Great White Kaolin Project, including lodgement of the Mining Lease
application, completion of a definitive feasibility study to a high quality bankable standard as well as the locking
in of binding offtake agreements to support the price and volume demand estimates that have been made for our
product. We continue to explore opportunities to de-risk the Project by reviewing mining and processing options,
engaging with the mature international markets, looking closer at new domestic markets and optimising in-pit feed
sources. We have aligned our incentivisation plans for the Board and employees to that of achieving Shareholder
value by meeting the important milestone of commencement of mining the Great White deposit by February 2022.
Finally I take this opportunity to express gratitude to the partners and families of the Board and staff for supporting
our focus and the extra hours given to develop the Company in a very difficult 2020 working environment.
Thank you all for your interest and support and I look forward to 2021 with great enthusiasm.
Rhod Grivas
Chairman
Streaky Bay.
4
ANDROMEDA METALS LIMITED SOUTH
AUSTRALIA
Overview of projects
Great White Kaolin Project
SOUTH AUSTRALIA
Andromeda Metals earning up to 75% interest
Andromeda Metals currently holds a 51% equity
interest in the world class halloysite-kaolin Great White
Kaolin Project (previously known as the Poochera
Halloysite-Kaolin Project) under a joint venture formed
in April 2018 with Minotaur Exploration Limited (ASX:
MEP). The Project is located at Poochera on the Eyre
Peninsula of South Australia approximately 635 km
west by road from Adelaide and near the coastal town
of Streaky Bay. (refer figure 1).
Joint Venture Terms
Under the terms of the Great White Kaolin Joint
Venture, Andromeda is required to spend up to
$6 million dollars over 5 years to earn a 75% interest in
the Project. In March 2020 the Company completed
Stage 1 of the expenditure commitment by spending
$3 million in the first 2 years on the Project to earn a
51% interest and elected to sole contribute a further
$3 million over the following 3 years to move to a 75%
interest in the Great White Kaolin Project. Andromeda
will revert to an immediate 75% equity interest on a
decision to mine by the joint venture partners.
132°
134°
136°
138°
Camel Lake Halloysite Project
Tarcoola
Roxby Downs
S O U T H A U S T R A L I A
Woomera
Ceduna
Thevenard
Streaky Bay
Great White Kaolin Project
GREAT AUSTRALIAN BIGHT
Mt Hope Kaolin Project
Port Augusta
Whyalla
Kimba
Port Pirie
Lucky Bay
Kadina
30°
32°
34°
Main road
Railway
Town
Lake
Exploration Licence
100% ADN
Great White JV Tenements
Exploration Licence
Application
36°
AND SA08
Port Lincoln
Adelaide
0
100
200
Kilometres
Figure 1 Andromeda Metals' halloysite-kaolin project locations.
5
ANNUAL REPORT 2020 Overview of projects
Project Name Changes
In addition to renaming the project the Great White
Kaolin Project, the various deposits and prospects have
also been renamed based on a theme of sharks and
rays found in Australian waters, which was considered
appropriate given the propensity for sharks contained
within the waters surrounding the Eyre Peninsula.
The deposits and prospects previous and new names
are shown in Table 1 and locations in Figure 2
Table 1 New project nomenclature.
PREVIOUS NAME
NEW NAME
Carey’s Well Deposit
Great White Deposit
Condooringie Prospect
Hammerhead Prospect
Tomney Prospect
(East and West)
Tiger Prospect (East)
Bronze Whaler (West)
Karcultaby South Prospect Manta Prospect
Feasibility Studies
Scoping Study
A Scoping Study for The Great White Kaolin Project
was released on 30 September 2019 and was based
on the assumption of an initial direct shipping ore
(DSO) operation during the first two years while a
dry-processing plant is constructed and operational
during Year 3. Dry-processing of mined kaolinised
granite to remove the majority of the contained quartz
sand, generating significant transport and shipping
savings over DSO, is then shipped in bulk bags to Asia
for toll wet-refining in order to produce a premium
bright-white halloysite-kaolin product. The Scoping
Study results showed that the Project was a technically
sound and financially robust venture capable of
generating significant cash flows returning an NPV
before tax of $413M (using an 8% discount rate), an IRR
of 174% and payback of 15 months.
Updated Scoping Study
An update to the Scoping Study to consider wet-
processing of site rather than dry-processing was
undertaken and released on 6 April 2020, which
delivered significant improvements to the already
compelling project economics for the Great White
Kaolin Project. Under the Scoping Study update, a wet-
processing option which considers a low cost, highly
efficient and commercially available plant to be built
at site that produces a concentrated kaolinitic product
shipped in bulk in the form of filter cake rather than
bags for final toll wet-refining, has the advantage of
generating improved recoveries of refined kaolin clay
material that is made available for sale and a lower cost
per tonne for processing due to operating efficiencies of
the wet-processing plant under consideration.
Under the Updated Scoping Study, at a unchanged
assumed selling price of A$700/tonne, total life of
mine (LOM) revenues increased by 22% compared to
the Original Scoping Study, All In Sustaining Capital
(AISC) reduced over the LOM and total cumulative
420,000m E
Streaky Bay
440,000m E
Coolgrana
460,000m E
480,000m E
6,380,000m N
Lupina Downs
EL 6096
EL 5814
EL 6426
Poochera
Parraba
Chandada
Hammerhead
Streaky Bay
Inkster
Great White
Great White Kaolin Project
Whichelby
Maryvale
Manta
Tootla
Cor visart Bay
6,380,000m N
EL 6096
Oak Vale
Bronze Whaler
Tiger
EL 6426
Yandra
EL 5814
Conglima
Colley
Witera
Minta
EL 6426
Venus Bay
Sceale Bay
Sceale Bay
Searcy
Bay
Calca
EL 6202
Mount Hall
Calca
6,380,000m N
Drinan Vale
Bairds Bay
Highway
Main road
Road
Town
Homestead
Exploration
licence
Resource
Exploration target
6,380,000m N
Poochera 08
Figure 2 Great White Kaolin Project deposits and prospects.
6
0
10
20
Kilometres
Venus Bay
SOUTH AUSTRALIA
GREAT WHITE KAOLIN JOINT VENTURE
Location of tenure
25 September 2020
ANDROMEDA METALS LIMITED Overview of projects
cashflow generated over LOM by wet-processing
on site increases by 31%. Total capital costs were
only marginally higher under the wet-processing
scenario. Using an 8% discount rate, this gave the
Project an NPV of A$544M, an increase of A$131M
while the IRR remained virtually unchanged at 175%.
Both the Original and Updated Scoping Studies were
based upon the February 2019 Mineral Resource to
allow meaningful comparison of the two processing
alternatives and the same mine life of 15 years at
a processing rate of 500ktpa of kaolinised granite
applied. The Payback Period was the same under both
scenarios of 15 months.
Pre-Feasibility Study
A more detailed Pre-Feasibility Study (PFS) for the
Great White deposit was released on 1 June 2020.
The PFS built on the highly positive Updated Scoping
Study and reinforced the potential for the Great White
Kaolin Project to be a long-term supplier of high-quality
halloysite-kaolin product able to meet a growing global
demand from ceramics industry manufacturers and
hence generate significant cash flows for Andromeda.
The PFS was based upon an initial phase of mining
kaolinised granite as Direct Shipping Ore (DSO) and toll
wet-refining overseas to generate early cash flows that
would be used to fund construction of an onsite wet-
processing facility, and associated infrastructure during
the second year of operation. Production would then
be scheduled to convert to onsite wet-processing to
remove the majority of the contained quartz sand in the
mined kaolinised granite, and produce concentrated
kaolinitic product to be shipped in bulk as filter cake
for final toll wet-refining overseas in order to produce a
premium bright-white halloysite-kaolin product.
Both dry-processing and wet-processing at site
were evaluated during the study with wet-processing
proving to produce the significantly better project
economics. The prime advantages of onsite
processing by a wet rather than a dry method is that
it delivers greater recoveries of kaolin clay, and hence
the generation of considerably higher revenues, while
also providing lower site processing costs due to the
operating features of wet processing and efficiencies
of the plant design being considered. The inclusion of
a hot drying stage under wet-processing was made
in order to comfortably meet maximum shipping
moisture contents, with the benefit of recovering
condensed water that would subsequently reduce
the external water demand, and also lower tonnage-
based transport and shipping costs. Both the initial
bulk DSO material and wet-processed bulk filter cake
product would be shipped through existing, or under
development, port facilities.
7
ANNUAL REPORT 2020 Overview of projects
A summary of the key physical and financial statistics associated with both the PFS and the previous Updated
Scoping Study is shown in Table 2.
Table 2 PFS Key Great White Project statistics.
UPDATED SS
PFS
CHANGE
Mine plan – production target
From measured resources
From indicated resources
From inferred resources
Total production target
Capital costs
Initial capital costs
Working capital
Maximum cash requirement
Processing plant costs
Sustaining capital costs
Production summary
Mine life (years)
Processing rate of kaolinised granite (ktpa)
Stripping ratio (waste:ore)
Annual refined kaolin produced (ktpa)
Yield of refined kaolin (LOM average)
Project economics
4.2 Mt
3.4 Mt
0.0 Mt
7.6 Mt
$13M
$16M
$29M
$35M
$11M
15
500
2.3
227
45%
11.2 Mt
1.3 Mt
0.2 Mt
12.7 Mt
$13M
$15M
$28M
$56M
$15M
26
500
2.1
233
46%
+167%
-61%
Minimal
+67%
No Change
-6%
-3%
+60%
+36%
+70%
No Change
-9%
+3%
+1%
Refined premium kaolin price (AUD)
$700/t
$700/t
No Change
Revenue
AISC equivalent (LOM average)
EBITDA (LOM)
Pre-tax cashflow
Pre-tax NPV (8% discount rate)
Pre-tax IRR
After-tax cashflow
After-tax NPV (8% discount rate)
After-tax IRR
+74%
-5%
+86%
+88%
+35%
$2,379M
$4,136M
$374/t
$354/t
$1,109M
$2,058M
$1,049M
$544M
175%
N/A
N/A
N/A
$1,974M
$736M
175%
No Change
$1,389M
$511M
135%
New
New
New
Payback from start of site works
15 months
15 months
No Change
8
ANDROMEDA METALS LIMITED Overview of projects
Main street of Streaky Bay twonship.
The PFS was developed using the December
2019 Mineral Resource estimate (refer ADN ASX
announcement dated 23 December 2019 titled
“Significant Increase in Mineralised Resource for the
Poochera Kaolin Project”) of 26.0Mt of Measured,
Indicated and Inferred kaolinised granite.
A mining rate of 500ktpa of raw material for the
12.7Mt Production Target over a 26-year mine life was
assumed, producing on average 233ktpa of refined
premium halloysite-kaolin product with a 15% average
LOM halloysite content.
Total cumulative cash flow generated over the LOM
was A$1,974M (pre-tax). At an assumed discount rate
of 8%, the Project showed an NPV of A$736M (Pre-
Tax), an IRR of 175% and payback of initial capital
and operating expenditures within 15 months from
commencement of operations.
Great White Mineral Reserve
A maiden Ore Reserve Estimate for the Great
White Deposit of 12.5Mt was announced on 10 July
2020. The Ore Reserve Estimate, comprising of 15%
halloysite and 78% kaolinite in the minus 45 micron
fraction, consisted entirely of Probable Reserves in
accordance with the 2012 JORC Code guidelines and
had been derived from the Measured and Indicated
Mineral Resources contained within the December
2019 Mineral Resource Estimate announced on
23 December 2019, and is shown in Table 3 below. The
Table 3 Great White Ore Reserve estimate.
Ore Reserve supports a 26-year mine life at a mining
rate of 500,000 tpa which is the basis under which the
PFS was prepared.
Hammerhead Resource
A 2,000 metre aircore drilling program was
undertaken in May 2020 at the Hammerhead
(formerly Condooringie) Prospect, which is
approximately 5 km northeast of the Great White
deposit, to follow up on a high-grade halloysite
zone located 1 km north of drilling undertaken at
Condooringie in December 2019, which significantly
extended the kaolin zone to the south and
allowing for an initial Mineral Resource estimate for
Hammerhead to be prepared.
Camel Lake Halloysite Project
The Camel Lake Halloysite Project, which is located
approximately 350 km north-west of the Great White
deposit and has reported historical occurrences of
near pure halloysite, is part of the Great White Kaolin
Project Joint Venture with Minotaur.
An introductory meeting with the Maralinga Tjarutja
Council, who are the traditional landowners on
which the Camel Lake tenement is located, was held
following the year end in August 2020 with a very
positive response received. Andromeda is now working
towards heritage clearance for the exploration areas
so that sampling can be undertaken.
TONNES
MT
GRADE
% -45µm
MINERAL CONTENT
% OF -45µm FRACTION
HALLOYSITE + KAOLINITE
% OF -45µm FRACTION
CATEGORY
Proven
Probable
Total
0.0
12.5
12.5
0
52
52
HALLOYSITE
KAOLINITE
0
15
15
0
78
78
Note that all figures are on a 100% Project basis and rounded for appropriate levels of confidence.
0
93
93
9
ANNUAL REPORT 2020 industry and sapphire glass (smart phones and
TV screens) remains of interest, and a number of
opportunities are under consideration.
These additional market opportunities were not
considered in the PFS work, but represent significant
potential future opportunities and further de-risking
of the project, so may be included in the Definitive
Feasibility Study which is currently underway.
Moving forward
The anticipated timeline for the Project development
is to conduct environmental impact assessments over
the balance of the 2020 calendar year and prepare
a mining lease application targeted to be lodged in
early 2021. Subject to satisfactory progress negotiating
agreements with key stakeholders, obtaining of all
necessary regulatory approvals and completion of
a Definitive Feasibility Study, commencement of site
activities is targeted for early 2022 with first product
sales possible in mid-2022.
Overview of projects
New exploration licences
Two exploration licence applications considered
prospective for halloysite-kaolin were lodged for
large areas adjacent to the Great White and Camel
Lake Projects. Mount Cooper covers 648 km2 directly
south and east of the three tenements at Great White
where previous drilling had encountered considerable
high-purity halloysite, and Dromedary covers 481 km2
bordering the Camel Lake tenement to the north, east
and south and has been secured as part of a strategy
to explore for further high-purity halloysite occurrences.
Market opportunities
Marketing activity for the PFS focussed on confirmation
of product market pricing and current demand, along
with production of large amounts of commercially
representative products to be used to secure customer
offtake agreements. Market pricing for Andromeda’s
premium grade halloysite-kaolin was indicated by
end users and commercial contacts in China, Japan
and Europe along with independent consultants.
Production of commercial quantities of final product
was completed and will now be distributed to potential
customers to secure offtake agreements.
A visit to China was made in June/July 2019 that
confirmed a significant demand for both halloysite-
kaolin ore and dry-processed product by numerous
potential Chinese customers. As a result, a number
of non-binding offtake Letters of Intent (LOI) were
received over the 2019 September quarter giving
307,000tpa of non-binding offtake LOIs for the dry-
processed product in addition to the previous total
of 405,000tpa of DSO and the 208,000tpa of wet-
refined product, which is the premium grade for the
ceramics industry.
Testing of product was expanded to new applications
to reduce dependence on the Chinese ceramic
industry and to investigate potentially higher value
business in Australia and overseas. This included
concrete and mine backfill applications where initial
results are extremely promising.
Other samples are also being tested in coatings (paint
and ink) applications as was for remediation.
The additional potential kaolin market areas of
High Purity Alumina (HPA) production for use in the
manufacture of high-tech products such as the
battery and energy storage sector, LED lighting
10
ANDROMEDA METALS LIMITED SOUTH
AUSTRALIA
520,000m E
530,000m E
540,000m E
550,000m E
EL 6286
6,230,000m N
Hall Bay
Brimpton Lake
Mt Hope
Kaolin Project
Mount Hope
6,220,000m N
Mt Hope Kaolin Deposit
6,210,000m N
0
5
10
Kilometres
Mt Hope 02
Kapinnie
Highway
Main road
Road
Railway
Town
Exploration licence
Historic drillhole
SOUTH AUSTRALIA
MT HOPE KAOLIN PROJECT
Location of tenure
10 August 2020
Figure 3 Mount Hope tenement, EL 6286.
Overview of projects
Mount Hope Kaolin Project
SOUTH AUSTRALIA
Andromeda Metals 100%
The 100% owned Mount Hope Kaolin deposit is
located on EL 6286, approximately 80 km northwest of
Port Lincoln and 160 km southeast of the Great White
Kaolin Project on the west coast of South Australia’s
Eyre Peninsula (Figure 3).
The Mount Hope tenement had previously reported a
non-JORC kaolin resource of 12.26Mt in 1973. In March
2020, the Company undertook an aircore drilling
program comprising 40 holes for 1,383 metres to
verify the central portion of the historic kaolin resource
in order to estimate a revised Mineral Resource
compliant with the JORC 2012 Code and to obtain
fresh material for testwork to determine suitability for
various applications.
Assay results received from this drilling program were
released to the market subsequent to the end of the
June quarter which delivered significantly high bright
white kaolin intersections (above 80 ISO Brightness)
across the historic kaolin resource. Some areas
of the Mount Hope deposit returned high levels of
halloysite (>20%) that is similar to the existing resource
at Great White. However, a substantial portion of the
deposit showed exceptionally low iron contaminant
within the bright white kaolin rarely found elsewhere
in the world, with halloysite levels ideally suited to
some high-value markets in specialist coatings and
polymers. This has opened up a new and potentially
significant market opportunity for Andromeda to
explore in addition to the high-value ceramic market
and thereby provides the Company with excellent
market diversification and de-risking in addition to
potentially adding further significant value to the
business as a whole. Large scale samples of this
high-purity kaolin material have been sent to the UK
for specialist processing and application testing along
with some equivalent material from Great White.
In August 2020 Andromeda released an Inferred
Resource Estimate of 18.0Mt of kaolinised granite for
the Mt Hope Kaolin Deposit that is compliant with the
2012 JORC Code.
11
ANNUAL REPORT 2020 Overview of projects
Halloysite Intellectual Property Joint Venture
SOUTH AUSTRALIA
Andromeda Metals 50%
Andromeda Metals and Minotaur Exploration formed
the 50:50 Intellectual Property Joint Venture company
Natural Nanotech Pty Ltd in May 2019 to undertake
research and hold title to any intellectual property
developed in relation to new technology innovations
created for halloysite application and uses along with
the commercialisation of potential opportunities. A
collaboration with the University of Newcastle’s Global
Innovation Centre for Advanced Nanomaterials
(GICAN) has seen significant progress made with
research in a number of areas including carbon
capture/storage/conversion, water purification and
energy systems. In October 2019 Andromeda secured
a matched Commonwealth grant for a total of up
to $100,000 to be spent on research conducted by
GICAN into the use of halloysite nanotubes for use as
a safe means for hydrogen storage.
GICAN are in the process of constructing a pilot
plant to assist commercialisation of the carbon
capture technologies, which will be operation before
the end of 2020.
Potential applications for halloysite nanotube
(HNT) technology.
12
ANDROMEDA METALS LIMITED Overview of projects
Drummond Epithermal Gold Project
QUEENSL AND
Andromeda Metals 100%. (Evolution Mining Limited
currently earning up to 80% interest)
QUEENSLAND
The Drummond Epithermal Gold Project comprises five
tenements securing a total area of 539km2 in the gold
prospective Drummond Basin in northern Queensland.
The Drummond Basin is prospective for high grade
epithermal gold deposits such as Pajingo which has
produced approximately 3 million ounces of gold.
Joint Venture with Evolution Mining
On 31 August 2018, the Company entered into a binding
Earn-in and Exploration Joint Venture Agreement
with Evolution Mining Limited (ASX: EVN) over the
Drummond Epithermal Gold Project which would see
up to $6.5 million spent over 4 years by an experienced
Australian gold miner in the region to earn up to an
80% equity interest in the Project. On execution of the
Agreement, the Company received a $300,000 cash
payment with a requirement that Evolution sole fund
$2 million on exploration activities across the Project
tenements within 2 years from the date of signing the
Joint Venture Agreement (Stage 1 Commitment).
On 11 September 2019, following confirmation by
the Company that Evolution had met the Stage 1
expenditure commitment, Evolution gave notice of its
decision to proceed with Stage 2 requiring it to spend
a further $4 million over the next 2 years to move to an
80% equity interest in the Project. Andromeda received
a second cash payment of $200,000 from Evolution on
their decision to proceed with Stage 2 as per the terms
of the joint venture agreement.
500,000m E
520,000m E
540,000m E
EPM 18090
Glenroy
EPM 25660
Gunthorpe
EPM 26154
Sandalwood Creek
EPM 25660
Gunthorpe
EPM 27501
Packhorse Creek
7,740,000m N
7,720,000m N
7,700,000m N
Drummond
Location
Cairns
Townsville
Charters Towers
Mount Isa
Exploration during the year
The diamond drilling program
which commenced in May
2019, was finalised in the first
quarter on the 2019/20. A total
of 10 holes for 4,568 metres
were drilled with 5 holes for
2,159.7 metres at Bunyip and
5 holes for 2408.3 metres
drilled at South West Limey.
Assays returned only modest
results with a highest intercept
achieved at Bunyip of
3.42g/t Au from 7 metres while results at South West
Limey returned only narrow low grade intersections.
Drummond_13
Figure 4 Location of
Drummond Project.
QUEENSLAND
DRUMMOND
Longreach
Brisbane
Mackay
Field activities were suspended from early 2020 for
the remainder of the financial year due to COVID-19
restrictions. However subsequent to the end of the
year field exploration activities on the Drummond
Gold Project resumed with a RC drilling program,
incorporating diamond tails, to test a 300 metre strike
length target of the Roo Tail Breccia, which is located
at the southern end of the South West Limey Prospect,
commencing in late September 2020.
In addition to drilling, Evolution conducted the following
exploration activities across the Project during the year:
• extended the geological mapping of the Limey
Trend (from South West Limey to North Limey along
a 2.5 km strike length);
• completed an extension to the ground magnetic
survey north of South West Limey along the Limey
Trend to North Limey;
• undertook a soil sampling program over the Stones
Creek Volcanics;
• completed an airborne hyperspectral survey across
significant areas of the tenement package with
the data collected identifying a number of discrete
pyrophyllite anomalies;
• performed geological mapping and soil sampling of
Drummond Project
the Breccia Hill prospect;
• conducted an initial reconnaissance visit to the
Mt Wyatt tenement;
Road
Track
River
Exploration licence
• completed significant track upgrades to provide
access for further regional and remote work across
the Drummond Project;
QUEENSLAND
DRUMMOND PROJECT
Location of tenure
31 October 2020
• made application on behalf of the joint venture
on vacant ground (Packhorse Creek) adjacent to
EPM 25660 following identification of an anomaly
resulting from the airborne hyperspectral survey.
7,680,000m N
EPM 26155
Mount Wyatt
Drummond 12
0
10
20
Kilometres
Figure 5 Location of tenure at Drummond Project.
13
ANNUAL REPORT 2020 Overview of projects
Moonta Copper-Gold Project
SOUTH AUSTRALIA
SOUTH
AUSTRALIA
Andromeda Metals 100%
(except Moonta Porphyry JV: Andromeda Metals 90%, Minotaur Exploration
10%). Environmental Metals Recovery currently earning up to a 75% interest)
The Moonta Copper-Gold Project falls near the
southern end of the world class Olympic Copper-Gold
Province in South Australia. The Olympic Copper-Gold
Province is highly prospective for Iron Oxide Copper
Gold (IOCG) deposits, with Olympic Dam, Prominent Hill
and Moonta-Wallaroo being three mines with past or
current production. OZ Minerals is now also developing
a mine at the Carrapateena deposit.
Moonta ISR Copper Joint Venture
In December 2018, the Company executed a
binding Earn-in and Joint Venture Agreement with
Environmental Metals Recovery Pty Ltd (EMR) to form
the Moonta ISR Joint Venture covering the northern
part of the 100% owned Moonta tenement EL 5984 in
South Australia. EMR can earn an initial 51% interest in
the Project Area by sole funding $2.0 million on project
related activities across the Project Area within four
years of execution of the Joint Venture Agreement
(Stage 1 Commitment). It can elect to acquire an
additional 24% equity interest (75% in total) through
expenditure of an additional $3.5 million ($5.5 million in
total) over a further 3.5 years (7.5 years in total) (Stage
2 Commitment).
EMR is an Australian private company comprising a
team of senior mining professionals with extensive
experience in mine development and operations,
including ISR production in South Australia. EMR is an
entity associated to Environmental Copper Recovery SA
Pty Ltd that is currently advancing the Kapunda Copper
ISR Project and comprises the same project team.
The Project Area defined by the Joint Venture
Agreement is considered to have attributes that are
prospective for hydrometallurgical in-situ recovery
application and significant technical due diligence
has been completed by EMR personnel to date. The
Bruce and Wombat prospects within the Project Area
are seen to possess a number of critical attributes that
may allow hydrometallurgical ISR copper production.
Both prospects are characterised by deeply
developed weathering troughs that extend hundreds
of metres below the surface. The rock to both the
north and south of the weathering troughs are fresh
and impermeable while the trough material contains
copper mineralisation that is oxidised, porous and likely
permeable, and is situated below the water table and
sea level. Both prospects remain open along strike,
presenting opportunities to find further mineralisation in
the trough extensions.
Major copper/gold deposit
137°30'E
-33°50'S
137°40'E
137°50'E
Challenger
Prominent Hill
Olympic
Copper-gold
province
Olympic Dam
Oak Dam
Khamsin
Carrapateena
SOUTH
AUSTRALIA
-34°00'S
SPENCER GULF
Alford West
Wombat
Tomahawk
Wallaroo
Willamulka
Kadina
West Doora
Doora
Vulcan
Paskeville
Copper Hill East
Paskeville
Port Hughes
Moonta
EL 5984
Moonta Tenement
0
SA_05
200
kilometres
Hillside
Adelaide
0
-34°10'S
Moonta_05
10
kilometres
Lat/Long GDA 94
Figure 6 Location of Moonta tenement.
Figure 7 EL 5984 project location map.
Moonta ISR JV
Moonta Project (ADN 100%)
Moonta Porphyry JV (ADN 90%)
Prospect
Main road
14
ANDROMEDA METALS LIMITED Overview of projects
In-situ recovery is a production process used to recover
minerals using a fluid circulated via drilled wells. During
the process a leaching solution (or “lixiviant”) is injected
into the mineralisation via a borehole, passes through
the deposit leaching the target commodity, and is
returned to the surface via a second bore where the
dissolved metal is extracted from solution by SXEW or
ion exchange in a processing plant. The costs of ISR
are substantially below those of conventional mining,
allowing production from much lower grade deposits.
Importantly, as no significant surface disturbance
is required, an ISR operation could conceivably be
conducted in conjunction with current agricultural land
use, and once completed have little on-going impact.
The Company still retains 100% ownership of a
significant amount of the tenement, which is highly
prospective for copper mineralisation and located at
the southern end of the Olympic Copper-Gold Domain.
The ground contains the Willamulka, Paskeville, Copper
Hill East and West Doora prospects amongst others
and Andromeda Metals is continuing to seek potential
third party funding to advance this area of the Project.
Financial year activity
During the first quarter of 2019/10, EMR completed a
JORC 2012 Mineral Resource Estimate incorporating
historical drilling results from a number of copper
prospects over the area of interest covered by the joint
venture. The results from this work has determined an
Inferred Resource of 66.1 million tonnes grading 0.17%
Cu, containing 114,000 tonnes of contained copper at
a cut-off grade of 0.05% Cu.
Composite samples from the Bruce, Larwood and
Wombat prospect, which included elevated levels
of copper and gold, were the subject of mineral
characterisation testing by XRD and QEM scanning
followed by a series of bottle roll leach tests designed
to determine recoveries using a number of different
lixiviant/oxidant combinations. Results show that the
main copper species found at Wombat is readily
leachable using various reagents as lixiviants in
recovering copper and gold under both acid and
alkaline conditions.
Evaluation of historical geophysical and
hydrogeological data also occurred during the year
in addition to Hylogger spectral scanning of historic
Wombat diamond core.
Pilbara Gold Project
W EST ER N AUSTR AL IA
Andromeda Metals 100%
WESTERN
AUSTRALIA
The Pilbara Gold Project comprises four tenements
covering a total of 396 km2 located in the Pilbara
region of Western Australia. The Pilbara region
has attracted significant attention following the
discovery by Novo Resources (TSX-V: NVO) of gold
mineralisation hosted in conglomerate occurring
near the base of the Fortescue Group, a sequence
of Archaean volcanic and sedimentary rocks that out
crop over extensive areas in the Pilbara.
This style of mineralisation is potentially analogous
to the conglomerate hosted gold deposits of the
Witwatersrand which have produced in excess of
1 billion ounces of gold, and so represent attractive
exploration targets.
Financial year activity
During the year application was made to acquire
a new tenement E43/1336, which is adjacent to
the Company’s E 46/1196 tenement, to add to the
Pilbara Gold Project portfolio. The new tenement has
evidence of historical alluvial gold workings and past
metal detecting for nuggets, with gold anomalous
rock chips encountered over the 14 km of strike.
However no drilling has been completed over the
tenement other than two shallow holes previously
drilled for uranium.
Andromeda is currently considering how best
to move the Pilbara Gold Project forward given
the focus of the Company is directed towards
development of the Great White Kaolin Project.
15
ANNUAL REPORT 2020 Overview of projects
Eyre Peninsula Gold Project
SOUTH AUSTRALIA
Andromeda Metals 100%
(Cobra Resources PLC earning up to a 75% equity interest)
The Eyre Peninsula Gold Project comprises six
tenements that total 1,928 km2 in the Central Gawler
Craton Gold Province of South Australia. The project
includes the Wudinna Gold Camp, a cluster of deposits
and earlier stage prospects that include the Barns,
Baggy Green and White Tank deposits.
Wudinna Gold Farm-In and Joint Venture
On 31 October 2017, the Company executed a binding
Heads of Agreement with Lady Alice Mines Pty Ltd
(LAM) to form the Wudinna Gold Farm-in and Joint
Venture. LAM was subsequently acquired by listed
London Stock Exchange entity Cobra Resources PLC
(Cobra). Cobra comprises a Board of highly regarded
mining executives with significant resource company
experience both in Australia and overseas.
Stage 1 of the Farm-in requires Cobra to sole fund
$2.1 million by 30 October 2020 to earn 50% equity
in the project. After completion of Stage 1 Cobra can
elect to form a joint venture or else earn up to 75%
equity by sole funding a further $2.9 million in two
additional stages.
Following a request received from Cobra to extend
the Stage 1 earn-in timeframe due predominantly to
COVID-19 travel restrictions, the Company agreed to
grant a two month extension to 31 December 2020 for
Cobra to meet its $2.1 million expenditure commitment
under the joint venture agreement.
SOUTH
AUSTRALIA
Exploration during the year
Results from 3 geochemical sampling programs
conducted over a number of prospects during the
second half of 2019/20 by Cobra, which included
multi-element geochemical analysis, has identified
a unique and distinctive chemical footprint for gold
mineralisation which Cobra believes will improve
drill targeting of gold mineralisation across the Eyre
Peninsula Gold Project.
Subsequent to the end of the year, Cobra
commenced a substantial RC drilling program over
a number of prospects across the Project. A total of
45 holes for 6,750 metres is targeted with the primary
objective to define the orientation and extensions of
mineralisation at various areas prospective for gold.
Cobra’s stated aspirational aim is to build on the
current Mineral Resource of 211,000 ounces towards
an initial target of 1 million ounces of gold resource
across the Project area.
550,000mE
600,000mE
Barns/White Tank
Paris Silver
Deposit
Wudinna
Gold Camp
6,350,000mN
Baggy Green
Wudinna
SOUTH AUSTRALIA
Eyre Peninsula Gold JV
Kimba
Adelaide
0
25
kilometres
Eyre_06
Andromeda Metals Exploration Licence
Figure 8 Location of Eyre Peninsula project tenements.
16
ANDROMEDA METALS LIMITED Schedule of tenements
as at 30 June 2020
TENEMENT
TENEMENT NAME
AREA KM2
REGISTERED HOLDER OR APPLICANT
NATURE OF COMPANY'S INTEREST
SOUTH AUSTRALIA
Wudinna Gold Joint Venture
EL 6317
EL 6131
EL 6489
EL 5953
EL 6001
EL 6262
Pinkawillinie
Corrobinnie
Wudinna Hill
Minnipa
Waddikee Rocks
Acraman
Moonta Copper Gold Project9
EL 5984
Moonta-Wallaroo
EL 5984
Moonta Porphyry JV
156
1303
42
184
147
96
713
106
Great White Kaolin Project
EL 5814
EL 6096
EL 6202
EL 6426
Tootla
Whichelby
Mt Hall
Mt Cooper
Camel Lake Halloysite-Kaolin Project
EL 6128
Camel Lake
ELA 2019/73
Dromedary
Mt Hope Halloysite-Kaolin Project
372
447
147
684
455
481
Peninsula Resources Ltd¹
Peninsula Resources Ltd
Peninsula Resources Ltd
Peninsula Resources Ltd
Peninsula Resources Ltd
Peninsula Resources Ltd
Peninsula Resources Ltd
Peninsula Resources Ltd
100%
100%
100%
100%
100%
100%
100%
90% - option to acquire
100% from Minotaur Exploration Ltd
Great Southern Kaolin Pty Ltd2
ADN 51%, GSK 49%
Minotaur Operations Pty Ltd3
ADN 51%, MOP 49%
Minotaur Operations Pty Ltd
ADN 51%, MOP 49%
Minotaur Operations Pty Ltd
ADN 51%, MOP 49%
Minotaur Operations Pty Ltd
ADN 51%, MOP 49%
Minotaur Operations Pty Ltd
ADN 51%, MOP 49%
EL 6286
Mt Hope
227
Andromeda Industrial
Minerals Pty Ltd4
100%
17
ANNUAL REPORT 2020 TENEMENT
TENEMENT NAME
AREA KM2
REGISTERED HOLDER OR APPLICANT
NATURE OF COMPANY'S INTEREST
QUEENSLAND
Drummond Gold Project6
EPM 18090
Glenroy
196
Adelaide Exploration Pty Ltd5
EPM 25660
Gunthorpe
74
Adelaide Exploration Pty Ltd
EPM 26154
Sandalwood Creek
109
Adelaide Exploration Pty Ltd
EPM 26155
Mount Wyatt
144
Adelaide Exploration Pty Ltd
EPMA 27501
Packhorse Creek
16
Adelaide Exploration Pty Ltd
ADN 100%,
EVN earning 80% over 48 months
ADN 100%,
EVN earning 80% over 48 months
ADN 100%,
EVN earning 80% over 48 months
ADN 100%,
EVN earning 80% over 48 months
ADN 100%,
EVN earning 80% over 48 months
WESTERN AUSTRALIA
Pilbara Gold Project
E 46/1196
East Rooneys
E 46/1336
(Application)
Rooneys
E 08/2954
Wyloo
E 08/2955
Cheela Plains
54
95
124
123
Frontier Exploration Pty Ltd7
Frontier Exploration Pty Ltd
Mylo Gold Pty Ltd8
Mylo Gold Pty Ltd
100%
100%
100%
100%
1 Peninsula Resources Ltd (incorporated 18 May 2007) is a wholly owned subsidiary of Andromeda Metals Ltd.
2 Great Southern Kaolin Pty Ltd ("GSK") is a wholly owned subsidiary of Minotaur Exploration Ltd.
3 Minotaur Operations Pty Ltd ("MOP") is a wholly owned subsidiary of Minotaur Exploration Ltd.
4 Andromeda Industrial Minerals Pty Ltd (incorporated 9 August 2018) is a wholly owned subsidiary of Andromeda Metals Ltd.
5 Adelaide Exploration Pty Ltd (incorporated 13 July 2001) is a wholly owned subsidiary of Andromeda Metals Ltd.
6 Andromeda Metals Ltd has formed a Joint Venture with Evolution Mining Ltd ("EVN") over the Drummond Epithermal Gold Project.
7 Frontier Exploration Pty Ltd (acquired 21 December 2017) is a wholly owned subsidiary of Andromeda Metals Ltd.
8 Mylo Gold Pty Ltd (acquired 21 December 2017) is a wholly owned subsidiary of Andromeda Metals Ltd.
9 Andromeda Metals Ltd has partnered with Environmental Metals Recovery Pty Ltd ("EMR") to form the Moonta ISR Joint Venture.
18
ANDROMEDA METALS LIMITED Competent Person
and JORC 2012
Compliance Statements
Corporate governance
Andromeda Metals and the Board are
committed to achieving and demonstrating the
highest standards of corporate governance.
The Company has reviewed its corporate
governance practices against the Corporate
Governance Principles and Recommendations
(3rd Edition) published by the ASX Corporate
Governance Council.
The corporate governance statement for the
year ended 30 June 2020 can be viewed on the
Company’s website at www.andromet.com.au.
COMPETENT PERSON STATEMENTS
Information in this report has been compiled by
Mr James Marsh a member of The Australasian
Institute of Mining and Metallurgy (AusIMM).
Mr Marsh is an employee of Andromeda
Metals Limited who holds shares and options
in the company and has sufficient experience,
which is relevant to the style of mineralisation,
type of deposits and their ore recovery
under consideration and to the activity being
undertaking to qualify as Competent Persons
under the 2012 Edition of the ‘Australasian
Code for reporting of Exploration Results,
Mineral Resources and Ore Reserves’ (JORC
Code). This includes Mr Marsh attaining over
30 years of experience in kaolin processing
and applications. Mr Marsh consents to the
inclusion in the report of the matters based on
the information in the form and context in which
it appears.
The data in this report that relates to Mineral
Resource Estimates is based on information
thoroughly reviewed by Mr Eric Whittaker who
is a Member of the Australasian Institute of
Mining and Metallurgy (MAusIMM). Mr Whittaker
is the Chief Geologist of Andromeda Metals
Limited and has sufficient experience relevant
to the style of mineralisation and type of deposit
under consideration and to the activity which
he is undertaking 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
(the “JORC Code”). Mr Whittaker consents to
inclusion in this document of the information in
the form and context in which it appears.
19
ANNUAL REPORT 2020 Statutory reports
Directors’ report
The directors present this Directors’ Report and the attached annual financial report of Andromeda Metals Limited
for the financial year ended 30 June 2020. In order to comply with the provisions of the Corporations Act 2001, the
directors report as follows:
DIRECTORS
The names and details of the directors of the Company during or since the end of the financial year are:
Mr Marsh has been instrumental
in developing and launching
industrial minerals products into
established and new applications
globally and has a successful track
record in general management
and sales.
Nicholas J Harding
BA (Acc), Grad Dip (Acc), Grad Dip
(App Fin), Grad Dip (Corp Gov),
FCPA, F Fin, AGIA, ACIS
Executive Director and Company
Secretary
Nick Harding is a qualified
accountant and company
secretary with over 30 years’
experience in the resources
industry. He is a Fellow of
CPA Australia, a Fellow of the
Financial Services Institute of
Australasia and a member of the
Governance Institute of Australia
and possesses qualifications in
accounting, finance and corporate
governance.
Mr Harding has held various
senior roles with WMC Resources
Limited, Normandy Mining Limited
and Newmont Australia Limited. At
WMC Resources over a period of
14 years to 1999 he held a number
of senior management roles at
both minesites and regional offices
in Western Australia and South
Australia including five years as
Chief Financial Officer for Olympic
Dam Operations, and four years
as Chief Accountant and Business
Planning Manager for the Copper
Uranium Division.
In eight years from 1999 to 2006
at Normandy Mining and then
Newmont Australia following
the takeover by Newmont of
Normandy, Mr Harding held the
positions of General Manager
Operations Finance and
General Manager Planning and
Analysis which respectively had
responsibilities for accounting,
finance and budgeting for 14
mining operations in Australia and
overseas.
Joseph F Ranford
BEng (Mining), MBA, FAusIMM,
GAICD
Operations Director – commenced
8 April 2020
Joe Ranford is a mining engineer
with significant experience gained
in senior management roles he
has held with both domestic and
international mining companies.
Most recently he held the role as
Chief Operating Officer for Nordic
Gold Inc., a Canadian based
company which was the previous
owner of the Laiva Gold Mine in
Finland, where he re-established
mining operations and brought
the project back into production
from care and maintenance. Prior
to that time Joe was Operations
Manager for Terramin Australia
Limited where he managed all
operational and technical aspects
of the Angas Zine Mine and
championed the evaluation and
approval processes for the Bird
in Hand Gold Project, both in the
community sensitive Adelaide Hills
district of South Australia
Rhoderick G J Grivas
BSc (Geology), MAusIMM
Non-Executive Chairman
Rhod Grivas is a geologist with
over 30 years resource industry
experience, including 20 years
ASX listed company board
experience. He is currently Non-
Executive Chairman of several
ASX listed resource companies
and was previously Managing
Director of ASX and TSX listed gold
miner Dioro Exploration NL, where
he oversaw the discovery and
development of a gold resource
through feasibility into production.
Mr Grivas has a strong
combination of equity market,
M&A, commercial, strategic
and executive management
capabilities. He is the Chairman of
the Remuneration Committee and
a member of the Audit and Risk
Committee.
James E Marsh
BSc (Hons), MAusIMM
Managing Director
James Marsh is an industrial
chemist and holds tertiary
qualifications in chemistry
and physics. He has extensive
experience across a wide range
of industrial minerals spanning a
30 year period, including senior
technical and marketing roles with
two global market leaders. He
previously worked for 7 years as
Business Development Manager
for Active Minerals Australia, part
of the Active Minerals International
group, a worldwide leader in the
production and marketing of kaolin
and gel quality attapulgite clay
minerals.
20
ANDROMEDA METALS LIMITED Directors’ report
Andrew N Shearer
BSc (Geology), Hons (Geophysics),
MBA
Non-Executive Director
Audit and Risk Committee
Chairman
Andrew Shearer has been involved
in the mining and finance industries
for 25 years. With a geoscientific
and finance background he
has experience in the resources
industry from exploration through
to development. As a Resources
Analyst, Mr Shearer has been
exposed to the global resources
sector covering small to mid-
cap resource stocks across a
broad suite of commodities.
Prior to moving into the finance
sector he spent over a decade
working in the minerals exploration
industry in technical and senior
management roles.
Most recently Mr Shearer held
the position of Senior Resource
Analyst at PAC Partners Pty Ltd, a
well-respected and trusted and
corporate advisor of companies.
His industry experience has
included senior management
experience and technical roles
with Mount Isa Mines, Glengarry
Resources and the South
Australian Government.
Mr Shearer is currently a Non-
Executive Director of ASX listed
Okapi Resources Limited (OKR),
Investigator Resources Limited
(IVR) and Resolution Minerals
Limited (RML).
Mr Shearer is the Chairman of
the Audit and Risk Committee
and a member of the
Remuneration Committee.
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other listed companies held by directors in the three years
immediately before the end of the financial year are as follows:
NAME
COMPANY
PERIOD OF DIRECTORSHIP
R G J Grivas Golden Mile Resources Limited From March 2017 to present
Aldoro Resources Limited
From November 2019 to present
Okapi Resources Limited
From June 2020 to present
A N Shearer Resolution Minerals Limited
From March 2017 to present
Okapi Resources Limited
From July 2020 to present
Investigator Resources Limited From July 2020 to present
PRINCIPAL ACTIVITIES
The principal activity of the Group is the advancement of the Great White
Kaolin Project through the completion of detailed Feasibility Studies and a
Mining Lease submission that will allow the Company to be in a position
to make a decision to mine should the economic evaluation of the Project
prove to be positive.
OPERATING AND FINANCIAL REVIEW
Strategy
To achieve the goal of growing shareholder wealth, Andromeda Metals’
directors have formulated a Company strategy comprising the following
key elements:
• The Company will maintain a focus on advancing the Great White
Kaolin Project through final Feasibility Studies and Mining Lease
submission to eventual development and production, should final
economic modelling determine this to be commercially viable.
Consideration of a number of production streams, including direct
shipping of raw ore, product beneficiation on site of raw material
through wet-processing for sale of processed kaolin to ceramic
manufactures in globally, possible downstream production of
High Purity Alumina (HPA) product and halloysite nanotechnology
opportunities, will be evaluated. Evaluation of the recently identified
concrete additive application will also be undertaken. Directors see
the market for quality halloysite-kaolin product and HPA to be growing
rapidly, and that the Great White Kaolin Project is a world-class deposit
capable of supplying this rapidly expanding market.
• The Company will fund research to assist in the development of new
market opportunities for halloysite-kaolin given the high purity halloysite
found at Poochera, Camel Lake and Mount Hope and the forecast
growth in demand for the product in emerging markets.
• The Company’s Board believes it is in shareholders’ best interests to
divest or enter joint venture arrangements for most of its portfolio of
gold and copper projects in order to allow Andromeda Metals to focus
of the advancement of the Great White Kaolin Project. To that end, joint
ventures with Evolution Mining Limited over the Drummond Epithermal
Gold Project, Cobra Resources PLAC over the Eyre Peninsula Gold
Project and Environmental Metals Recovery Pty Ltd over the northern
part of the Moonta Copper-Gold Project have been executed. In
addition, the Company sold the Rover Copper-Gold Project to a
21
ANNUAL REPORT 2020 Directors’ report
wholly owned subsidiary of Westgold Resources
Limited during the financial year and is currently
seeking interest from third parties for the Pilbara
Gold Project.
• The Company will adhere to principles of good
corporate governance, caring for its employees,
conducting its operations in an environmentally
sensitive manner, and maintaining respect for other
stakeholders and for the communities in which
it operates.
Financial results
The net result of operations for the year was a loss
after income tax of $3,447,274 (2019: loss of $1,113,181).
Exploration and evaluation expenditure for the
year was $3,175,536 (2019: $1,237,102) with funds
predominantly directed towards advancing the Great
White Kaolin Project. Net operating cash outflows for
the year totalled $1,081,686 (2019: $788,261). At the
30 June 2020 the Company held cash and cash
equivalents totalling $2,998,626 (2019: $1,669,188).
On 25 October 2019 the Company raised $3,997,199
before costs under a share placement to professional
and sophisticated investors at an issue price of
4.7 cents per share which resulted in the issue of
85,046,790 ordinary shares.
During the year the Company raised $1,072,978
through the issue of 89,414,679 listed options with
an exercise price of $0.012 and expiry date of
30 November 2020 and $30,000 through the issue
of 2,500,000 unlisted options with an issue price of
$0.012 and expiry date of 15 November 2021.
Exploration and evaluation activities
During the 2019/20 financial year Andromeda Metals’
exploration and evaluation effort was directed principally
towards advancing the Great White Kaolin Project which
is the subject to a Joint Venture agreement entered
into by the Company with Minotaur Exploration Limited
(MEP). In addition, an initial drill program was performed
at the Company’s 100% owned Mount Hope Kaolin
Project while progress was also made at a number of
ADN’s farmed-out projects by joint venture partners.
Great White Kaolin Project
In June 2018 the Company exercised its option to
acquire up to a 75% equity interest in the world class
Great White Kaolin Project in South Australia under a
Joint Venture Agreement with Minotaur Exploration
Limited (MEP). During the next twelve months the
Company advanced the project through to completion
of an extremely positive Scoping Study in September
2019. This was further improved in an updated Scoping
Study completed in April 2020, and again by a
Pre-Feasibility Study released in June 2020.
22
The Great White Kaolin Project includes the Great
White and Hammerhead Resources, which are
high quality halloysite-kaolin mineral that is highly
valued by the ceramic industry for the manufacture
of premium quality porcelain. Global demand for this
mineral is increasing whilst global supply is reducing,
which puts ADN in a strong position. The extremely
high purity of the halloysite-kaolin also makes it an
ideal feed material for the manufacture of HPA. HPA
is a new age material critical in the manufacture of
high-tech products in the battery technologies and
energy storage sector, LED lighting industry and
sapphire glass used in smart phones and TV screens.
During 2018 and 2019 metallurgical process testing
was carried out by independent chemical engineers,
which proved that the Carey’s Well mineral could be
used to consistently produce 99.99% (4N) purity HPA
with only one stage of purification. This proved that
it offers significant opportunities for cost savings in
the HPA manufacturing process, as well as the ability
to produce higher value end product. Collaborative
opportunities were considered during 2020 with one
company being identified to progress further with.
That has led to more metallurgical testing being done
at Queensland University of Technology during 2020,
which validated the process and increased the purity
of the potential HPA product. Negotiations are now in
progress regarding a commercial agreement.
The halloysite component of the mineral has a
nanotube structure, which presents a large number
of market opportunities in the nanotechnology sector.
A number of commercial applications already exist
for this extremely rare and high value product, and
yet global supply is almost non-existent. Historic
exploration on Great White Kaolin JV tenure has shown
areas of high purity halloysite, and ADN carried out
more exploration drilling in these areas during the last
twelve months including the collection of a large-scale
sample for future work. Collaborative work with the
University of Newcastle’s Global Innovative Centre
for Nanotechnology (GICAN) on halloysite nanotubes
(HNT) from the Great White Resource has progressed
well over the last twelve months. This has operated
under the ADN and MEP Intellectual Property JV
company ‘Natural Nanotech’ that was formed in May
2019 to capture and progress any IP opportunities.
Several applications for Federal funding have been
made along with the University and other parties,
and they are currently constructing a pilot plant to
manufacture nanostructures from halloysite-kaolin to
drive the opportunities to commercialisation. Current
research projects making good progress include
carbon capture/conversion to fuel, water purification,
hydrogen transport and storage, medical, agricultural
and the removal/recycling of microplastics from
the ocean.
ANDROMEDA METALS LIMITED Directors’ report
In December 2019 the Great White Resource was
increased by approximately 80% in the Measured
Category to give 26Mt that would yield 10.6Mt of minus
45 micron bright white halloysite-kaolin.
In July 2020 the Maiden Ore Reserve Estimate of
12.5Mt was announced for the Great White Resource,
which supported the 26-year mine life reported in the
Pre-Feasibility Study.
Further commercial scale processing trials and
metallurgical studies were carried out on the October
2018 215 tonne bulk sample of halloysite kaolin ore from
the Great White Resource over the last twelve months.
This included extensive wet processing in Northern
Ireland, Japan, China, the USA, the UK and Germany
and was designed to enable Feasibility Study process
design, as well as providing large scale product
samples to be used for final approvals with potential
customers to lock in binding offtake agreements. There
are now approximately 10 tonnes of final product in
Japan, which is being thoroughly evaluated before
sampling to potential customers. Additional quantities
will be available from China and Europe and are
planned to be used for the same purposes.
Samples from the Great White and Hammerhead
Resources are being tested in concrete and
underground mine backfill applications, with
early results showing very positive results. These
opportunities will be progressed through to full-
scale trials before the end of the year and may be
incorporated into the Definitive Feasibility Study
currently in progress.
Focus is now heavily directed towards completion of
the Definitive Feasibility Study and the Mining Lease
application process with site mining activities targeted
for early 2022.
Camel Lake Halloysite-Kaolin Project
Numerous attempts were made to hold a meeting
with the Camel Lake traditional owners, but the Covid
Pandemic delayed the process considerably. A virtual
meeting was held with the community leaders and their
advisors in August 2020 and they agreed to move the
heritage clearance process forward to enable some
sampling to be made.
Mount Hope Kaolin Project
During August 2020 ADN announced a JORC Mineral
Resource of 18Mt for the 100% owned Mount Hope
tenements in South Australia. A significant amount of
this material was analysed as being ultra-high purity
kaolin with minimal halloysite content. This could
potentially be used to produce a high value kaolin
product for the coatings (paints and inks) sector, and
a large sample has been sent to the UK for application
testing. Subsequently, some equivalent kaolin was
identified in the Great White Resource and this was
also submitted for the same testing regime. If these
results are favaourable it would open up another very
large and high value global market for the project.
Drummond Epithermal Gold Project
In the September 2019 quarter, joint venture partner
Evolution Mining completed a 10 hole diamond drilling
program for a total of 4,568 metres at the Bunyip and
South West Limey Prospects which had commenced
during the latter part of the previous financial year. The
best intercept achieved was 3.42g/t Au from 7 metres
at Bunyip while narrow low grade intersections were
returned at South West Limey.
Evolution undertook extensive geological mapping,
ground magnetic surveys, soil sampling and an
airborne hyperspectral survey at various locations
across the project area during the financial year. An
anomaly identified on vacant ground adjacent to EPM
25660 from the airborne hyperspectral survey was
pegged on behalf of the joint venture (“Packhorse
Creek”) as a result.
Evolution completed its Stage 1 commitment of $2.0
million under the Drummond Joint Venture and elected
to proceed with Stage 2 under which it is required to
spend an additional $4.0 million over the next 2 years
to acquire an 80% equity interest in the Project. Under
the terms of the Agreement, the Company received
a cash payment of $200,000 from Evolution on its
decision to proceed with Stage 2.
The impact of COVID-19 impacted field activities
during the second half of the financial year.
However, with restrictions recently partially relaxed
by the Queensland Government, Evolution are
now intending to recommence drilling activity at
the Drummond Project with an RC drilling program
planned for Roo Tail, located at the southern end of
the South West Limey Prospect, to commence in the
September 2020 quarter.
Moonta Copper-Gold Project
Steady progress was made by Moonta ISR joint
venture partner Environmental Metals Recovery Pty
Ltd during the financial year. An inferred Mineral
Resource Estimate of 66.1 million tonnes grading
0.17% Cu, containing 114,000 tonnes of contained
copper at a cut-off grade of 0.05% Cu was estimated
incorporating historical drilling results from a number
of copper prospects across the joint venture area
of interest that are considered favourable for
ISR application.
23
ANNUAL REPORT 2020 Directors’ report
Testwork on composite samples sourced from
the Bruce, Larwood and Wombat prospects was
performed that included mineral characterisation by
XRD and QEM scan along with bottle roll leach tests
which examined recoveries using a number of different
lixiviant/oxidant combinations, along with studies of
hydrogeological information, was undertaken by EMR
during the year, with positive results achieved.
Eyre Peninsula Gold Project
Joint venture partner Cobra Resources PLC undertook
a series of geochemical sampling programs in the
second half of the financial year over a number
of targets across the Eyre Peninsula Gold Project
area with the aim of improving the definition of gold
targets prior to drilling through the establishment of
pathfinder relationships across a broad range of 49
chemical elements. Results of this work has identified
a unique and distinctive chemical footprint for gold
mineralisation at the Barns, White Tank and Baggy
Green deposits and other prospects at the Project.
Subsequent to the end of the financial year, in
September 2020 Cobra commenced a substantial RC
drilling program at a number of these targeted areas
utilising the results from the geochemical sampling
program and previous drilling results achieved by ADN
and others that will see Cobra earn an initial 50%
equity interest in the Project.
Pilbara Gold Project
During the year the Company made application for
a fourth tenement (E46/1196 “Rooneys”) in the Pilbara
region to add to the three tenements that have already
been granted that comprise the Pilbara Gold Project.
A native title heritage agreement with the respective
indigenous group at Rooneys was currently still
being negotiated at year end prior to the tenement
being granted.
Andromeda is considering how best to move
the project forward, including seeking interest
from potential third parties to acquire the Pilbara
Project, given the focus of the Company is now
directed towards industrial minerals rather than
gold exploration.
Rover Copper-Gold Project
On 2 August 2019 the Company executed a binding
Sale and Purchase Agreement for the sale of the
Rover Copper Gold Project to Castile Resources Pty
Ltd, a wholly owned subsidiary of Westgold Resources
Limited, for a total cash consideration of $650,000.
These funds were received on 3 September 2019 in
addition to the return of a $50,000 bank guarantee
held by the Central Land Council on behalf of the
Rover Project.
24
Outlook and Future Developments
The focus of the Company will predominantly be
directed towards further advancing the Great White
Kaolin Project. Key steps include:
• Completion of the Definitive Feasibility Study;
• Preparation and submission of a Mining Lease
application for the Great White Deposit during the
first quarter of 2021;
• Exploration and evaluation of other prospects in the
Poochera district:
• Exploration and evaluation of the Mount Hope
Deposit;
•
Initiate exploration activities at the Camel Lake
Prospect;
• Evaluate concrete additive application for Great
White and Hammerhead material;
• Decide upon a logistics solution for transportation
of ore from site to market;
•
Lock in binding offtake agreements to support
decision to mine;
• Progress halloysite nanotechnology opportunities
through the halloysite research joint venture with
Minotaur Exploration.
In addition, the Company will:
• Evaluate opportunities for the Company in HPA;
• Determine how best to move forward with the
Pilbara Gold Project.
DIVIDENDS
No dividends were paid or declared since the
start of the financial year, and the directors do not
recommend the payment of dividends in respect of the
financial year.
CHANGES IN STATE OF AFFAIRS
There was no significant change in the state of affairs
of the Group during the financial year.
COVID-19
The outbreak of the 2019 novel strain of coronavirus
causing a contagious respiratory disease known as
COVID-19, and the subsequent quarantine measures
imposed by the Australian and other governments,
and related travel and trade restrictions have caused
disruption to businesses and resulted in significant
global economic impacts. As at 30 June 2020, these
impacts have not had a significant effect on the
ANDROMEDA METALS LIMITED Directors’ report
Group’s financial results or operations. However, as
the impact of COVID-19 continues to evolve, including
changes in government policy and business reactions
thereto, if our staff are unable to work or travel due to
illness or government restrictions, we may be forced to
reduce or suspend our exploration and development
activities. In addition, as the COVID-19 pandemic and
mitigation measures have also negatively impacted
global economic conditions, this, in turn, could
adversely affect our business in the future. Due to the
continually evolving nature of COVID-19 the Directors
cannot reasonably estimate the effects that the
COVID-19 pandemic could have on future periods,
and believe that any disturbance may be temporary.
However, there is uncertainty about the length and
potential impact of any resultant disturbance. As a
result, we are unable to estimate the potential impact
on the Group’s future operations as at the date of these
Financial Statements.
During the year ended 30 June 2020 the group
received Job Keeper and Covid cash boost government
assistance of $36,000 and $62,500 respectively which
have been recognised as other income.
SUBSEQUENT EVENTS
There were no other matters or circumstances
occurring subsequent to the end of the financial year
that has significantly affected, or may significantly
affect, the operations of the consolidated entity, the
results of those operations, or the state of affairs of the
consolidated entity in future financial years.
ENVIRONMENTAL DEVELOPMENTS
The Group carries out exploration activities on its
properties in South Australia, Queensland and Western
Australia. No mining activity has been conducted by
the Group on its properties.
The Group’s exploration operations are subject to
environmental regulations under the various laws of
South Australia, Queensland, Western Australia, and
the Commonwealth. While its exploration activities
to date have had a low level of environmental
impact, the Group has adopted a best practice
approach in satisfaction of the regulations of relevant
government authorities.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of
Directors attended by each director during the year
ended 30 June 2020 was:
MEETINGS HELD
WHILE IN OFFICE
MEETINGS
ATTENDED
R G J Grivas
J E Marsh
N J Harding
J F Ranford
A N Shearer
11
11
11
2
11
11
11
11
2
11
The Company held two meetings of the Audit and
Risk Committee during the year ended 30 June 2020.
The members of this committee comprise A N Shearer
(Chairman) and R G J Grivas.
There were two meetings held of the Remuneration
Committee during the year ended 30 June 2020. The
members of this committee comprise R G J Grivas
(Chairman) and A N Shearer.
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor
for non-audit services provided during the year by
the auditor are outlined in Note 20 to the financial
statements.
The directors are satisfied that the provision of
non-audit services during the year by the auditor
(or by another person or firm on the auditor’s
behalf) is compatible with the general standard
of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as
disclosed in Note 20 to the financial statements do not
compromise the external auditor’s independence for
the following reasons:
• all non-audit services have been reviewed and
approved to ensure that they do not impact the
integrity and objectivity of the auditor, and
• none of the services undermine the general
principles relating to auditor independence as set
out in Code of Conduct APES 110 Code of Ethics for
Professional Accountants issued by the Accounting
Professional & Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting
in a management or decision-making capacity for
the Company, acting as advocate for the Company
or jointly sharing economic risks and rewards.
25
ANNUAL REPORT 2020 Directors’ report
SHARES UNDER SHARE OPTIONS OR ISSUED ON EXERCISING OF SHARE OPTIONS
Details of unissued shares under share options as at the date of this report were:
ISSUING ENTITY
NUMBER OF SHARES
UNDER SHARE OPTIONS
CLASS OF
SHARES
EXERCISE PRICE OF
SHARE OPTIONS
EXPIRY DATE OF
PERFORMANCE RIGHTS
Andromeda Metals Limited
449,045,754
Ordinary
$0.012
30 November 2020
Andromeda Metals Limited
17,500,000
Ordinary
$0.012
15 November 2021
Andromeda Metals Limited
59,000,000
Ordinary
$0.064
28 November 2022
Andromeda Metals Limited
20,000,000
Ordinary
$0.075
28 November 2023
Details of shares issued during or since the end of the financial year as result of the vesting of share options are:
ISSUING ENTITY
NUMBER OF SHARES
UNDER SHARE OPTION
CLASS OF
SHARES
AMOUNT PAID
FOR SHARES
AMOUNT UNPAID
ON SHARES
Andromeda Metals Limited
258,042,409
Ordinary
$0.012
$nil
AUDITORS INDEPENDENCE DECLARATION
The auditor’s independence declaration is included on page 33 of the financial report.
INDEMNIFICATION OF OFFICERS AND AUDITORS
During the year the Company arranged insurance cover and paid a premium for directors in respect of
indemnity against third party liability. At the Annual General Meeting of the Company held on 17 November 1997
shareholders resolved to extend the indemnification for a period of seven years after a director ceases to hold
office. In accordance with the terms and conditions of the insurance policy, the amount of the premium paid
has not been disclosed on the basis of confidentiality, as is permitted under Section 300 (9) of the Corporations
Act 2001.
The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer
or auditor of the Company or of any related body corporate against a liability incurred by an officer or auditor.
DIRECTORS’ SHAREHOLDINGS
The following table sets out each director’s relevant interest in shares in the Company as at the date of this report.
DIRECTORS
R G J Grivas
J E Marsh
N J Harding
J F Ranford
A N Shearer
E J Whittaker
FULLY PAID ORDINARY SHARES
(NUMBER)
OPTIONS TO ACQUIRE ORDINARY SHARES
(NUMBER)
5,199,055
2,500,000
6,600,991
-
5,361,024
-
19,661,070
21,745,159
32,000,000
23,500,000
-
17,399,998
-
94,645,157
The above table includes shares held by related parties of directors.
26
ANDROMEDA METALS LIMITED Remuneration report
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for directors and other key management personnel of
the Company and its wholly owned subsidiaries.
Director and other key management personnel details
The following persons acted as key management personnel of the Group during or since the end of the
financial year:
R G J Grivas
(Non-Executive Chairman)
J E Marsh
(Managing Director)
N J Harding
(Executive Director and Company Secretary)
J F Ranford
(Operations Director) – appointed Non-Executive Director on 8 April 2020 and subsequently
Operations Director on 1 June 2020
A N Shearer
(Non-Executive Director)
E J Whittaker
(Chief Geologist) – appointed 17 February 2020
Relationship between the remuneration policy and company performance
The tables below set out summary information about the Group’s earnings and movements in shareholder wealth
for the five years to June 2020:
30 JUNE 2020
30 JUNE 2019
30 JUNE 2018
30 JUNE 2017
30 JUNE 2016
Other Income
767,419
18,960
5,815
4,989
15,443
Net profit / (loss) before tax
(3,365,301)
(1,041,044)
(683,544)
(6,847,987)
(3,882,933)
Net profit / (loss) after tax
(3,447,274)
(1,113,181)
(832,707)
(6,908,847)
(3,940,324)
30 JUNE 2020
30 JUNE 2019
30 JUNE 2018
30 JUNE 2017
30 JUNE 2016
Share price at beginning of the year
Share price at end of year
$0.015
$0.051
$0.007
$0.015
$0.006
$0.007
$0.02
$0.006
$0.02
$0.02
Basic earnings per share
$(0.0024)
$(0.0010)
$(0.0012)
$(0.0174)
$(0.0117)
Diluted earnings per share
$(0.0024)
$(0.0010)
$(0.0012)
$(0.0174)
$(0.0117)
No dividends have been declared during the five years ended 30 June 2020 and the directors do not recommend
the payment of a dividend in respect of the year ended 30 June 2020.
There is no link between the Company’s performance and the setting of remuneration except as discussed below
in relation to shares issued under the Loan Funded Employee Share Plan (LFESP) for key management personnel.
Remuneration philosophy
The performance of the Group depends on the quality of its directors and other key management personnel
and therefore the Group must attract, motivate and retain appropriately qualified industry personnel. The Group
embodies the following principles in its remuneration framework:
• provide competitive rewards to attract and retain high calibre directors and other key management personnel;
•
•
link executive rewards to shareholder value;
link reward with the strategic goals and performance of the Company; and
• ensure total remuneration is competitive by market standards.
The above framework is reliant on the business having the financial capacity to deliver on the principles. Where
this is not the situation, executive and director loyalty to shareholders may require short term sacrifice to maintain
the viability of the business.
27
ANNUAL REPORT 2020 Remuneration report
Remuneration policy
The Company has established a Remuneration Committee to assist the Board in discharging its responsibilities
relating to the remuneration of directors and other key management personnel. The Committee makes
recommendations on all remuneration matters for consideration by the Board.
The Committee assesses the appropriateness of the nature and amount of remuneration of such persons on
a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum shareholder benefit from retention of high quality directors and other key management personnel.
External advice on remuneration matters is sought whenever the Committee deems it necessary. No advice was
obtained during the year ended 30 June 2020 (2019: nil).
The remuneration of the directors and other key management personnel is not dependent on the satisfaction of a
performance condition, other than as discussed below.
Non-executive director remuneration
The Board of Directors seeks to set remuneration of Non-Executive Directors at a level which provides the
Company with the ability to attract and retain directors of the highest calibre, whilst incurring a cost which is
appropriate at this stage of the Company’s development.
The Non-Executive Chairman is entitled to receive $65,000 (2019: $50,000) per annum excluding statutory
superannuation. In addition, consulting fees paid during the year to the Non-Executive Chairman were $3,600
(2019: $25,200). The Non-Executive Director is entitled to receive $45,000 (2019: $35,000) per annum excluding
statutory superannuation.
In addition, Non-Executive Directors are entitled to be paid reasonable travelling, accommodation and other
expenses incurred as a consequence of their attendance at meetings of directors and otherwise in the execution
of their duties as directors.
Managing director remuneration
The Company aims to reward the Managing Director with a level and mix of remuneration commensurate with his
position and responsibilities within the Company to:
• align the interests of the Managing Director with those of shareholders;
•
link reward with the strategic goals and performance of the Company; and
• ensure total remuneration is competitive by market standards.
Other key management personnel remuneration
The Company aims to remunerate other key management personnel at a level commensurate with their position
and responsibility within the Company.
Currently the Company has a service agreement with an entity associated with N J Harding and a service
agreement with an entity associated with J F Ranford, details of which are set out below.
28
ANDROMEDA METALS LIMITED 62,350
238,946
249,550
32,500
42,292
67,500
75,200
182,649
187,600
35,000
2020
R G J Grivas
J E Marsh
N J Harding
J F Ranford
A N Shearer
E J Whittaker
2020 Total
2020
R G J Grivas
J E Marsh
N J Harding
A N Shearer
2019 Total
Remuneration report
Summary of amounts paid to key management personnel
The table below discloses the compensation of the key management personnel of the Group during the year.
SHORT-TERM
EMPLOYEE BENEFITS
SALARY & FEES(I)
($)
POST
EMPLOYMENT
SUPERANNUATION
($)
ANNUAL & LONG
SERVICE LEAVE
CASH BONUS(III)
SUB TOTAL
SHARE BASED
PAYMENTS(II)
TOTAL
($)
-
($)
($)
($)
($)
22,831
92,931
336,339
429,270
7,750
27,038
26,322
45,662
337,968
617,143
955,111
-
-
6,048
6,413
-
-
-
50,000
299,550
476,741
776,291
-
32,500
-
32,500
22,831
71,171
336,339
407,510
5,685
-
79,598
-
79,598
693,138
47,249
32,007
141,324
913,718
1,766,562 2,680,280
i)
Includes consulting fees paid.
ii) Share based payments do not represent cash payments to key management personnel and the related shares may or may
not ultimately vest.
iii) A discretionary cash bonus payment was paid to Executive Directors J E Marsh of $50,000 inclusive of superannuation
and N J Harding of $50,000 (exclusive of superannuation) and to Non-Executive Directors R G J Grivas and A N Shearer of
$25,000 inclusive of superannuation each on 16 March 2020 to link reward with the strategic goals and performance of the
Company. No other bonuses were granted during the financial year.
SHORT-TERM
EMPLOYEE BENEFITS
SALARY & FEES(I)
($)
POST
EMPLOYMENT
SUPERANNUATION
($)
ANNUAL & LONG
SERVICE LEAVE
CASH BONUS(III)
SUB TOTAL
SHARE BASED
PAYMENTS(II)
TOTAL
($)
-
($)
-
($)
79,950
($)
-
($)
79,950
4,750
20,822
21,057
36,529
261,057
63,256
324,313
-
3,325
-
-
-
-
187,600
36,821
224,421
38,325
-
38,325
480,449
28,897
21,057
36,529
566,932
100,077
667,009
i)
Includes consulting fees paid.
ii) Share based payments do not represent cash payments to key management personnel and the related shares may or may
not ultimately vest.
iii) James Marsh was paid an additional one-off cash payment of $40,000 inclusive of superannuation on 5 December 2018
following 6 months employment as was agreed in his employment contract. No other bonuses were granted during the
financial year.
No key management personnel appointed during the year received a payment as part of his consideration for
agreeing to hold the position.
29
ANNUAL REPORT 2020 Remuneration report
Service agreements
Details of the current services and consultancy
agreements are set out below:
2020
KEY MANAGEMENT
PERSONNEL
TERMS
N J Harding
Daily rate of $920
At the Annual General Meeting held on the
30 November 2015, the shareholder’s approved the
granting of 4,500,000 fully paid ordinary shares to the
former Managing Director and 2,500,000 ordinary
shares to the Executive Director under the LFESP (the
value of these shares issued to the former Managing
Director and Executive Director were $24,119 and
$13,400 respectively). The shares are to be transferred
to the director on the achievement of those KPI’s met by
31 December 2016 and the payment of $0.01 per share
for those shares to which vested by 1 January 2021.
J F Ranford
R G J Grivas
Monthly rate of $20,000 for 3 days
per week
Daily rate of $900 per day as
required
The KPIs for the former Managing Director were
as follows:
2019
KEY MANAGEMENT
PERSONNEL
TERMS
N J Harding
Daily rate of $800
R G J Grivas
Daily rate of $900 per day
as required
On 19 December 2019 the Group entered into a new
service agreement with an entity associated with
N J Harding with no fixed term. The Group or the
entity associated with N J Harding may terminate the
agreement by giving three months notice respectively.
On 1 June 2020 the Group entered into a service
agreement with an entity associated with J F Ranford
with no fixed term. The Group or the entity associated
with J F Ranford may terminate the agreement by
giving three months notice respectively.
The Group entered into a consultancy agreement with
R G J Grivas on 27 October 2017 to provide consulting
services on an as needs basis at the rate of $900 per
day. A total of $3,600 (2019: $25,200) was paid under
this agreement during the year.
Payments under the above service agreements are
included in the remuneration table.
Shares held by key management personnel
under the loan funded employee share plan
At the Annual General Meeting held on 30 November
2015 the shareholders approved the Company’s
LFESP. Fully paid ordinary shares will be held by
the trustee of the LFESP and transferred to key staff
members of the Company on achieving certain
Company and personal KPIs and the payment of
the share issue price, as long as the holder remains
employed by the Company. An interest-free loan
will be provided by the Company to each key staff
member to acquire the shares that are held by the
trustee under the terms of the LFESP.
30
• up to 2,250,000 shares will vest based on the
Company’s share performance against a peer
group relative share price performance during the
calendar year 2016; and
• up to 2,250,000 shares will vest on the
achievement of various KPIs based on his personal
performance during the calendar year 2016.
As at 31 December 2016 some of the KPIs were met
resulting in 1,687,500 shares becoming unrestricted
and 2,812,500 shares were returned to the trustee
for future allocations. On payment of $0.01 per share
the unrestricted shares were issued to the former
Managing Director.
The KPIs for the Executive Director were as follows:
• up to 1,000,000 shares will vest based on the
Company’s share performance against a peer
group relative share price performance during the
calendar year 2016; and
• up to 1,500,000 shares will vest on the
achievement of various KPIs based on his personal
performance during the calendar year 2016.
As at 31 December 2016 some of the KPIs were met
resulting in 1,125,000 shares becoming unrestricted
and 1,375,000 shares were returned to the trustee
for future allocations. On payment of $0.01 per share
the unrestricted shares were issued to the Executive
Director on 24 June 2020.
At the Annual General Meeting held on the 30
November 2016, the shareholder’s approved the
granting of 2,300,000 fully paid ordinary shares to
the former Managing Director and 1,300,000 ordinary
shares to the Executive Director under the LFESP (the
value of these shares issued to the former Managing
Director and Executive Director were $16,647 and
$9,409 respectively). The shares are to be transferred
to the director on the achievement of those KPI’s met by
31 December 2017 and the payment of $0.01 per share
for those shares to which vested by 1 January 2022.
ANDROMEDA METALS LIMITED Remuneration report
The KPIs for the former Managing Director were
as follows:
• up to 1,150,000 shares will vest based on the
Company’s share performance against a peer
group relative share price performance during the
calendar year 2017; and
• up to 1,150,000 shares will vest on the achievement
of various KPIs based on his personal performance
during the calendar year 2017.
As at 31 December 2017 some of the KPIs were met
resulting in 1,012,000 shares becoming unrestricted
and 1,288,000 shares were returned to the trustee
for future allocations. On payment of $0.01 per share
the unrestricted shares were issued to the former
Managing Director.
The KPIs for the Executive Director are as follows:
• up to 520,000 shares will vest based on the
Company’s share performance against a peer
group relative share price performance during the
calendar year 2017; and
• up to 780,000 shares will vest on the achievement
of various KPIs based on his personal performance
during the calendar year 2017.
As at 31 December 2017 some of the KPIs were met
resulting in 780,000 shares becoming unrestricted
and 520,000 shares were returned to the trustee for
future allocations. On payment of $0.01 per share
the unrestricted shares were issued to the Executive
Director on 24 June 2020.
At the Annual General Meeting held on the 30
November 2017, the shareholder’s approved the
granting of 1,800,000 fully paid ordinary shares to the
former Managing Director and 1,800,000 ordinary
shares to the Executive Director under the LFESP (the
value of these shares issued to the former Managing
Director and Executive Director were $7,143 and $7,143
respectively). The shares are to be transferred to the
director on the achievement of those KPI’s met by 31
December 2018 and the payment of $0.006 per share
for those shares to which vested by 1 January 2023.
The KPIs for the former Managing Director were as
follows:
• up to 900,000 shares will vest based on the
Company’s share performance against a peer
group relative share price performance during the
calendar year 2018; and
• up to 900,000 shares will vest on the achievement
of various KPIs based on his personal performance
during the calendar year 2018.
The former Managing Director resigned on 26 April
2018. The Board determined that 300,000 shares
become unrestricted and 1,500,000 shares returned to
the trustee for future allocation. On payment of $0.006
per share the unrestricted shares were issued to the
former Managing Director.
The KPIs for the Executive Director are as follows:
• up to 720,000 shares will vest based on the
Company’s share performance against a peer
group relative share price performance during the
calendar year 2018; and
• up to 1,080,000 shares will vest on the
achievement of various KPIs based on his personal
performance during the calendar year 2018.
As at 31 December 2018 the Board determined that
all of the KPIs were met resulting in 1,800,000 shares
becoming unrestricted. On payment of $0.006 per
share the unrestricted shares were issued to the
Executive Director on 24 June 2020.
Value of shares granted under the LFESP – basis
of calculation
• Value of shares granted under the LFESP is
calculated by multiplying the fair value of shares
granted by the number of shares granted during
the financial year.
• The shares are issued once the KPIs have been
met and the loan has been repaid. The value of
shares issued under the LFESP is calculated by
multiplying the fair value of shares at the date
of issue (calculated as the difference between
consideration paid and the Australian Securities
Exchange last sale price on the day that the shares
were issued) by the number of shares issued during
the financial year.
• Value of shares granted under the LFESP forfeited/
cancelled is calculated by multiplying the fair value
of shares granted at the time they were forfeited/
cancelled multiplied by the number of shares
forfeited/cancelled during the financial year.
The total value of shares granted under the LFESP
included in compensation for the financial year is
calculated in accordance with Accounting Standard
AASB 2 “Share-based Payment”. Shares granted under
the LFESP during the financial year are recognised in
compensation over their vesting period.
31
ANNUAL REPORT 2020 Remuneration report
Equity holdings of key management personnel as at 30 June 2020
Fully paid ordinary shares issued by Andromeda Metals Limited
BALANCE
01/07/19
ISSUED AS PART PAYMENT
OF DIRECTOR FEES
EXERCISE OF OPTIONS
TRANSFERRED FROM
THE LFESP(I)
R G J Grivas
2,699,055
J E Marsh
N J Harding
J F Ranford
A N Shearer
E J Whittaker
-
2,171,993
-
2,361,673
-
2,500,000
2,500,000
-
-
BALANCE
30/06/20
5,199,055
2,500,000
723,998
3,705,000
6,600,991
-
402,576
2,596,775
-
-
-
-
-
-
5,361,024
-
-
-
-
-
i)
Issued to N J Harding on payout of company loan under the LPESP of $29,850
Listed options issued by Andromeda Metals Limited
BALANCE
01/07/19
GRANTED
EXERCISED
LAPSED
BALANCE
30/06/20
VESTED AND
EXERCISABLE
R G J Grivas
12,745,159
J E Marsh
N J Harding
J F Ranford
A N Shearer
E J Whittaker
-
723,998
-
8,496,773
-
-
-
-
-
-
-
2,500,000
-
723,998
-
2,596,775
-
-
-
-
-
-
-
10,245,159
See Note 16 for details
-
-
-
See Note 16 for details
See Note 16 for details
See Note 16 for details
5,899,998
See Note 16 for details
-
See Note 16 for details
Unlisted options issued by Andromeda Metals Limited
BALANCE
01/07/19
GRANTED
EXERCISED
LAPSED
BALANCE
30/06/20
VESTED AND
EXERCISABLE
R G J Grivas
J E Marsh
N J Harding
J F Ranford
A N Shearer
E J Whittaker
-
11,500,000
-
13,000,000 21,500,000 2,500,000
7,000,000 16,500,000
-
-
-
-
11,500,000
-
-
-
-
-
-
-
-
-
-
-
11,500,000
See Note 16 for details
32,000,000
See Note 16 for details
23,500,000
See Note 16 for details
-
See Note 16 for details
11,500,000
See Note 16 for details
-
See Note 16 for details
Shares held by the trustee of the LFESP
BALANCE
01/07/19
GRANTED
EXERCISED
FORFEITED/
CANCELLED
BALANCE
30/06/20
VESTED AND
EXERCISABLE
N J Harding
3,705,000
-
3,705,000
-
-
See Note 18 for details
Signed in Adelaide this 30th day of September 2020 in accordance with a resolution of the Directors.
J E Marsh
Managing Director
A N Shearer
Non-Executive Director
32
ANDROMEDA METALS LIMITED
Auditors independence declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth, WA, 6000
Australia
Phone: +61 8 9365 7000
www.deloitte.com.au
The Board of Directors
Andromeda Metals Limited
69 King William Road
UNLEY SA 5061
30 September 2020
Dear Board Members
Auditor’s Independence Declaration to Andromeda Metals Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Andromeda Metals Limited.
As lead audit partner for the audit of the financial report of Andromeda Metals Limited for the year ended
30 June 2020, I declare that to the best of my knowledge and belief, there have been no contraventions
of:
(i)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
33
ANNUAL REPORT 2020
Consolidated statement of profit or loss and other
comprehensive income
for the year ended 30 June 2020
Other income
Impairment of exploration expenditure
Administration expenses
Corporate consulting expenses
Company promotion
Salaries and wages
Directors fees
Occupancy expenses
Share based payments
Loss before income tax
Tax expense
Loss for the year
NOTE
4
8
4
5
YEAR ENDED
30/06/20
$
767,419
(399,942)
(459,365)
(380,991)
(81,956)
(144,811)
(157,745)
(40,600)
(2,467,310)
(3,365,301)
(81,973)
(3,447,274)
YEAR ENDED
30/06/19
$
18,960
(135,484)
(308,535)
(201,403)
(62,426)
(105,617)
(85,000)
(61,200)
(100,339)
(1,041,044)
(72,137)
(1,113,181)
Other comprehensive income, net of income tax
-
-
Total comprehensive income for the year
(3,447,274)
(1,113,181)
Earnings per share
Basic (cents per share) – (Loss)
Diluted (cents per share) – (Loss)
26
26
(0.24)
(0.24)
(0.10)
(0.10)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
34
ANDROMEDA METALS LIMITED
Consolidated statement of financial position
as at 30 June 2020
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation expenditure
Plant and equipment
Other financial assets
Investment in joint venture
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities - current
Other liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Lease liabilities – non-current
Other liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
NOTE
6
8
9
7
10
11
13
12
14
13
15
16
17
30/06/20
$
2,998,626
84,997
3,083,623
30/06/19
$
1,669,188
117,538
1,786,726
9,218,491
6,442,897
150,547
74,500
157,964
9,601,502
12,685,125
626,274
70,851
12,178
709,303
26,632
43,024
975,517
1,045,173
11,899
124,966
-
6,579,762
8,366,488
455,997
-
468
456,465
21,000
-
975,517
996,517
1,754,476
1,452,982
10,930,649
6,913,506
47,826,518
42,756,559
2,939,738
562,719
(39,835,607)
(36,405,772)
10,930,649
6,913,506
The above Consolidated statement of financial position should be read in conjunction with the
accompanying notes.
35
ANNUAL REPORT 2020 Consolidated statement of changes in equity
for the year ended 30 June 2020
Balance at 1 July 2018
40,025,378
378,206
54,173
(35,292,591)
5,165,166
ISSUED
CAPITAL
SHARE OPTION
RESERVE
$
$
EMPLOYEE
EQUITY-SETTLED
BENEFITS RESERVE
$
ACCUMULATED
LOSSES
TOTAL
$
$
Loss attributable to the year
Total comprehensive income for the year
Issue of share capital through a
placement at 0.6 cents
Issue of share capital through a rights
issue at 0.65 cents
-
-
1,100,000
1,762,000
-
-
-
-
Costs associated with the issue of shares
(240,456)
30,001
Related income tax
72,137
-
Fair value of options issued to directors
-
97,317
Issue of shares as part payment of
director fees
Share based payment expense related
to shares issued to employees under the
loan funded employee share plan
37,500
-
-
-
-
-
-
-
-
-
-
3,022
(1,113,181)
(1,113,181)
(1,113,181)
(1,113,181)
-
-
-
-
-
-
-
1,100,000
1,762,000
(210,455)
72,137
97,317
37,500
3,022
Balance at 30 June 2019
42,756,559
505,524
57,195
(36,405,772)
6,913,506
Loss attributable to the year
Total comprehensive income for the year
Issue of share capital through a
placement at 4.7 cents
-
-
3,997,199
Costs associated with the issue of shares
(273,243)
Related income tax
Issue of shares as part payment of
director fees
Shares issued on the exercise of
listed options
Shares issued on the exercise of
unlisted options
81,973
17,500
1,093,910
(20,932)
42,165
(12,165)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,447,274)
(3,447,274)
(3,447,274)
(3,447,274)
-
-
-
-
-
-
-
-
3,997,199
(273,243)
81,973
17,500
1,072,978
30,000
70,699
2,467,311
Shares issued from treasury stock
110,455
-
(39,756)
Fair value change of options issued
Fair value of options issued to directors
and employees
Forfeiture of shares issued to employees
under the Loan Funded Employee
Share Plan
-
-
2,467,311
-
-
(17,439)
17,439
-
Balance at 30 June 2020
47,826,518
2,939,738
-
(39,835,607)
10,930,649
The above Consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
36
ANDROMEDA METALS LIMITED Consolidated statement of cash flows
for the year ended 30 June 2020
Cash flows relating to operating activities
Receipts from government grants
Payments to suppliers and employees
Net operating cash flows (Note (a))
Cash flows relating to investing activities
Interest received
Refund of bank guarantee
Payment of environmental bonds
Payment for investment in associate
Payments for exploration and evaluation expenditure
Payment received from joint venture partner
Proceeds from the sale of assets (Note 4)
Payments for plant and equipment
Net investing cash flows
Cash flows relating to financing activities
Proceeds from share and equity options issued
Lease payments
Interest paid
Payments for capital raising costs
Net financing cash flows
Net increase in cash and cash equivalents
Cash at beginning of financial year
INFLOWS/(OUTFLOWS)
30/06/20
$
74,000
(1,155,686)
(1,081,686)
27,221
50,000
-
(157,964)
(3,191,085)
200,000
650,000
(34,681)
30/06/19
$
-
(788,261)
(788,261)
9,704
-
(16,500)
-
(1,342,864)
300,000
-
(5,647)
(2,456,509)
(1,055,307)
5,170,876
(28,565)
(1,435)
(273,243)
4,867,633
1,329,438
1,669,188
2,862,000
-
-
(210,455)
2,651,545
807,977
861,211
Cash and cash equivalents at end of financial year
2,998,626
1,669,188
Note (a): Reconciliation of loss for the period to net cash flow from
operating activities.
Loss for the period
Interest revenue
Share based remuneration
Director fees paid in shares
Depreciation
Interest expense
Sale of Rover Project
Exploration written off or impaired
Share issue costs
(Increase) decrease in receivables
Increase/(decrease) in payables
Increase/(decrease) in provisions
Net operating cash flows
(3,447,274)
(18,919)
2,467,310
17,500
37,857
1,435
(650,000)
399,942
81,973
13,002
(1,854)
17,342
(1,081,686)
(1,113,181)
(18,473)
100,339
37,500
3,873
-
-
135,484
72,137
(52,222)
41,538
4,744
(788,261)
The above Consolidated statement of cash flows should be read in conjunction with the accompanying notes.
37
ANNUAL REPORT 2020 Notes to the financial statements
for the financial year ended 30 June 2020
1 GENERAL INFORMATION
Andromeda Metals Limited (the Company) is a
listed public company, incorporated in Australia and
operating in Australia.
Andromeda Metals Limited’s registered office and its
principal place of business are as follows:
Registered office and principal place of business
69 King William Road
Unley
South Australia 5061
2 ADOPTION OF NEW AND REVISED
ACCOUNTING STANDARDS
In the current year, the Group has adopted all of
the new and revised Standards and Interpretations
issued by the Australian Accounting Standards Board
(the AASB) that are relevant to its operations and
effective for the current annual reporting period. New
and revised standards and amendments thereof and
interpretations effective for the current reporting period
that are relevant to the Group include:
y AASB 16 Leases
y
Interpretation 23 Uncertainty over Income
Tax Treatments
y AASB 2017-7 Amendments – Long-term Interests in
Associates and Joint Venture Amendments to IAS
28 and Illustrative Example – Long-term Interests in
Associates and Joint Ventures
y AASB 2018-1 Amendments – Annual Improvements
2015-2017 Cycle
The adoption of the aforementioned standards have
resulted in no impact on the financial statements
of the Group for the financial year ended 30 June
2020. A discussion on the adoption of AASB 16 is
included below.
Impact of initial application of AASB 16 Leases
In the current year, the Group has applied AASB 16 that
is effective for annual periods that begin on or after 1
January 2019.
AASB 16 introduces new or amended requirements with
respect to lease accounting. It introduces significant
changes to lessee accounting by removing the
distinction between operating and finance lease and
requiring the recognition of a right-of-use asset and a
lease liability at commencement for all leases, except
for short-term leases and leases of low value assets.
In contrast to lessee accounting, the requirements for
lessor accounting have remained largely unchanged.
Details of these new requirements are described
in note 1. The impact of the adoption of AASB 16
on the Group’s consolidated financial statements is
described below.
The date of initial application of AASB 16 for the Group
is 1 January 2019.
38
The Group has chosen the modified retrospective
application of AASB 16 in accordance with
AASB 16:C8(a). Consequently, the Group will not
restate the comparative information.
In contrast to lessee accounting, AASB 16 substantially
carries forward the lessor accounting requirements in
AASB 117.
Impact of the new definition of a lease
The change in definition of a lease mainly relates to
the concept of control. AASB 16 distinguishes between
leases and service contracts on the basis of whether the
use of an identified asset is controlled by the customer.
Control is considered to exist if the customer has:
y
The right to obtain substantially all of the economic
benefits from the use of an identified asset; and
y
The right to direct the use of that asset.
The Group will apply the definition of a lease and related
guidance set out in AASB 16 to all lease contracts
entered into or modified on or after 1 July 2019 (whether
it is a lessor or a lessee in the lease contract). In
preparation for the first-time application of AASB 16, the
Group has carried out an implementation project. The
project has shown that the new definition of AASB 16
will not change significantly the scope of contracts that
meet the definition of a lease for the Group.
Impact on lessee accounting
Former operating leases
AASB 16 changes how the Group accounts for leases
previously classified as operating leases under AASB
117, which were off-balance sheet.
Applying AASB 16, for all leases (except as noted
below), the Group:
a) Recognises right-of-use assets and lease liabilities
in the consolidated statement of financial position,
initially measured at the present value of the future
lease payments;
b) Recognises depreciation of right-of-use assets and
interest on lease liabilities in the statement of profit
or loss;
c) Separates the total amount of cash paid into
a principal portion (presented within financing
activities) and interest (presented within operating
activities) in the cash flow statement.
Lease incentives (e.g. rent-free period) will be recognised
as part of the measurement of the right-of-use assets
and lease liabilities whereas under AASB 117 they
resulted in the recognition of a lease liability incentive,
amortised as a reduction of rental expenses on a
straight-line basis.
Under AASB 16, right-of-use assets will be tested for
impairment in accordance with AASB 136 Impairment
of Assets.
For short-term leases (lease term of 12 months or less)
and leases of low-value assets (such as personal
computers and office furniture), the Group will opt to
recognise a lease expense on a straight-line basis as
permitted by AASB 16. This expense is presented within
‘occupancy expenses’ in profit or loss.
ANDROMEDA METALS LIMITED
Financial impact of the initial application of
3 SIGNIFICANT ACCOUNTING POLICIES
AASB 16
The impact on profit or loss for the current year as a
result of the application of AASB 16 is detailed in Note
9. The impact on right-of-use assets on adoption is
disclosed in note 9.
The application of AASB 16 has an impact on the
consolidated statement of cash flows of the Group.
Under AASB 16, lessees must present:
y Short-term lease payments, payments for leases of
low-value assets and variable lease payments not
included in the measurement of the lease liability as
part of operating activities.
y Cash paid for the interest portion of a lease liability
as either operating activities or financing activities,
as permitted by AASB 107 (the Group has opted to
include interest paid as part of financing activities).
y Cash payments for the principal portion for a lease
Statement of compliance
These financial statements are general purpose
financial statements which have been prepared
in accordance with the Corporations Act 2001,
Accounting Standards and Interpretations, and comply
with other requirements of the law. The financial
statements comprise the consolidated statements
of the Group. For the purpose of preparing the
consolidated financial statements, the Company is a
profit entity.
Accounting Standards include Australian Accounting
Standards. Compliance with Australian Accounting
Standards ensures that the financial statements and
notes of the Company and the Group comply with
International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by
the directors on 30th September 2020.
liability, as part of financing activities.
Basis of preparation
Under AASB 117, all lease payments on operating
leases were presented as part of cash flows from
operating activities. Consequently, the net cash
generated by operating activities has increased by
$30,000, being the lease payments, and net cash
used in financing activities has increased by the
same amount.
Standards and Interpretations on issue but not
yet effective
STANDARD/INTERPRETATION
AASB 2018-6 Amendments
to Australian Accounting
Standards – Definition of a
Business
AASB 2018-7 Amendments
to Australian Accounting
Standards – Definition of
Material
Conceptual Framework
2019-1 Amendments to
Australian Accounting
Standards – References
to the Conceptual
Framework
APPLICATION
DATE OF
STANDARD
APPLICATION
DATE FOR
GROUP
1 January
2020
1 July
2020
1 January
2020
1 July
2020
1 January
2020
1 January
2020
1 July
2020
1 July
2020
Australian Accounting Standards and Interpretations
that have recently been issued or amended but are
not yet effective have not been adopted by the Group
for the annual reporting period ended 30 June 2020.
Those which may be relevant to the Group are set
out in the table below, but these are not expected
to have any significant impact on the Group’s
financial statements:
The financial report has been prepared on the basis
of historical cost, except for the revaluation of certain
non-current assets and financial instruments. Cost is
based on the fair values of the consideration given
in exchange for assets. All amounts are presented in
Australian dollars, unless otherwise noted.
In the application of the Group’s accounting policies,
which are described below, management is required
to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates
and associated assumptions are based on historical
experience and various other factors that are believed
to be reasonable under the circumstances, the results
of which form the basis of making the judgements.
Actual results may differ from these estimates.
Certain comparative financial information in the
statement of profit or loss and other comprehensive
income has been reclassified to ensure consistency
with current year presentation. This reclassification
does not affect reported profit or loss or other
comprehensive income for the year ended 30 June
2019.
Significant management judgement
The following are significant management judgements
in applying the accounting policies of the Group
that have the most significant effect on the financial
statements.
Estimation uncertainty
Information about estimates and assumptions that
have the most significant effect on recognition
and measurement of assets, liabilities, income and
expenses is provided below. Actual results may be
substantially different.
39
ANNUAL REPORT 2020
Exploration and evaluation expenditure
The application of the Group’s accounting policy
for exploration and evaluation expenditure requires
judgement in determining whether it is likely that
future economic benefits are likely either from
future exploration or sale or whether activities have
not reached a stage which permits a reasonable
assessment of the existence of reserves. The
determination of a Joint Ore Reserves Committee
(JORC) resource is itself an estimation process that
requires varying degrees of uncertainty depending on
sub-classification and these estimates directly impact
the point of deferral of exploration and evaluation
expenditure. The deferral policy requires management
to make certain estimates and assumptions about
future events or circumstances, in particular whether
an economically viable extraction operation can be
established. Estimates and assumptions made may
change if new information becomes available.
Ore reserve and resource estimates
The Group estimates its ore reserves and mineral
resources based on information compiled by
Competent Persons (as defined in the 2012 edition of
the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Resources (the
JORC Code). Reserves determined in this way are
taken into account in considering the recoverability of
capitalised exploration and evaluation expenditure.
Going concern
The financial statements have been prepared on the
going concern basis, which assumes the continuity of
normal business activities, and that the Group will be
able to realise its assets and extinguish its liabilities in
the normal course of business.
For the year ended 30 June 2020 the Group incurred
a net loss of $3,447,274 (30 June 2019: $1,113,181),
and experienced net cash outflows from operating
and investing activities of $3,538,195 (30 June 2019:
$1,843,568). At 30 June 2020, the Group has cash
reserves of $2,998,626 (30 June 2019: $1,669,118).
The directors have prepared a cash flow forecast for
the period ending 30 September 2021 which indicates
that the Group will have sufficient funding to meet
all expected cash outflows, including its currently
envisaged exploration activities. The ability of the Group
to continue as a going concern is dependent on:
y
receiving minimum proceeds of approximately
$3,700,000 associated with the exercise of share
options prior to expiry on 30 November 2020, which
is in addition to approximately $1,410,000 that has
been received from the exercise of share options
between 1 July 2020 and 31 August 2020; and
y managing and deferring costs where applicable to
coincide with the funding received outlined above
to ensure all obligations can be met.
The directors are satisfied that they will achieve the
matters set out above and therefore the going concern
basis of preparation is appropriate. However, should the
minimum proceeds expected to be received from the
exercise of share options not be met, additional funding
would be required, or the Group would be required to
reduce its currently envisaged exploration program.
Should the Group be unable to achieve the matters
above, there is a material uncertainty that may cast
significant doubt as to whether the Group will be able
to continue as a going concern and, therefore, whether
it will realise its assets and discharge its liabilities in the
normal course of business.
The financial report does not include any adjustments
relating to the recoverability and classification of
recorded asset amounts or to the amount and
classification of liabilities that might be necessary
should the Group not continue as a going concern.
COVID-19
The outbreak of the 2019 novel strain of coronavirus
causing a contagious respiratory disease known as
COVID-19, and the subsequent quarantine measures
imposed by the Australian and other governments,
and related travel and trade restrictions have caused
disruption to businesses and resulted in significant
global economic impacts. As at 30 June 2020, these
impacts have not had a significant effect on the
Group’s financial results or operations. However, as
the impact of COVID-19 continues to evolve, including
changes in government policy and business reactions
thereto, if our staff are unable to work or travel due to
illness or government restrictions, we may be forced to
reduce or suspend our exploration and development
activities. In addition, as the COVID-19 pandemic and
mitigation measures have also negatively impacted
global economic conditions, this, in turn, could
adversely affect our business in the future. Due to the
continually evolving nature of COVID-19 the Directors
cannot reasonably estimate the effects that the
COVID-19 pandemic could have on future periods,
and believes that any disturbance may be temporary.
However, there is uncertainty about the length and
potential impact of any resultant disturbance. As a
result, we are unable to estimate the potential impact
on the Group’s future operations as at the date of these
Financial Statements.
Accounting policies
a) Cash and cash equivalents
Cash and cash equivalents comprise cash on
hand, cash in banks and bank deposits.
b) Employee benefits
A liability is recognised for benefits accruing to
employees in respect of wages and salaries,
annual leave, long service leave, and sick leave
when it is probable that settlement will be required
and they are capable of being measured reliably.
Liabilities recognised in respect of employee
benefits, expected to be settled within 12 months,
are measured at their nominal values using the
remuneration rate expected to apply at the time
of settlement. Liabilities recognised in respect
of employee benefits which are not expected
to be settled within 12 months are measured as
the present value of the estimated future cash
outflows to be made by the consolidated entity in
respect of services provided by employees up to
reporting date.
Contributions to accumulated benefit
superannuation plans are expensed when incurred.
40
ANDROMEDA METALS LIMITED
c) Exploration and evaluation expenditure
¬ any proceeds received that are not attributable
Exploration and evaluation expenditures in relation
to each separate area of interest, are recognised
as an exploration and evaluation asset in the year
in which they are incurred where the following
conditions are satisfied:
i)
the rights to tenure of the area of interest are
current; and
ii) at least one of the following conditions is
also met:
– the exploration and evaluation expenditures
are expected to be recouped through
successful development and exploration of
the area of interest, or alternatively, by its
sale: or
– exploration and evaluation 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 initially
measured at cost and include acquisition of rights
to explore, studies, exploration drilling, trenching
and sampling and associated activities. General
and administrative costs are only included in the
measurement of exploration and evaluation costs
where they relate directly to operational activities in
a particular area of interest.
Exploration and evaluation assets are assessed
for impairment when facts and circumstances (as
defined in AASB 6 “Exploration for and Evaluation
of Mineral Resources”) suggest that the carrying
amount of exploration and evaluation assets may
exceed its recoverable amount. The recoverable
amount of the exploration and evaluation assets
(or the cash-generating unit(s) to which it has been
allocated, being no larger than the relevant area
of interest) is estimated to determine the extent of
the impairment loss (if any). Where an impairment
loss subsequently reverses, the carrying amount of
the asset is increased to the revised estimate of its
recoverable amount, but only to the extent that the
increased carrying amount does not exceed the
carrying amount that would have been determined
had no impairment loss been recognised for the
asset in previous years.
Where a decision is made to proceed with
development in respect of a particular area of
interest, the relevant exploration and evaluation
asset is tested for impairment, reclassified to
development properties, and then amortised over
the life of the reserves associated with the area of
interest once mining operations have commenced.
Farm-outs – exploration and evaluation phase
The consolidated entity accounts for the treatment
of farm-out arrangements under AASB 6 Evaluation
of Mineral Resources under these arrangements:
¬
the farmor will not capitalise any expenditure
settled by the farmee;
to future expenditure are initially credited
against the carrying amount of any existing
exploration and evaluation asset; and
¬
to the extent that the proceeds received from
the farmee exceed the carrying amount of
any exploration an evaluation asset that has
already been capitalised by the farmor, this
excess is recognised as a gain in profit or loss.
d) Financial assets
Financial assets and financial liabilities are
recognised in the Group’s statement of financial
position when the Group becomes a party to the
contractual provisions of the instrument. Financial
assets and financial liabilities are initially measured
at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial
assets and financial liabilities at fair value through
profit or loss) are added to or deducted from the fair
value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial
assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit
or loss.
All recognised financial assets are measured
subsequently in their entirety at either amortised
cost or fair value, depending on the classification
of the financial assets. Classification of financial
assets Debt instruments that meet the following
conditions are measured subsequently at
amortised cost:
¬
¬
¬
¬
the financial asset is held within a business
model whose objective is to hold financial
assets in order to collect contractual cash flows;
and
the contractual terms of the financial asset give
rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal amount outstanding. Debt instruments
that meet the following conditions are measured
subsequently at fair value through other
comprehensive income (FVTOCI):
the financial asset is held within a business
model whose objective is achieved by both
collecting contractual cash flows and selling the
financial assets; and
the contractual terms of the financial asset
give rise on specified dates to cash flows
that are solely payments of principal and
interest on the principal amount outstanding.
By default, all other financial assets are
measured subsequently at fair value through
profit or loss (FVTPL). Despite the foregoing,
the Group may make the following irrevocable
election/designation at initial recognition of a
financial asset:
¬
the Group may irrevocably elect to present
subsequent changes in fair value of an equity
investment in other comprehensive income if
certain criteria are met; and
41
ANNUAL REPORT 2020
¬
the Group may irrevocably designate a debt
investment that meets the amortised cost
or FVTOCI criteria as measured at FVTPL if
doing so eliminates or significantly reduces
an accounting mismatch. Amortised cost
and effective interest method. The effective
interest method is a method of calculating
the amortised cost of a debt instrument
and of allocating interest income over the
relevant period.
Amortised cost and effective interest
method
f)
The effective interest method is a method of
calculating the amortised cost of a debt instrument
and of allocating interest income over the relevant
period. For financial assets other than purchased
or originated credit-impaired financial assets
(i.e. assets that are credit-impaired on initial
recognition), the effective interest rate is the rate
that exactly discounts estimated future cash
receipts (including all fees and points paid or
received that form an integral part of the effective
interest rate, transaction costs and other premiums
or discounts) excluding expected credit losses,
through the expected life of the debt instrument, or,
where appropriate, a shorter period, to the gross
carrying amount of the debt instrument on initial
recognition.
Impairment of financial assets
The Group recognises a loss allowance for
expected credit losses on investments in debt
instruments that are measured at amortised cost
or at FVTOCI, lease receivables, trade receivables
and contract assets, as well as on financial
guarantee contracts. The amount of expected
credit losses is updated at each reporting date
to reflect changes in credit risk since initial
recognition of the respective financial instrument.
The Group always recognises lifetime ECL for trade
receivables, contract assets and lease receivables.
The expected credit losses on these financial
assets are estimated using a provision matrix based
on the Group’s historical credit loss experience,
adjusted for factors that are specific to the debtors,
general economic conditions and an assessment
of both the current as well as the forecast direction
of conditions at the reporting date, including time
value of money where appropriate.
e) Goods and service tax
Revenues, expenses and assets are recognised
net of the amount of goods and services tax (GST),
except:
i) where the amount of GST incurred is not
recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of
an asset or as part of an item of expense or:
ii)
for receivables and payables which are
recognised inclusive of GST, the net amount
of GST recoverable from, or payable to,
the taxation authority is included as part of
receivables or payables.
42
The net amount of GST recoverable from, or
payable to, the taxation authority is included as
part of receivables or payables.
Cash flows are included in the cash flow statement
on a gross basis. The GST component of cash flows
arising from investing and financing activities which
is recoverable from, or payable to, the taxation
authority is classified as operating cash flows.
Impairment of assets (other than exploration
and evaluation)
At each reporting date, the Group reviews the
carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment
loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to
determine the extent of the impairment loss (if
any). Where the asset does not generate cash
flows that are independent from other assets, the
consolidated entity estimates the recoverable
amount of the cash-generating unit to which the
asset belongs.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset
for which the estimates of future cash flows have
not been adjusted.
If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised in profit
or loss immediately, unless the relevant asset is
carried at fair value, in which case the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses,
the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but only to the extent that the
increased carrying amount does not exceed the
carrying amount that would have been determined
had no impairment loss been recognised for the
asset (cash-generating unit) in prior periods. A
reversal of an impairment loss is recognised in
profit or loss immediately, unless the relevant asset
is carried at fair value, in which case the reversal
of the impairment loss is treated as a revaluation
increase.
g) Income tax
Current tax
Current tax is calculated by reference to the
amount of income taxes payable or recoverable
in respect of the taxable profit or tax loss for the
period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted
by reporting date. Current tax for current and prior
periods is recognised as a liability (or asset) to the
extent that it is unpaid (or refundable).
ANDROMEDA METALS LIMITED
Deferred tax
Deferred tax is accounted for using the
comprehensive balance sheet liability method
in respect of temporary differences arising from
differences between the carrying amount of assets
and liabilities in the financial statements and the
corresponding tax base of those items.
In principle, deferred tax liabilities are recognised
for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is
probable that sufficient taxable amounts will be
available against which deductible temporary
differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets
and liabilities are not recognised if the temporary
differences giving rise to them arise from the
initial recognition of assets and liabilities (other
than as a result of a business combination) which
affects neither taxable income nor accounting
profit. Furthermore, a deferred tax liability is not
recognised in relation to taxable temporary
differences arising from goodwill.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply to
the period(s) when the asset and liability giving
rise to them are realised or settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacting by reporting date. The
measurement of deferred tax liabilities and assets
reflects the tax consequences that would follow
from the manner in which the consolidated entity
expects, at the reporting date, to recover or settle
the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when
they relate to income taxes levied by the same
taxation authority and the company/consolidated
entity intends to settle its current tax assets and
liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised as
an expense or income in the Statement of
Comprehensive Income, except when it relates to
items credited or debited directly to equity, in which
case the deferred tax is also recognised directly in
equity, or where it arises from the initial accounting
for a business combination, in which case it is taken
into account in the determination of goodwill or
excess.
Tax consolidation
The Company and all its wholly-owned Australian
resident entity are part of a tax-consolidated group
under Australian taxation law. Andromeda Metals
Limited is the head entity in the tax-consolidated
group. Tax expense/income, deferred tax liabilities
and deferred tax assets arising from temporary
differences of the members of the tax-consolidated
group are recognised in the separate financial
statements of the members of the tax-consolidated
group using the ‘separate taxpayer within group’
approach. Current tax liabilities and assets and
deferred tax assets arising from unused tax
losses and tax credits of the members of the tax-
consolidated group are recognised by the Company
(as head entity in the tax-consolidated group).
Due to the existence of a tax funding arrangement
between the entities in the tax-consolidated
group, amounts are recognised as payable to or
receivable by the Company and each member of
the group in relation to the tax contribution amounts
paid or payable between the parent entity and
the other members of the tax-consolidated group
in accordance with the arrangement. Further
information about the tax funding arrangement
is detailed in Note 5 to the financial statements.
Where the tax contribution amount recognised by
each member of the tax-consolidated group for
a particular period is different to the aggregate of
the current tax liability or asset and any deferred
tax asset arising from unused tax losses and tax
credits in respect of that period, the difference is
recognised as a contribution from (or distribution to)
equity participants.
h) Investment in joint venture
A joint venture is a joint arrangement whereby the
parties that have joint control of the arrangement
have rights to the net assets of the joint
arrangement. Joint control is the contractually
agreed sharing of control of an arrangement, which
exists only when decisions about the relevant
activities require unanimous consent of the parties
sharing control.
The results and assets and liabilities of joint ventures
are incorporated in these financial statements using
the equity method of accounting, except when the
investment is classified as held for sale, in which
case it is accounted for in accordance with AASB
5.
Under the equity method, an investment in a joint
venture is recognised initially in the consolidated
statement of financial position at cost and adjusted
thereafter to recognise the Group’s share of the
profit or loss and other comprehensive income of
the joint venture. When the Group’s share of losses
of a joint venture exceeds the Group’s interest in
that joint venture (which includes any long-term
interests that, in substance, form part of the Group’s
net investment in the associate or joint venture),
the Group discontinues recognising its share of
further losses. Additional losses are recognised
only to the extent that the Group has incurred legal
or constructive obligations or made payments on
behalf of the joint venture.
An investment in a joint venture is accounted for
using the equity method from the date on which
the associate or a joint venture, any excess of
the cost of the investment over the Group’s share
of the net fair value of the identifiable assets and
liabilities of the investee is recognised as goodwill,
which is included within the carrying amount of the
investment. Any excess of the Group’s share of the
net fair value of the identifiable assets and liabilities
over the cost of the investment, after reassessment,
is recognised immediately in profit or loss in the
period in which the investment is acquired.
43
ANNUAL REPORT 2020
The requirements of AASB 136 are applied to
determine whether it is necessary to recognise
any impairment loss with respect to the Group’s
investment in a joint venture. When necessary, the
entire carrying amount of the investment (including
goodwill) is tested for impairment in accordance
with IAS 36 as a single asset by comparing its
recoverable amount (higher of value in use and
fair value less costs of disposal) with its carrying
amount. Any impairment loss recognised is not
allocated to any asset, including goodwill that forms
part of the carrying amount of the investment. Any
reversal of that impairment loss is recognised in
accordance with AASB 136 to the extent that the
recoverable amount of the investment subsequently
increases.
The Group discontinues the use of the equity
method from the date when the investment ceases
to be a joint venture. When the Group retains an
interest in the former joint venture and the retained
interest is a financial asset, the Group measures
the retained interest at fair value at that date
and the fair value is regarded as its fair value on
initial recognition in accordance with AASB 9. The
difference between the carrying amount of the
joint venture at the date the equity method was
discontinued, and the fair value of any retained
interest and any proceeds from disposing of a
part interest in the associate or a joint venture is
included in the determination of the gain or loss
on disposal of the associate or joint venture. In
addition, the Group accounts for all amounts
previously recognised in other comprehensive
income in relation to that associate on the same
basis as would be required if that associate had
directly disposed of the related assets or liabilities.
Therefore, if a gain or loss previously recognised
in other comprehensive income by that joint
venture would be reclassified to profit or loss on
the disposal of the related assets or liabilities, the
Group reclassifies the gain or loss from equity to
profit or loss (as a reclassification adjustment) when
the associate or joint venture is disposed of.
When the Group reduces its ownership interest
in a joint venture but the Group continues to use
the equity method, the Group reclassifies to profit
or loss the proportion of the gain or loss that had
previously been recognised in other comprehensive
income relating to that reduction in ownership
interest if that gain or loss would be reclassified to
profit or loss on the disposal of the related assets or
liabilities.
When a Group entity transacts with a joint venture
of the Group, profits and losses resulting from the
transactions with the joint venture are recognised in
the Group’s consolidated financial statements only
to the extent of interests in the joint venture that are
not related to the Group.
The Group applies AASB 9, including the
impairment requirements, to long-term interests in
an associate or joint venture to which the equity
method is not applied and which form part of the
net investment in the investee.
Furthermore, in applying AASB 9 to long-term
interests, the Group does not take into account
adjustments to their carrying amount required by
IAS 28 (i.e. adjustments to the carrying amount of
long-term interests arising from the allocation of
losses of the investee or assessment of impairment
in accordance with AASB 128).
i) Joint arrangements
Interests in jointly controlled operations are
reported in the financial statements by including
the consolidated entity’s share of assets employed
in the joint arrangements, the share of liabilities
incurred in relation to the joint arrangements and
the share of any expenses incurred in relation to the
joint arrangements in their respective classification
categories.
j) Financial instruments issued by the Company
Debt and equity instruments
Debt and equity instruments are classified as
either liabilities or as equity in accordance with
the substance of the contractual arrangement. An
equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds
received, net of direct issue costs.
Other financial liabilities
Other financial liabilities are initially measured at fair
value, net of transaction costs.
Other financial liabilities are subsequently
measured at amortised cost using the effective
interest method, with interest expense recognised
on an effective yield basis.
The effective interest method is a method of
calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant
period. The effective interest rate is the rate that
exactly discounts estimated future cash payments
through the expected life of the financial liability, or,
where appropriate, a shorter period.
k) Plant and equipment
Plant and equipment are stated at cost less
accumulated depreciation and impairment. Cost
includes expenditure that is directly attributable
to the acquisition of the item. In the event
that settlement of all or part of the purchase
consideration is deferred, cost is determined by
discounting the amounts payable in the future to
their present value as at the date of acquisition.
Depreciation is provided on plant and equipment.
Depreciation is calculated on a straight line basis
so as to write off the net cost of each asset over its
expected useful life to its estimated residual value.
The estimated useful lives, residual values and
depreciation method is reviewed at the end of each
annual reporting period.
The following estimated useful lives are used in the
calculation of depreciation:
¬
Plant and equipment – at cost
3-5 years
44
ANDROMEDA METALS LIMITED
l) Principles of consolidation
The consolidated financial statements incorporate
the financial statements of the Company and
entities (including structured entities) controlled
by the Company and its subsidiaries. Control is
achieved when the Company:
¬
¬
¬
has power over the investee;
is exposed, or has rights, to variable returns
from its involvement with the investee; and
has the ability to use its power to affect
its returns.
The Company reassesses whether or not it controls
an investee if facts and circumstances indicate
that there are changes to one or more of the three
elements of control listed above.
When the Company has less than a majority of the
voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give
it the practical ability to direct the relevant activities
of the investee unilaterally. The Company considers
all relevant facts and circumstances in assessing
whether or not the Company’s voting rights in an
investee are sufficient to give it power, including:
¬
the size of the Company’s holding of voting
rights relative to the size and dispersion of
holdings of the other vote holders;
¬ potential voting rights held by the Company,
other vote holders or other parties;
¬
rights arising from other contractual
arrangements; and
¬ any additional facts and circumstances that
indicate that the Company has, or does not
have, the current ability to direct the relevant
activities at the time that decisions need to be
made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the
Company obtains control over the subsidiary and
ceases when the Company loses control of the
subsidiary. Specifically, income and expenses of
a subsidiary acquired or disposed of during the
year are included in the consolidated statement
of profit or loss and other comprehensive income
from the date the Company gains control until
the date when the Company ceases to control
the subsidiary.
Profit or loss and each component of other
comprehensive income are attributed to the
owners of the Company and to the non-
controlling interests. Total comprehensive income
of subsidiaries is attributed to the owners of the
Company and to the non-controlling interests even
if this results in the non-controlling interests having a
deficit balance.
When necessary, adjustments are made to the
financial statements of subsidiaries to bring their
accounting policies into line with the Group’s
accounting policies.
All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions
between members of the Group are eliminated in
full on consolidation.
Changes in the Group’s ownership interests in
subsidiaries that do not result in the Group losing
control over the subsidiaries are accounted for as
equity transactions. The carrying amounts of the
Group’s interests and the non-controlling interests
are adjusted to reflect the changes in their relative
interests in the subsidiaries. Any difference between
the amount by which the non-controlling interests
are adjusted and the fair value of the consideration
paid or received is recognised directly in equity and
attributed to owners of the Company.
When the Group loses control of a subsidiary,
a gain or loss is recognised in profit or loss and
is calculated as the difference between the
aggregate of the fair value of the consideration
received and the fair value of any retained interest
and the previous carrying amount of the assets
(including goodwill), and liabilities of the subsidiary
and any non-controlling interests. All amounts
previously recognised in other comprehensive
income in relation to that subsidiary are accounted
for as if the Group had directly disposed of the
related assets or liabilities of the subsidiary (i.e.
reclassified to profit or loss or transferred to another
category of equity as specified/permitted by
applicable AASBs). The fair value of any investment
retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial
recognition for subsequent accounting under AASB
139, when applicable, the cost on initial recognition
of an investment in an associate or a joint venture.
m) Interest income
Interest income is accrued on a time basis, by
reference to the principal outstanding and at the
effective interest rate applicable, which is that
rate that exactly discounts estimated future cash
receipts through the expected life of the financial
asset to that asset’s net carrying amount.
n) Share-based payments
Equity-settled share-based payments to employees
and others providing similar services are measured
at the fair value of the equity instruments at the
grant date. Details regarding the determination
of the fair value of equity-settled share-based
transactions are set out in Note 16.
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 equity instruments
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.
45
ANNUAL REPORT 2020
¬
The lease payments change due to changes
in an index or rate or a change in expected
payment under a guaranteed residual value,
in which cases the lease liability is remeasured
by discounting the revised lease payments
using an unchanged discount rate (unless the
lease payments change is due to a change in
a floating interest rate, in which case a revised
discount rate is used).
¬ A lease contract is modified and the lease
modification is not accounted for as a separate
lease, in which case the lease liability is
remeasured based on the lease term of the
modified lease by discounting the revised lease
payments using a revised discount rate at the
effective date of the modification.
The Group did not make any such adjustments
during the periods presented.
The right-of-use assets comprise the initial
measurement of the corresponding lease
liability, lease payments made at or before the
commencement day, less any lease incentives
received and any initial direct costs. They are
subsequently measured at cost less accumulated
depreciation and impairment losses.
Whenever the Group incurs an obligation for
costs to dismantle and remove a leased asset,
restore the site on which it is located or restore the
underlying asset to the condition required by the
terms and conditions of the lease, a provision is
recognised and measured under AASB 137. To the
extent that the costs relate to a right-of-use asset,
the costs are included in the related right-of-use
asset, unless those costs are incurred to produce
inventories.
Right-of-use assets are depreciated over the
shorter period of lease term and useful life of the
underlying asset.
If a lease transfers ownership of the underlying
asset or the cost of the right-of-use asset reflects
that the Group expects to exercise a purchase
option, the related right-of-use asset is depreciated
over the useful life of the underlying asset. The
depreciation starts at the commencement date of
the lease.
The right-of-use assets are presented as a
separate line in the consolidated statement of
financial position.
The Group applies AASB 136 to determine whether
a right-of-use asset is impaired and accounts for
any identified impairment loss as described in the
‘Property, Plant and Equipment’ policy.
o) Leases
The Group as lessee
The Group assesses whether a contract is or
contains a lease, at inception of the contract.
The Group recognises a right-of-use asset and
a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except
for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value
assets (such as tablets and personal computers,
small items of office furniture and telephones).
For these leases, the Group recognises the lease
payments as an operating expense on a straight-
line basis over the term of the lease unless another
systematic basis is more representative of the time
pattern in which economic benefits from the leased
assets are consumed.
The lease liability is initially measured at the present
value of the lease payments that are not paid at
the commencement date, discounted by using
the rate implicit in the lease. If this rate cannot be
readily determined, the Group uses its incremental
borrowing rate.
Lease payments included in the measurement of
the lease liability comprise:
¬
Fixed lease payments (including in-substance
fixed payments), less any lease incentives
receivable;
¬ Variable lease payments that depend on an
index or rate, initially measured using the index
or rate at the commencement date;
¬
¬
¬
The amount expected to be payable by the
lessee under residual value guarantees;
The exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and
Payments of penalties for terminating the lease,
if the lease term reflects the exercise of an
option to terminate the lease.
The lease liability is presented as a separate line in
the consolidated statement of financial position.
The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and by reducing the carrying amount to
reflect the lease payments made.
The Group remeasures the lease liability (and
makes a corresponding adjustment to the related
right-of-use asset) whenever:
¬
The lease term has changed or there is a
significant event or change in circumstances
resulting in a change in the assessment of
exercise of a purchase option, in which case
the lease liability is remeasured by discounting
the revised lease payments using a revised
discount rate.
46
ANDROMEDA METALS LIMITED
p) Government grants
Government grants are assistance by government
in the form of transfers of resources to the Group
in return for past or future compliance with certain
conditions relating to the operating activities of
the entity.
Government grants are not recognised until there
is reasonable assurance that the Group will comply
with the conditions attached to them and the grant
will be received. Government grants whose primary
condition is to assist with exploration activities are
recognised as deferred income in the statement of
financial position and recognised in profit or loss
on a systematic basis when the related exploration
and evaluation is written off.
Other government grants are recognised as
income over the periods necessary to match them
with the related costs which they are intended to
compensate on a systematic basis. Government
grants receivable as compensation for expenses
or losses already incurred or for the purpose
of giving immediate financial support to the
consolidated entity with no future related costs
are recognised as income in the period in which it
becomes receivable.
Other grants related to cost reimbursements are
recognised as other income in profit or loss in the
period when the costs were incurred or when
the incentive meets the recognition requirements
(if later).
q) Business combinations
Acquisitions of subsidiaries and businesses are
accounted for using the acquisition method. The
consideration for each acquisition is measured
at the aggregate of their fair values (at the date
of exchange) of assets given, liabilities incurred
or assumed, and equity instruments issued by the
Group in exchange for control of the acquiree.
Acquisition-related costs are recognised in profit or
loss as incurred.
Where applicable, the consideration for the
acquisition includes any asset or liability resulting
from a contingent consideration arrangement,
measured at its acquisition-date fair value.
Subsequent changes in such fair values are
adjusted against the cost of acquisition where they
qualify as measurement period adjustments (see
below). All other subsequent changes in the fair
value of contingent consideration classified as an
asset or liability are accounted for in accordance
with relevant Standards. Changes in the fair value
of contingent consideration classified as equity are
not recognised.
Where a business combination is achieved in
stages, the Group’s previously held interests in the
acquired entity are remeasured to fair value at the
acquisition date (i.e. the date the Group attains
control) and the resulting gain or loss, if any, is
recognised in profit or loss. Amounts arising from
interest in the acquiree prior to the acquisition date
that have previously been recognised in other
comprehensive income are reclassified to profit or
loss, where such treatment would be appropriate if
that interest were disposed of.
The acquiree’s identifiable assets, liabilities and
contingent liabilities that meet the conditions for
recognition under AASB 3(2008) are recognised at
their fair value at the acquisition date, except that:
¬ deferred tax assets or liabilities and liabilities
or assets related to employee benefit
arrangements are recognised and measured in
accordance with AASB 112 “Income Taxes” and
AASB 119 “Employee Benefits” respectively;
¬
liabilities or equity instruments related to the
replacement by the Group of an acquiree’s
share-based payment awards are measured
in accordance with AASB 2 “Share-based
Payment”; and
¬ assets (or disposal groups) that are classified as
held for sale in accordance with AASB 5 “Non-
current Assets Held for Sale and Discontinued
Operations” are measured in accordance with
that Standard.
If the initial accounting for a business combination
is incomplete by the end of the reporting period
in which the combination occurs, the Group
reports provisional amounts for the items for which
the accounting is incomplete. Those provisional
amounts are adjusted during the measurement
period (see below), or additional assets or liabilities
are recognised, to reflect new information obtained
about facts and circumstances that existed as
of the acquisition date that, if known, would have
affected the amounts recognised as of that date.
The measurement period is the period from
the date of acquisition to the date the Group
obtains complete information about facts and
circumstances that existed as of the acquisition
date, and is subject to a maximum of one year.
47
ANNUAL REPORT 2020
4 LOSS FROM OPERATIONS
Other income
Interest income on bank deposits
Profit on sale of assets (i)
Realised foreign exchange gain
Other (ii)
YEAR ENDED
30/06/20
$
18,919
650,000
-
98,500
767,419
YEAR ENDED
30/06/19
$
18,474
-
39
447
18,960
i) Profit on the sale of assets related to the disposal of the Rover Copper Gold Project
ii) Relates to government assistance in the form of Job Keeper received starting from March 2020 and expected until
December 2020; Covid cash bonus received starting from March 2020 and expected until September 2020.
Other expenses
Employee benefit expense:
Post employment benefits:
Accumulated benefit superannuation plans
77,293
47,831
Share based payments:
Equity settled share-based payments (shares issued under
the LFESP) (i)
Other employee benefits
Less amounts capitalised in exploration and evaluation expenditure
Depreciation of plant and equipment
Operating lease rental expenses
2,039,075
1,187,364
3,303,732
(712,862)
2,590,870
37,857
40,600
100,339
719,809
867,979
(401,729)
466,250
3,873
61,200
i) Share based payments relate to the amortisation of shares granted under the LFESP to employees. Shares granted
under the LFESP do not represent cash payments and may or may not be exercised (paying the related loan amount) by
the employee.
48
ANDROMEDA METALS LIMITED 5 INCOME TAX
a) Income tax recognised in profit or loss
The prima facie income tax expense on the loss before income
tax reconciles to the tax expense in the financial statements
as follows:
Loss from continuing operations
Income tax income calculated at 30%
Share based payments
Other
Deferred tax assets not brought to account
Tax expense
YEAR ENDED
30/06/20
$
YEAR ENDED
30/06/19
$
(3,365,301)
(1,009,590)
740,193
(49,821)
401,191
81,973
(1,041,044)
(312,313)
30,102
37,807
316,541
72,137
The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when
compared with the previous reporting period.
b) Recognised tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Trade and other receivables
(7,531)
(2,514)
Exploration and evaluation expenditure
(2,764,830)
(1,973,830)
Capital raising costs
Trade and other payables
Employee benefits
Other liabilities
Tax value of losses carried forward
Net deferred tax assets / (liabilities)
c) Unrecognised deferred tax assets
A deferred tax asset has not been recognised in respect of the
following item:
265,002
61,345
11,643
33,450
(2,400,903)
2,400,903
-
183,029
24,974
6,440
33,450
(1,728,451)
1,728,451
-
Tax losses-revenue
11,363,598
10,962,407
A deferred tax asset has not been recognised in respect of the above tax losses because it is not probable that
future taxable profit will be available against which the consolidated entity can utilise the benefit.
d) Movement in recognised temporary differences and
tax losses
Opening balance
Recognised in equity
Recognised in income
Closing balance
-
81,973
(81,973)
-
-
72,137
(72,137)
-
Tax consolidation
Relevance of tax consolidation to the consolidated entity
The Company and its wholly-owned Australian resident entities are in a tax-consolidated group and are therefore
taxed as a single entity. The head entity within the tax consolidated group is Andromeda Metals Limited.
Nature of tax funding arrangement
Entities within the tax-consolidated group have entered into a tax funding arrangement with the head entity. Under the
terms of the tax funding arrangement, Andromeda Metals Limited and its wholly owned Australian resident entities have
agreed to pay a tax equivalent payment to or from the head entity, based on the current tax liability or current tax asset of
the entity. Such amounts are reflected in amounts receivable from or payable to other entities in the consolidated group.
49
ANNUAL REPORT 2020
6 CURRENT TRADE AND OTHER RECEIVABLES
Interest receivable
Other receivables
7 OTHER NON-CURRENT FINANCIAL ASSETS
Deposits (Note 23 (c))
Environmental bonds
8 EXPLORATION AND EVALUATION EXPENDITURE
Costs brought forward
Expenditure incurred during the year
Impairment of exploration and evaluation expenditure
Expenditure impaired (i)
Expenditure written off (ii)
30/06/20
$
543
84,454
84,997
30/06/20
$
42,500
32,000
74,500
30/06/20
$
6,442,897
3,175,536
9,618,433
(384,009)
(15,933)
399,942
30/06/19
$
8,378
109,160
117,538
30/06/19
$
92,966
32,000
124,966
30/06/19
$
5,341,279
1,237,102
6,578,381
-
(135,484)
(135,484)
9,218,491
6,442,897
i)
Impairment
Impairment of specific exploration and evaluation assets during the year have occurred where Directors have
concluded that capitalised expenditure is unlikely to be recovered by sale or future exploitation. At each reporting
date the group undertakes an assessment of the carrying amount of its exploration and evaluation assets. During the
year indicators of impairment were identified on certain exploration and evaluation assets in accordance with AASB 6
Exploration for and Evaluation of Mineral Resources. As a result of this review, an impairment loss of $384,009 (2019:
nil) has been recognised in relation to areas of interest where the Directors have concluded that no further work will be
completed, and consequently the capitalised expenditure is unlikely to be recovered by sale or future exploitation.
ii) Expenditure written off relates to exploration and evaluation expenditure associated with tenements or parts of
tenements that have been surrendered.
iii) The recoverability of the carrying value of the exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
50
ANDROMEDA METALS LIMITED
9 PLANT AND EQUIPMENT
2019/20
Gross carrying amount
PLANT &
EQUIPMENT
MOTOR
VEHICLES
FURNITURE &
FITTINGS
OFFICE & IT
EQUIPMENT
RIGHT OF USE
ASSETS
TOTAL
Opening balance
84,313
3,736
45,007
201,840
-
334,896
Recognition upon first time
adoption of AASB 16
Additions
Disposals and write-offs
-
5,740
(64,338)
-
-
-
-
-
142,439
142,439
295
28,030
-
(60,625)
-
-
34,065
(124,963)
Balance 30 June 2020
25,715
3,736
45,302
169,245
142,439
386,437
Accumulated depreciation
Opening balance
(83,720)
(3,736)
(45,008)
(190,533)
-
(322,997)
Depreciation
Disposals and write-offs
(858)
64,338
-
-
(31)
-
(7,293)
(29,675)
(37,857)
60,626
-
124,964
Balance 30 June 2020
(20,240)
(3,736)
(45,039)
(137,200)
(29,675)
(235,890)
Net book value 30 June 2020
5,475
-
263
32,045
112,764
150,547
2018/19
Gross carrying amount
Opening balance
83,683
3,736
45,007
194,448
Additions
630
-
-
7,392
Balance 30 June 2019
84,313
3,736
45,007
201,840
Accumulated depreciation
Opening balance
(83,683)
(3,736)
(45,007)
(186,698)
Depreciation
(37)
-
-
(3,836)
Balance 30 June 2019
(83,720)
(3,736)
(45,007)
(190,534)
Net book value 30 June 2019
593
-
-
11,306
-
-
-
-
-
-
-
326,874
8,022
334,896
(319,124)
(3,873)
(322,997)
11,899
The Group only has one lease which is for the office premises. The average lease term is 2 years.
Amount recognised in profit or loss
Depreciation expense on right-to-use assets
Interest expense on lease liabilities
Expense relating to short term leases
The total cash outflow for leases amounts to $30,000.
10 INVESTMENT IN JOINT VENTURE
Investment in joint venture (i)
30/06/20
$
29,675
1,435
40,600
30/06/20
$
157,964
-
i) Relates to investment in Natural Nanotech Pty Ltd. As at 30 June 2020 ADN has joint control by virtue of have one of two
board positions. ADN will acquire a 50% equity interest in Natural Nanotech in the first half of financial year 2020/21.
51
ANNUAL REPORT 2020 11 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Trade payables and accruals
30/06/20
$
626,274
30/06/19
$
455,997
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
The average credit period taken for trade purchases is 30 days. No interest is charged on the trade payables. The
Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed
credit terms.
12 CURRENT LIABILITIES – OTHER
Employee benefits – annual leave
Movement in employee benefits
Balance at the beginning of the year
Leave accrued
Leave taken
Closing value
13 LEASE LIABILITIES
Maturity analysis:
Year 1
Year 2
Less unearned interest
Closing value
Analysed as:
Current
Non-current
30/06/20
$
12,178
12,178
468
28,030
(16,320)
12,178
30/06/20
$
73,000
43,400
116,400
(2,525)
113,875
70,851
43,024
113,875
30/06/19
$
468
468
-
15,220
(14,752)
468
30/06/19
$
-
-
-
-
-
-
-
-
The Group does not face a significant liquidity risk with regards to its lease liabilities. Lease liabilities are monitored
within the Group’s treasury function.
14 NON-CURRENT LIABILITIES – PROVISIONS
Employee benefits
15 NON-CURRENT LIABILITIES – OTHER
Deferred income (government grant)
30/06/20
$
26,632
30/06/20
$
975,517
30/06/19
$
21,000
30/06/19
$
975,517
Deferred income relates to government grants received in relation to exploration related activities associated with
currently active exploration projects, refer note 3(p) for the accounting policy. The funds received are non-refundable.
52
ANDROMEDA METALS LIMITED 16 ISSUED CAPITAL
1,532,863,256 fully paid ordinary shares
(2019: 1,355,499,211)
2,107,500 treasury stock (2019: 9,940,000)
Movement in issued shares for the year
30/06/20
$
30/06/19
$
47,878,739
42,879,479
(52,221)
(122,920)
47,826,518
42,756,559
NUMBER
YEAR ENDED
30/06/20
$
NUMBER
YEAR ENDED
30/06/19
$
Fully paid ordinary shares
Balance at beginning of financial year
1,355,499,211
42,879,479
896,028,227
40,148,298
Placement at 4.7 cents
Placement at 0.6 cents
Placement at 0.65 cents*
85,046,790
3,997,199
-
-
-
-
-
-
183,333,333
1,100,000
271,076,923
1,762,000
Issue of shares as part payment of director fees
402,576
17,500
5,060,728
37,500
Exercise of listed options
89,414,679
1,093,910
Exercise of unlisted options
2,500,000
Shares issued from treasury stock
Costs associated with the issue of shares
Related income tax
-
-
-
42,165
39,756
(273,243)
81,973
-
-
-
-
-
-
-
-
(240,456)
72,137
Balance at end of financial year
1,532,863,256
47,878,739
1,355,499,211
42,879,479
Treasury stock
Balance at beginning of financial year
(9,940,000)
(122,920)
(9,940,000)
(122,920)
Shares issued from treasury stock
7,832,500
70,699
-
-
Balance at end of financial year
(2,107,500)
(52,221)
(9,940,000)
(122,920)
Total issued capital
1,530,755,756
47,826,518
1,345,559,211
42,756,559
* One free option per share with an exercise price of $0.012 and an expiry date of 30 November 2020 were also issued.
Fully paid shares carry one vote per share and carry the right to dividends.
Financial year ended 30 June 2019
On 7 August 2018 the Company issued 183,333,333 ordinary shares under a placement to professional and
sophisticated investors at an issue price of 0.6 cents per share raising $1,100,000 before costs.
A total of 5,060,728 ordinary shares were issued to Non-Executive Directors on 3 December 2018 as payment of
partly deferred director fees as approved by shareholders.
On 28 February 2019 the Company issued 271,076,923 ordinary shares under a placement to professional and
sophisticated investors at an issue price of 0.65 cents per share raising $1,762,000 before costs. Participants in the
placement were issued 3 listed options for every 4 new shares subscribed resulting in 203,307,712 listed options being
issued having an exercise price of $0.012 cents and expiry date of 30 November 2020
Financial year ended 30 June 2020
On 25 October 2019 the Company issued 85,046,790 ordinary shares under a placement to professional and
sophisticated investors at an issue price of 4.7 cents per share raising $3,997,199 before costs.
A total of 402,576 ordinary shares were issued to a Non-Executive Director on 3 December 2019 as payment of partly
deferred director fees as approved by shareholders.
53
ANNUAL REPORT 2020
Share Options on Issue
At 30 June 2019 there were 704,588,163 listed share options on issue having an exercise price of 1.2 cents and an
expiry date of 30 November 2020. A total of 89,414,679 listed share options were exercised during the year leaving
615,173,484 listed share options on issue at 30 June 2020.
At 30 June 2019 there were 20,000,000 unlisted options on issue having an exercise price of 1.2 cents and an expiry
date of 15 November 2021. On 24 June 2020 2,500,000 unlisted options were exercised leaving 17,500,000 unlisted
options on issue at 30 June 2020.
On 24 December 2019, 59,000,000 unlisted options were issued with an exercise price of 6.4 cents and an expiry
date of 28 November 2022. None of these unlisted options were exercised during the year.
On 24 December 2019, a further 20,000,000 unlisted options were issued, which vest 12 months following the 2019
AGM, with an exercise price of 7.5 cents and expiry date of 28 November 2023. None of these unlisted options were
exercised during the year.
17 RESERVES
Share option reserve (i)
Employee equity-settled benefits reserve (ii)
30/06/20
$
2,939,738
-
2,939,738
30/06/19
$
505,524
57,195
562,719
i) The share option reserve arises from the issuance of share options arising from rights issues and issuance to directors,
employees and consultants.
ii) The employee equity-settled benefits reserve arises on the granting of shares to employees, consultants and executives
under the Loan Funded Employee Share Plan (LFESP). Amounts are transferred out of the reserve and into issued capital
when the shares under the LFESP are exercised. Further information about share based payments made under the plan
is shown in Note 18 to the financial statements.
18 LOAN FUNDED EMPLOYEE SHARE PLAN
The Loan Funded Employee Share Plan (LFESP) is an ownership-based compensation plan for executives, employees
and consultants.
At the Annual General Meeting held on 30 November 2015 the shareholders approved the Company’s LFESP.
Fully paid ordinary shares will be held by the trustee of the LFESP and transferred to executives, employees and
consultants of the Company on achieving certain Company and personal KPIs and the payment of the share
issue price, as long as the holder remains employed by the Company. An interest-free loan will be provided by the
Company to each staff member to acquire the shares that are held by the trustee under the terms of the LFESP.
At the Annual General Meeting held on the 30 November 2015, the shareholder’s approved the granting of 4,500,000
shares to the former Managing Director and 2,500,000 shares to the Executive Director under the LFESP and held by
the trustee of the Plan at an issue price of $0.01 per share along with associated loans of the same value. The shares
will transfer to the individual executive on the achievement of a number of KPIs set by the Board of Directors for the
2016 calendar year.
On 30 June 2016, directors approved the issue of 2,940,000 shares to key staff members under the LFESP and
held by the trustee of the Plan at an issue price of $0.018 per share along with associated loans of the same value.
The shares will transfer to the individual staff member on the achievement of a number of KPIs set by the Board of
Directors for the 2016 calendar year.
At the Annual General Meeting held on the 30 November 2016, the shareholder’s approved the granting of 2,300,000
shares to the former Managing Director and 1,300,000 shares to the Executive Director under the LFESP and held by
the trustee of the Plan at an issue price of $0.01 per share along with associated loans of the same value. The shares
will transfer to the individual executive on the achievement of a number of KPIs set by the Board of Directors for the
2017 calendar year.
At the Annual General Meeting held on the 30 November 2017, the shareholder’s approved the granting of 1,800,000
shares to the former Managing Director and 1,800,000 shares to the Executive Director under the LFESP and held
by the trustee of the Plan at an issue price of $0.006 per share along with associated loans of the same value. The
shares will transfer to the individual executive on the achievement of a number of KPIs set by the Board of Directors for
the 2018 calendar year.
On 23 May 2018 directors approved the issue of 750,000 shares to a key staff member under the LFESP and held
by the trustee of the Plan at an issue price of $0.007 per share along with an associated loan of the same value.
The shares will transfer to the individual staff member on the achievement of a number of KPIs set by the Board of
Directors for the 2018 calendar year.
54
ANDROMEDA METALS LIMITED The following LFESP shares were in existence during the financial year:
RIGHTS – SERIES
NUMBER
GRANT DATE
VESTING DATE
FAIR VALUE AT GRANT DATE
Series 1
Series 2
Series 3
Series 4
Series 5
7,000,000
30/11/2015
As described above
2,940,000
30/06/2016
As described above
3,600,000
3,600,000
30/11/2016
As described above
30/11/2017
As described above
750,000
23/05/2018
As described above
$0.005
$0.003
$0.007
$0.004
$0.007
Movement in shares granted under the Loan Funded Employee Share Plan during the year
At 30 June 2019 the number of shares granted to executives and employees was 7,832,500 and the amount held by
the trustee of the LFESP was 2,107,500 that are available to be issued to executives and employees. During the year
7,832,500 shares were transferred to executives and employees through the settlement of their respective interest-
free loans. At 30 June 2020, 2,107,500 shares remained held by the trustee of the LFESP.
The following reconciles the shares granted under the Plan at the beginning and end of the financial year:
30/06/20
30/06/19
NUMBER OF
LFESP SHARES
WEIGHTED AVERAGE
EXERCISE PRICE $
NUMBER OF
LFESP SHARES
WEIGHTED AVERAGE
EXERCISE PRICE $
Loan Funded Employee Share Plan
Balance at beginning of financial year
7,832,500
0.009
7,832,500
0.009
Granted during the financial year
-
-
Exercised during the financial year
(7,832,500)
(0.009)
Forfeited during the financial year
Cancelled during the financial year
Balance at end of the financial year
Exercisable at end of year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,832,500
7,832,500
0.009
0.009
19 KEY MANAGEMENT PERSONNEL COMPENSATION
The key management personnel of Andromeda Metals Limited during the year were:
y R G J Grivas
(Non-Executive Chairman)
y J E Marsh
(Managing Director)
y N J Harding
(Executive Director and Company Secretary)
y J F Ranford
(Operations Director) – appointed Non-Executive Director on 8 April 2020
and subsequently Operations Director on 1 June 2020
y A N Shearer
(Non-Executive Director)
y E J Whittaker
(Chief Geologist) – appointed 17 February 2020
The aggregate compensation of key management personnel of the Group is set out below:
Short-term employee benefits
Post employment benefits
Leave benefits
Cash bonus
Share-based payments (i)
YEAR ENDED
30/06/20
$
693,138
47,249
32,007
141,324
1,766,562
2,680,280
YEAR ENDED
30/06/19
$
480,449
28,897
21,057
36,529
100,077
667,009
i) Share based payments do not represent cash payments to key management personnel and the related shares may or
may not ultimately vest.
55
ANNUAL REPORT 2020
20 REMUNERATION OF AUDITORS
Deloitte and related network firms*
Audit or review of financial reports
Group
Other services
Tax return preparation and advice
30/06/20
$
30/06/19
$
66,860
52,000
-
66,860
10,950
62,950
* The auditor of Andromeda Metals Limited is Deloitte Touche Tohmatsu.
21 RELATED PARTY DISCLOSURES
a) Equity interests in related parties
Equity interests in subsidiaries
Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 27 to the
financial statements.
Interests in joint arrangements
Details of interests in joint arrangements are disclosed in Note 22 to the financial statements.
b) Key management personnel compensation
Details of key management personnel compensation are disclosed in Note 19.
c) Transactions with key management personnel
Other than as disclosed in Note 19 and Note 21(b), there were no transactions with key management personnel or
their personally related entities during the year ended 30 June 2020 (2019: Nil).
22 THIRD PARTY INTERESTS
The Group had interests in unincorporated joint arrangements at 30 June 2020 as follows:
Moonta Porphyry Joint Venture (note i) – copper/gold exploration
Rover Copper Gold Project (note ii) – copper/gold exploration
Wudinna Gold Joint Venture (note iii) – gold exploration
Great White Kaolin Joint Venture (note iv) – halloysite-kaolin
evaluation and development
Drummond Gold Joint Venture (note v) – gold exploration
Moonta Copper ISR Joint Venture (note vi) – copper in-situ recovery
Halloysite Nanotechnology Joint Venture (note vii) –
halloysite research
PERCENTAGE
INTEREST 2020
PERCENTAGE
INTEREST 2019
90%
N/A
100%
51%
100%
100%
0%
90%
100%
100%
0%
100%
100%
0%
i) The Group has an option to purchase the remaining 10% at any time for a consideration of $200,000 cash or the
equivalent of $200,000 in Andromeda Metals Limited shares.
ii) The Rover Copper Gold Project covers 287 km2 in the Rover Field southwest of Tennant Creek in the Northern Territory.
The Rover field is prospective for ironstone hosted copper-gold deposits geologically identical to deposits found in the
Tennant Creek Field, many of which exhibited high grades allowing them to be profitably mined in the past. On 2 August
2019 the Company executed a binding Sale and Purchase Agreement for the sale of the Rover Copper Gold Project
to Castile Resources Pty Ltd, a wholly owned subsidiary of Westgold Resources Limited, for a total cash consideration
of $650,000.
56
ANDROMEDA METALS LIMITED
iii) Under the terms of the Wudinna Farm-in and Joint Venture Agreement, Lady Alice Mines Pty Ltd (LAM) is required to
spend $2,100,000 by 30 October 2020 on exploration activities across tenements comprising the Company’s Eyre
Peninsula Gold Project to earn a 50% equity interest in the Project. The Company granted an extension to 31 December
2020 for the completion of the Stage 1 expenditure following a request from LAM due to logistical issues associated with
COVID-19. LAM can then elect to sole fund a further $1,650,000 over a further two years to increase its equity to 65%
and then an additional $1,250,000 over a further year to move to 75% equity interest in the project. Thereafter each party
may contribute to ongoing expenditure in respect to their joint venture holding or else elect to dilute. Should a party’s
equity fall below 5%, its equity will be compulsory acquired by the other party at a price to be negotiated in good faith or
as determined by an independent valuer. LAM is required to spend $100,000 before it has a right to withdraw from the
Joint Venture. LAM has been acquired by London Stock Exchange listed entity Cobra Resources PLC and acts as the
operator of the joint venture.
iv) Under the terms of the Great White Kaolin Joint Venture Agreement (previously known as the Poochera Joint Venture), the
Company can acquire a 51% equity interest in the tenements located on the Eyre Peninsula currently held by Minotaur
Exploration Limited (MEP) that contain high-quality halloysite-kaolin deposits on spending $3,000,000 by 24 April 2020
in advancing the project through exploration and evaluation activities and feasibility studies. $400,000 is required to be
spent by the Company before it has the right to withdraw. ADN can elect to sole fund a further $3,000,000 over a further
three years to acquire an additional 24% equity in the Project. The Company’s interest will immediately convert to 75%
ownership prior to the completion of the second stage contribution if a decision to mine is determined by both parties to
the agreement. Thereafter each party may contribute to ongoing expenditure in respect to their joint venture holding or
else elect to dilute. If any party dilutes to less than 5% equity interest, then its interest will be acquired by the other party
for a modest sum and covert to a 2% net smelter royalty. On 4 March 2020, the joint venture partners announced that
the Stage 1 expenditure had been met by ADN and that the Company had acquired a 51% interest in the Project. ADN
has elected to proceed with Stage 2 by sole funding an additional $3,000,000 to be spent by 24 April 2023 to acquire a
further 24% interest in the Project.
v) The Drummond Gold Joint Venture was established on 31 August 2018 with Evolution Mining Limited (EVN) to explore
epithermal gold prospects across the Company’s Drummond Gold Project in north Queensland. Under the terms of the
joint venture, EVN is required to sole fund $2.0 million on exploration expenditure under Stage 1 within 2 years of execution
and pay the Company $300,000 at the time of entering the joint venture. Subsequent to the end of the financial year, on
11 September 2019 EVN advised it had met its Stage 1 expenditure commitment and elected to proceed to Stage 2 which
will require it to spend another $4.0 million over the next 2 years and pay the Company a further $200,000 to earn an
overall 80% equity interest in the Project.
vi) The Moonta Copper ISR Joint Venture was established on 19 December 2018 with Environmental Metals Recovery Pty
Ltd (EMR) to progress the potential to recover copper via in-situ leach recover technique across the northern part of the
Company’s Moonta tenement in South Australia. Under the terms of the joint venture EMR will sole fund $2.0 million over 4
years to earn a 51% equity interest in the project area. EMR can elect to move to a 75% interest in the project by spending
a further $3.5 million over an additional 3.5 years.
vii) The Halloysite Technology Joint Venture is a collaborative partnership with Minotaur Exploration Limited established
on 16 May 2019 to undertake research and development to develop intellectual property and investigate commercial
applications for halloysite-kaolin nanotubes sourced from the Great White Kaolin Project. Under the terms of the
agreement the Company is required to make contributions to earn a 50% equity interest in an incorporated company
named Natural Nanotech Pty Ltd which will hold the intellectual property developed on behalf of the joint venture
partners. As at 30 June 2020 all payments required to earn the 50% interest have been made, with the shares expected
to legally transferred to the Andromeda in the first half of FY21. Andromeda already has joint control by virtue of having
one of two board seats, and consequently the investment is classified as an investment in joint venture as at 30 June
2020. Refer Note 10 for further information.
The amount included in mining tenements, exploration and evaluation (Note 8) includes $9,044,172 (2019: $6,387,639)
relating to the above joint arrangements.
23 COMMITMENTS FOR EXPENDITURE AND CONTINGENT LIABILITIES
a) Exploration expenditure commitments
The Group has certain obligations to perform exploration work and expend minimum amounts of money on such
works on mineral exploration tenements.
These obligations will vary from time to time, subject to statutory approval. The terms of current and future joint
ventures, the grant or relinquishment of licences and changes to licence areas at renewal or expiry, will alter the
expenditure commitments of the Company.
Total expenditure commitments at balance date in respect of minimum expenditure requirements not provided for
in the financial statements are approximately:
Not later than one year
Later than one year but not later than two years:
Later than two years but not later than five years:
2020
$
2,797,250
2,078,500
937,000
2019
$
2,726,773
2,022,083
1,406,333
57
ANNUAL REPORT 2020 b) Service agreements
Details of the current services and consultancy agreements are set out below:
2020
KEY MANAGEMENT PERSONNEL
N J Harding
J F Ranford
R G J Grivas
2019
KEY MANAGEMENT PERSONNEL
N J Harding
R G J Grivas
TERMS
Daily rate of $920
Monthly rate of $20,000 for 3 days week
Daily rate of $900 per day as required
TERMS
Daily rate of $800
Daily rate of $900 per day as required
On 19 December 2019 the Group entered into a new service agreement with an entity associated with N J
Harding with no fixed term. The Group or the entity associated with N J Harding may terminate the agreement by
giving three months notice respectively.
On 1 June 2020 the Group entered into a service agreement with an entity associated with J F Ranford with no
fixed term. The Group or the entity associated with J F Ranford may terminate the agreement by giving three
months notice respectively.
The Group entered into a consultancy agreement with R G J Grivas on 27 October 2017 to provide consulting
services on an as needs basis at the rate of $900 per day. A total of $3,600 (2019: $25,200) was paid under this
agreement during the year.
c) Bank guarantees
The Group has provided restricted cash deposits of $42,500 as security for the following unconditional
irrevocable bank guarantees:
¬ An environment bond of $10,000 (2019: $10,000) to the Minister for Mineral Resources Department, South
Australia,
¬ A rent guarantee of $32,500 (2019: $32,500) to the landlord of the Company’s leased office premises.
A performance bond of $50,000 to the Central Land Council, Northern Territory was cancelled and returned to
the Company during the financial year.
d) Operating lease – prior to adoption of AASB 16
Operating lease relates to the lease of office space which expires on 31 January 2022 (2019: 31 January 2020).
The Group does not have an option to purchase the leased asset at the expiry of the lease period.
Non-cancellable operating lease commitments
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Longer than 5 years
2019
$
40,600
-
-
40,600
58
ANDROMEDA METALS LIMITED
24 FINANCIAL INSTRUMENTS
Capital risk management
The Group aims to manage its capital to ensure that entities in the Group will be able to continue as a going concern
while maximising the return to shareholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of cash and cash equivalents, and equity attributable to equity holders of
the parent, comprising issued capital, reserves and accumulated losses.
Due to the nature of the Group’s activities (exploration) the directors believe that the most advantageous way to fund
activities is through equity and strategic joint venture arrangements. The Group’s exploration activities are monitored
to ensure that adequate funds are available.
Categories of financial instruments
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial liabilities
Trade and other payables
Lease liabilities
Other liabilities
2020
$
2019
$
2,998,626
1,669,188
84,997
74,500
626,274
113,875
12,178
117,538
124,966
455,997
-
468
Interest rate risk management
The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.
Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to interest rates for both derivative and
non-derivative instruments at the reporting date and the stipulated change taking place at the beginning of the
financial year and held constant throughout the reporting period.
At reporting date, if interest rates had been 50 basis points higher or lower and all other variables were held constant,
the Group’s net profit would increase/decrease by $11,669 (2019: increase/decrease by $6,326). This is mainly
attributable to interest rates on bank deposits.
The Group’s sensitivity to interest rates has increased due to the increase in the current holding in cash compared to
the prior year.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to
the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient
collateral where appropriate, as a means of mitigating the risk of financial loss from activities.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the counterparties are
banks with high credit-ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances for losses,
represents the Group’s maximum exposure to credit risk without taking account of the value of any collateral
obtained.
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who has built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long-term funding and
liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves.
59
ANNUAL REPORT 2020
Liquidity and interest risk tables
The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The
table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on
which the Group can be required to pay. The table includes both interest and principal cash flows.
2020
Non-interest bearing
Interest bearing
2019
Non-interest bearing
WEIGHTED AVERAGE
EFFECTIVE INTEREST RATE
%
-
2.63%
LESS THAN ONE YEAR
ONE TO TWO YEARS
$
626,274
70,851
$
-
43,024
-
455,997
-
Fair value of financial instruments
The fair values of financial assets and financial liabilities are determined as follows:
y
y
the fair value of financial assets and financial liabilities with standard terms and conditions and traded on active
liquid markets are determined with reference to quoted market prices.
the fair value of other financial assets and financial liabilities (excluding derivative instruments) are determined in
accordance with generally accepted pricing models based on discounted cash flow analysis using prices from
observable current market transactions.
y
the book value approximates the fair value.
25 SEGMENT INFORMATION
The Group has a number of exploration licenses in Australia which are managed on a portfolio basis. The decision to
allocate resources to individual projects in the portfolio is predominantly based on available cash reserves, technical
data and the expectations of future metal prices. Accordingly, the Group effectively operates as one segment,
being exploration in Australia. This is the basis on which internal reports are provided to the directors for assessing
performance and determining the allocation of resources within the Group.
26 EARNINGS PER SHARE
Basic earnings per share – profit / (loss)
Diluted earnings per share – profit / (loss)
YEAR ENDED 30/06/20
CENTS PER SHARE
YEAR ENDED 30/06/19
CENTS PER SHARE
(0.24)
(0.24)
(0.10)
(0.10)
Basic earnings per share
The earnings and weighted average number of ordinary shares used
in the calculation of basic earnings per share are as follows:
– Earnings
$
$
(3,447,274)
(1,113,181)
NUMBER
NUMBER
– Weighted average number of ordinary shares
1,423,661,411
1,143,839,122
Diluted earnings per share
The earnings and weighted average number of ordinary shares used
in the calculation of diluted earnings per share are as follows:
– Earnings
$
$
(3,447,274)
(1,113,181)
NUMBER
NUMBER
– Weighted average number of ordinary shares
1,423,661,411
1,143,839,122
60
ANDROMEDA METALS LIMITED
YEAR ENDED 30/06/20
NUMBER
YEAR ENDED 30/06/19
NUMBER
615,173,484
704,588,163
96,500,000
20,000,000
2,107,500
9,940,000
713,780,984
734,528,163
OWNERSHIP INTEREST
The following potential ordinary shares are anti-dilutive and are
therefore excluded from the weighted average number of ordinary
shares for the purposes of diluted profit / (loss) per share:
– Listed share options
– Unlisted share options
– Treasury shares
27 CONTROLLED ENTITIES
NAME OF ENTITY
Parent Entity
Andromeda Metals Limited
Subsidiaries
Adelaide Exploration Pty Ltd
Peninsula Resources Pty Ltd
ADN LFESP Pty Ltd
Mylo Gold Pty Ltd
Frontier Exploration Pty Ltd
Andromeda Industrial Minerals Pty Ltd
i) Head entity in tax consolidated group.
ii) Members of tax consolidated group.
COUNTRY OF
INCORPORATION
Australia
Australia
Australia
Australia
Australia
Australia
Australia
(i)
(ii)
(ii)
(ii) (iii)
(ii)
(ii)
(ii)
2020
%
100%
100%
100%
100%
100%
100%
100%
iii) The Company acts as the trustee to the Loan Funded Employee Share Plan.
2019
%
100%
100%
100%
100%
100%
100%
100%
61
ANNUAL REPORT 2020 28 PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Financial performance
Profit / (loss) for the year
Other comprehensive income
Total comprehensive income
30/06/20
$
30/06/19
$
3,083,617
8,625,995
11,709,612
709,307
69,656
778,963
1,786,658
5,334,592
7,121,250
456,466
21,000
477,466
47,826,518
42,756,559
2,739,738
562,719
(39,835,607)
(36,675,494)
10,930,649
6,643,784
YEAR ENDED
30/06/20
$
(3,177,551)
-
YEAR ENDED
30/06/19
$
(978,820)
-
(3,047,876)
(978,820)
Commitment for expenditure and contingent liabilities if the parent entity
Note 23 to the financial statements disclose the Group’s commitments for expenditure and contingent liabilities. Of the
items disclosed in that note the following relate to the parent entity:
y
service agreements
y bank guarantees
y operating leases
29 SUBSEQUENT EVENTS
There were no other matters or circumstances occurring subsequent to the end of the financial year that has
significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those
operations, or the state of affairs of the consolidated entity in future financial years.
62
ANDROMEDA METALS LIMITED
Directors’ Declaration
The directors declare that:
In the directors’ opinion, there are reasonable grounds to
believe that the Company will be able to pay its debts as and
when they become due and payable;
In the directors’ opinion, the attached financial statements are
in compliance with International Financial Reporting Standards,
as stated in Note 3 to the financial statements;
In the directors’ opinion, the financial statements and notes
thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a
true and fair view of the financial position and performance of
the Group; and
The directors have been given the declaration required by
Section 295A of the Corporation Act 2001.
Signed in accordance with a resolution of the directors made
pursuant to Section 295(5) of the Corporations Act 2001.
On behalf of the directors
James E Marsh
Managing Director
Andrew N Shearer
Non-Executive Director
Adelaide, South Australia
30th September 2020
63
ANNUAL REPORT 2020
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Brookfield Place, Tower 2
123 St Georges Terrace
Perth, WA, 6000
Australia
Phone: +61 8 9365 7000
www.deloitte.com.au
Independent Auditor’s Report to the
members of Andromeda Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Andromeda Metals Limited (the “Company”), and its subsidiaries
(the “Group”) which comprises the consolidated statement of financial position as at 30 June 2020,
consolidated statement of profit or loss and other comprehensive income, consolidated statement of
changes in equity and consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, 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 30 June 2020 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 confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Entity, would be in the same terms if given to the directors as at the time of
this auditor’s report.
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 3 in the financial report, which indicates that the Group incurred a net loss of
$3,447,274 and experienced net cash outflows from operating and investing activities of $3,538,195
during the year ended 30 June 2020. As stated in Note 3, these events or conditions, along with other
matters as set forth in Note 3, indicate 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.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
64
ANDROMEDA METALS LIMITED
Our procedures in relation to going concern included, but were not limited to:
•
Inquiring of management and the directors in relation to events and conditions that may impact
the assessment on the Group’s ability to pay its debts as and when they fall due;
• Challenging the assumptions reflected in management’s cash flow forecast, including the timing
of expected cash flows, including the uncertainty in relation to the impact of COVID-19 on the
Group;
Assessing the impact of events occurring after balance date on the financial statements; and
•
• Assessing the adequacy of the disclosure related to going concern in Note 3 to the financial
statements.
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 for 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.
Key Audit Matter
Carrying value of Exploration and
evaluation assets
As at 30 June 2020, the Group has capitalised
$9.2 million of exploration and evaluation
expenditure as disclosed in Note 8.
Significant judgement is applied in
determining the treatment of exploration and
evaluation expenditure including:
• Whether the conditions for capitalisation
are satisfied;
• Which elements of exploration and
evaluation expenditures qualify for
recognition; and
• Whether the facts and circumstances
indicate that the exploration and
expenditure assets should be tested for
impairment.
How the scope of our audit responded to the
Key Audit Matter
Our procedures included, but were not limited to:
• Obtaining an understanding of management’s
process for assessing the recoverability of
exploration and evaluation assets;
• Obtaining a schedule of the areas of interest
held by the Group, and assessing whether
the rights to tenure of those areas of
interest remained current at balance date;
• Holding discussions with management as to
the status of ongoing exploration
programmes in the respective areas of
interest;
•
•
•
Assessing whether any such areas of interest
had reached a stage where a reasonable
assessment of economically recoverable
reserves existed;
Testing on a sample basis, exploration and
evaluation expenditure capitalised during the
year for compliance with the recognition and
measurement criteria of the relevant
accounting standards; and
Assessing whether any facts or
circumstances existed to suggest
impairment testing was required.
We also assessed the appropriateness of the
disclosures included in Note 8 to the financial
statements.
Other Information
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 30 June 2020, 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 we do not express any form
of assurance conclusion thereon.
65
ANNUAL REPORT 2020
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 concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has 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 the 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.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group’s audit. We remain
solely responsible for our audit opinion.
66
ANDROMEDA METALS LIMITED
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.
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 in pages 27 to 32 of the Directors’ Report for the
year ended 30 June 2020.
In our opinion, the Remuneration Report of Andromeda Metals Limited, for the year ended 30 June
2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of Andromeda Metals Limited 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.
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Perth, 30 September 2020
67
ANNUAL REPORT 2020 Investor information
as at 30 September 2020
SHARE PRICE MOVEMENTS
Share prices on the Australian Securities Exchange
during the 2019-2020 year were:
QUARTER ENDED
September 2019
December 2019
March 2020
June 2020
HIGH
$0.082
$0.060
$0.057
$0.075
LOW
$0.014
$0.035
$0.019
$0.030
ANNOUNCEMENTS
The Company makes both statutory announcements
(quarterly activities reports, financial reports, Appendix
5B cashflow statements, changes to directors’ interests)
and specific announcements under continuous
disclosure provisions on a timely basis.
Company announcements made since the start of
the financial year and marked as price sensitive by
ASX include:
2019
18 July
29 July
China visit confirms significant Halloysite-
Kaolin demand
Additional offtake for Dry-Processed
Halloysite-Kaolin
Response to ASX Query
June 19 Quarterly Activities Report
June 19 Quarterly Cashflow Report
Sale of Rover Copper-Gold Project
Response to ASX Query
Trading Halt
DSO offtake secured for Halloysite-Kaolin
product
Expansion of Project Tenure at Poochera
and Camel Lake
12 September Evolution commits to Stage 2 of
31 July
31 July
31 July
5 August
13 August
16 August
19 August
9 September
Drummond Joint Venture
26 September Trading Halt
26 September Exchange SA Conference Presentation
30 September Scoping Study delivers robust economics
14 October
16 October
24 October
30 October
for Poochera
Trading Halt
Placement
Funding for Halloysite-Kaolin research for
Hydrogen Storage
Drilling at Carey’s Well extends
Mineralised Zone
September 19 Quarterly Activities Report
September 19 Quarterly Cashflow Report
Video Interview with Managing Director
31October
31 October
15 November
28 November Managing Director’s Presentation – 2019
29 November
AGM
SA Mining and Exploration Conference
Presentation
Commencement of Drilling at Poochera
5 December
12 December High Purity Halloysite confirmed at
Poochera
23 December Significant increase in Mineral Resource
at Poochera
68
2020
5 March
16 March
20 March
7 April
8 April
20 April
31 January
31 January
4 March
30 April
30 April
7 May
18 May
December 19 Quarterly Activities Report
December 19 Quarterly Cashflow Report
Andromeda acquires 51% interest in
Poochera Project
Summary of Managing Director’s
Interview
High Grade Halloysite Zone identified at
Condooringie
Drilling underway at Mount Hope
Halloysite-Kaolin Prospect
MD Webinar Presentation
Andromeda strengthens Board and Team
Significant Kaolin intersected at Mount
Hope Project
March 20 Quarterly Activities Report
March 20 Quarterly Cashflow Report
NWR Small Cap Resources Presentation
Drilling underway at Condooringie
Halloysite-Kaolin Prospect
Trading Halt
Pre-Feasibility Study further improves
Poochera economics
Video Interviews conducted by
Managing Director
Appointment of Project Manager
Letter to Optionholders
Maiden Ore Reserve for Carey’s Well
Deposit
New Major Market Opportunity following
Mount Hope results
Noosa Mining Virtual Conference
Presentation
June 20 Quarterly Activities Report
June 20 Quarterly Cashflow Report
New Mineral Resource for Mount Hope
Kaolin Project
Appointment of Marketing Services
Provider
3 September
Video Interview with Managing Director
11 September Hammerhead results and Potential New
30 July
30 July
11 August
11 June
19 June
10 July
28 May
1 June
31 August
10 June
15 July
15 July
Product Application
Share Café Webinar and Presentation
11 September
28 September Trading Halt
29 September Response to ASX Price Query Letter
29 September Commencement of Drilling at Wudinna
Gold Project
29 September Mineral Resource for Hammerhead
28 October
Halloysite-Kaolin Deposit
Halloysite Nanotechnology
Breakthroughs for Natural Nanotech
ANDROMEDA METALS LIMITED Additional shareholder information
as at 30 September 2020
TOP 20 SHAREHOLDERS OF ORDINARY SHARES
SHARES
% SHARES
6.33
1.76
1.50
1.24
1.22
1.20
1.04
1.01
0.89
0.86
0.82
0.80
0.76
0.64
0.62
0.61
0.59
0.59
0.56
0.56
Buratu Pty Limited (Connolly Super Fund A/C)
Debuscey Pty Ltd
BNP Paribas Nominees Pty Ltd (IB Au Noms Retail Client DRP)
John Pezzaniti
PAC Partners Pty Ltd
Raymond Laurence Carroll
Citicorp Nominees Pty Ltd
Toni & Anika Sinozic
LJ & K Thomson Pty Ltd (LJT & KT Super Fund A/C)
107,737,499
30,000,000
25,595,287
21,069,497
20,777,982
20,500,000
17,736,784
17,250,000
15,138,298
Peter Dallas Checkley & Niomie Esther Varady (Checkley Family S/F A/C)
14,701,129
1
2
3
4
5
6
7
8
9
10
11
Janet Monica Henriod
12 William Mark Palmer & Patricia Dawn Gregory (Palmer S/F A/C)
13
14
15
16
17
17
19
Adonis Kiritsopoulos & Jennifer Anne Ford
CS Fourth Nominees Pty Ltd (HSBC Cust Nom Au Ltd 11 A/C)
Ampersand 8 Pty Ltd (S Helby Superfund A/C)
Aiden John Barker
George David Butkeraitis
Nick Milenkovski
Kristen Lee Young
20 Craig Russell Stranger
Total of top 20 shareholdings
Other holdings
14,000,000
13,633,839
13,000,000
10,944,356
10,500,000
10,350,000
10,000,000
10,000,000
9,605,488
9,500,000
402,040,159
1,300,368,042
23.62%
76.38%
Total fully paid ordinary shares on issue
1,702,408,201
100.00%
DISTRIBUTION OF SHAREHOLDERS
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-over
Total
NO. OF HOLDERS
ORDINARY SHARES
352
438
628
78,452
1,426,855
5,271,939
2,702
116,610,660
1,808
1,579,020,295
5,928
1,702,408,201
There were 574 shareholders with less than a marketable parcel of 3,125 shares.
SUBSTANTIAL SHAREHOLDERS
Buratu Pty Limited (Connolly Super Fund A/C)
107,737,499
69
ANNUAL REPORT 2020 TOP 20 OPTIONHOLDERS OF LISTED ADNOB OPTIONS
1
2
3
4
5
6
7
8
9
Peter Andrew Proksa
Buratu Pty Limited (Connolly Super Fund A/C)
John Pezzaniti
David Fagan
Goodheart Pty Ltd
Robert John Connolly
Michele Fay Perry
Henning Beth
Anna Rozos
10
Ching-Wei Chang
11
12
13
14
15
16
17
18
19
BNP Paribas Nominees Pty Ltd (IB Au Noms Retail Client DRP)
Laurie Nicholls
Kalpesh Varsani & Rita Varsani (Varsani Family S/F A/C)
ARMA Investment Holdings Pty Ltd (Monastiri Super Fund A/C)
EEEP Pty Ltd (Fagan Super Fund Account)
Valas Investments Pty Ltd (Valas Investments A/C)
ROBMP Pty Ltd (RMP Super Fund A/C)
Robert John Connolly
Parker Finance Pty Ltd (Parker Finance A/C)
20 Matthew Stone
Total of top 20 listed option holdings
Other option holdings
Total listed ADNOB options on issue
Exercise price of 1.2 cents and expiry date of 30 November 2020.
DISTRIBUTION OF LISTED ADNOB OPTIONHOLDERS
OPTIONS
% OPTIONS
44,000,000
9.87
37,382,501
19,009,000
17,645,000
10,245,159
9,000,000
8,035,480
8,028,000
7,964,409
7,302,510
7,214,773
7,211,539
7,000,000
6,293,309
6,000,000
5,899,998
5,600,084
5,600,000
5,480,000
5,043,492
8.39
4.27
3.96
2.30
2.02
1.80
1.80
1.79
1.64
1.62
1.62
1.57
1.41
1.35
1.32
1.26
1.26
1.23
1.13
229,955,254
215,673,285
445,628,539
51.60
48.40
100.00
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-over
Total
NO. OF HOLDERS LISTED ADNOB OPTIONS
14
23
18
130
257
442
4,951
73,249
145,007
6,524,277
438,881,055
445,628,539
There were 29 optionholders with less than a marketable parcel of 3,572 options.
UNLISTED OPTIONS
exercise price of 1.2 cents and expiry date of 15 November 2021
exercise price of 6.4 cents and expiry date of 28 November 2022
exercise price of 7.5 cents and expiry date of 28 November 2023
17,500,000
59,000,000
20,000,000
96,500,000
70
ANDROMEDA METALS LIMITED A few facts about the Andromeda Galaxy:
• Andromeda Golaxy coordinates
RA 0h 42m 44s | Dec +41º 16' 9"
• Nearest major galaxy to our own Milky
Way Galaxy
• 2.5 million light years from earth
• Appears in the Constellation of Andromeda,
named after the mythological Greek
princess Andromeda
•
Is the brightest galaxy in the sky and is the
most distant thing that we can see from
earth with the unaided naked eye
• Contains an estimated 1 trillion stars, more
than double that of the Milky Way
• Andromeda has a central core with
spiral arms
•
•
Is 2.5 times longer than the Milky Way
Is the biggest known galaxy by volume
• The central core is considered to contain
metal-rich stars with a metal-poor
galactic halo
• The Andromeda Galaxy will collide with the
Milky Way in 4.5 billion years from now.
71
ANNUAL REPORT 2020 Registered and Principal Office
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