ANNUAL REPORT
2022
Company information
Contents
DIRECTORS
Mick Wilkes
James Marsh
Joe Ranford
Melissa Holzberger
Austen Perrin
Non-executive Chair
Managing Director
Operations Director
Non-executive Director
Non-executive Director
COMPANY SECRETARY
Andrea Betti
Company Secretary
ANDROMEDA METALS LIMITED
ABN: 75 061 503 375
ASX code: ADN
REGISTERED AND PRINCIPAL ADDRESS
Level 10, 431 King William Street
Adelaide, South Australia 5000
CONTACT DETAILS
Telephone: +61 8 7089 0600
ir@andromet.com.au
www.andromet.com.au
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
Highlights
Letter from the Chair
Managing Director's report
Operations review
Great White Kaolin Project
New product opportunities
Exploration
Great White Deposit
Hammerhead Deposit
Tiger Deposit
Eyre Kaolin Project
Mt Hope Kaolin Project
Rare Earth Elements
Camel Lake Halloysite Project
Wudinna Gold Project
Moonta Copper Gold Project
Drummond Epithermal Gold Project
Corporate
Schedule of tenements
Reserves and resources
Competent person statements
Directors' report
Remuneration report
Auditor's independence declaration
Financial report
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
Shareholder information
Glossary
3
4
6
8
10
16
17
17
18
19
19
20
21
21
21
22
22
23
24
26
30
31
41
62
63
64
65
66
68
96
97
102
103
2
ANDROMEDA METALS LIMITE D
Highlights
Mining lease
Granted
Definitive Feasibility Study
Released
Site establishment
Works scoped and designed
Land access
Procurement
Land acquisition agreements signed
Long lead items procurement underway
Minotaur acquisition
Natural Nanotech
Completed
100% owned
Funding
$45 million raised
Andromeda – strongly positioned for growth
Tier 1 mining jurisdiction
Exploration endowment
Mineral resources
Ore reserves
Experienced team
South Australia
Large portfolio of
exploration tenements,
totalling 8,313.7km²
including earn-ins
Kaolin Mineral
Resource: >110Mt of
Resources
Kaolin Ore Reserve
(GWKP): 15.1Mt of
Reserves
Experienced and
industry focused Board
and Executive team
Mining lease & PEPR
Great White Kaolin
Project Mining Lease
granted
Environmental
Management Plan
submitted for approval
DFS completed
and land acquired
Great White DFS
de-risks project with
production in stages
Agreements signed to
acquire land covered
under Mining Lease
Binding offtakes
New high value products
Nanotechnologies
Four Binding offtake
agreements signed
Letter of Intent signed
with conversion to
Binding Offtake in
progress
Other opportunities
under negotiation
Developing new high
value products
including High Purity
Alumina (HPA) for
existing markets
Strategic research
relationship with
University of Newcastle
3
ANNUAL REPORT 2022 Letter from the Chair
Dear Shareholders,
Welcome to the Annual Report covering the Financial
Year 2022 for Andromeda Metals Limited (Andromeda).
This is my first Annual Report letter to you as Chair,
after being appointed to the Board in April this year.
I have over 35 years of international experience,
predominantly in precious and base metals across
Asia and Australia, and look forward to working closely
with the Board and Executive Team to drive growth
and advance on our strategy.
One of the immediate tasks the Board and I have
undertaken was to focus on a strong governance
approach relative to new performance guidelines and
will continue this work with the business.
Despite ongoing disruptions due to the COVID-19
pandemic, Andromeda has achieved steady progress
in advancing our aim of becoming a global halloysite-
kaolin producer, in addition to progressing numerous
other new product opportunities.
Looking over the past year, a significant amount
of work has been done in progressing our flagship
Great White Kaolin Project (GWKP or Project). We
continued moving towards making a final investment
decision while progressively de-risking the Project
and evaluating funding arrangements that best
suit the long-term interests of the Company and its
shareholders. These progressive steps are part of the
invigorated long-term strategy to bring our product to
the broader global market.
The Project is currently underpinned by four binding
offtake agreements signed for Great White refined
halloysite-kaolin products, subject to standard
conditions precedent, plus a letter of intent. The
growth profile of these agreements, as well as ongoing
negotiations with several other potential customers,
continue to provide us with the confidence that further
offtake agreements will be signed and production
volumes will quickly grow as the Great White brand
takes root in the kaolin market.
4
Our confidence in the Project, and the strong
economic efficiencies gained through full ownership,
prompted the strategic decision to acquire our joint-
venture partner in GWKP, Minotaur Exploration Limited
(Minotaur), which was successfully completed during
the year.
Following this consolidation, we released the Definitive
Feasibility Study (DFS) which confirmed the significant
value and long-term viability of GWKP. Since publishing
the DFS, and considering the changed conditions
driven by the continued impacts of the COVID-19
pandemic, along with other major global and
geopolitical developments, the Board sought to further
de-risk the Project.
Accordingly, a refinement of the staged, scalable
approach to developing GWKP was deemed prudent,
through the initial construction of a Starter Plant that
more closely matches production to signed offtake
volumes currently in place and being negotiated,
with a reduced initial capital requirement prior to first
production and cash flow.
Importantly however, it remains the firm intention of
Andromeda’s Board and Management to deliver
the Project’s production and financial outcomes, as
outlined in the DFS.
Further, we are likely to be building the Starter Plant
during a period of high inflation. Commencing the
Project with a smaller initial plant reduces our exposure
to cost inflation, and the potential for significant
scope creep. To further mitigate inflationary impacts,
we will be managing the design and construction of
the Project using our own personnel, giving us more
direct control over the outcome. The modular nature
of the design also allows us to develop the in-house
expertise to efficiently build subsequent stages that will
enable the delivery of the full potential of the Project
as outlined in the DFS. This “self-perform” approach to
development is critical to the successful delivery of the
Project in the current environment.
ANDROMEDA METALS LIMITED Letter from the Chair
In addition to progressing GWKP, the Company
continues to pursue a range of other potential
opportunities, with the strategic objective of
creating new products and markets using our
unique halloysite-kaolin resource to increase the
weighted average sale price for our products.
The critical mineral, High Purity Alumina (HPA), and
nanotechnologies are two of these potential future
product opportunities that can achieve this.
To that end, Andromeda is funding research being
carried out by the Global Innovative Centre for
Advanced Nanomaterials (GICAN) at the University
of Newcastle into industry applications for GWKP
halloysite based nanomaterials.
We also acknowledge the importance of committing
to sustainable extraction and supply of superior quality
industrial minerals. As the Company moves towards
production, its aspiration is to adopt, monitor and
report on relevant frameworks and metrics that emerge
from the developing consensus and convergence
of Environmental, Social and Governance (ESG)
frameworks and standards.
Finally, the Board acknowledges, and has reflected on,
the concerns raised by shareholders in relation to our
approach to remuneration that led to a ‘first strike’ at
the 2021 Annual General Meeting.
Consequently, to ensure Andromeda is well-positioned
for the future, significant changes have been made
to the composition and expertise of the Board and
Management, and to the Company’s approach
to remuneration. I invite you a read about these
changes, and the enhanced disclosure, contained
in the Remuneration Report, starting on page 41 of
this Report.
I acknowledge the retirement from the Board of
Rhoderick Grivas, the former Chair, and Andrew
Shearer and Nicholas J Harding as Directors, and
thank them for their service to the Company. I also
welcome to the Board Melissa Holzberger and Austen
Perrin as fellow Independent Non-executive Directors.
The Board and Management remain focused and
committed to delivering on the full potential of GWKP
and the significant other opportunities we have before
us, which in turn will deliver long-term value for you,
our shareholders.
Yours sincerely,
Mick Wilkes
Non-executive Chair
5
ANNUAL REPORT 2022 Managing Director's report
Dear Shareholders,
Reflecting over the past year, it has been a challenging
year for Andromeda, although we have achieved
numerous significant milestones. We have made some
progressive and positive changes as we continue to
strive for growth and execute our strategic goals.
I welcome our new Chairman of the Board, Mick
Wilkes, who brings a wealth of experience and will be
instrumental in our continued focus on governance,
company growth and strong alignment with all
company stakeholders. I look forward to working
closely with Mick and the Board on growing our
developing business.
The strategic focus is to develop our globally
significant, high-quality halloysite-kaolin resources
into mining operations that produce superior quality
products for global markets.
In addition, we are assessing new products and
nanotechnologies that leverage the potential of these
world-class resources and represent future business
opportunities for Andromeda.
Significant progress achieved on GWKP
To fulfil our aim of becoming a global producer of the
kaolin industrial mineral, Andromeda continues to make
progress in advancing our flagship GWKP towards
development. Progressing the Project represents a
significant, long-term opportunity for Andromeda, you
our shareholders, the local Eyre Peninsula community
and the South Australian economy.
Following the acquisition of Minotaur, our joint-venture
partner in GWKP, the significant value and long-term
benefits of developing GWKP were confirmed through
the finalisation of the DFS. Released in April 2022, it
showed that, using a staged, scalable approach, the
high-quality 15.1Mt Ore Reserve could support a long
28-year mining operation and generate a pre-tax net
present value (NPV) of A$613 million.
6
Despite the challenges due to the impacts of the
COVID-19 pandemic, during the year we signed
additional binding offtake agreements to further
underpin and de-risk the development of GWKP. We
now have four binding offtake agreements, subject
to standard conditions precedent, signed with
customers for Great White refined halloysite-kaolin
product, covering a range of markets across the Asia-
Pacific region.
Ongoing negotiations for additional binding offtake
agreements continue, which provide confidence that
the production and financial outcomes outlined in the
DFS can be achieved.
Other important milestones achieved in progressing
GWKP include granting of a mining lease and
supporting miscellaneous purposes licences1,
purchase of relevant land and lodgement for
approval of the Program for Environment Protection
and Rehabilitation (PEPR) documentation2. These
activities followed months of extensive stakeholder
consultations, including with landholders and the
broader Eyre Peninsula community.
Since publishing the DFS, a refinement of the staged
development of GWKP was adopted through the
building of an initial Starter Plant. The Starter Plant,
the design and planning for which is now complete,
incorporates the ability to quickly ramp-up processing
capacity to satisfy additional commitments in line with
customer demand.
1 Refer ADN Announcement dated 17 December 2021 titled
“Great White Kaolin Project – Mining Lease Granted”.
2 Refer ADN Announcement dated 18 August 2022 titled
“Andromeda progresses Great White Kaolin Project with
signing of Land Acquisition Agreements and lodgement
of PEPR”
ANDROMEDA METALS LIMITED Managing Director's report
At full production, the Starter Plant is planned to
process a nominal rate of 100,000t/pa of ore and have
a nominal capacity of 50,000t/pa of product to fulfil
customer requirements. The ramp-up in production
from this base is expected to increase in line with
offtake agreements to the processing capacity of
300,000 t/pa of ore as outlined in Stage 1 of the DFS
and then progressing through to Stages 2, 3 and 4 of
the Project.
Procurement activities for long lead items are
underway and are anticipated to take up to
approximately twelve months for delivery. During this
time, on-site construction works will be progressively
undertaken subject to receiving approval of the PEPR.
These two streams of work will be carried
out simultaneously, to optimise the total
construction period.
New product opportunities
During FY22, a structured Business Development
Framework for the assessment and staged progression
of new product opportunities was implemented.
Under this framework, the critical mineral, HPA, and
nanotechnologies were prioritised as new product
opportunities for Andromeda.
After year end, research and development activities
to produce HPA conducted during the year, led to the
filing of a provisional patent application to produce
both HPA and Smelter Grade Alumina (SGA).
To leverage the capabilities of our high-quality
halloysite, Andromeda funds research by GICAN
into numerous promising industry applications and
technologies for GWKP halloysite based nanomaterials.
These potential industry applications include carbon
capture and conversion. An international Patent
Co-operative Treaty (PCT) application was filed
by Andromeda after year-end for carbon capture
nanomaterials. These proprietary materials are
incorporated into the Carbon Capture Pilot Plant,
which was manufactured and recently arrived in
Australia. We are now awaiting the completion of
assessment of the technical specifications of the
various Plant components prior to the Plant being
assembled for testing and certification.
Gold and copper assets
With our strategic focus on developing our portfolio
of halloysite-kaolin projects, we continue to seek
opportunities to realise maximum shareholder value for
our gold and copper assets, while minimising the cost
and management time incurred.
Well positioned for continued growth in value
During FY22, the Company enhanced its financial
and corporate strength, ensuring Andromeda
is well-positioned for generating long-term
shareholder value.
The Company’s balance sheet was significantly
strengthened, with assets increasing by 881 percent,
from $17.8 million to $174.2 million. Significantly,
we remain debt-free and as at year-end we had
$32.9 million in cash.
To effectively be in a position to execute the
Company’s transition from an explorer to a producer
of halloysite-kaolin, and to advance the significant
value-add opportunities open to the business, the
Company has implemented a broadening of executive
strength during the year to ensure it has the right
capabilities and people in place.
During the year, Tim Anderson joined Andromeda
as Chief Commercial Officer, bringing over 30 years
of national and international business development
experience. His previous roles demonstrated his
abilities in identifying and commercialising intellectual
property, which are a significant addition to the team.
Other additional operational roles have enhanced
the depth and breadth of executive capabilities and,
together with the numerous growth opportunities in
front of us, provide us confidence of achieving success
in executing our strategy and in delivering long-term
value for you, our shareholders.
Yours sincerely,
James Marsh
Managing Director
7
ANNUAL REPORT 2022 Operations review
Andromeda is an Australian company with a vision to lead the world in the
sustainable supply of superior quality industrial minerals and the advancement of
nanotechnologies.
Andromeda’s aim is to develop its globally significant, high-quality resources into world-class mining operations
that produce superior quality halloysite-kaolin to supply global markets.
In addition to becoming a key supplier of high-quality kaolin for many applications used in our everyday lives,
Andromeda is conducting research and exploring opportunities for the use of halloysite-kaolin in nanotechnologies
across a range of emerging high-growth applications. This includes leveraging our resources and proprietary
technologies for enhanced availability of critical minerals and enabling the world’s transition to a more
sustainable future.
As a near-term producer of the kaolin industrial mineral, Andromeda’s main focus is on progressing its flagship
GWKP and our other activities that seek to leverage the potential of this world-class resource.
Developing the Project represents a significant, long-term opportunity for Andromeda to deliver value for our
shareholders, the local Eyre Peninsula community and the South Australian economy.
Together with our portfolio of halloysite-kaolin projects, Andromeda is also exploring several copper and gold
prospects across Australia in conjunction with joint venture partners. Our strategy for these metal assets is to
leverage our joint venture relationships to maximise shareholder value while minimising the cost and management
time incurred.
Our purpose
Through the use of our industrial minerals and nanotechnologies we strive to enrich the lives of people by
improving the environment, creating prosperity for our shareholders and delivering value for our stakeholders.
G ROW
M ETALS
G ROW
Our vision
Lead the world in
sustainable supply of
superior quality
industrial minerals
and advancement of
nanotechnologies.
I
N
D
USTRIAL M I N E
A L S
R
HARV E S T
Our values
N
A
N
OTECHN O L O G IE S
Our mission
To mine and
process industrial
minerals for supply,
together with
advancing
nanotechnologies,
to our global
customer base by
leveraging our
unique natural
resources and
intellectual capital.
Innovation
Teamwork
Integrity
Quality
The safety and wellbeing of our employees and our communities is our first priority.
8
ANDROMEDA METALS LIMITED Operations review
Overview of Andromeda’s current projects and resources
Halloysite-Kaolin
CAMEL LAKE
Kaolin
GREAT WHITE
Kaolin
MOUNT HOPE
Natural Nanotech
GICAN
Kaolin
EYRE
Copper Gold
MOONTA
Gold
WUDINNA
GREAT WHITE KAOLIN
PROJECT (GWKP)
Flagship project with 15.1Mt Ore
Reserve and Resource ~100Mt
DFS underpins 28-year operation
with pre-tax NPV of $613 million.
MOONTA COPPER GOLD
PROJECT
Joint venture for potential
extraction of copper via in-situ
recovery (ISR) with Environmental
Metal Recovery Pty Ltd.
NATURAL NANOTECH
R&D on potential for halloysite
applications and uses, such as critical
minerals, battery technology, water
purification and carbon capture.
WUDINNA GOLD PROJECT
Cluster of gold deposits and
prospects over six tenements
covering 1,928 km2.
EYRE KAOLIN PROJECT /
MOUNT HOPE KAOLIN
PROJECT /
CAMEL LAKE PROJECT
Projects focused on expanding
halloysite-kaolin resources, across
six tenements covering 3,481km2.
9
ANNUAL REPORT 2022 Operations review
Great White Kaolin Project
SOUTH AUSTRALIA
100% Andromeda
GWKP is a wholly owned project
that includes several high-quality
deposits of halloysite-kaolin, containing
naturally occurring kaolinite plates and
halloysite tubes.
Subject to making a final investment
decision with respect to GWKP,
Andromeda aims to become as a globally
significant supplier of high-quality kaolin
to international markets.
GWKP is located on the Eyre Peninsula in South
Australia. and comprises four tenements approximately
635km west by road from Adelaide. It is centred within
the District Council of Streaky Bay, near the community
of Poochera (Figure 3).
Andromeda has continued to de-risk and significantly
progress the Project's development. During FY22, this
included a Mining Lease (ML 6532) over the deposit
being granted, land access was secured with the
required waivers, and a compliant PEPR was lodged
and is currently being assessed by South Australia’s
Department for Energy and Mining.
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
Port Augusta
Whyalla
Kimba
Port Pirie
Mt Hope Kaolin Project
Lucky Bay
Kadina
30°
32°
34°
Main road
Railway
Town
Lake
AIM 100%
Great White Tenements
AIM 75% GSK 25%
Exploration Licence
Application
Eyre Kaolin JV
36°
AND SA08
Port Lincoln
Adelaide
0
100
200
Kilometres
Figure 1 Andromeda's halloysite-kaolin project locations.
Figure 2 Images show (from left) raw kaolin clay from Andromeda’s GWKP, which is then refined and processed, before being
graded and packaged into various products that meet our clients’ exacting specifications.
10
ANDROMEDA METALS LIMITED Operations review
MARKETING
Offtake Agreements
Having already secured two binding offtake
agreements3, during FY22 the Company continued its
focus on locking-in offtake agreements for the balance
of the initial GWKP’s plant output to further de-risk
the Project.
Marketing activities are a critical function of any
industrial minerals project. While Andromeda continued
to progress negotiations, access to some key target
markets, such as China and Japan, have been and
remain very restrictive.
Securing good quality binding offtake agreements
for kaolin products is a lengthy and complicated
process. This has been made far more difficult by the
impacts of the COVID-19 pandemic, with face-to-face
meetings not being possible and with technical centres
throughout Asia being closed for lengthy periods due
to lockdowns.
3 Offtake agreements are subject to a number of conditions
precedent to be met including in respect to a final
decision to mine and investment decision required to be
made, receipt of all mining approvals and achievement of
commercial levels of production.
While demand remains solid, the COVID-19 pandemic
has extended the timeframes for completing
negotiations with customers, which in ordinary times
are already lengthy due to the exacting product
specifications and extensive sampling and testing
requirements.
Additionally, while China remains the largest single
market, the rest of Asia in total represents a greater
share of global demand. Andromeda has accordingly
sought to increase the geographic diversity of its
discussions with customers. Thus, recent offtake
agreements were signed for customers covering a
broad range of markets across Asia.
Ongoing negotiations for further offtake agreements
continue with several other interested parties across
multiple markets.
420,000m E
Streaky Bay
440,000m E
Coolgrana
460,000m E
480,000m E
6,380,000m N
Lupina Downs
EL 6096
EL 6588
EL 6426
Poochera
Streaky Bay
Great White Kaolin Project
Maryvale
Parraba
Chandada
Hammerhead
Great White
Inkster
ML 6532
Manta
Tootla
EL 6096
Oak Vale
Bronze Whaler
Tiger
Cor visart Bay
6,360,000m N
Sceale Bay
Sceale Bay
Calca
EL 6426
Yandra
EL 6588
Conglima
6,340,000m N
Searcy
Bay
Highway
Main road
Road
Town
Homestead
Exploration licence
Mining Lease 6532
MPL 163 (water pipeline)
MPL 164 (access road)
Resource
Prospect
6,320,000m N
Poochera 64
EL 6202
Mount Hall
Calca
Drinan Vale
Bairds Bay
Colley
Witera
Minta
EL 6426
Venus Bay
0
10
20
Kilometres
Venus Bay
SOUTH AUSTRALIA
GREAT WHITE KAOLIN PROJECT
Location of tenure
June 2022
Figure 3 Great White Kaolin Project deposits and prospects.
11
ANNUAL REPORT 2022 Operations review
CONCENTRATE
GREAT WHITE
KCMTM90
A semi-refined high-quality kaolin concentrate for
sale for direct use, further refinement by other parties
or to upgrade their feedstock
(Picture of Great White KCMTM90 produced at Streaky Bay pilot plant.)
During FY22, binding offtake agreements for Great White KCM™90 were signed, subject to standard conditions
precedent, at prices in excess of pricing assumed in the DFS of between A$425 and A$465 per tonne, with:
• Asia Minerals Resources of Hong Kong and Vietnam, for 31,000 tonnes, with a minimum of 23,500 and
maximum of 38,500 tonnes, over the first three years of production, for sales into the ceramics sectors
across Vietnam, Malaysia, Singapore, Bangladesh, India, Pakistan, Philippines, South Korea, Indonesia,
Thailand and the UAE4, and.
• Plantan Yamada, for 35,000 tonnes, with a minimum of 27,000 and up to a total of 43,000 tonnes, over the
first three years of production, for sales into the ceramics sector of Japan5 .
The DFS outlined KCM™90 as the initial refined product made from GWKP feedstock which can be mined for the
life of the mine. KCM™90 can be further refined into other products as required to meet customer demand. The
two agreements demonstrate demand for KCM™90 for a minimum three years, which exceeds the two years
initially assumed in DFS.
CONCRETE
GREAT WHITE
HRMTM
A refined halloysite-kaolin for sale for use as a
concrete and building product additive
During FY22, a Letter of Intent for exclusive distribution rights into the Asia/Pacific region was signed with IMCD,
the world’s largest additives distributer, for the Great White HRM™ concrete additive and the Great White SRM™
suspension aid additive.
Ongoing testing by potential customers has demonstrated the beneficial properties in concrete mixes in
numerous applications. Additional Great White HRM™ product has been produced at the Streaky Bay Pilot plant
to supply IMCD as part of their due diligence process.
Subsequent negotiations with IMCD have centred on further progressing the relationship through to the signing
of a binding offtake agreement.
4 Refer ADN ASX announcement dated 26 July 2022 titled
“Andromeda Signs Binding Halloysite-Kaolin Offtake
Term Sheet”.
5 Refer ADN ASX announcement dated 8 August 2022 titled
“Andromeda signs another Binding Offtake Agreement for
KCM™90 from the Great White Project”.
12
ANDROMEDA METALS LIMITED Operations review
CERAMICS
GREAT WHITE
CRMTM
A refined, dried, bagged product for sale for use by
end-users in the high-end ceramics market.
(Picture of porcelain cup produced by Plantan Yamada using
Great White CRMTM product in final commercial product trials.)
An existing offtake agreement was signed with:
• Plantan Yamada, a highly respected Japanese porcelain manufacturer with factories in Japan and China,
for 5,000tpa of Great White CRM™ at A$700 per tonne6
PAINTS
GREAT WHITE
PRMTM
A refined, dried, and bagged product for sale for use
by end-users in coatings and polymers markets.
(Picture of Great White PRMTM produced in Streaky Bay pilot plant.)
An existing offtake agreement was signed with:
• Jiangsu Mineral Sources International Trading Co. Ltd (MSI) for 70,000tpa +/- 10% of Great White PRM™
at significantly higher than A$700 per tonne for the coatings and polymers market with an initial term of
five years7.
Streaky Bay Pilot Plant
During FY22, the Streaky Bay pilot plant continued to
be operated. This enabled Andromeda to confirm the
product quality of samples collected from the area that
will be mined in the early years of GWKP.
The pilot plant successfully produced new samples
to undertake further test work, inform the engineering
design of the GWKP processing plant, project execution
and financial modelling of the Project, as well as for
product approvals by potential offtake partners.
Following delays caused by lockdowns in China
related to COVID-19, a new drum washer for the
pilot plant has been installed and is in operation at
Streaky Bay (Figure 4).
A new series of hydrocyclones representative of what
will be used in the new processing plant were added,
for further confirmation of scalability and the plant
process design.
Subsequent to year-end, a specialised pilot scale
kaolin centrifuge was installed, which is now being
used for halloysite purification studies.
These additions to the pilot plant are being used
to support sales and marketing, and product
development by supplying representative samples to
potential customers for product trials.
Figure 4 New drum washer for pilot plant.
6 Refer ADN ASX announcement dated 1 June 2020
titled “Pre-Feasibility Study Further Improves Poochera
Halloysite-Kaolin Project Economics”.
7 Refer ADN ASX announcement dated 10 June 2021 titled
“Significant Binding Offtake Agreement Signed for Great
White Kaolin Project”.
13
ANNUAL REPORT 2022 Operations review
DEFINITIVE FEASIBILITY STUDY (DFS)
During FY22, a DFS was completed confirming GWKP
has the potential to be a globally significant, long-life
supplier of high value kaolin to international ceramic,
coatings and other specialised markets.
The DFS confirmed GWKP could deliver strong long-
term cashflows from a range of high-grade kaolin
products with sufficient Reserves to sustain a 28-year
mining operation based on assumptions at that time.
Using conventional mining and processing techniques,
the DFS found GWKP could generate high quality
products, leading to high margin cashflows with a pre-
tax NPV of $613 million.
The four-stage approach to development outlined
in the DFS, was expected to deliver average annual
EBITDA of $81.5 million and require an initial capital
cost of $93.8 million during Stage One. All capital
expenditure following the completion of Stage One
could be funded from cash flows generated by GWKP,
as outlined in the DFS. The significant cashflows
detailed in the DFS, generate an internal rate of
return of 36% and a payback period of 5.9 years. This
payback period includes payback of the initial capital
cost as well as the capital cost of the Stage 2 and 3
plant and infrastructure upgrades.
Since publishing the DFS, the effects of the COVID-19
pandemic, as well as the geo-political and economic
environment, have changed significantly. This has seen
elevated levels of risk, as a result of labour shortages,
supply chain disruptions and rises in the rate of inflation
and cost of capital.
Considering the changed conditions, the Company
accordingly sought to further de-risk the Project
through refining the staged, scalable approach to
developing GWKP.
The initial development of a scalable Starter Plant that
more closely matches production to total commitments
for signed offtake agreements, with the benefit of
reducing initial up-front capital requirements, was
deemed more prudent.
The Starter Plant represents the beginning of a staged
approach to developing GWKP that continues to aim
to deliver on the production and financial outcomes of
the DFS.
The Starter Plant enables the ability to ramp-up
production from an initial processing level of 100,000t/
pa of ore, to increases in volume in line with signed
binding offtake agreements, up to the processing
capacity of 300,000t/pa outlined in Stage 1 of the DFS,
then progressing through to Stages 2, 3 and 4.
Ongoing negotiations for additional binding offtake
agreements provide confidence that the staged, scalable
approach to developing GWKP will deliver on the
production and financial outcomes outlined in the DFS.
REGULATORY APPROVAL AND LAND
ACCESS AGREEMENTS
Following the DFS, further progress was achieved, and
risk reduced, in advancing GWKP, with the granting
of a Mining Lease (ML 6532) and two supporting
Miscellaneous Purposes Licences (MPL 163 & 164) that
underpin the Project. This represents the first stage of
South Australian legislation, which consists of a two-
stage assessment and approval process to conduct
mining operations.
Subsequent to year end, the PEPR was submitted
to South Australia’s Department for Energy and
Mining for assessment and approval. The PEPR is
an environmental management program that must
show the capacity to comply with the mining lease
conditions, and must be approved before mining
operations can commence. It is the second step in the
two-stage assessment and approval process.
The DFS detailed on the following production profile:
(all figures are tpa)
STAGE 1
2 YEARS
STAGE 2
2 YEARS
STAGE 3
2 YEARS
TOTAL ORE PROCESSING CAPACITY
300,000*
300,000
600,000
STAGE 4
22 YEARS
600,000
Great White KCM™90
138,000
Great White HRM™
Great White CRM™
Great White PRM™
15,000
35,000
40,000
40,000 (2 years)
130,000
284,000
225,000 (6 years)
then 284,000 (16 years)
56,000 (6 years)
*
The Starter Plant represents the initial step of implementing Stage 1 from an initial processing level of 100,000t/pa of ore, to
increases in volume in line with signed binding offtake agreements, up to the processing capacity of 300,000t/pa outlined in
Stage 1 of the DFS, then progressing through to Stages 2, 3 and 4
14
ANDROMEDA METALS LIMITED Operations review
Additionally, agreements to acquire all the required
freehold land from relevant landowners for the
Project were signed. These agreements include the
land access waivers that are required as part of the
PEPR approval.
Both these activities followed months of extensive
stakeholder consultations with landholders, regulators
and the broader Eyre Peninsula community.
Both the tenements and PEPR approvals are
required to allow the Project to progress to the
construction phase.
STARTER PLANT DESIGN AND
CONSTRUCTION
A more prudent staged, scalable approach to
developing GWKP, is achieved through the initial
development of a Starter Plant that more closely
matches production to total commitments for signed
offtake agreements.
This approach has the additional benefits of reducing
initial up-front capital requirements, while also enabling
the scaling up of production volumes in line with
subsequent signed offtake agreements.
The Starter Plant represents the beginning of a staged
approach to developing GWKP that continues to aim
to deliver on the production and financial outcomes of
the DFS.
The staged approach de-risks the development of
the Project whilst building the Great White brand,
reputation, and value in the market.
After revising and rescheduling the mine plan, the
Starter Plant was able to reduce the initial capital
required, to get into production without compromising
the overall design plans detailed in the DFS.
When fully operational, the Starter Plant is planned to
process a nominal rate of 100,000 t/pa of ore, and
have a nameplate capacity of 50,000 t/pa of refined
product to fulfil customer demand.
The plant is designed to produce Great White KCM™90
and Great White HRM™, with built-in optionality to
provide the feedstock to meet the need for other
products our customers demand.
The Stater Plant enables the abilty to ramp-up
production, from an initial processing level of
100,000t/pa of ore, with increases in volume in line with
signed binding offtake agreements. The staged nature
of current offtake agreements and signing of additional
offtake agreements is expected to see production
increase to the processing capacity of 300,000t/pa
outlined in Stage One of the DFS, and subsequent
Stages 2, 3 and 4 thereafter.
The finalisation of the design of the Starter Plant, in August
2022, triggered preparations for the commencement
of the procurement process of long lead items for the
processing plant. The procurement process is anticipated
to take approximately six to twelve months and include
finalising tender documents, placing orders with selected
manufacturers, and delivery to site.
During this time, subject to approval of the PEPR, on-site
preparatory works will be undertaken as Andromeda
moves towards making a final investment decision.
Subject to making a final investment decision, all planned
and current activities underway will be run in parallel
to complete construction as efficiently as possible, with
various components to be fabricated offsite in advance
to reduce construction times. The construction schedule
aligns the delivery of the long lead items with the on-site
construction so that on delivery the equipment can be
directly installed and commissioned.
Pending the South Australian Government’s approval of
the PEPR, on-site delivery of long lead items, and a final
investment decision being made, commissioning of the
Starter Plant is anticipated in late 2023.
Figure 5 3D elevation of Great White Kaolin Project – Stage 4 capacity plant.
15
ANNUAL REPORT 2022 Operations review
Figure 6 Andromeda Business Development Framework.
NEW PRODUCT OPPORTUNITIES
Business Development Framework
Andromeda has implemented a structured Business
Development Framework (refer Figure 6) for the
assessment and staged progression of targeted new
product opportunities.
The critical mineral HPA and nanotechnologies are
prioritised new product opportunities for Andromeda.
The strategic objective for these opportunities is to
create new products and markets using our unique
halloysite kaolin resource to increase the weighted
average sale price for our GWKP products.
The HPA and nanotechnologies product opportunities
have been prioritised by Andromeda through the
Business Development Framework initial assessment
process and are being progressed through the stage
gate process.
High Purity Alumina (HPA)
During FY22, Andromeda conducted research and
development activities to produce HPA. This work
led, after year-end to the filing of a provisional patent
application based on its process flowsheet to produce
both HPA as well as SGA.
Nanotechnologies
Natural Nanotech Pty Ltd (NNT) is a research and
commercialisation entity wholly owned by Andromeda
following the acquisition of Minotaur.
Andromeda, through NNT, is funding research by
GICAN into industry applications for GWKP halloysite
based nanomaterials.
These potential industry applications include carbon
capture and conversion, for which in FY21 NNT signed
a $4 million research partnership over five years
with GICAN.
As a result, an international PCT application was
filed by NNT on 1 July 2022 for halloysite derived
nanoporous carbon materials used in the carbon
dioxide capture process. This PCT application was
based on the provisional patent application for these
nanoporous carbon materials that was filed by NNT on
2 July 20218.
During the year, the Carbon Capture Pilot Plant arrived
in Australia and is currently located in Newcastle. The
plant incorporates proprietary technologies, included
in the abovementioned PCT Application. The technical
specifications of its various components are being
assessed for verification to confirm the equipment
meets Australian Standards, prior to the plant being
assembled, for testing and certification.
16
8 Refer ADN ASX announcement dated 7 July 2021 titled
“Patent Lodged for Halloysite-Kaolin Conversion to
Nanoporous Carbon Materials”.
ANDROMEDA METALS LIMITED Operations review
Exploration
Great White Deposit
SOUTH AUSTRALIA
Andromeda 100%
The initial focus of GWKP, is centred
around the Great White Deposit which
underpins the planned 28-year mining
operation detailed in the DFS.
During the year, the Ore Reserve
Estimate for the Great White Deposit
was increased to 15.1 Mt of bright white
kaolinised granite, comprising 34% Proved
Reserve and 66% Probable Reserve9.
In December 2021, Andromeda
was granted the Mining Lease
(ML 6532) underpinning the GWKP,
by South Australia’s Department
for Energy and Mining, along with
supporting Miscellaneous Purposes
Licences (MPL 163 & 164).
Since 2018, Andromeda has conducted
an extensive and ongoing program of
landholder and community engagement
to build support for the Project.
The engagement undertaken by
Andromeda guided negotiations
with landholders and assisted in the
preparation of its PEPR documentation.
This led to Andromeda announcing in
August 2022 that it had signed land
purchase agreements and had lodged its
PEPR related to the Great White Deposit10.
Puntabie
450,000m E
500,000m E
Nunjikompita
SOUTH AUSTRALIA
Location of tenure
Carawa
Cartwheel Corner
Pimbaacla
Nargultie
Wirrulla
Haslam
6,400,000m N
Streaky Bay
Yantanabie
Halfpipe
EL 6665
Cungena
Hammerhead Deposit
EL 6096
Capietha
EL 6666
Poochera
EL 6426
Highway
Main road
Road
Town
Resource
Prospect
EL – Great White Kaolin Project
EL – Eyre Kaolin Project
Mineral Lease 6532
MPL 163 (water pipeline)
MPL 164 (access road)
EL 6666
Parraba
Streaky Bay
Chandada
Inkster
6,350,000m N
Sceale
Bay
EL 6096
Sceale Bay
Searcy
Bay
EL 6202
Bairds Bay
0
10
20
Kilometres
Whichelby
Manta
Bronze Whaler
EL 6426
EL 6588
EL 6588
EL 6426
Witera
Venus Bay
Venus Bay
Karcultaby
Great White Deposit
Tiger Deposit
Poldinna
Yaninee
EL 6663
EL 6664
Mount Damper
Chairlift
Talia Station
Poochera 49
Figure 7 Great White Deposit Mining Lease and Miscellaneous Purposes
Licences.
ORE FEED CATEGORY
RESERVE
CATEGORY
TONNES
YIELD
GREAT WHITE PRMTM
YIELD
GREAT WHITE CRMTM
HALLOYSITE
BRIGHTNESS
ISOB
Fe2O3
Great White PRMTM Feed
Proved
Probable
Subtotal
Proved
Probable
Subtotal
Great White CRMTM Feed
(Great White KCMTM90 &
Great White HRMTM)
Total
(Mt)
0.4
1.1
1.5
4.8
8.9
13.7
15.1
(% of whole rock)
(% in <45 µm fraction)
27
24
25
-
-
-
-
18
16
17
45
46
46
-
3
1
2
15
11
12
-
87
87
87
84
83
83
84
0.3
0.3
0.3
0.5
0.5
0.5
0.5
9 Refer ADN ASX announcement dated 6 April 2022 titled “Great White Kaolin Project - Definitive Feasibility study and Updated
Ore Reserve”.
10 Refer ADN ASX announcement dated 18 August 2022 titled “Andromeda progresses Great White Kaolin Project with signing
of Land Acquisition Agreements and lodgement of PEPR”.
17
ANNUAL REPORT 2022 Operations review
Hammerhead Deposit
SOUTH AUSTRALIA
Andromeda 100%
Andromeda’s Hammerhead Deposit is approximately 5 km northeast of the Great White
Deposit (See Figure 3).
An Inferred Mineral Resource for the Hammerhead Deposit of 51.5Mt of kaolinised granite
reported at an ISO Brightness (ISO B R457) cut-off of 75 in the minus 45µm size fraction
has been estimated (refer Table 1).
Table 1 Hammerhead Kaolin Mineral Resource
DOMAIN
Main
Halloysite
Total
Mt
43.1
8.4
51.5
PSD <45 µm
KAOLINITE %
HALLOYSITE %
52.7
52.1
52.6
43.2
40.5
42.7
5.4
12.0
6.5
Note that all figures are rounded to reflect appropriate levels of confidence.
The Resource yields 27.1Mt of High Bright kaolin product (ISO B >80) in the minus 45µm recovered fraction, with the
remaining approximate 47.4% of material being largely residual quartz derived from the weathered granite. The
Halloysite sub domain contains 4.7Mt of minus 45µm material comprised of 21.6% halloysite with an ISO B of 82.9.
Table 2 Hammerhead Kaolin Mineral Resource -45µm
DOMAIN
Main
Halloysite
Total
Mt
22.4
4.7
27.1
ISO B
82.0
82.9
82.2
KAOLINITE %
HALLOYSITE %
82.7
72.9
81.0
10.4
21.6
12.3
Al2O3 %
36.90
37.47
36.99
Fe2O3 %
0.63
0.64
0.63
TiO2 %
0.73
0.62
0.71
Note that all figures are rounded to reflect appropriate levels of confidence.
Significantly, some areas within the Hammerhead Deposit show high levels of halloysite (>20%) that is similar to the
existing resource reported at the Great White Deposit.
18
ANDROMEDA METALS LIMITED Operations review
Tiger Deposit
SOUTH AUSTRALIA
Andromeda 100%
Andromeda’s Tiger Kaolin Deposit is approximately 10km south of the Great White Deposit (See Figure 3).
A maiden Tiger Mineral Resource Estimate of 12.1Mt containing 7.2Mt of kaolin (<45 µm) was announced in
March 202211.
The Tiger Kaolin Deposit further demonstrates GWKP’s potential to become a world class producer of kaolin.
Table 3 Tiger Kaolin Mineral Resource
CLASSIFICATION
Inferred
Mt
12.1
PSD <45µm
KAOLINITE + HALLOYSITE %
59.9
56.7
Note that all figures are rounded to reflect appropriate levels of confidence
Table 4 Tiger Kaolin Mineral Resource <45µm
CLASSIFICATION
Inferred
Mt
7.2
ISO B
83.1
KAOLINITE +
HALLOYSITE %
Al2O3 %
Fe2O3 %
94.7
37.2
0.81
TiO2 %
0.61
Note that all figures are rounded to reflect appropriate levels of confidence
Eyre Kaolin Project
SOUTH AUSTRALIA
Andromeda 0%
(earning up to an 80% interest in the tenements through sole funding expenditure of $2.75
million over six years from commencement of the joint venture)
During the period Andromeda executed a binding Heads of Agreement with private entity
Peninsula Exploration Pty Ltd (Peninsula ) to form the Eyre Kaolin Joint Venture (EKJV)
comprising four tenements near GWKP on the western Eyre Peninsula of South Australia.
The four exploration licences cover 2,799km2.
Subsequently, Andromeda actively explored for kaolin with properties to complement those of the Great White
Deposit’s kaolin. Two kaolin prospects located on the EKJV tenements; Chairlift and Halfpipe, were drill tested12.
At the Chairlift Prospect, located on tenement EL 6664, 28 holes were completed for 896 meters, and at the
Halfpipe Prospect located on EL 6665, 24 drillholes were completed for 1102 meters. From this drilling, the
Company continues to await the results of a total of 199 composite samples that were submitted for processing
and analysis.
11 Refer ADN ASX announcement dated 23 March 2022 titled “Maiden Tiger Kaolin Resource and Regional Rare Earth
Element Potential”.
12 Refer to ADN ASX announcement dated 29 July 2022 titled “Quarterly Activities Report – June 2022”.
19
ANNUAL REPORT 2022 Operations review
Mount Hope Kaolin Project
SOUTH AUSTRALIA
Andromeda 100%
Andromeda holds a 100% interest in the Mount Hope Kaolin Project, approximately 160km
southeast of GWKP.
Assay results from aircore drilling at Mount Hope undertaken in April 2020 identified
significant areas of ultra-high bright white kaolin with exceptionally low iron contaminant
providing a further potential additional high value market opportunity in specialist coatings and polymers.
An Inferred Mineral Resource for Mount Hope of 18.0Mt of bright white kaolinised granite was subsequently
estimated using an ISO B cut-off of 75, yielding 7.5Mt of minus 45µm quality kaolin product.
Table 5 - Mount Hope Kaolin Mineral Resource
DOMAIN
Main
Halloysite
Ultra-bright
Total
Mt
12.8
1.6
3.7
18.0
PSD <45µm
KAOLINITE %
HALLOYSITE %
40.95
39.13
44.37
41.49
33.6
25.6
38.0
33.8
0.9
6.7
0.7
1.4
Note that all figures are rounded to reflect appropriate levels of confidence
The ultra-bright sub domain contains 1.6Mt of minus 45-micron material with an ISO B of 84.1 and the halloysite sub
domain contains 0.6Mt of minus 45-µm material comprised of 17.2% halloysite.
DOMAIN
Main
Halloysite
Ultra-bright
Total
Mt
5.2
0.6
1.6
7.5
ISO B
81.8
81.2
84.1
82.2
KAOLINITE %
HALLOYSITE %
82.1
65.4
85.7
81.4
2.2
17.2
1.5
3.3
Al2O3 %
35.1
34.8
36.0
35.3
Fe2O3 %
0.56
0.60
0.32
0.51
TiO2 %
0.62
0.63
0.63
0.62
Note that all figures are rounded to reflect appropriate levels
of confidence.
The ultra-bright domain is extremely high purity, bright
white kaolin with low halloysite levels. This makes
it ideally suited to high-value markets in specialist
coatings and polymers.
520,000m E
530,000m E
540,000m E
550,000m E
EL 6286
S O U T H A U S T R A L I A
Roxby Downs
Tarcoola
Woomera
Ceduna
Streaky Bay
Mt Hope
Kaolin
Project
GREAT
AUSTRALIAN
BIGHT
Port Augusta
Whyalla
Port Pirie
Port Lincoln
Adelaide
6,230,000m N
Hall Bay
Inset
Mount Hope
Kaolin Project
Mount Hope
Brimpton Lake
100
200
0
Kilometres
Inset
6,220,000m N
Mount Hope Kaolin Deposit
F
L
I
N
D
E
R
S
H
I
G
H
W
A
Y
6,210,000m N
0
5
10
Kilometres
Mt Hope 05
Figure 6 Mount Hope licence area.
Kapinnie
Highway
Main road
Road
Railway
Town
Exploration licence
Kaolin resource
SOUTH AUSTRALIA
MOUNT HOPE
KAOLIN PROJECT
20
ANDROMEDA METALS LIMITED
Operations review
Rare Earth Elements
Additionally, the regional prospectively within GWKP tenements for rare earth elements
(REEs) is to be carefully assessed following the potential identification of ionic adsorption
clay REEs in association with the halloysite kaolin at Bronze Whaler.
Assays from the Bronze Whaler Prospect returned elevated Total Rare Earth Oxides
(TREO) as exampled by TW19AC001 which returned from 10m, 18m @ 1752ppm TREO in
the <45µm fraction including 5m @ 2256ppm TREO.
Camel Lake Halloysite Project
SOUTH AUSTRALIA
Andromeda 100%
Meetings were held with the Maralinga Tjarutja Council, the traditional landowners on
which the Camel Lake tenement is located. An initial site inspection of targeted areas
within the Camel Lake tenement occurred in January 2021. A report was prepared by the anthropologist outlining
areas that can be accessed for surface sampling by Andromeda. This project will continue to be evaluated
through FY23.
Wudinna Gold Project
SOUTH AUSTRALIA
Andromeda 35%
The Wudinna Gold Project (WGP) comprises five tenements that total 1,832km2 in the
Central Gawler Ranges. The WGP combined estimated Mineral Resource stands at
2.215Mt at 1.5g/t gold for 211,000 ounces.
In October 2017, a Heads of Agreement was entered into with Lady Alice Mines (LAM) for expenditure of up to
$5.0 million by LAM on the tenements in order to earn a 75% interest. LAM was subsequently acquired in early 2019
by Cobra Resources PLC (Cobra), a listed London Stock Exchange entity.
Cobra met the Stage 2 expenditure commitments during the period and therefore earned a 65% equity interest in the
tenements. Cobra subsequently advised that they are close to reaching Stage 3 of the joint venture which required
them to spend a further $1.25m over the next 12 months to move to a 75% interest.
During the period Cobra completed 875 shallow Rotary Air Blast (RAB) holes which were drilled across eight
existing prospects to better understand pathfinder elements in cover above known mineralisation, for a total
of 7335 metres. In follow up to the RAB program and the 2020 drilling program at Clarke Prospect where hole
CBRC0009 intercepted from 69m, 31m of gold at 3.06g/t, 14 reverse circulation (RC) holes were completed for a
total of 2187 metres. Significant gold intercepts from RC holes drilled at Clarke included 33m of gold at 1.03g/t from
65m, and 20m at 1.5g/t from 88m.
The analysis of pathfinder elements at Clarke identified the presence of anomalous levels of REEs in the saprolitic
(clay rich) profile above the gold mineralisation. The levels of REEs were encouraging enough for Cobra to undertake
a program of reanalysing the saprolitic intervals of historic drill samples for REEs throughout the broader WGP.
Additionally, detailed ground gravity surveys were conducted on three Iron Oxide Copper Gold (IOCG) targets
to better define drill targets. Geochemical results from drilling undertaken since the reporting period were not
reflective of IOCG mineralisation.
21
ANNUAL REPORT 2022 Operations review
Moonta Copper Gold Project
SOUTH AUSTRALIA
Andromeda 100%
(except Moonta Porphyry Joint Venture: Andromeda 90%, Demetallica Limited 10%)
Environmental Metals Recovery currently earning up to a 75% interest in Moonta ISR JV area)
The Moonta Copper-Gold Project falls near the southern end of the Olympic Copper-
Gold Province in South Australia. The Olympic Copper-Gold Province is highly
prospective for world class IOCG deposits as exampled by Olympic Dam, Prominent Hill
and Carrapateena Mines
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 Moonta
tenement (EL 5984). EMR can earn an initial 51% interest of the Moonta ISR JV area by sole funding $2.0 million
within 4 years of the execution Joint Venture Agreement.
During the period EMR continued to make steady progress, completing additional leach test work using lixiviants in
a range of pH conditions with generally positive results achieved.
In August 2022, South Australia’s Department for Energy and Mining approved EMR’s Program for Environmental
Protection and Rehabilitation to undertake drilling and pump trials using tracers.
In parallel, a review of the Moonta Project is being undertaken by Andromeda, utilising existing drilling results, to
assess the in-situ recovery (ISR) potential of 100% Andromeda held copper prospects13.
Drummond Epithermal Gold Project
QUEENSLAND
Andromeda 100%
The Drummond Epithermal Gold Project comprises five tenements securing a total area of
539km2 in the Drummond Basin in North Queensland. The Drummond Basin is considered
prospective for high grade epithermal gold deposits.
After undertaking a full re-evaluation of the information and exploration results previously undertaken, the
Company considered various options to realise maximum value for this project.
Subsequent to the end of the FY22, the Company has determined that maximum shareholder value is achieved
through accepting an offer for the Drummond Epithermal Gold Project from Rush Resources Limited (Rush) for
approximately $250,000 worth of fully paid ordinary shares in Rush.
The binding Term Sheet Agreement has been signed, and is subject to the following conditions precedent:
• completion of due financial, legal and technical due diligence by Rush;
• Rush undertaking a capital raising and receiving valid applications for at least $4,000,000 worth of
shares; and
• ASX providing in-principle, conditional approval for Rush’s admission to the official list of the ASX and the
quotation of its shares.
Completion of the transaction is expected to occur five business days after the date on which all of the above
conditions are either satisfied or waived.
13 Refer ADN ASX announcement dated 30 June 2022 titled “Investor presentation update”.
22
ANDROMEDA METALS LIMITED Operations review
Corporate
ACQUISITION OF MINOTAUR
During the FY22, Andromeda extended its position as
an Australian industrial minerals and nanotechnology
company through acquiring its joint-venture
partner Minotaur.
In November 2021, Andromeda announced it had
entered into a Bid Implementation Agreement (BIA) with
Minotaur Exploration Limited (Minotaur), to acquire all
the issued ordinary shares of Minotaur by way of an
off-market takeover.
The unanimously recommended off-market takeover
offer of 1.15 new Andromeda shares offered for every
1 Minotaur share, was completed in March 2022.
The acquisition enhanced Andromeda’s scale and
provided significant strategic and financial benefits
through enabling the consolidation and simplification
of ownership structures of GWKP and NNT.
The benefits delivered through Andromeda’s
acquisition of Minotaur include the following:
GREATER SIZE, SCALE AND MARKET RELEVANCE
– Enhanced balance sheet strength and share
market liquidity
– Improved access to both equity and debt
funding options
– Simplified ownership structure through removal of
complicated joint venture structures
– Streamlined management and decision-
making processes
– Cost synergies through removal of duplicate costs
from two publicly listed companies
GREAT WHITE KAOLIN PROJECT
NATURAL NANOTECH
– Unified project
– Enhanced
management and control
– Enhanced development
optionality
– Greater optimisation
of project design,
funding mix and
development timetable
development and
commercialisation of
intellectual property
– Streamlined
research and
investment decision-
making processes
– Increased focus on
broadening halloysite
role across emerging
uses and applications
BOARD AND MANAGEMENT CHANGES
In August 2021, Nick Harding announced his
resignation as Executive Director and Company
Secretary. Andrea Betti was appointed as interim
Company Secretary until the appointment of a
permanent Legal Counsel and Company Secretary,
for which a recruitment process is underway. Ms Betti
is a corporate governance professional with more
than 20 years’ experience in accounting, corporate
governance, finance and corporate banking. She has
acted as Company Secretary for companies in the
private and publicly listed sectors.
In September 2021, Melissa Holzberger was appointed
to the Board as an Independent Non-executive Director.
Ms Holzberger is an experienced Director and mining
lawyer with over 20 years’ experience in the international
energy and resources sector. Her substantial experience
extends to highly regulated industries, international
commodity trade, corporate ethics, risk and compliance
oversight, together with a focus on environment, social
and governance (ESG) Matters.
In December 2021, Tim Anderson joined Andromeda
as Chief Commercial Officer. He has over 30 years
of national and international business development
experience. His previous role as Program Manager
of the Energy & Resources Program at Nova Systems
has demonstrated his ability in identifying intellectual
property and commercialisation opportunities, resulting
in the development of a blue-chip client base with his
team in the mining, water, power and oil & gas markets
through innovative technical engineering and project
delivery solutions.
In January 2022, Rhoderick Grivas resigned as
Non-executive Chair, with Non-executive Director
Melissa Holzberger immediately assuming the role of
Acting Chair.
Ms Holzberger remained in the role of Acting Chair,
until April 2022, when Mick Wilkes was appointed to
the role of Independent Non-executive Chair.
Mr Wilkes is an experienced mining executive and
company director with more than 35 years of broad
international mining experience coupled with a
successful track record of leading the development
and operation of greenfield mines.
In June 2022, Andromeda announced the
appointment of Austen Perrin as Independent Non-
executive Director of the Company, effective from
1 July 2022. Mr Perrin is an experienced corporate
executive and company director with more than
35 years of experience in corporate and financial
roles. He has considerable knowledge of transport,
logistics, infrastructure and the mining industries. He
also has in-depth experience across commercial,
accounting and the finance spectrums.
Subsequent to the end of FY22, Andrew Shearer
resigned as an Independent Non-executive Director in
August 2022.
23
ANNUAL REPORT 2022 Operations review
Schedule of tenements
as at 30 June 2022
PROJECT
TENEMENT
TENEMENT NAME
AREA km2
REGISTERED HOLDER OR APPLICANT
NATURE OF COMPANY’S
INTEREST %
South Australia
Great White
Kaolin Project
ML 6532
Great White
319 ha
Andromeda Industrial Minerals Pty Ltd1
and Great Southern Kaolin Pty Ltd2
AIM 75%
GSK 25%
MPL 163
MPL 164
Water Pipeline
MPL
78 ha
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
Access Road
MPL
13 ha
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
EL 6588
Tootla
372
EL 60963
Whichelby
447
EL 6202
Mt Hall
147
EL 6426
Mt Cooper
648
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
Wudinna Gold EL 6317
Project
Pinkawillinie
156
Peninsula Resources Ltd4
EL 6131
Corrobinnie
1303
Peninsula Resources Ltd
EL 6489
Wudinna Hill
42
Peninsula Resources Ltd
EL 5953
Minnipa
184
Peninsula Resources Ltd
EL 6001
Moonta
Copper Gold
Project5
EL 5984
EL 5984
Waddikee
Rocks
Moonta-
Wallaroo
Moonta
Porphyry JV
147
713
Peninsula Resources Ltd
Peninsula Resources Ltd
106
Peninsula Resources Ltd
PRL 35%
LAM 65%
PRL 35%
LAM 65%
PRL 35%
LAM 65%
PRL 35%
LAM 65%
PRL 35%
LAM 65%
100%
90% - option to
acquire 100% from
Demetallica Ltd
EL 6128
Camel Lake
455
Andromeda Industrial Minerals Pty Ltd
and Great Southern Kaolin Pty Ltd
AIM 75%
GSK 25%
ELA 2019/73
Dromedary
481
Demetallica Operations Pty Ltd6
AIM 75%
GSK 25%
EL 6663
Aspen
EL 6664
Whistler
EL 6665
Hotham
EL 6666
Thredbo
EL 6286
Mt Hope
976
452
875
496
227
Peninsula Exploration Pty Ltd7
Peninsula 100%
Peninsula Exploration Pty Ltd
Peninsula 100%
Peninsula Exploration Pty Ltd
Peninsula 100%
Peninsula Exploration Pty Ltd
Peninsula 100%
Andromeda Industrial Minerals Pty Ltd 100%
Camel Lake
Halloysite
Project
Eyre Kaolin
Project
Mt Hope
Kaolin Project
24
ANDROMEDA METALS LIMITED Operations review
PROJECT
TENEMENT
TENEMENT NAME
AREA km2
REGISTERED HOLDER OR APPLICANT
NATURE OF COMPANY’S
INTEREST %
Queensland
Drummond
Gold Project
EPM 18090
Glenroy
EPM 25660
Gunthorpe
EPM 26154
Sandalwood
Creek
196
74
109
Adelaide Exploration Pty Ltd8
Adelaide Exploration Pty Ltd
Adelaide Exploration Pty Ltd
EPM 26155
Mount Wyatt
144
Adelaide Exploration Pty Ltd
EPM 27501
Packhorse
Creek
16
Adelaide Exploration Pty Ltd
Western Australia
Dundas
Project
E 63/2089
Circle Valley
29
Mylo Gold Pty Ltd9
100%
100%
100%
100%
100%
100%
1 Andromeda Industrial Minerals Pty Ltd (AIM), (incorporated 9 August 2018) is a wholly owned subsidiary of Andromeda
Metals Ltd.
2 Great Southern Kaolin Pty Ltd (GSK) is a wholly owned subsidiary of Andromeda Metals Ltd.
3 Following a prospectivity review of EL 6096 Andromeda chose not to renew the EL and allowed it to expire on
17 September 2022.
4 Peninsula Resources Ltd (PRL), (incorporated 18 May 2007) is a wholly owned subsidiary of Andromeda Metals Ltd. PRL
has a farm-in agreement with Lady Alice Mines Pty Ltd (LAM), a wholly owned subsidiary of Cobra Resources PLC.
5 Andromeda Metals Ltd has partnered with Environmental Metals Recovery Pty Ltd (EMR) to form the Moonta ISR
Joint Venture.
6 Demetallica Operations Pty Ltd is a wholly owned subsidiary of Demetallica Ltd. Registered interest is to be transferred to
AIM (75%) and GSK (25%) upon grant.
7 Andromeda Industrial Minerals Pty Ltd has a farm in agreement with Peninsula Exploration Pty Ltd (Peninsula) over the Eyre
Kaolin Project.
8 Adelaide Exploration Pty Ltd (incorporated 13 July 2001) is a wholly owned subsidiary of Andromeda Metals Ltd.
9 Mylo Gold Pty Ltd (acquired 21 December 2017) is a wholly owned subsidiary of Andromeda Metals Ltd.
25
ANNUAL REPORT 2022 Operations review
Resources and Reserves
as at 30 June 2022
Andromeda’s Mineral Resource and Ore Reserve estimates as at 30 June 2021 and 30 June 2022 are
listed below.
The Mineral Resource estimates are reported inclusive of Ore Reserve estimates. The totals and average of some
reports may appear inconsistent with the parts, but this is due to rounding of values to levels of reporting precision
commensurate with the confidence in the respective estimates.
The statements for the 30 June 2022 estimates by the Competent Person, as defined under the 2012 Edition of
the ‘Australasian Code for reporting Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code), are
included on page 30 of this Annual Report.
Andromeda’s public reporting governance for Mineral Resources and Ore Reserves estimates includes a chain of
assurance measures. Firstly, Andromeda ensures that the Competent Persons responsible for public reporting:
• are current members of a professional organisation that is recognised in the JORC Code framework;
• have sufficient mining industry experience that is relevant to the style of mineralisation and reporting activity, to
be considered a Competent Person as defined in the JORC Code;
• have provided Andromeda with a written sign-off on the results and estimates that are reported, stating
that the report agrees with supporting documentation regarding the results or estimates prepared by each
Competent Person; and
• have prepared supporting documentation for results and estimates to a level consistent with normal
industry practices – which for JORC Code 2012 resources includes Table 1 Checklists for any results and/or
estimates reported.
The following tables set out the current Resource and Reserve position for the Company.
Table of Resources – Clay, whole rock
CLAY, WHOLE ROCK
2021
Great White1,2,3
Hammerhead1,3,4
Mount Hope1,3,5
Total (100%)1
Total 2021 (Andromeda share)1
MEASURED RESOURCE
INDICATED RESOURCE
INFERRED RESOURCE
TOTAL RESOURCES
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
75
75
100
5.7
-
-
5.7
4.3
50.2
39.5
-
-
50.2
50.2
-
-
39.5
39.5
6.9
-
-
6.9
6.9
14.2
51.1
42.0
-
-
14.2
10.7
-
-
51.1
51.1
-
-
42.0
42.0
5.0
-
-
5.0
5.0
14.7
51.5
18
84.2
67.7
49.3
52.6
41.5
49.7
49.1
40.3
42.7
33.8
40.4
39.9
4.9
6.5
1.4
5.1
4.9
34.6
51.5
18
104.1
82.6
50.2
52.6
41.5
49.9
49.4
40.9
42.7
33.8
40.6
40.2
5.3
6.5
1.4
5.2
5
2022
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
Great White1,2,3
Hammerhead1,3,4
Tiger6
Mount Hope1,3,5
Total (100%)
100
100
100
100
Total 2022 (Andromeda share)
5.7
50.2
39.5
6.9
-
-
-
5.7
4.3
-
-
-
-
-
-
50.2
50.2
39.5
39.5
-
-
-
6.9
6.9
14.2
-
12.1
-
26.3
26.3
51.1
-
42.0
-
59.9
56.7
-
55.1
55.1
-
48.8
48.8
5.0
-
-
-
2.7
2.7
14.7
51.5
-
18
84.2
67.7
49.3
52.6
-
41.5
49.7
49.1
40.3
42.7
-
33.8
40.4
39.9
4.9
6.5
-
1.4
5.1
4.9
34.6
51.5
12.1
18
116.2
116.2
50.2
52.6
59.9
41.5
50.9
50.9
40.9
42.7
56.7
33.8
42.2
42.2
5.3
6.5
-
1.4
4.7
4.7
26
ANDROMEDA METALS LIMITED Operations review
Table of Resources – Clay <45µm
CLAY <45µm
2021
Great White1,2,3
Hammerhead1,3,4
Mount Hope1,3,5
Total (100%)1
Total 2021 (Andromeda share)1
MEASURED RESOURCE
INDICATED RESOURCE
INFERRED RESOURCE
TOTAL RESOURCES
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
75
75
100
2.9
83.9
78.8
13.8
7.3
82.8
82.3
9.9
-
-
2.9
2.9
-
-
83.9
83.9
-
-
78.8
78.8
-
-
13.8
13.8
-
-
7.3
7.3
-
-
82.8
82.8
-
-
82.3
82.3
-
-
9.9
9.9
7.2
27.1
7.5
41.8
33.2
83.3
82.2
82.2
82.4
82.4
81.7
81
81.4
81.2
81.3
9.9
12.3
3.3
10.3
9.9
17.4
27.1
7.5
52
40.9
82.3
82.2
82.2
82.5
82.5
81.5
81.0
81.4
81.2
81.2
10.5
12.3
3.3
10.4
10.1
2022
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
Great White1,2,3
Hammerhead1,3,4
Tiger6
Mount Hope1,3,5
Total (100%)
100
100
100
100
Total 2022 (Andromeda share)1
2.9
83.9
78.8
13.8
-
-
-
2.9
2.9
-
-
-
-
-
-
83.9
83.9
78.8
78.8
-
-
-
13.8
13.8
7.3
-
7.2
-
14.5
14.5
82.8
-
83.1
-
82.9
82.9
82.3
-
94.7
-
88.5
88.5
9.9
-
-
-
5.0
5.0
7.2
27.1
-
7.5
41.8
41.8
83.3
82.2
-
82.2
82.4
82.4
81.7
81.0
-
81.4
81.2
81.3
9.9
12.3
-
3.3
10.3
9.9
17.4
27.1
7.2
7.5
59.2
59.2
82.3
82.2
83.1
82.2
82.3
82.3
81.5
81.0
94.7
81.4
82.9
82.9
10.5
12.3
-
3.3
9.1
9.1
Table of Resources – Clay <45µm continued
CLAY <45µm (CONTINUED)
MEASURED RESOURCE
INDICATED RESOURCE
INFERRED RESOURCE
TOTAL RESOURCES
2021
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
Great White1,2,3
Hammerhead1,3,4
Mount Hope1,3,5
Total (100%)1
75
75
100
Total 2021 (Andromeda share)1
2.9
36.7
0.52
0.32
7.3
36.6
0.51
0.5
-
-
2.9
2.9
-
-
36.7
36.7
-
-
0.52
0.52
-
-
0.32
0.32
-
-
7.3
7.3
-
-
36.6
36.6
-
-
0.51
0.51
-
-
0.5
0.5
7.2
27.1
7.5
41.8
33.2
36.4
37.0
35.3
36.6
36.5
0.51
0.63
0.51
0.60
0.60
0.45
0.71
0.62
0.70
0.70
17.4
27.1
7.5
52.0
40.9
36.5
37.0
35.3
36.6
36.5
0.51
0.63
0.51
0.60
0.60
0.45
0.71
0.62
0.60
0.60
2022
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
TONNES
(Mt)
PSD
(<45µm)
KAOLINITE
(%)
HALLOYSITE
(%)
Great White1,2,3
Hammerhead1,3,4
Tiger6
Mount Hope1,3,5
Total (100%)
100
100
100
100
Total 2022 (Andromeda share)1
2.9
36.7
0.52
0.32
-
-
-
2.9
2.9
-
-
-
-
-
-
36.7
36.7
0.52
0.52
-
-
-
0.32
0.32
7.3
-
7.2
-
14.5
14.5
36.6
0.51
-
37.2
-
36.9
36.9
-
0.81
-
0.70
0.70
0.50
-
0.61
-
0.60
0.60
7.2
27.1
-
7.5
41.8
41.8
36.4
37.0
-
35.3
36.6
36.5
0.51
0.63
-
0.51
0.60
0.60
0.45
0.71
-
0.62
0.70
0.70
17.4
27.1
7.2
7.5
59.2
59.2
36.5
37.0
37.2
35.3
36.7
36.7
0.51
0.63
0.81
0.51
0.60
0.60
0.45
0.71
0.61
0.62
0.60
0.60
27
ANNUAL REPORT 2022 Operations review
Table of Resources – Gold
GOLD
2021
Barns1,7,8
Baggy Green1,7,8
White Tank1,7,8
Total (100%)1
ANDROMEDA
INTEREST (%)
50
50
50
Total 2021 (Andromeda share)1
TONNES
(kt)
410
-
-
410
205
ANDROMEDA
INTEREST (%)
TONNES
(kt)
35
35
35
35
100
100
100
Total 2022 (Andromeda share)1
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
Total 2021 (Andromeda share)1
ANDROMEDA
INTEREST (%)
TONNES
(Mt)
2022
Barns
Baggy Green
White Tank
Total (100%)
2021
Wombat1,9,10,11
Bruce1,9,10,11
Larwood1,9,10,11
Total (100%)1
2022
Wombat
Bruce
Larwood
Total (100%)
410
-
-
410
140
46.5
11.8
7.8
66.1
66.1
46.5
11.8
7.8
66.1
66.1
INDICATED RESOURCE
INFERRED RESOURCE
TOTAL RESOURCES
AU
(g/t)
1.4
-
-
1.4
1.4
AU
(g/t)
1.4
-
-
1.4
1.4
AU
(oz)
18,000
-
-
18,000
9,000
AU
(oz)
18,000
-
-
18,000
6,300
TONNES
(kt)
1,710
2,030
280
4,020
2,010
TONNES
(kt)
1,710
2,030
280
4,020
1,400
AU
(g/t)
1.5
1.4
1.4
1.4
1.5
AU
(g/t)
1.5
1.4
1.4
1.4
1.5
AU
(oz)
86,000
94,000
13,000
193,000
96,000
AU
(oz)
86,000
94,000
13,000
193,000
67,500
TONNES
(kt)
2,210
2,030
280
4,430
2,215
TONNES
(kt)
2,210
2,030
280
4,430
1,550
CU
(%)
0.17
0.19
0.15
0.17
0.17
CU
(%)
0.17
0.19
0.15
0.17
0.17
CU
(kt)
80.0
22.0
12.0
114.0
114.0
CU
(kt)
80.0
22.0
12.0
114.0
114.0
AU
(g/t)
-
-
0.04
0.04
0.04
AU
(g/t)
-
-
0.04
0.04
0.04
AU
(koz)
-
-
10.0
10.0
10.0
AU
(koz)
-
-
10.0
10.0
10.0
TONNES
(Mt)
46.5
11.8
7.8
66.1
66.1
TONNES
(Mt)
46.5
11.8
7.8
66.1
66.1
CU
(%)
0.17
0.19
0.15
0.17
0.17
CU
(%)
0.17
0.19
0.15
0.17
0.17
CU
(kt)
80.0
22.0
12.0
114.0
114.0
CU
(kt)
80.0
22.0
12.0
114.0
114.0
AU
(g/t)
1.5
1.4
1.4
1.5
1.5
AU
(g/t)
1.5
1.4
1.4
1.5
1.5
AU
(g/t)
-
-
0.04
0.04
0.04
AU
(g/t)
-
-
0.04
0.04
0.04
AU
(oz)
104,000
94,000
13,000
210,000
105,000
AU
(oz)
104,000
94,000
13,000
211,000
73,000
AU
(koz)
-
-
10.0
10.0
10.0
AU
(koz)
-
-
10.0
10.0
10.0
Table of Resources – Copper (in situ recovery)
COPPER (IN SITU RECOVERY)
INFERRED RESOURCE
TOTAL RESOURCES
Total 2022 (Andromeda share)
28
ANDROMEDA METALS LIMITED Operations review
Table of Reserves – Great White Deposit
GREAT WHITE DEPOSIT
2021
ANDROMEDA
INTEREST(%)
TONNES
(Mt)
PRM YIELD
(%)
CRM YIELD
(%)
RECOVERY <45µm
FRACTION (%)
YIELD PRM
(%)
YIELD CRM
(%)
TOTAL YIELD
(%)
HALLOYSITE
(%)
KAOLINITE
(%)
HALLOYSITE +
KAOLINITE (%)
BRIGHTNESS
(R457)
Fe2O3
(%)
PROVED RESERVE
Great White1,12,13,14,16
75
Total (100%)1
Total 2021 (Andromeda share)1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2022
ANDROMEDA
INTEREST(%)
TONNES
(Mt)
PRM YIELD
(%)
CRM YIELD
(%)
RECOVERY <45µm
FRACTION (%)
YIELD PRM
(%)
YIELD CRM
(%)
TOTAL YIELD
(%)
HALLOYSITE
(%)
KAOLINITE
(%)
HALLOYSITE +
KAOLINITE (%)
BRIGHTNESS
(R457)
Fe2O3
(%)
Great White PRM1,12,13,15,16
Great White CRM1,12,13,15,16
Total (100%)1,12,13,15,16
100
100
Total 2022 (Andromeda share)1
0.4
4.8
5.2
5.2
27
-
-
-
18
-
-
-
-
-
-
-
27
-
-
-
18
45
-
-
45
45
45
45
PROBABLE RESERVE
3
15
14
14
-
-
-
-
-
-
-
-
87
84
84
84
0.3
0.5
0.5
0.5
GREAT WHITE DEPOSIT
2021
ANDROMEDA
INTEREST(%)
TONNES
(Mt)
PRM YIELD
(%)
CRM YIELD
(%)
RECOVERY <45µm
FRACTION (%)
YIELD PRM
(%)
YIELD CRM
(%)
TOTAL YIELD
(%)
HALLOYSITE
(%)
KAOLINITE
(%)
HALLOYSITE +
KAOLINITE (%)
BRIGHTNESS
(R457)
Fe2O3
(%)
Great White1,12,13,14,16
75
Total (100%)1
Total 2021 (Andromeda share)1
12.5
12.5
9.4
-
-
-
-
-
-
52
52
52
-
-
-
-
-
-
-
-
-
15
15
15
78
78
78
93
93
93
-
-
-
-
-
-
2022
ANDROMEDA
INTEREST(%)
TONNES
(Mt)
PRM YIELD
(%)
CRM YIELD
(%)
RECOVERY <45µm
FRACTION (%)
YIELD PRM
(%)
YIELD CRM
(%)
TOTAL YIELD
(%)
HALLOYSITE
(%)
KAOLINITE
(%)
HALLOYSITE +
KAOLINITE (%)
BRIGHTNESS
(R457)
Fe2O3
(%)
Great White PRM1,12,13,15,16
Great White CRM1,12,13,15,16
Total (100%)1,12,13,15,16
100
100
Total 2022 (Andromeda share)1
1.1
8.9
9.9
9.9
24
-
-
-
16
-
-
-
-
-
-
-
24
-
-
-
16
46
-
-
40
46
45
45
TOTAL RESERVE
1
11
10
10
-
-
-
-
-
-
-
-
87
83
83
83
0.3
0.5
0.5
0.5
GREAT WHITE DEPOSIT
2021
ANDROMEDA
INTEREST(%)
TONNES
(Mt)
PRM YIELD
(%)
CRM YIELD
(%)
RECOVERY <45µm
FRACTION (%)
YIELD PRM
(%)
YIELD CRM
(%)
TOTAL YIELD
(%)
HALLOYSITE
(%)
KAOLINITE
(%)
HALLOYSITE +
KAOLINITE (%)
BRIGHTNESS
(R457)
Fe2O3
(%)
Great White1,12,13,14,16
75
Total (100%)1
Total 2021 (Andromeda share)1
12.5
12.5
9.4
-
-
-
-
-
-
52
52
52
-
-
-
-
-
-
-
-
-
15
15
15
78
78
78
93
93
93
-
-
-
-
-
-
2022
ANDROMEDA
INTEREST(%)
TONNES
(Mt)
PRM YIELD
(%)
CRM YIELD
(%)
RECOVERY <45µm
FRACTION (%)
YIELD PRM
(%)
YIELD CRM
(%)
TOTAL YIELD
(%)
HALLOYSITE
(%)
KAOLINITE
(%)
HALLOYSITE +
KAOLINITE (%)
BRIGHTNESS
(R457)
Fe2O3
(%)
Great White PRM1,12,13,15,16
Great White CRM1,12,13,15,16
Total (100%)1,12,13,15,16
100
100
Total 2022 (Andromeda share)1
1.5
13.7
15.1
15.1
25
-
-
-
17
-
-
-
-
-
-
-
25
-
-
-
17
-
-
-
41
46
46
46
2
12
11
11
-
-
-
-
-
-
-
-
87
83
84
84
0.3
0.5
0.5
0.5
Figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding.
ISO brightness (R457) cut-off of at 75 in the <45µm size fraction.
ASX 29 September 2020, New mineral resource estimate for Hammerhead Halloysite-Kaolin Deposit.
1
2 ASX 26 November 2020, Updated mineral resource for the Great White Kaolin JV Deposit.
3
4
5 ASX 11 August 2020, New mineral resource for the Mount Hope Kaolin Project.
6 ASX 23 March 2022, Maiden Tiger Kaolin Resource and Regional Rare Earth Element Potential.
7 ASX announcement released 8 May 2019 “Increased ounces in updated Wudinna Gold Project Mineral Resource”.
8 The Wudinna Gold Project Mineral Resources estimates have been reported at a 0.5 g/t gold cut-off grade to reflect extraction by
open pit mining.
9 ASX release dated 15 August 2019 “Substantial initial copper resource – Moonta Project, inferred ISR copper resource of
114,000 tonnes contained copper”.
10 Figures are rounded to reflect appropriate levels of confidence. Apparent differences may occur due to rounding.
11 Environmental Copper Recovery Pty Ltd earning a 75% interest.
12 ASX release dated 10 July 2020 “Maiden Ore Reserve for Carey’s Well Deposit”.
13 Great White Reserve estimated based off the 2019 Great White Resource estimate (refer ADN ASX release dated
23 December 2019 “Significant Increase in Mineral Resource at Poochera”).
14 The maiden Ore Reserve Estimate is drawn from the PFS released in June 2020 (refer ADN ASX announcement dated
1 June 2020 titled “Pre-Feasibility Study further improves Poochera Halloysite-Kaolin Project Economics”).
15 2022 Ore Reserve used in the DFS released in April 2022 (refer ADN ASX announcement dated 16 April 2022 titled “Definitive
Feasibility Study and Updated Ore Reserve”).
16 Ore Reserves have been reported from Measured and Indicated Resources only.
29
ANNUAL REPORT 2022 Operations review
Competent person
statements
Great White and Mt Hope Projects Resources
Information in that relates to the Great White
Project and Mt Hope Project has been reviewed
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, options and performance
rights in the company and is entitled to participate
in Andromeda’s employee incentive plan (details
of which are included in Andromeda’s Annual
Remuneration Report) 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 Person 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 that relates to Mineral Resource Estimates
for the Great White Kaolin Project (Great White,
Hammerhead and Tiger Deposits) and Mount Hope
Kaolin Project are based on information evaluated
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 has 30 years of
experience in the mining industry. Mr Whittaker
consents to the information in the form and context
in which it appears. Mr Whittaker holds Performance
Rights in the Company and is entitled to participate
in Andromeda’s employee incentive plan.
30
Wudinna Gold Project Resources
Information that relates to the Estimation and Reporting
of Mineral Resources for the Barns, White Tank and
Baggy Green Deposits were compiled by Mrs Christine
Standing BSc Hons (Geology), MSc (Min Econs),
MAusIMM, MAIG. Mrs Standing is a full-time employee of
Optiro and has acted as an independent consultant on
the Mineral Resource estimates for the Barns, White Tank
and Baggy Green deposits. Mrs Standing is a Member of
the Australian Institute of Geoscientists and the Australian
Institute of Mining and Metallurgy and has sufficient
experience with the style of mineralisation, deposit type
under consideration and to the activities undertaken to
qualify as a Competent Person as defined in the 2012
Edition of the JORC Code. Mrs Standing consents to
the inclusion in this report of the contained technical
information relating to the Mineral Resource estimations
in the form and context in which it appears.
Moonta Copper ISR Resources
The information in this release that relates to the
Estimation and Reporting of Mineral Resources has been
compiled by Mr David Coventry BSc (Hons). Mr Coventry
was at the time of the estimation a full-time employee
of Mining Plus Pty Ltd and acted as an independent
consultant on the Moonta Deposit Mineral Resource
estimations. Mr Coventry is a Member of the Australasian
Institute of Geoscientists and has sufficient experience
with the style of mineralisation, deposit type under
consideration and to the activities undertaken to qualify
as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (The JORC
Code). Mr Coventry consents to the inclusion in this
report of the contained technical information relating the
Mineral Resource Estimation in the form and context in
which it appears.
Great White Ore Reserves
The data in this report that relates to Mineral Reserve
Estimates for the Great White Deposit is based on
information evaluated by Mr John Millbank who is a
Member of the Australasian Institute of Mining and
Metallurgy (MAusIMM). Mr Millbank is the Director of
Proactive Mining Solutions Pty Ltd, an independent
mining consultancy, 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 Millbank consents
to the information contained in this report being used
in the form and context in which it appears. Neither
Mr Millbank, or any of the entities he directly controls,
have any financial interests in Andromeda Metals Ltd or
any of its subsidiaries.
ANDROMEDA METALS LIMITED Directors' report
TABLE OF CONTENTS
Directors’ report
Remuneration report
Auditor’s independence declaration
Financial Statements
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
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
General Information
Adoption of new and revised accounting standards
Significant accounting policies
Loss from operations
Income tax
Current trade and other receivables
Other non-current financial assets
Exploration and evaluation expenditure
Plant and equipment
Investment in joint venture
Current liabilities – trade and other payables
Current liabilities – other
Lease liabilities
Non-current liabilities – provisions
Issued capital
Reserves
Loan-funded employee share plan
Key management personnel compensation
Remuneration of auditors
Related party disclosures
Third party interests
Commitments for expenditure and contingent liabilities
Financial instruments
Segment information
Earnings per share
Controlled entities
Parent entity disclosures
Subsequent events
Asset acquisition
Directors’ declaration
Independent auditor’s report
Shareholder information
Glossary
32
41
62
63
64
65
66
68
68
68
78
79
80
80
81
82
83
83
83
84
84
85
87
87
87
88
88
88
89
91
92
92
93
94
94
95
96
97
102
103
31
ANNUAL REPORT 2022 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 2022.
DIRECTORS AND KEY MANAGEMENT PERSONNEL
The names and details of the Directors and Key Management Personnel of the Company during or since the end
of the financial year are:
Michael Wilkes
BEng(Hons), MBA, MAusIMM, MAICD
James E Marsh
BSc (Hons), MAusIMM
(Appointed 6 April 2022)
Non-executive Chairman
Mick Wilkes is an experienced mining
executive and company director
with more than 35 years of broad
international mining experience
coupled with a successful track
record of leading the development
and operation of greenfield mines.
Most recently in his executive
career, Mick was the President and
CEO of dual listed (ASX and TSX)
OceanaGold Corporation (ASX:
OCG) from 2011 to 2020 where he led
the transformation from a single asset
junior company to a multinational
mid-tier producer with four operations
across three countries.
In previous roles he was the Executive
General Manager of Operations
at OZ Minerals responsible for the
development of the Prominent Hill
copper/gold project in South Australia
and General Manager of the Sepon
gold/copper project for Oxiana
based in Laos.
Mick is currently a Non-executive
Chair of Kingston Resources Limited
(ASX: KSN), been appointed as
Non-executive Director of Genesis
Minerals Ltd effective 1 October;
and a member of the Sustainable
Minerals Institute’s Advisory Board
at the University of Queensland.
He was previously the Chair of
the Governance Committee and
a member of the Administration
Committee of the World Gold Council.
32
Managing Director
James Marsh is a highly qualified
kaolin specialist with more than
30 years’ industrial minerals
experience, including notable, senior
technical and marketing roles with
two global market leaders.
With experience at all levels of the
industry from laboratory development
through to market listing, James has
been instrumental in developing new
applications and markets for kaolin
around the world.
James spent fifteen years working
as Technical Manager for Imerys
Minerals, the world leader in industrial
minerals with a focus on kaolin,
where he successfully assisted in
developing and commercialising
several new grades from projects
around the world.
He then worked for nine years with
Minerals Corporation in Australia as
Marketing and Technical Director
commercialising kaolin products
from Australia and China, and
setting up a global network for sales
and distribution.
James spent seven years as Business
Development Manager for Active
Minerals International, a worldwide
leader in the production and
marketing of kaolin and attapulgite
minerals. Uniquely qualified in all
aspects of the kaolin industry, James
is passionate about leveraging his
experience to deliver a world-class
industrial minerals business.
Joseph F Ranford
BEng (Mining), MBA, FAusIMM, GAICD,
Grad Dip (Business Management)
Operations Director
Joe Ranford is a mining engineer
with 25 years’ senior management
experience across both domestic
and international mining companies.
Joe has significant experience
bringing mining operations
into production within sensitive
communities and considerable
knowledge of the South Australian
mining approval process and
stakeholder landscape.
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 his role at Nordic Gold Inc,
Joe was Operations Manager for
Terramin Australia Limited 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.
Joe is focused on bringing the
deposits of the Great White Kaolin
Project on South Australia’s Eyre
Peninsula project into production.
Growing up in the region, Joe has a
genuine understanding and respect
for the local community and wants
to continue building partnerships
based on creating shared value.
ANDROMEDA METALS LIMITED Directors’ report
Melissa K Holzberger
LLM Resources Law (Distinction (Scotland),
Dip. International Nuclear Law (Hons)
(France), LLB (Adel), BA (Adel), Grad Dip
Legal Practice, GAICD, FGIA
(Appointed 23 September 2021)
Independent Non-executive Director
Acting Chair (Jan – April 2022)
Audit and Risk Committee Chair
(until 30 June 2022)
Sustainability and Governance
Committee Chair
Ms Holzberger is an experienced
Independent Non-executive Director
and mining lawyer with over 20 years’
experience in the international energy and
resources sector.
Ms Holzberger is currently a Non-executive
Director of Paladin Energy Ltd (ASX:
PDN) and a member of the Australian
Radiation Protection and Nuclear Safety
Agency’s Radiation Health and Safety
Advisory Council.
She brings a deep understanding of
mining projects and operations, having
previously worked with BHP and Rio Tinto.
Her substantial experience extends to
highly regulated industries, international
commodity trade, corporate ethics, risk and
compliance oversight, together with a focus
on sustainability, environment, social and
governance (ESG) matters.
Ms Holzberger holds a Master of Laws
in Resources Law (Distinction) as a
Chevening scholar from the Centre for
Energy, Petroleum and Mineral Law and
Policy, University of Dundee; a Diploma in
International Nuclear Law (Hons) as an
OECD Nuclear Energy Agency scholar from
the University of Montpellier; a Bachelor
of Laws and Bachelor of Arts from the
University of Adelaide; and a Graduate
Diploma in Legal Practice.
She is a graduate of the University of
Oxford’s Leading Sustainable Corporations;
a graduate member of the Australian
Institute of Company Directors; and a Fellow
of the Governance Institute of Australia.
In 2006 Ms Holzberger was awarded the
Telstra South Australian Young Business
Woman of the Year which recognised her
commitment and leadership in the energy,
resources and business community.
Andrew Shearer
BSc (Geology), Hons (Geophysics),
MBA
Austen Perrin
B. Econ. (Acc.), CA, GAICD
(Appointed 1 July 2022)
(Resigned 24 August 2022)
Non-executive Director
Audit and Risk Committee
Chairman
Andrew Shearer has been
involved in the mining and finance
industries for 20 years.
Coupled with geoscience and
finance qualifications he has
experience from exploration
through to production.
Andrew also holds company
director positions with
Investigator Resources and
Resolution Minerals.
Andrew has been exposed to the
global resources sector covering
micro to mid-cap resources
stocks; from exploration to
producing companies, across a
broad suite of commodities.
He has held senior roles in the
mining and finance industries
with PAC Partners, Phillip Capital,
Austock, the South Australian
Government, Mount Isa Mines and
Glengarry Resources. Andrew
leveraged a strong track-record
in mining and finance to assist in
bringing Andromeda’s valuable
deposits into production.
Non-executive Director
Austen Perrin has had significant
experience in developing capital
management strategies and
financing solutions to support
corporate objectives including
development of key infrastructure
and transport projects and
underground coal mines.
He has a breadth of experience
gained in a variety of industries
including transport and logistics,
ports, road and rail infrastructure,
coal, copper and gold mining,
unconventional shale gas,
mining services, oil, gas and
water pipeline construction,
general building construction
and insurance.
Austen Perrin is currently a non-
executive director with AJ Lucas
Group Limited and up until
recently a non-executive director
for Round Oak Minerals Pty
Limited. Austen currently chairs
the Audit and Risk Committee
for AJ Lucas and previously for
Round Oak Minerals Pty Limited.
He has been a Charted
Accountant for over
33 years and is a graduate
of the Australian Institute of
Company Directors.
33
ANNUAL REPORT 2022 Directors’ report
Andrea Betti
BCom, MBA, GradDip (Corporate
Governance), GradDip (Applied
Finance and Investment) MBA
(Appointed 11 August 2021)
Company Secretary
Andrea Betti is a corporate
governance professional with over
20 years’ experience in accounting,
corporate governance, finance and
corporate banking.
She has acted as Company
Secretary for companies in the
private and publicly listed sectors.
Andrea is a member of the Institute
of Chartered Accountants in
Australia and New Zealand and
an associate member of the
Governance Institute of Australia.
Andrea is currently a Director of a
corporate advisory company based
in Perth that provides corporate and
other advisory services to publicly
listed companies.
She has a Bachelor of Commerce,
Graduate Diploma in Corporate
Governance, Graduate Diploma in
Applied Finance and Investment and
a Master of Business Administration.
34
Michael Zannes
BBus, CPA, Grad Cert (AICD)
Tim Anderson
BEng (Honours), Grad Cert (AICD)
(Appointed 1 December 2021)
Chief Financial Officer
Michael Zannes is a qualified
CPA with more than 20 years of
experience in the mining industry.
He has an extensive background in
managing governance, operational
and corporate finance in resource
companies both in Australia and
internationally.
Chief Commercial Officer
Tim Anderson is an experienced
executive with more than
30 years of experience including
commercialisation, business
development and operations
management roles in resources,
energy, water, technology
and engineering.
Michael has extensive experience in
financial reporting and analysis, tax,
treasury, reporting, systems design
and implementation, purchasing
and logistics, project exploration,
project development and business
improvement.
Before joining Andromeda, Michael
held an executive role with New
Gold Inc including Company Director
and Secretary for New Gold’s
Australian divisions and General
Manager of Australian operations for
New Gold Inc. Michael has also held
senior roles with Whitehaven Coal
Ltd, and Xstrata PLC. He has proven
skills in financial management,
funding, feasibility studies,
compliance, risk management and
both operations and corporate
finance management.
Tim was a Senior Leadership Team
member and Program Manager
– Energy & Resources for Nova
Systems, an Australian-owned
internationally operating engineering
and technology solutions company.
He served as CEO of Optimatics,
a global leader in water utility
systems planning and operations
optimization through the application
of computational intelligence
technologies.
Tim held business development and
operations management roles at
The University of Adelaide for the
commercialisation of research and
the provision of academic consulting
and testing services.
Tim has led and grown businesses
from the ground up and established
and transformed new business
entities within mature state
companies.
He holds an Honours Degree in Civil
Engineering from The University of
Adelaide in Australia and a Graduate
Diploma from the Australian Institute
of Company Directors.
ANDROMEDA METALS LIMITED Directors’ report
DIRECTORS WHO RESIGNED DURING THE FINANCIAL YEAR
Rhoderick G J Grivas
BSc (Geology), MAusIMM
Non-executive Chairman
(resigned 20 January 2022)
Rhod is a geologist with over 30 years’ resource industry experience, including 20+ years ASX listed company
board experience.
Nicholas J Harding
BA (Acc), GradDip (Acc), GradDip (App Fin), GradDip (Corp Gov), FCPA, F Fin, AGIA, ACIS
Executive Director and Company Secretary
(resigned 10 August 2021)
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.
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
M Wilkes
COMPANY
PERIOD OF DIRECTORSHIP
Kingston Resources Limited
From May 2018 to present
Matador Mining Limited
From July 2020 to May 2022
Dacian Gold Limited
Genesis Minerals Ltd
From September 2021 to September 2022
From October 2022
M K Holzberger
Paladin Energy Limited
From May 2021 to present
Silex Systems Limited
From January 2019 to October 2021
A Perrin
AJ Lucas Group Limited
From December 2014 to present
A N Shearer
Resolution Minerals Limited
From March 2017 to present
Investigator Resources Limited
From July 2020 to present
Osmond Resources Limited
From September 2021 to present
Okapi Resources Limited
From July 2020 to May 2021
R G J Grivas
Golden Mile Resources Limited
From March 2017 to present
Lexington Gold Limited (AIM Listed)
From November 2020 to present
Aldoro Resources Limited
From November 2019 to November 2020
Okapi Resources Limited
From June 2020 to May 2021
35
ANNUAL REPORT 2022 Directors’ report
PRINCIPAL ACTIVITIES
The principal activity of the Group is the advancement
of GWKP through the development of production
facilities for halloysite-kaolin products to meet
customer-driven demand.
Subject to making a final investment decision,
development will be through the initial construction of a
Starter Plant14 in line with the production and financial
assumptions outlined in the DFS released in April 202215.
OPERATING AND FINANCIAL REVIEW
(All $ are AUD unless otherwise stated)
Strategy
To achieve the goal of growing shareholder wealth,
Andromeda's Directors have formulated a Company
strategy comprising the following key elements:
• The Company will maintain a focus on advancing
the GWKP through to a final investment decision
for eventual development and production. The
Directors continue to see a strong market for quality
halloysite-kaolin products, underpinned by declines
in global supply.
• The Company will fund research to assist in the
development of new market opportunities for
halloysite-kaolin given the high purity halloysite
found at Great White and other projects to service
the growth in demand for the product.
• 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 to allow Andromeda to focus on
the advancement of the Great White Kaolin Project.
To that end, joint ventures with Cobra over the Eyre
Peninsula Gold Project and EMR over the northern
part of the Moonta Copper-Gold Project have
been executed. The Company has, subsequent
to year-end, entered into an agreement to sell the
Drummond Epithermal Gold Project to Rush for
approximately $250,000 worth of shares in Rush,
subject to a number of conditions precedent (see
page 22 in this Report).
• 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.
• The Company acknowledges the importance
of committing to and establishing an integrated
approach to Sustainability and consistent reporting
on Environmental, Social and Governance (ESG)
frameworks and factors. As the Company moves
into production, its aspiration is to adopt, monitor
and report on relevant frameworks and metrics
that emerge from the developing consensus and
convergence of ESG standards.
Financial results
Income for FY22 increased to $452,516, representing a
636% increase from the $61,461 recorded during FY21.
The net result of operations for the year was a loss
after income tax of $8,733,119, which is a 36% increase
from the loss of $6,443,299 for the prior year. This
was driven by the increased expenses incurred as
the Company continued to move GWKP towards a
final investment decision, and prepare for operational
readiness ahead of production.
The earnings per share for FY22 was a loss of 0.33
cents per share, consistent with the prior year.
At 30 June 2022, the Company held cash and cash
equivalents totalling $32,853,203. This is significantly
higher than the $4,904,719 held the year prior, largely
due to the successful raising of $44,999,913 through
undertaking a Share Placement16 and a Share
Purchase Plan17.
Significant changes to state of affairs
Significant changes in the state of affairs of the
Company during the financial year were as follows:
Capital Raising
On 30 June 2021, the Company announced it had
completed a successful bookbuild to raise $30 million
(before costs) via a placement to professional and
sophisticated investors, which would be accompanied
by a Share Purchase Plan offer to existing shareholders
to raise a further $15 million (before costs). On 7 July
2021, the Company issued 200,000,000 fully paid
ordinary shares at the issue price of $0.15 per share
pursuant to the placement and on 27 July 2021,
the Company issued a further 99,999,219 fully paid
ordinary shares pursuant to the Share Purchase Plan.
14 Refer ADN ASX announcements dated 26 August 2022
titled “Andromeda Commencing Procurement of Long
Lead Time Items for Great White Kaolin Project” and 29
August 2022 titled “Investor Webinar – Market Update”.
15 Refer ADN ASX announcements dated 6 April 2022 titled
“Great White Kaolin Project - Definitive Feasibility study
and Updated Ore Reserve”.
16 Refer ADN ASX announcement dated 30 June 2021
titled “Andromeda successfully completed Completes
$30 million Placement and Launches $15 million Share
Purchase Plan”.
17 Refer ADN ASX announcement dated 27 July 2021 titled
“Oversubscribed Share Purchase Plan raises $15 million”.
36
ANDROMEDA METALS LIMITED Directors’ report
Minotaur Exploration Ltd takeover
On 10 November 2021 the Company announced it had launched a friendly off-market takeover bid for Minotaur
Exploration Ltd. The takeover offer became unconditional on 7 February 2022. The Company proceeded to
issue 571,675,752 fully paid ordinary shares on 4 March 2022 pursuant to the takeover bid and issued a further
48,832,301 fully paid ordinary shares upon the completion of compulsory acquisition of Minotaur Exploration Ltd.
The following securities were issued during the reporting period:
DATE
ISSUE
AMOUNT
DETAIL
20 August 2021
Performance Rights
(2,250,000)
Cancellation
23 August 2021
Ordinary Shares
325,000
Option conversion
26 August 2021
Performance Rights
5,639,475
Employee Incentive Plan
6 September 2021
Ordinary Shares
500,000
Option Conversion
12 November 2021
Ordinary Shares
21,500,000
Option Conversion
16 November 2021
Ordinary Shares
675,000
Option Conversion
2 December 2021
Performance Rights
3,375,000
Employee Incentive Plan
2 December 2021
Unlisted Options
2,800,000
Employee Incentive Plan
2 December 2021
Performance Rights
2,760,000
Director PRs
2 December 2021
Unlisted Options
4,180,000
Director Options
18 March 2022
Performance Rights
(1,441,150)
Cancellation
30 May 2022
30 June 2022
30 June 2022
Ordinary Shares
Ordinary Shares
Unlisted Options
3,500,000
PR conversion
273,333
Option Conversion
(546,667)
Cancellation
Note: For more detailed information refer to Note 15 in the notes to the Financial Statements (page 85).
Subsequent to the end of the reporting period, on 22 July 2022, the Company issued 2,000,000 fully paid ordinary
shares upon the conversion of 2,000,000 vested Performance Rights.
On 4 April 2022 the Company advised its Registered Office and Principal Place of Business had changed to Level
10, 431 King William Street, Adelaide.
37
ANNUAL REPORT 2022 Directors’ report
Great White Kaolin Project (GWKP)
During FY22, and following the acquisition of Minotaur,
the Company completed the DFS confirming the
significant value and long-term cashflows that can
be generated through developing GWKP based on
established markets for Kaolin, such as ceramics,
coatings and concrete.
Using conventional mining and processing techniques,
the DFS found GWKP can generate high quality
halloysite-kaolin products, with a pre-tax NPV of
$613 million based on project assumptions at that
time, and has sufficient reserves to sustain a 28-year
mining operation.
The four-stage approach to development outlined in
the DFS, is expected to deliver average annual EBITDA
of $81.5 million and require an initial capital cost of
$93.8 million during Stage One.
The cashflows detailed in the DFS, were expected
to see GWKP generate an internal rate of return of
36% and a payback period of 5.9 years based on
assumptions at that time. This payback period includes
payback of the initial capital cost as well as capital
costs of Stages 2–4 of DFS.
After releasing the DFS, and in light of the changed
conditions through the impacts of the COVID-19
pandemic along with other geopolitical developments,
the Board sought to further de-risk the Project.
Accordingly, a refinement of the staged, scalable
approach to developing GWKP was deemed
more prudent, through the initial development of a
scalable Starter Plant that more closely matches
production to total commitments for signed offtake
agreements, with the benefit of reducing initial up-front
capital requirements.
The Starter Plant represents the beginning of a staged
approach to developing GWKP that continues to aim
to deliver on the production and financial outcomes of
the DFS.
The Stater Plant will ramp-up production, from an
initial processing level of 100,000 t/pa of ore, in line
with signed binding offtake agreements. The signing
of additional offtake agreements is then expected to
see production increase to the processing capacity
of 300,000 t/pa outlined in Stage One of the DFS, and
then progress through to Stage 4.
Ongoing negotiations for additional binding offtake
agreements provide confidence that the staged,
scalable approach to developing GWKP will deliver
on the production and financial outcomes outlined in
the DFS.
Having already secured two binding offtake
38
agreements18, the Company has continued its focus
on locking-in offtake agreements for the balance of
the initial Great White plant output to further de-risk
the Project.
Subsequent binding offtake agreements for Great
White KCM™ 90 were signed with:
• Asia Minerals Resources of Hong Kong and
Vietnam, for 31,000 tonnes, with a minimum of
23,500 and maximum of up to a total of 38,500
tonnes, over the first three years of production, for
sales into the ceramics sectors across Vietnam,
Malaysia, Singapore, Bangladesh, India, Pakistan,
Philippines, South Korea, Indonesia, Thailand and
the UAE, and
• Plantan Yamada, a highly respected Japanese
porcelain manufacturer, for 35,000 tonnes,
with a minimum of 27,000 and maximum total
of 43,000 tonnes, over the first three years of
production, for sales into the ceramics sector
of Japan.
Both these agreements were signed at prices in
excess of the pricing assumed in the DFS, of between
$425 and $465 per tonne and are subject to standard
conditions precedent.
The DFS outlined KCM™90 as the initial refined product
made from GWKP feedstock which is able to be mined
for the life of mine of the Project, or further refined
into other products, as required to meet customer
demand. The two agreements demonstrate demand
for KCM™90 for a minimum three years, rather than the
two years initially assumed in DFS.
Current offtake agreements indicate a ramping up
of volume year-on-year. Production is expected to
increase in line with additional offtake agreements to
the processing capacity of 300,000 t/pa outlined in
Stage One of the DFS.
A Letter of Intent for exclusive distribution rights
into Asia/Pacific was signed with IMCD, the world’s
largest additives distributer, for the Great White
HRM™ concrete additive and the Great White SRM™
suspension aid additive. Subsequent negotiations
with IMCD have centred on further progressing
the relationship through the signing of a binding
offtake agreement.
18 Offtake agreements are subject to a number of conditions
precedent to be met in respect to a final decision to mine
and investment decision required to be made, receipt
of all mining approvals and achievement of commercial
levels of production.
ANDROMEDA METALS LIMITED Directors’ report
Ongoing negotiations for further offtake agreements
continue with several other interested parties across
multiple markets in Asia, Europe and the Middle East,
with the aim of securing the balance of production
output detailed in the DFS.
The DFS was based on an Ore Reserve of 15.1Mt
for the Great White Deposit, that was completed
during the year and underpins the planned 28-year
mining operation.
Nanotechnologies
Andromeda is funding research by GICAN at the
University of Newcastle into industry applications for
GWKP halloysite based nanomaterials.
This includes the Carbon Capture Pilot Plant that was
manufactured and recently arrived in Australia. A PCT
Application was filed by Andromeda on 1 July 2022
for the claimed nano porous material which would be
used in the carbon capture process.
In December 2021, the Mining Lease and supporting
Miscellaneous Purposes Licences underpinning GWKP
were granted by South Australia’s Department for
Energy and Mining.
The GICAN team is now actively seeking to reach an
adsorbed amount of two tonnes of CO2 per tonne
of the adsorbent material whilst also maximising
recyclability of these materials.
In August 2022, Andromeda announced that it had
signed land purchase agreements, lodged the PEPR
related to GWKP and commenced the procurement
process for long lead items, thereby further de-risking
the path to production.
New product opportunities
The Company tested halloysite-kaolin across several
concrete application mix designs with positive results
achieved. Clear strength gains and important handling
and performance improvements to concrete through
the addition of halloysite-kaolin were observed,
representing an additional domestic and global
market opportunity.
Work continues on the potential use of halloysite-
kaolin as a rheology modifier product for the
concrete industry with a patent successfully lodged
by Andromeda for this application and certification
obtained for use in the Australian concrete industry.
High purity alumina (HPA)
During FY22, Andromeda conducted research and
development activities to produce HPA. This work led,
subsequent to year-end to the filing of a provisional
patent application based on its process flowsheet to
produce both HPA as well as SGA.
Optimising the adsorption and recyclability potential
are considered critical to commercialisation of
this technology.
Exploration and evaluation activities
During FY22, Andromeda’s main focus has been to
further progress GWKP through:
• completion of the DFS,
• obtaining the necessary mining approvals and the
preparations and planning ahead of the expected
commencement of construction activities.
Exploration and evaluation expenditure for the year
was $3,714,818, which was an 8% decrease on
the $4,023,911 incurred the year prior. Funds were
predominantly directed towards advancing GWKP.
Eyre Kaolin Project
Peninsula Exploration Pty Ltd (Peninsula) holds title to
four exploration licences that cover 2,799 km2 located
on the Eyre Peninsula of South Australia and which
are adjacent to, or near, tenements that comprise the
Great White Kaolin Project.
Following a geological review of Australia and
especially the Eyre Peninsula, the ground held by
Peninsula was identified as containing halloysite kaolin
targets like those found at numerous locations across
the GWKP and Mount Hope Kaolin Project.
A binding Heads of Agreement (HOA) with Peninsula
was executed to form the EKJV19.
Andromeda could earn up to an 80% interest in the
EKJV tenements through sole funding expenditure of
$2.75 million over 6 years from commencement of the
joint venture. An initial exploration program has been
undertaken, the results of which will inform potential
next stage work.
19 Refer ADN ASX announcement dated 12 August 2021
titled “Andromeda enters new kaolin Joint Venture on the
Eyre Peninsula, SA”.
39
ANNUAL REPORT 2022 Directors’ report
Moonta Copper ISR Joint Venture
Joint venture partner EMR continued to make steady
progress, completing additional leach testwork using
lixiviants in a range of pH conditions with generally
positive results achieved.
Drummond Epithermal Gold Project
After undertaking a full re-evaluation of the information
and exploration results previously undertaken, the
Company considered various options to realise
maximum value for this project.
In August 2022, South Australia’s Department for
Energy and Mining (DEM) approved EMR’s Program for
Environment Protection and Rehabilitation to undertake
drilling and pump trials using tracers.
A review of the Moonta Project is being undertaken by
Andromeda, utilising existing drilling results, to assess
the in-situ recovery (ISR) potential of 100% Andromeda
held copper prospects20.
Wudinna Gold Joint Venture
Wudinna Gold Joint Venture partner Cobra completed
an aircore drilling program that tested multiple regional
targets and continued their regional assessment of
historic drill samples for saprolitic clay hosted rare
earth element (REE) mineralisation.
Joint venture partner Cobra completed a 41-hole,
6,090 metre drilling program targeting several
prospects across the project.
The results of this drilling program are yet
to be received.
Cobra advised it had reached Stage 2 of the joint
venture with expenditure of $1.65M to move to a 65%
interest in the project.
Cobra subsequently advised they were close to
reaching Stage 3 of the Joint Venture which required
them to spend a further $1.25million to move to a
75% interest.
Subsequent to the end of the FY22, the Company
has determined that maximum shareholder value
is achieved through accepting an offer for the
Drummond Epithermal Gold Project by Rush for
approximately $250,000 worth of fully paid ordinary
shares in Rush.
The binding Term Sheet Agreement has been signed,
and is subject to the following conditions precedent:
• completion of financial, legal and technical due
diligence by Rush;
• Rush undertaking a capital raising and receiving
valid applications for at least $4,000,000 worth of
shares under the capital raising; and
• ASX providing in-principle, conditional approval for
Rush’s admission to the official list of the ASX and
the quotation of its shares.
Completion of the transaction is expected to occur five
business days after the date on which all of the above
conditions are either satisfied or waived.
Acquisition of Minotaur
During FY22, Andromeda consolidated ownership of
GWKP and Natural Nanotech following the acquisition
of Minotaur.
The unanimously recommended off-market takeover
offer for 1.15 new Andromeda shares offered for every
1 Minotaur share, was completed in March 2022.
The completion of this transaction and consolidating
100% ownership of the GWKP and Natural Nanotech
into a single entity provides Andromeda full
development optionality. It simplifies the ownership
and streamlines the management of GWKP as the
Company progresses towards financing, development,
and construction.
20 Refer ADN ASX announcement dated 30 June 2022 titled
“Investor presentation update”.
40
ANDROMEDA METALS LIMITED Remuneration report (audited)
LETTER FROM THE REMUNERATION AND NOMINATION COMMITTEE CHAIR
Dear Shareholders,
On behalf of the Board, I present the Remuneration Report for FY22.
Despite ongoing disruptions due to geopolitical unrest, inflation, and the COVID-19 pandemic all driving economic
uncertainty, FY22 saw steady progress in developing GWKP, in addition to the advancement of the Company’s
other opportunities and a substantial expansion of our reserves.
At the 2021 Annual General Meeting, 48.79% of votes were cast against the adoption of the 2021 Remuneration
Report, thereby incurring a ‘first strike’. The Board takes this outcome, and the concerns raised by shareholders,
very seriously. Consequently, the Board resolved to take significant action during 2022 to address the concerns
raised by shareholders.
Our response to shareholder concerns in relation to the 2021 Remuneration Report
Following the 2021 Annual General Meeting, the Board undertook a comprehensive review of the Company’s
remuneration framework (Review), the way we communicate our remuneration, and how we reward our Non-
executive Directors (NEDs) and Executives.
The Review found that shareholder concerns centred around remuneration being elevated, not sufficiently aligned
to Company performance and communications needed to be more transparent.
In addressing shareholder concerns, the Board has responded to the issues raised in a range of ways as set out in
section 1.2 on page 44 of this Report. Our response focused on three key aspects:
• conducting a comprehensive review of current remuneration arrangements and identifying any gaps
compared to industry practice;
•
reviewing the executive reward framework to ensure it remains ‘fit for purpose’ in the current environment; and
• ensuring 2022 reward decisions appropriately reflect performance and are communicated clearly.
To assist in undertaking the Review, the Remuneration and Nomination Committee engaged two independent
external remuneration advisers. Their assistance centred on analysing Andromeda’s remuneration framework and
outcomes; providing guidance on industry practice, and comparisons to a relevant group of ASX listed peers;
and, considered recommendations and actions to address any gaps. Further information related to the use of
remuneration consultants is included in section 1.3 on page 46 of this report.
41
ANNUAL REPORT 2022 Remuneration report (audited)
Changes to 2022 remuneration framework and outcomes
Based on the findings of the Review, the Board resolved to make certain changes to the remuneration framework and
practices of the Company. A summary of these changes and the impact on remuneration outcomes are as follows:
SHAREHOLDER CONCERN
OUR RESPONSE AND ACTION
REMUNERATION OUTCOMES
Remuneration – level
considered too high and
not linked to Company
performance
Non-executive
Directors – equity
options and performance
rights
Board renewal and skill
– Review of remuneration
– Overhauling of the remuneration framework:
framework, structure, and
incentive levels
– Assessment of industry
practice
– Benchmarking against a
peer group of ASX listed
companies
y Capping of the potential earnings of all NEDs and
Executives
y
y
y
Introduction of yearly remuneration reviews
benchmarking assessments against peers
Linking of Executive STI incentives to Company
performance and strategy through Key
Performance Indicators (KPIs)
Linking of Executive LTI incentives to Company
TSR performance against peers
– Review of remuneration
– NEDs are not eligible for STI and LTI incentives
structure and incentive levels
for NEDs
– Removed equity component of remuneration, and
adjusted cash component
– Assessment of Board
skills, experience and
backgrounds; and
requirements for managing
transition to production stage
– Undertook a thorough
search for a new Non-
executive Chair and NED
to complement existing
board skills, experience and
backgrounds
– NEDs to acquire Company shares on market
equal in value to one year’s Director’s Fees over a
5-year period
– Introduction of regular Board skills matrix assessment
– Board composition aligned to the Company’s strategy
– Disclosure of the Board skills matrix
– In September, appointed Melissa Holzberger as an
Independent Non-executive Director, with significant
legal, mining and energy experience
– In April, appointment of Mick Wilkes as new
Independent Chair, an experienced mining
executive and director with significant mining and
project development experience
– In June, announced the appointment of Austen Perrin
as an Independent NED, with significant finance,
mining, and logistics experience
– Enhanced disclosure to improve transparency
Communication and
transparency
– Review of remuneration
disclosures, format and
communications
Note: For more detailed information refer to section 1.2 on page 44 of this Report.
Enhancing transparency around our reward framework
As a Board, we reflected on concerns raised by shareholders in relation to our approach to remuneration
communication and acknowledge that how we measured and communicated the link between remuneration
outcomes and performance could be improved.
Importantly, we have included additional disclosures to provide greater transparency on how our remuneration
framework operates, introduced links between performance and remuneration outcomes, and enhanced
communications to more clearly communicate the Board’s decision-making processes in determining reward outcomes.
Continuing to engage with you as our shareholders will be a key priority for 2023 and beyond. This will be
particularly important as we manage the transition to becoming a mining production company.
Yours sincerely,
Mick Wilkes
Independent Chair, Remuneration and Nominations Committee
42
ANDROMEDA METALS LIMITED Remuneration report (audited)
REMUNERATION REPORT - TABLE OF CONTENTS
SECTION
CONTENT
1.1
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.9
1.10
1.11
1.12
1.13
Key Management Personnel covered in this Remuneration Report
Response to shareholder concerns from 2021 AGM
Services from Remuneration Consultants
Remuneration Governance
Andromeda Remuneration - Strategy and Principles
Andromeda Remuneration Framework
Remuneration Components
Key Management Personnel Service Agreements
Performance and Outcomes for 2022
Remuneration of Directors and Key Management Personnel
Options and Performance Rights
Key Management Personnel Shareholdings
Other Transactions with Key Management Personnel and/or Their Related Parties
PAGE
44
44
46
47
48
49
50
53
54
55
56
61
61
43
ANNUAL REPORT 2022 Remuneration report (audited)
1.1 KEY MANAGEMENT PERSONNEL COVERED IN THIS REMUNERATION REPORT
The following Key Management Personnel (KMP) of the Company comprises the Non-executive Directors (NEDs)
of the Company and the Executives listed below, who have significant influence over the Company’s operating
performance:
NAME
POSITION
TERM AS KMP
Non-executive Directors
Michael Wilkes
Independent Non-executive Chair
Appointed 6 April 2022
Andrew Shearer*
Independent Non-executive Director
Full year
Melissa Holzberger**
Independent Non-executive Director
Appointed 23 September 2021
Austen Perrin
Rhod Grivas
Executive KMP
James Marsh
Joseph Ranford
Michael Zannes
Tim Anderson
Independent Non-executive Director
Appointed 1 July 2022
Independent Non-executive Director
Resigned 20 January 2022
Managing Director
Operations Director
Chief Financial Officer (CFO)
Full year
Full year
Full year
Chief Commercial Officer
Appointed 1 December 2021
Nicholas Harding
CFO and Company Secretary
Resigned 10 August 2021
*
Andrew Shearer resigned subsequent to reporting period on 24 August 2022.
** Melissa Holzberger was acting Chair from 21 January 2022 to 5 April 2022.
1.2 RESPONSE TO SHAREHOLDER CONCERNS FROM 2021 AGM
Andromeda takes shareholder concerns very seriously and, following the 2021 Annual General Meeting (AGM), the
Company undertook a comprehensive review process to address those concerns and enhance the transparency
of the remuneration framework and outcomes.
1 Shareholder concern
– Engagement reviewed
– Concerns - understood
2 Review of remuneration
framework
– Comprehensive review
undertaken
– Independent external
remuneration advice
received
– Review industry practice
and peer benchmarking
– Board skills assessment
3 Actions taken
and outcomes
– Linking of STI and LTI
outcomes to Company
Performance
– Capped NED and
Executive remuneration
outcomes
– Board renewal and
ongoing skills assessment
– Enhanced transparency
and clarity of
communications
44
ANDROMEDA METALS LIMITED Remuneration report (audited)
Following is a detailed summary of the engagement with shareholders and actions taken in response to concerns
raised from the 2021 AGM:
SHAREHOLDER CONCERN
OUR RESPONSE AND ACTION
Non-executive
Director remuneration
– removing the issue
of equity (options and
performance rights)
The voting results at the AGM in November 2021 indicated that our shareholders are not
supportive of issuing equity (shares, options, performance rights) to NEDs as a form of
remuneration. During the reporting period, the Company has therefore restructured the
remuneration of NEDs and removed the equity component of their remuneration. This has in turn,
resulted in an increase to the cash component of NED remuneration.
This change in remuneration structure and increase in cash fees is accompanied by a change in
policy whereby the Company requires NEDs to acquire shares on market in the Company equal in
value to one year of their Director’s Fees, within a five-year period from appointment.
Remuneration
The Company received feedback that the level and structure of remuneration is not appropriate
for the Company, specifically regarding levels of remuneration and structures around incentives.
The Company has therefore undertaken a thorough review of the Company’s policies and
practices regarding the approach to remuneration and implemented a new remuneration
framework with the following elements:
– capping of the potential earnings of all NEDs and the Executive KMP;
– completing an annual remuneration benchmarking review as part of the new remuneration
strategy and framework;
– the introduction of a structured short-term incentive (STI) program where incentives are linked
to Company performance and strategy through the use of KPIs;
– the introduction of a structured long-term incentive (LTI) program where the incentive is linked
to the KPI of Total Shareholder Return (TSR), against a group of peer ASX listed companies;
– only Executive KMP and Senior Management will participate in the LTI program; and
– NEDs are not permitted participate in the STI and LTI programs.
Board renewal and
skill
The Company received feedback that the Board required new and refreshed skills as it embarks
on a development and production stage.
The Company had already commenced the broadening of its mix of skills with the appointment
of Melissa Holzberger as an NED in 2021 and then in early 2022, commenced a thorough search
for a new Independent Non-Executive Chair upon the resignation of Rhod Grivas. In April, the
Company appointed Mick Wilkes, an experienced mining executive and director with significant
mining and project development experience to the role of Independent Non-executive Chair.
In June 2022, the Company announced the appointment of Austen Perrin as an Independent
NED to the Board. Mr Perrin has significant finance, mining, and logistics experience to add to
the current complement of skills and experience on the existing Board.
This improved mix of skills, experience and background of Directors is further detailed in this
Annual Report and as part of the Board Skills Matrix in the Company’s 2022 Annual Corporate
Governance Statement.
Communication and
transparency
The Company recognises the previous format of the Remuneration Report was factual and
presented as a compliance report, rather than as an opportunity to communicate with
shareholders and other stakeholders.
The Company has therefore placed considerable effort to improve the disclosures,
communication and transparency in the 2022 Remuneration Report. The style, format and
content of the Remuneration Report now reflects a more open and transparent reporting format,
which not only includes the required compliance disclosures, and also provides added clarity
and insight into Andromeda’s organisational culture, enhanced remuneration framework, and
reward practices and outcomes.
Company performance The Company received feedback from stakeholders for the need for Executive remuneration to be
linked to Company performance. The Company has therefore changed the remuneration structure
so that Executive remuneration is linked to performance metrics and strategy outcomes, which are
both business and share value focused, through the STI and LTI programs.
The Company also prohibits NEDs from participating in any STI and LTI programs. As noted
above, NEDs do not receive any equity as part of their remuneration.
As part of the new Remuneration Strategy and Framework, NEDs are required to acquire a
minimum shareholding in the Company on market, equivalent in value to one year’s Director’s
Fees over a five-year period from appointment through on-market purchases.
45
ANNUAL REPORT 2022 Remuneration report (audited)
1.3 SERVICES FROM REMUNERATION CONSULTANTS
During the reporting period, the Company engaged BDO Remuneration and Reward Pty Ltd (BDO) and Align
Advisors, as independent external remuneration consultants, to assist with developing a remuneration framework
and guiding principles to ensure that total remuneration packages for all KMP are relevant compared to current
market benchmarks and competitively set to attract and retain appropriately qualified and experienced people.
BDO is an international consulting and business advisory organisation that works with a range of ASX listed
companies. Total fees paid to BDO for the independent advice was $6,875 during the year ending 30 June 2022
(2021: $22,550) and $4,250 for the annual subscription to the Mining & Metals remuneration survey data.
BDO data was used to benchmark the Company against peer companies in the mining and metals sector with
a similar market capitalisation. The report was presented to the Chair of the Remuneration and Nomination
Committee of the Board of Directors (the Committee), providing a summary of base salaries, statutory
superannuation plans, STI and LTI levels and assessing the positioning of the Company compared to the market.
The Board is satisfied that the interaction between BDO and the Executive KMP was minimal and BDO had
processes and procedures in place to minimise potential opportunities for undue influence from the KMP. The
Board is therefore satisfied the information and advice received from BDO was free from undue influence from
the Executive KMP to whom the remuneration information applies. The Board reviewed the independent advice
and utilised the Committee to consider the information and data, along with other business conditions when
recommending remuneration packages based on the advice received.
During the reporting year, the Company also engaged Align Advisors, an independent remuneration expert, to
benchmark and present an analysis on fixed and variable remuneration levels and practices for executive KMP.
The basis of this analysis was to compare our current Executive remuneration to ASX listed peers (see table
below) as a secondary data source. Total fees paid to Align Advisors during the year ending 30 June 2022 were
$5,632 (2021: nil).
The Board is satisfied that the interaction between Align Advisors and the Executive KMP was minimal, and Align
Advisors had processes and procedures in place to minimise potential opportunities for undue influence from the
Executive KMP. The Board is therefore satisfied the information and advice received from Align Advisors was free
from undue influence from the Executive KMP to whom the remuneration information applies. The Board reviewed
the independent advice and utilised the Committee to consider the information and data, along with other
business conditions when recommending remuneration packages based on the advice received.
The information from both BDO and Align Advisors was used to set the remuneration values for Executive KMP of
the Company.
COMPANY PEERS – ASX-LISTED PEER COMPANIES USED BY ALIGN ADVISORS
Aeris Resources Limited
Altech Chemicals Limited
Arafura Resources Limited
Base Resources Limited
BCI Minerals Limited
Bellevue Gold Limited
MACA Limited
MacMahon Holdings
Panoramic Resources Limited
Pantoro Limited
Perenti Group
Red 5 Limited
Hastings Technology Metals Limited
Resolute Mining Limited
Image Resources NL
Kalium Lakes Limited
Kore Potash PLC
Sheffield Resources Limited
Strandline Resources Limited
Vimy Resources Limited
46
ANDROMEDA METALS LIMITED Remuneration report (audited)
1.4 REMUNERATION GOVERNANCE
The Committee is responsible for determining the remuneration arrangements for KMP and making
recommendations to the Board. The Committee comprises three NEDs, inclusive of an independent Chair.
The Committee reviews remuneration levels and other terms of employment on a periodic basis having regard to
relevant employment market conditions, the strategy of the Company, and the qualifications, skills and experience
of the KMP.
The Committee also advises on the appropriateness of remuneration packages of the Company given trends in
comparative companies, with the overall objective of ensuring maximum stakeholder benefit from the retention of a
high-quality board and executive team.
The overall remuneration framework is approved by the Board upon receiving recommendations by the
Committee. The Committee’s recommendations are based on adaptations to reflect competitive market and
business conditions. Within this framework, the Committee considers remuneration policies and practices
generally, and determines specific remuneration packages and other terms of employment for the Managing
Director and senior Executives. Executive remuneration and other terms of employment are reviewed annually
having regard to performance, relevant comparative information and expert advice.
Board
The Board is responsible for approving and
reviewing the remuneration arrangements for the
Directors and Key Management Personnel, based
on recommendations of the Remuneration and
Nomination Committee. The Board also reviews
the performance of all KMPs and itself on a regular
continual basis.
Remuneration and Nomination Committee
The Remuneration and Nomination Committee
reviews and makes recommendations to the Board
regarding the Directors and KMP remuneration
arrangements. These reviews take place at least
annually, taking into account relevant factors
including market conditions.
Management
The Managing Director, in consultation with
other KMP sets and reviews the remuneration
arrangements of all other employees.
Remuneration Consultants
External advisors may be engaged directly by the
Board or through the Remuneration and Nomination
Committee to provide advice or information related
to remuneration that is free from the influence
of management.
As noted in this Remuneration Report the Company
has used both BDO Remuneration and Reward Pty
Ltd and Align Advisors as detailed above.
47
ANNUAL REPORT 2022 Remuneration report (audited)
1.5 ANDROMEDA REMUNERATION - STRATEGY AND PRINCIPLES
ELEMENT
Philosophy
Purpose
DETAIL
The performance of the Company depends on the quality of its Directors and other KMP.
Therefore, to achieve success in executing its corporate strategy, the Company must
attract, motivate and retain appropriately qualified personnel.
To achieve these aims, the Company embodies the following in its
remuneration framework:
– provide competitive rewards to attract and retain high calibre directors and other KMP;
– 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 above.
The Company’s remuneration framework is designed to align Executives’ remuneration with
shareholders’ interests and to retain appropriately qualified executive talent for the benefit
of the Company.
The Framework aims to balance multiple factors such as Company operational
performance, investor expectations, financial and sustainability performance, fairness to
individuals and maintaining market competitiveness.
Principles
Andromeda operates a remuneration strategy comprising fixed pay and variable pay.
– Fixed pay (Total Fixed Remuneration) includes base salary and statutory
superannuation; and
– Variable pay includes STI and LTI but may be structured in other ways.
Remuneration is benchmarked to Australian Mining Companies similar in size, scale
and operational scope to Andromeda utilising independent external data sources, with
benchmarking set around the 50th percentile.
48
ANDROMEDA METALS LIMITED Remuneration report (audited)
1.6 ANDROMEDA REMUNERATION FRAMEWORK
In order to improve its remuneration practices and as a result of feedback received at the Company’s 2021 AGM,
the Company has developed a new Remuneration Framework with the following key components.
COMPONENT
DETAIL
Total Fixed Remuneration
(TFR)
TFR includes base salary plus statutory superannuation.
TFR is reviewed annually by the Committee, following consideration of individual
performance, industry benchmarking, relevant economic indicators and internal capacity
at Andromeda.
Variable Remuneration
- Short-Term Incentive
(STI)
The Company may invite Executives and employees to participate in its STI Program.
The STI Program will include specific KPIs that are required to be achieved in order for an
award to be made.
Further details regarding the STI Program is detailed below in section 1.7
Remuneration Components.
NEDs will not participate in STI or LTI Programs.
Variable Remuneration -
Long-Term Incentive (LTI)
The Company may invite Executives to participate in the LTI Program. The LTI Program will
be based on the key metric of the Company’s Total Shareholder Return (TSR) relative to a
selected group of ASX-listed peer companies.
Malus Clause
LTI awards will be granted as performance rights.
Further details regarding the LTI Program is detailed below in section 1.7 Remuneration
Components.
The Board has discretion in exceptional circumstances to forfeit or reduce any yet to be
awarded or unvested STI and/or LTI opportunities, where previously awarded incentive
outcomes have, in the opinion of the Board, resulted in the award of an inappropriate
benefit.
Any unvested securities or securities yet to be converted into fully paid ordinary shares will
be subject to recovery (clawback).
Change of Control
On the occurrence of a change of control event, the Board will determine, in its sole and
absolute discretion, the manner in which all STI awards and LTI awards (unvested and
vested Performance Rights) will be dealt with.
Termination of
Employment
If a participant in the STI or LTI program ceases employment with the Company prior to the
end of the performance period, they will forego any STI or LTI award. A pro-rata payment
of the STI/LTI award will be considered in exceptional circumstances.
Non-executive Director
Share ownership
If the employee is a Good Leaver, as defined in the Company’s Employee Incentive
Plan, all unvested Performance Rights will remain and will be assessed at the end of the
performance period.
NEDs will not participate in any STI or LTI Programs.
NEDs are required to hold a minimum shareholding in Andromeda Metals Limited, on
market, as follows:
– 50% of pre-tax Director annual base fee within 3 years of appointment; and
– 100% of pre-tax Director annual base fee within 5 years of appointment.
49
ANNUAL REPORT 2022 Remuneration report (audited)
1.7 REMUNERATION COMPONENTS
1.7.1 Non-executive Director remuneration
In accordance with current corporate governance practices, the structure for the remuneration of NEDs and
Senior Executives is separate and distinct.
Shareholders approve the maximum aggregate remuneration payable to NEDs, with the current aggregate
Directors’ Fees pool limit being $500,000 per annum. The Committee recommend the actual payments to
Directors to the Board for decision.
During the reporting period, the Company reviewed the structure of NED remuneration and determined that a
change was required upon the results of the 2021 Annual General Meeting and Shareholder Feedback. The
Company has therefore transitioned to a remuneration structure where NEDs are wholly remunerated by fixed
Director’s Fees (wholly cash-based), with no Share Based Payment component (no issue of shares, options,
performance rights or other securities). The NED remuneration structure is now also similar to other developer and
producer listed public companies.
NED remuneration is now structured as follows:
i)
The Non-executive Chair receives fees of $200,000 per annum inclusive of superannuation.
ii) NEDs receive $116,000 per annum inclusive of superannuation.
iii) Directors holding an additional position of Committee Chair are not paid any additional fees.
iv) Board Committee members are not paid any additional fee.
v) NEDs are entitled to statutory superannuation benefits.
vi) NEDs are not remunerated through the issue of shares, options, performance rights or any other securities.
vii) NEDs are required to own shares in the Company, through on-market purchases, with the aim of owning:
a) 50% of pre-tax Director annual base fee within 3 years of appointment and
b) 100% of pre-tax Director annual base fee within 5 years of appointment.
viii) Any consultancy arrangements for NEDs who provide services outside of, and in addition to, their duties as
NEDs are first considered by the Board and can only be permitted and approved by the Board.
NEDs are not entitled to participate in performance-based remuneration schemes, for example any STI or
LTI programs.
All Directors are entitled to have premiums on indemnity insurance paid by the Company. During the financial year,
the Company paid premiums to insure the Directors and other officers of the consolidated entity. The liabilities
insured are for costs and expenses that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of entities in the consolidated entity.
1.7.2 Executive remuneration
During the reporting period, the Company reviewed the structure of executive remuneration (inclusive of
Executive Director remuneration). Executive Remuneration is now structured in accordance with the Andromeda
Remuneration Framework (Section 1.6 on page 49). Executive Remuneration is designed to promote superior
performance and long-term commitment to the Company, whilst building sustainable shareholder value.
Remuneration packages are set at levels that are intended to attract and retain executives capable of
contributing to the Company’s operations and strategic plans. All executives receive a base remuneration which
is market reviewed, together with performance-based remuneration linked to the achievement of pre-determined
milestones and targets (Key Performance Indicators).
The structure of Executive Remuneration comprises:
i)
Fixed remuneration.
ii) STI with KPIs linked to annual planning and strategic objectives; and
iii) LTI with KPIs as part of performance-based equity plans, with prior approval of shareholders to the
extent required.
50
ANDROMEDA METALS LIMITED Remuneration report (audited)
The proportion of fixed and variable remuneration has been established by the Committee for FY23. The
Committee linked the proportion of each segment to relevant market practices and to the degree to which the
Board intends participants to focus on short and long-term outcomes.
Participation Rates for STI and LTI plans as follows:
Managing Director
Executives
STI (% OF TFR)
60%
50%
LTI (% OF TFR)
120%
75%
FIXED REMUNERATION
SHORT-TERM INCENTIVES
LONG-TERM INCENTIVES
– Comprises Director’s Fees,
– Cash “at risk” component of
– Equity “at risk” remuneration to
consulting fees, salaries, and
superannuation contributions
remuneration for KMP
– Linked to achievement of the
Company’s strategic objectives
and outcomes
– Based on performance against
financial and non-financial KPIs
promote alignment between KMP
and shareholder value
– Performance Rights granted based
on KPI of TSR performance against
TSR of ASX-listed peer group
– Vesting over a three-year period
– KPI targets are set at the beginning
of each financial year and are
intended to be challenging but
achievable
– Paid over a two-year period
Fixed remuneration
Fixed remuneration comprises Director’s Fees, consulting fees, salaries, and superannuation contributions.
Short-term incentives linked to annual planning and strategic objectives
The objective of STIs is to link achievement of the Company’s strategic objectives and outcomes, or which clearly
build shareholder value, with the remuneration received by Executives charged with meeting those targets.
The STI is an “at risk” component of remuneration for key management personnel and is payable based on
performance against KPIs set at the beginning of each financial year. Targets are intended to be challenging
but achievable.
The STI is offered annually, set as a percentage of annual salary, payment of which is conditional upon the
achievement of agreed KPIs for each Executive, which comprise a combination of agreed milestones and financial
measures. These milestones are selected from group, functional/unit and individual level objectives, each weighted
to reflect their relative importance and each with targets linked to the Board’s expectations and with threshold,
target and stretch levels set where possible.
The KPIs comprise financial and non-financial objectives and include out-performance against financial metrics,
health and safety targets and specific operations-related milestones including project development milestones for
the Great White Kaolin Project. Measures chosen directly align the individual’s reward to the KPIs of the group and
to its strategy and performance.
51
ANNUAL REPORT 2022 Remuneration report (audited)
The participation rate for all employees in the STI program is as follows:
POSITION
CEO/Managing Director
Executives including Executive Directors
TARGET STI % OF TFR
60%
50%
The award rate scale for the KPIs within the STI program for all participants is as follows:
PERFORMANCE
Below the threshold
Threshold performance
Target performance
Stretch performance
AWARD
Nil
50% of KPI
100% of KPI
150% of KPI
Awards will be made on a pro-rata basis (using the straight-line method) when between “Threshold” and “Target”
and between “Target” to “Stretch” Performance.
Long-term incentives through participation in performance-based equity plans
The objective of LTIs is to promote alignment between Executives and shareholders through the holding of equity.
As such, LTIs are only granted to Executives who can directly influence the generation of shareholder wealth, or
who are in a position to contribute to shareholder wealth creation.
The participation rate for Executives in the LTI Program is as follows:
POSITION
CEO/Managing Director
Executives including Executive Directors
General Managers, Chief Geologist & other Group Managers
TARGET LTI % OF TFR
120%
75%
45%
The LTI Program is a program whereby Performance Rights are granted with a measurement period of three years
and with the vesting condition KPI comprising TSR, on a graduated scale.
The measurement of TSR will be based on a combined return for the Company measured by the change in its
share price plus dividends over a three-year period. The Company’s TSR will be ranked against the TSR of a
selected group of ASX-listed peer companies as determined by the Board of Directors.
The award rate scale for the KPIs within the LTI Program for all participants is as follows:
PERFORMANCE
Below the 50th percentile
50th percentile
75th percentile or above
AWARD
Nil
50% of KPI
100% of KPI
Awards will be made on a pro-rata basis (using straight-line method) between the 50th and 75th percentile.
Any Performance Rights issued under the LTI Program will be issued pursuant to the Company’s Employee
Incentive Plan, with shareholder approval sought for any Executive Directors, as required.
52
ANDROMEDA METALS LIMITED Remuneration report (audited)
1.8 KEY MANAGEMENT PERSONNEL SERVICE AGREEMENTS
1.8.1 Non-executive Director Agreements
The structure of NED Remuneration has been provided in section 1.7.1 above. All NEDs are appointed pursuant to
an Appointment Letter, which details the terms and conditions of the appointment.
NEDs are not appointed for a fixed term.
In addition to Directors’ Fees that are detailed in section 1.7.1 above, NEDs 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.
1.8.2 Executive Directors
JAMES MARSH, MANAGING DIRECTOR
Agreement commenced
30 May 2018
Term of agreement
No fixed term
Fixed remuneration
$553,000 (effective from 1 July 2022)
Equity compensation
Mr Marsh is entitled to participate in the STI and LTI programs.
During the reporting period Mr Marsh was issued with the following equity:
– 1,710,000 unlisted options
– 1,410,000 performance rights
Full details of the equity issued is provided in section 1.12.1 below.
Termination/notice
Mr Marsh may terminate his employment by giving four months’ notice.
Other key terms
5 weeks annual leave
STI participation rate
60% (refer section 1.7.2 for full details)
LTI participation rate
120% (refer section 1.7.2 for full details)
JOSEPH RANFORD, OPERATIONS DIRECTOR
Agreement commenced
8 April 2020
Term of agreement
No fixed term
Details
Fixed remuneration
On 1 June 2020 the Company entered into a service agreement with a consulting
company, associated with Mr Ranford.
The monthly charge for Mr Ranford’s services was $25,000 per month (3 days per
week) from 1 January 2021 in accordance with contractual terms and increased to
$30,000 per month (3 days per week) effective 1 September 2021.
Equity compensation
Mr Ranford is entitled to participate in the STI and LTI programs.
During the reporting period Mr Ranford was issued with the following equity:
– 1,650,000 unlisted options
– 1,350,000 performance rights
Full details of the equity issued is provided in section 1.12.1 below.
Termination/notice
Mr Ranford, currently through his consulting Company, may terminate the
agreement by giving three months’ notice.
Other key terms
Nil
STI participation rate
50% (refer section 1.7.2 for full details)
LTI participation rate
75% (refer section 1.7.2 for full details)
53
ANNUAL REPORT 2022 Remuneration report (audited)
1.8.3 Executives
MICHAEL ZANNES, CHIEF FINANCIAL OFFICER
Agreement commenced
1 June 2020
Term of agreement
No fixed term
Fixed remuneration
$361,000 per annum, effective 1 July 2022
Equity compensation
Mr Zannes is entitled to participate in the STI and LTI programs.
During the reporting period Mr Zannes was issued with the following equity:
– 1,400,000 unlisted options
– 2,325,000 performance rights
Full details of the equity issued is provided in section 1.12.1 below.
Termination/notice
Mr Zannes may terminate his employment by giving three months’ notice.
Other key terms
Nil
STI participation rate
50% (refer section 1.7.2 for full details)
LTI participation rate
75% (refer section 1.7.2 for full details)
TIMOTHY ANDERSON, CHIEF COMMERCIAL OFFICER
Agreement commenced
1 December 2021
Term of agreement
No fixed term
Fixed remuneration
$337,000 per annum, effective from 1 July 2022
Equity compensation
Mr Anderson is entitled to participate in the STI and LTI programs.
During the reporting period Mr Anderson was issued with the following equity:
– 1,400,000 unlisted options
– 2,250,000 performance rights
Full details of the equity issued is provided in section 1.12.1 below.
Termination/notice
Mr Anderson may terminate his employment by giving three months’ notice.
Other key terms
Nil
STI participation rate
50% (refer section 1.7.2 for full details)
LTI participation rate
75% (refer section 1.7.2 for full details)
1.9 PERFORMANCE AND OUTCOMES FOR 2022
The tables below set out summary information about the Group’s earnings and movements in shareholder wealth
for the five years to June 2022:
30 JUNE 2022
30 JUNE 2021
30 JUNE 2020
30 JUNE 2019
30 JUNE 2018
Other Income
452,516
61,461
767,419
18,960
5,815
Net profit / (loss) before tax
(8,733,119)
(6,435,782)
(3,365,301)
(1,041,044)
(683,544)
Net profit / (loss) after tax
(8,733,119)
(6,443,299)
(3,447,274)
(1,113,181)
(832,707)
30 JUNE 2022
30 JUNE 2021
30 JUNE 2020
30 JUNE 2019
30 JUNE 2018
Share price at beginning of the year
Share price at end of year
$0.150
$0.07
$0.051
$0.150
$0.015
$0.051
$0.007
$0.015
$0.06
$0.007
Basic earnings per share
$(0.0033)
$(0.0033)
$(0.0024)
$(0.0010)
$(0.0012)
Diluted earnings per share
$(0.0033)
$(0.0033)
$(0.0024)
$(0.0010)
$(0.0012)
54
ANDROMEDA METALS LIMITED Remuneration report (audited)
No dividends have been declared during the five years ended 30 June 2022 and the Directors do not recommend
the payment of a dividend in respect of the year ended 30 June 2022.
There has been no link between the Company’s financial performance and the setting of remuneration during
the reporting period, however the STI and LTI plans have been amended during the reporting period and
are expected to result in a link between financial performance, specifically share price, and remuneration in
future periods.
1.10 REMUNERATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
KMP
YEAR
FIXED REMUNERATION
OTHER
NON-CASH
BENEFITS
STATUTORY
SUPER-
ANNUATION
ANNUAL
LEAVE
SUB TOTAL
EQUITY COMPENSATION REMUNERATION
SHARE BASED
PAYMENTS FOR
SECURITIES ISSUED
IN THE CURRENT
PERIOD1,4
SHARE BASED
PAYMENTS FOR
SECURITIES
ISSUED IN PRIOR
PERIODS1,3
SHARE BASED
PAYMENTS FOR
SECURITIES
CANCELLED1,2
TOTAL
SHORT-TERM
EMPLOYEE
BENEFITS,
SALARY, AND
FEES
$
$
$
$
$
Non-executive Directors
Michael Wilkes9
2022
2021
47,222
-
Andrew Shearer
2022
101,422
2021
49,775
Melissa Holzberger10
2022
59,423
2021
-
Rhoderick Grivas
2022
159,6165
2021
137,7007
Executive Directors
-
-
-
-
-
-
-
-
-
-
10,328
4,275
5,942
-
8,012
6,175
-
-
-
-
-
-
-
$
-
-
-
$
-
-
273,096
47,222
-
111,750
54,050
256,145
51,035
65,365
43,733
-
167,628
-
-
-
-
(65,888)6
143,875
256,145
51,035
James Marsh
2022
362,500
71,232
36,250
38,341
508,323
43,662
394,473
2021
307,193
Joseph Ranford
2022
350,000
2021
270,000
Nicholas Harding
2022
86,94012
2021
246,797
Executives
Michael Zannes
2022
273,973
2021
22,831
Timothy Anderson11
2022
160,437
2021
-
-
-
-
-
-
-
27,510
31,587
366,290
369,987
109,361
-
350,000
42,130
965,688
-
1,357,818
-
-
270,000
2,453,771
-
86,940
-
(134,768)8
246,797
369,987
80,198
27,397
23,182
324,552
136,691
2,169
1,923
26,923
16,044
23,077
199,558
90,021
-
-
-
-
-
-
-
Total
2022
1,601,533
71,232
103,973 84,600 1,861,338
356,237
1,432,601
87,467
3,737,643
2021
1,034,296
-
40,129
33,510 1,107,935
3,706,035
291,629
-
5,105,599
55
$
$
-
-
-
47,222
-
384,846
361,230
87,4672
196,5652
-
-
-
-
-
101,740
451,055
946,458
845,638
2,723,771
(47,828)
696,982
461,243
26,923
289,579
-
-
-
-
-
-
ANNUAL REPORT 2022 Remuneration report (audited)
Footnotes to the above table in section 1.10
1 Share-based payments do not represent cash payments and the related shares may or may not ultimately vest. In
accordance with the requirements of accounting standard AASB 2 Share Based Payments, valuations of share-based
payments were undertaken based on market conditions at the date of grant and are expensed over the relevant vesting
period. The amount included as remuneration is not related to nor indicative of the benefit (if any) that may ultimately be
realised should the securities vest.
2 With the restructure of NED remuneration, all unvested options (546,667 options) held by Melissa Holzberger were cancelled
on 30 June 2022. In accordance with AASB 2 Share Based Payments (AASB2), the value of the options, as determined at
grant date, is required to be recognised in full during the 2022 financial reporting period. It is to be noted that the amount of
$87,467 does not represent any actual benefit (cash or otherwise) to Melissa Holzberger as a result of the cancellation, it is
an accounting entry only as required by AASB 2.
3 As stated above, share based payments are required to be expensed over the relevant vesting period as per AASB 2 Share
Based Payments. Accordingly, an expense is required to be recognised in the current reporting period for grants of securities
in prior years.
4 Details of the securities issued to KMP during the current reporting period are disclosed in detail in section 1.12.1.
5 Rhoderick Grivas’ 2022 fees of $159,616 included $80,116 for fees as Non-executive Chairman and $79,500 in fees for
additional consulting services outside of the scope of his role as Non-executive Chairman.
6 Rhoderick Grivas resigned effective 20 January 2022. 1,441,150 performance rights did not vest because of a failure to
satisfy the service condition attached to the rights. In accordance with the requirements of AASB 2 Share Based Payments,
the accumulated share-based payment expense was reversed, resulting in a negative share based payment expense in the
current period.
7 Rhoderick Grivas’ 2021 fees of $137,700 included fees as Non-executive Chairman ($65,000) and fees for additional
consulting services ($72,700) outside of the scope of his role as Non-executive Chairman.
8 Nicholas Harding resigned effective 10 August 2021. 2,250,000 performance rights did not vest because of a failure to satisfy
the service condition attached to the rights. In accordance with the requirements of AASB 2 Share Based Payments, the
accumulated share based payment expense was reversed, resulting in a negative share based payment expense in the
current period.
9 Michael Wilkes was appointed to the Board as Chair on 6 April 2022.
10 Melissa Holzberger was appointed to the Board on 23 September 2021.
11 Timothy Anderson was appointed to the role of Chief Commercial Officer on 1 December 2021.
12 Nicholas Harding’s fees included a payment of $59,800 which represents a 3-month payment on termination of contract.
1.11 OPTIONS AND PERFORMANCE RIGHTS
1.11.1 Options granted as compensation to key management personnel
2022
NUMBER OF OPTIONS GRANTED
DURING THE PERIOD
NUMBER OF OPTIONS GRANTED
DURING THE PERIOD THAT WERE
CANCELLED OR LAPSED
DURING THE PERIOD
VALUE ALLOCATED IN FY22 TO
OPTIONS GRANTED
$
Michael Wilkes
Andrew Shearer
Melissa Holzberger3
Rhoderick Grivas1
James Marsh
Joseph Ranford
Nicholas Harding2
Michael Zannes
Timothy Anderson
Total
-
-
820,000
-
1,710,000
1,650,000
-
1,400,000
1,400,000
6,980,000
-
-
(546,667)
-
-
-
-
-
-
(546,667)
-
-
131,2003
-
43,662
42,130
-
34,909
34,909
286,810
Footnotes to the above table in section 1.11.1:
1 Mr Grivas resigned at 20 January 2022.
2 Mr Harding resigned at 10 August 2021.
3 With the restructure of NED remuneration, all unvested options (546,667 options) held by Melissa Holzberger were cancelled
on 30 June 2022. In accordance with AASB 2 Share Based Payments (AASB2), the value of the options, as determined at
grant date, were required to be recognised/expensed in full during the 2022 financial reporting period. It is to be noted that
of the $131,200 value allocated to the issue of the options to Ms Holzberger, the amount of $87,467 does not represent any
actual benefit (cash or otherwise) to Melissa Holzberger as a result of the cancellation of 546,667 options, it is an accounting
entry only, as required by AASB 2.
56
ANDROMEDA METALS LIMITED Remuneration report (audited)
1.11.2 Performance rights granted as compensation to key management personnel
2022
NUMBER OF PERFORMANCE RIGHTS
GRANTED DURING THE PERIOD
NUMBER OF PERFORMANCE RIGHTS
GRANTED DURING THE PERIOD
THAT WERE CANCELLED OR LAPSED
DURING THE PERIOD
Michael Wilkes
Andrew Shearer
Melissa Holzberger
Rhoderick Grivas1
James Marsh
Joseph Ranford
Nicholas Harding2
Michael Zannes
Timothy Anderson
Total
-
-
-
-
1,410,000
1,350,000
-
2,325,000
2,250,000
7,335,000
-
-
-
-
-
-
-
-
-
-
VALUE ALLOCATED IN FY22 TO
PERFORMANCE RIGHTS GRANTED
$
-
-
-
-
-3
-3
-
101,7824
55,1124
156,894
Footnotes to the above table in section 1.11.2:
1 Mr Grivas resigned at 20 January 2022.
2 Mr Harding resigned at 10 August 2021.
3 Expected production and sales schedules at the time of issue are different from current expectations and as such these
performance rights are now not expected to vest prior to their expiry date, and consequently no value has been recognised
in relation to these performance rights in 2022. As required under AASB 2, the probability of these performance rights vesting
will be reassessed at each reporting date.
4 Values have been recognised for performance rights issued to Mr Zannes, relating to the commencement of mining and the
first shipment of kaolin, and to Mr Anderson, in relation to several Business Development KPI’s, as required under AASB 2. As per
footnote 3, performance rights granted in relation to production and sales schedules have had no value recognised in 2022.
Issuing of options and performance rights in reporting period ended 30 June 2022
Melissa Holzberger
On 3 December 2021, Ms Holzberger was issued 820,000 zero priced options expiring 31/12/2025, pursuant to
shareholder approval received at the 2021 AGM. At grant date, the options had a fair value per option of $0.16
per option. On 30 June 2022, 273,333 options vested and were converted into Fully Paid ordinary shares. With the
restructure of NED remuneration, all unvested options (546,667 options) were cancelled on 30 June 2022.
James Marsh
On 3 December 2021, Mr Marsh was issued with 1,710,000 options exercisable at $0.2375, expiring 31/12/2025
and vesting 31/12/2023, pursuant to shareholder approval received at the AGM in November. On 3 December
Mr Marsh was also issued with 1,410,000 Performance Rights, expiring 30/06/2024, pursuant to shareholder
approval at the 2021 AGM, which will vest and be convertible into fully paid ordinary shares in the Company upon
commercial shipment of a refined kaolin product, with the following graduated hurdles:
i) 50,000 tonnes shipped will result in 20% of Performance Rights to vest;
ii) 115,000 tonnes shipped will result in 50% of Performance Rights to vest;
iii) 165,000 tonnes or more shipped will result in 100% of Performance Rights to vest.
At grant date, the options had a fair value of $0.0901 per option and the Performance Rights had a fair value of
$0.16 per Right. As detailed in footnote 3 to the above table, no value / expense has been recognised during the
year ended 30 June 2022 in relation to the Performance Rights granted on 3 December 2021.
57
ANNUAL REPORT 2022 Remuneration report (audited)
Joe Ranford
On 3 December 2021, Mr Ranford was issued with 1,650,000 options exercisable at $0.2375, expiring 31/12/2025
and vesting 31/12/2023, pursuant to shareholder approval received at the AGM in November. Mr Ranford was
issued with 1,350,000 Performance Rights, expiring 30/06/2024, pursuant to shareholder approval at the 2021
AGM, which will vest and be convertible into fully paid ordinary shares in the Company upon commercial shipment
of a refined kaolin product, with the following graduated hurdles:
i) 50,000 tonnes shipped will result in 20% of Performance Rights to vest;
ii)
115,000 tonnes shipped will result in 50% of Performance Rights to vest;
1iii) 65,000 tonnes or more shipped will result in 100% of Performance Rights to vest.
At grant date, the options had a fair value of $0.0901 At grant date, the Performance Rights had a fair value of
$0.16 per Right. As detailed in footnote 3 to the above table, no value / expense has been recognised during the
year ended 30 June 2022 in relation to the Performance Rights granted on 3 December 2021.
Michael Zannes
On 26 August 2021, Mr Zannes was issued with 1,200,000 Performance Rights, expiring 23/12/2023, with 50% of
the Performance Rights to vest upon the commencement of mining and 50% of the Performance Rights to vest
upon the first shipment of Kaolin product. On 3 December 2021, Mr Zannes was issued with 1,400,000 options
exercisable at $0.2375, expiring 31/12/2025 and vesting on 31/12/2023. On 3 December 2021, Mr Zannes was also
issued with 1,125,000 Performance Rights, expiring 30/06/2024, which will vest and become convertible into fully
paid ordinary shares in the Company upon commercial shipment of a refined kaolin product, with the following
graduated hurdles:
i) 50,000 tonnes shipped will result in 20% of Performance Rights to vest;
ii)
115,000 tonnes shipped will result in 50% of Performance Rights to vest.
iii) 165,000 tonnes or more shipped will result in 100% of Performance Rights to vest.
At grant date, the options had a fair value of $0.0901 per option and the Performance Rights had a fair value of
$0.16 per Right. As detailed in footnote 3 to the above table, no value / expense has been recognised during the
year ended 30 June 2022 in relation to the Performance Rights granted on 3 December 2021.
Timothy Anderson
On 3 December 2021, Mr Anderson was issued with 1,400,000 options exercisable at $0.2375, expiring
31/12/2025 and vesting on 31/12/2023. On 3 December 2021, Mr Anderson was also issued with 750,000
Performance Rights, expiring 31/12/2023, with 55% of the Performance Rights to vest upon the achievement of
several Business Development hurdles and 45% to vest upon the commencement of mining. On 3 December
2021, Mr Anderson was also issued with 1,500,000 Performance Rights, expiring 30/06/2024, which will vest and
become convertible into fully paid ordinary shares in the Company upon commercial shipment of a refined kaolin
product, with the following graduated hurdles:
i) 50,000 tonnes shipped will result in 20% of Performance Rights to vest;
ii)
115,000 tonnes shipped will result in 50% of Performance Rights to vest;
iii) 165,000 tonnes or more shipped will result in 100% of Performance Rights to vest.
At grant date, the options had a fair value of $0.0901 per option and the Performance Rights had a fair value of
$0.16 per Right. As detailed in footnote 3 to the above table, no value / expense has been recognised during the
year ended 30 June 2022 in relation to the Performance Rights granted on 3 December 2021.
58
ANDROMEDA METALS LIMITED Remuneration report (audited)
1.11.3 Issuing of performance rights in report period ended 30 June 2021
2021
Andrew Shearer
Rhoderick Grivas
James Marsh
Joseph Ranford
Nicholas Harding
Michael Zannes
Eric Whittaker
Total
NUMBER OF PERFORMANCE RIGHTS
GRANTED DURING THE PERIOD
VALUE ALLOCATED IN FY21 TO
PERFORMANCE RIGHTS GRANTED
$
TOTAL VALUE ALLOCATED
IN FY21
$
2,250,000
2,250,000
3,250,000
12,250,000
3,250,000
-
-
256,145
256,145
369,987
2,453,771
369,987
-
-
256,145
256,145
369,987
2,453,771
369,987
-
-
23,250,000
3,706,035
3,706,035
There were no options granted during the period ended 30 June 2021.
Andrew Shearer
On 23 December 2020, Mr Shearer was issued with 2,250,000 Performance Rights, expiring 23/12/2023, which will
vest and be convertible into fully paid ordinary shares upon the commencement of mining within three years.
Rhoderick Grivas
On 23 December 2020, Mr Grivas was issued with 2,250,000 Performance Rights, expiring 23/12/2023, which will
vest and be convertible into fully paid ordinary shares upon the commencement of mining within three years. When
Mr Grivas resigned on 20 January 2022 1,441,150 Performance Rights were forfeited.
James Marsh
On 23 December 2020, Mr Marsh was issued with 3,250,000 Performance Rights, expiring 23/12/2023, which will
vest and be convertible into fully paid ordinary shares upon the commencement of mining within three years.
Joe Ranford
On 23 December 2020, Mr Ranford was issued with the following tranches of Performance Rights, pursuant to
shareholder approval at the 2021 AGM:
3,250,000 Performance Rights, expiring 23/12/2023, which will vest and be convertible into fully paid ordinary
shares upon the commencement of mining within three years.
3,500,000 Performance Rights, expiring 23/12/2022, which will vest and be convertible into fully paid ordinary
shares upon the lodgement of the Mining Lease application.
2,000,000 Performance Rights, expiring 24/12/2022, which will vest and be convertible into fully paid ordinary
shares upon the approval of the Mining Lease application.
3,500,000 Performance Rights, expiring 23/12/2022, which will vest and be convertible into fully paid ordinary
shares upon the completion of the Definitive Feasibility Study (DFS).
Nicholas Harding
On 23 December 2020, Mr Harding was issued with 3,250,000 Performance Rights, expiring 23/12/2023, which will
vest and be convertible into fully paid ordinary shares upon the commencement of mining within three years. When
Mr Harding resigned on 10 August 2021 2,250,000 Performance Rights were forfeited.
59
ANNUAL REPORT 2022 Remuneration report (audited)
1.11.3 Key management personnel option holdings
2022
BALANCE AT PREVIOUS
YEAR REPORTING DATE
GRANTED
DURING THE PERIOD
CONVERTED
DURING THE PERIOD
OTHER
BALANCE AT
REPORTING DATE1
Non-executive Directors
Michael Wilkes
-
Andrew Shearer
11,500,000
-
-
-
-
-
-
-
11,500,000
Melissa Holzberger
-
820,000
(273,333)
(546,667)2
Rhoderick Grivas3
11,500,000
-
-
(11,500,000)3
-
-
Executive Directors
James Marsh
32,000,000
1,710,000
(10,500,000)
Joseph Ranford
-
1,650,000
Nicholas Harding4
23,500,000
-
Executives
Michael Zannes
Timothy Anderson
-
-
1,400,000
1,400,000
-
-
-
-
-
-
23,210,000
1,650,000
(23,500,000)4
-
-
-
1,400,000
1,400,000
Total
78,500,000
6,980,000
(10,773,333)
(35,546,667)
39,160,000
Footnotes to the above table in section 1.11.3:
1 As at 30 June 2022, there were no options held by KMP that had vested and were exercisable.
2 With the restructure of NED remuneration, all unvested options (546,667 options) held by Melissa Holzberger were cancelled
on 30 June 2022.
3 Mr Grivas ceased to be a KMP on 20 January 2022, with removal of option holding in “other” upon ceasing to be a KMP
4 Mr Harding ceased to be a KMP on 10 August 2021, with removal of option holding in “other” upon ceasing to be a KMP
1.11.4 Key management personnel performance rights holdings
2022
BALANCE AT PREVIOUS
YEAR REPORTING DATE
GRANTED
DURING THE PERIOD1
CONVERTED
DURING THE PERIOD
OTHER
BALANCE AT
REPORTING DATE1
Non-executive Directors
Michael Wilkes
-
Andrew Shearer
2,250,000
Melissa Holzberger
-
Rhoderick Grivas2
2,250,000
Executive Directors
-
-
-
-
James Marsh
3,250,000
1,410,000
-
-
-
-
-
Joseph Ranford
8,750,000
1,350,000
(3,500,000)
Nicholas Harding3
3,250,000
-
Executives
Michael Zannes
Timothy Anderson
-
-
2,325,000
2,250,000
-
-
-
-
-
-
(2,250,000)2
-
-
(3,250,000)3
-
2,250,000
-
-
4,660,000
6,600,000
-
-
-
2,325,000
2,250,000
Total
19,750,000
7,335,000
(3,500,000)
(5,500,000)
18,085,000
60
ANDROMEDA METALS LIMITED Remuneration report (audited)
Footnotes to the above table in section 1.11.4:
1 As at 30 June 2022, 2,000,000 of the Performance Rights held by Joseph Ranford had vested and were exercisable. No
other Performance Rights held by KMP at 30 June 2022 had vested and were exercisable.
2 Mr Grivas ceased to be a KMP on 20 January 2022, with removal of Performance Rights holding in “other” upon ceasing to
be a KMP.
3 Mr Harding ceased to be a KMP on 10 August 2021, with removal of Performance Rights holding in “other” upon ceasing to be
a KMP.
1.12 KEY MANAGEMENT PERSONNEL SHAREHOLDINGS
The numbers of shares in the Company held during the financial year by key management personnel, including
personally related entities are set out below:
2022
BALANCE AT
1 JULY 2021
RECEIVED THROUGH EXERCISE
OF OPTIONS/RIGHTS
PURCHASE OR DISPOSAL
DURING THE YEAR
OTHER
BALANCE AT
30 JUNE 2022
Non-executive Directors
Michael Wilkes
-
Andrew Shearer
10,991,019
Melissa Holzberger
-
Rhoderick Grivas
14,995,612
Executive Directors
James Marsh
2,500,000
Joseph Ranford
3,500,000
Nicholas Harding
6,600,997
Executives
Michael Zannes
Timothy Anderson
-
-
-
-
273,333
97,456
10,500,000
3,500,000
97,450
-
-
2,473,195
146,185
-
-
(707,000)3
(640,000)4
-
-
-
2,473,195
11,137,204
273,333
(15,093,068)1
-
-
-
12,293,000
6,360,000
-
-
-
(6,698,447)2
-
-
-
-
-
Total
38,587,628
14,468,239
1,272,380
(21,791,515)
32,536,732
Footnotes to the above table in section 1.12:
1 Mr Grivas ceased to be a KMP on 20 January 2022, with removal of shareholding in “other” upon ceasing to be a KMP.
2 Mr Harding ceased to be a KMP on 10 August 2021, with removal of shareholding in “other” upon ceasing to be a KMP.
3 The movements due to purchases or disposals includes a disposal of 770,000 shares during the year, with proceeds used to
pay the exercise price for conversion of options.
4 The movements due to purchases or disposals includes a disposal of 725,000 shares during the year, with proceeds used to
satisfy income tax obligations arising from securities received as part of Mr Ranford’s remuneration.
1.13 OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL AND/OR THEIR
RELATED PARTIES
Michael Wilkes invoices through his private company for Director’s Fees only. It is not a separate entity that provides
consulting services to the Company. The NEDs Melissa Holzberger and Andrew Shearer are paid Director’s Fees
through the Company’s payroll. Rhoderick Grivas’ Director’s Fees were paid through Company payroll and his
consulting services were paid through his private company.
Mr Wilkes, Mr Shearer and Ms Holzberger satisfy the definition and maintain their status as Independent NEDs, thus
retain objectivity and their ability to meet their oversight role.
The Company has determined that the Loan Funded Employee Share Plan is no longer fit for purpose and, as it
has not actively been used with no shares issued since December 2018, will accordingly be wound down.
61
ANNUAL REPORT 2022 Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
30 September 2022
The Board of Directors
Andromeda Metals Limited
Level 10/431 King William Street
Adelaide SA 5000
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
2022, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
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.
Financial report (audited)
Consolidated statement of profit or loss and other
comprehensive income
for the Year ended 30 June 2022
Other income
Impairment of exploration expenditure
Exploration and evaluation expenditure expensed
Administration expenses
Corporate consulting expenses
Company promotion
Salaries and wages
Directors’ fees
Occupancy expenses
Research & development
Share based payments
Share of loss of joint venture
Loss before income tax
Tax expense
Loss for the year
NOTE
4
8
8
5
5
YEAR ENDED
30/06/22
$
452,516
(422,114)
(18,230)
(2,197,525)
(2,002,361)
(90,675)
(719,162)
(291,267)
(78,171)
(846,464)
YEAR ENDED
30/06/21
$
61,461
(37,893)
(24,047)
(939,167)
(848,251)
(124,079)
(132,283)
(110,000)
(21,276)
-
(2,280,129)
(3,997,664)
(239,537)
(262,583)
(8,733,119)
(6,435,782)
-
(7,517)
(8,733,119)
(6,443,299)
Other comprehensive income, net of income tax
-
-
Total comprehensive income for the year
(8,733,119)
(6,443,299)
Earnings per share
Basic (cents per share) – (Loss)
Diluted (cents per share) – (Loss)
25
25
(0.33)
(0.33)
(0.33)
(0.33)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
63
ANNUAL REPORT 2022 Financial report (audited)
Consolidated statement of financial position
as at 30 June 2022
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Assets held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation expenditure
Property, 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
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
NOTE
6
8(b)
8
9
7
10
11
13
12
14
13
15
16
30/06/22
$
32,853,203
1,247,211
250,000
30/06/21
$
RESTATED
4,904,719
853,927
-
34,350,414
5,758,646
137,367,031
11,316,819
2,134,319
372,224
-
139,873,574
174,223,988
1,966,169
165,974
185,337
2,317,480
35,498
680,163
715,661
212,960
184,500
282,638
11,996,917
17,755,563
1,110,176
56,974
41,933
1,209,083
30,679
26,591
57,270
3,033,141
1,266,353
171,190,847
16,489,210
219,250,120
6,865,285
56,929,522
5,838,594
(54,924,558)
(46,278,906)
171,190,847
16,489,210
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
The Consolidated Statement of Financial Position as at 30 June 2021 has been retrospectively adjusted to reflect a
change in accounting policy. Refer note 3 for further information.
64
ANDROMEDA METALS LIMITED Financial report (audited)
Consolidated statement of changes in equity
for the Year ended 30 June 2022
ISSUED
CAPITAL
$
SHARE OPTION
RESERVE
$
NCI ACQUISITION
RESERVE
$
ACCUMULATED
LOSSES
$
TOTAL
$
Balance at 1 July 2020
47,826,518
2,939,738
Loss attributable to the year
Total comprehensive income for the year
-
-
-
-
Shares issued on the exercise of
listed options
Shares issued on the exercise of
unlisted options
Related income tax
Share based payments
7,436,523
(66,308)
651,520
7,517
-
-
-
-
3,997,664
Costs associated with the issue of shares
(25,056)
Conversion of performance rights
1,032,500
(1,032,500)
Balance at 30 June 2021
56,929,522
5,838,594
Loss attributable to the year
Total comprehensive income for the year
-
-
Issue of share capital through placement
44,999,913
Costs associated with the issue of shares
(2,303,816)
-
-
-
-
Shares issued on the exercise of
unlisted options
Share based payments
Transfer of previously forfeited share-based
payments
1,578,550
(1,016,551)
-
-
2,280,129
(87,467)
Conversion of performance rights
1,032,500
(1,032,500)
Conversion of options
43,733
(43,733)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share Capital issued – acquisition of
Minotaur (refer note 29)
116,969,718
-
926,813
(39,835,607)
10,930,649
(6,443,299)
(6,443,299)
(6,443,299)
(6,443,299)
-
-
-
-
-
-
7,370,215
651,520
(25,056)
7,517
3,997,664
-
(46,278,906)
16,489,210
(8,733,119)
(8,733,119)
(8,733,119)
(8,733,119)
-
-
-
-
44,999,913
(2,303,816)
561,999
2,280,129
87,467
-
-
-
-
-
-
117,896,531
Balance at 30 June 2022
219,250,120
5,938,472
926,813
(54,924,558)
171,190,847
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
65
ANNUAL REPORT 2022 Financial report (audited)
Consolidated statement of cash flows
for the Year ended 30 June 2022
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
Receipts from government grants
Payment of environmental bonds
Payment for investment in joint venture
Payments for exploration and evaluation expenditure
Payments for acquisition related costs – Minotaur (Note 29)
Payment received from joint venture partner
Payments for property, plant and equipment
Loans advanced to Minotaur pre-acquisition
Cash received via Minotaur Acquisition (Note 29)
Cash transferred to secured term deposit
INFLOWS/(OUTFLOWS)
YEAR ENDED 30/06/22
$
INFLOWS/(OUTFLOWS)
YEAR ENDED 30/06/21
$
-
(5,140,961)
(5,140,961)
29,380
1,326,001
(15,000)
(241,699)
(4,035,983)
(2,348,383)
448,298
(1,070,991)
(4,973,348)
1,178,858
(125,784)
62,000
(1,799,540)
(1,737,540)
9,072
343,879
(20,000)
(380,006)
(5,010,162)
-
979,784
(112,613)
-
-
(90,000)
Net investing cash flows
(9,828,651)
(4,280,046)
Cash flows relating to financing activities
Proceeds from share placement
Proceeds from exercise of share options
Lease payments
Interest paid
Payments for share issue costs
Net financing cash flows
Net increase in cash and cash equivalents
Cash at beginning of financial year
44,999,913
332,000
(99,795)
(10,206)
(2,303,816)
42,918,096
27,948,484
4,904,719
-
8,021,735
(70,851)
(2,149)
(25,056)
7,923,679
1,906,093
2,998,626
Cash and cash equivalents at end of financial year
32,853,203
4,904,719
66
ANDROMEDA METALS LIMITED Financial report (audited)
Note (a): Reconciliation of loss for the period to net cash flow from
operating activities.
Loss for the period
Interest income
Share based remuneration
Depreciation
Interest expense
Exploration written off or impaired
Income tax expense
(Increase) / decrease in receivables
Share of loss of joint venture
Increase/(decrease) in payables
Increase/(decrease) in provisions
Fair Value of Financial Instruments
Net operating cash flows
(8,733,119)
(6,443,299)
(39,297)
2,280,129
191,021
10,206
440,344
-
(668,144)
239,537
865,186
148,226
124,950
(8,636)
3,997,664
93,227
2,337
61,940
7,517
(149,719)
262,584
405,043
33,802
-
(5,140,961)
(1,737,540)
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes
67
ANNUAL REPORT 2022 Financial report (audited)
Notes to the financial statements
for the financial year ended 30 June 2022
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
PRINCIPAL PLACE OF BUSINESS
Level 10, 431 King William Street
Level 10, 431 King William Street
Adelaide
Adelaide
South Australia, 5000
South Australia, 5000
2 ADOPTION OF NEW AND REVISED ACCOUNTING STANDARDS
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 an accounting period that begins on
or after 1 July 2021.
Standards and Interpretations on issue but not yet effective
STANDARD/INTERPRETATION
AASB 2014-10 Amendments to Australian Accounting Standards
– Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture, AASB 2015-10 Amendments to Australian
Accounting Standards – Effective Date of Amendments to AASB 10
and AASB 128, AASB 2017-5 Amendments to Australian Accounting
Standards – Effective Date of Amendments to AASB 10 and AASB 128
and Editorial Corrections
AASB 2020-1 Amendments to Australian Accounting Standards
– Classification of Liabilities as Current or Non-current and AASB
2020-6 Amendments to Australian Accounting Standards –
Classification of Liabilities as Current or Non-current – Deferral of
Effective Date
APPLICATION DATE OF
STANDARD
APPLICATION DATE FOR
GROUP
1 January 2022
1 July 2022
1 January 2023
1 July 2023
AASB 2020-3 Amendments to Australian Accounting Standards –
Annual Improvements 2018-2020 and Other Amendments
1 January 2022
1 July 2022
AASB 2021-2 Amendments to Australian Accounting Standards
– Disclosure of Accounting Policies and Definition of Accounting
Estimates
1 January 2023
1 July 2023
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 2022. 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:
3 SIGNIFICANT ACCOUNTING POLICIES
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 30 September 2022.
68
ANDROMEDA METALS LIMITED Financial report (audited)
Basis of preparation
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.
Change in Significant Accounting Policy
During the year the Group amended its accounting policy with respect to the treatment of government grants
received in relation to exploration related activities.
Prior to this change in policy the Group recognised government grants whose primary condition was to assist with
exploration activities as deferred income within the consolidated statement of financial position, with the government
grants then being recognised in profit or loss when the related exploration and evaluation asset was written off.
Following this change in policy the Group now nets the government grants received related to exploration activities
against the related exploration and evaluation assets.
The Directors believe that this change in policy will result in more relevant and no less reliable information as the policy
is more transparent, and is more closely aligned with the accounting policies adopted by comparable companies.
The change in policy will therefore assist users of the financial statements in gaining a clear understanding of the
Group’s financial position, due to the fact that the government grants are non-refundable.
Comparative financial information has been restated in this financial report to align with the new accounting policy.
The impact of this voluntary change in accounting policy on the consolidated financial statements is
summarised below:
PREVIOUSLY REPORTED
30 JUNE 2021
$
CHANGE
$
RESTATED
30 JUNE 2021
$
Consolidated statement of financial position
Exploration and evaluation expenditure
13,180,462
(1,863,643)
Total non-current assets
13,860,560
(1,863,643)
11,316,819
11,996,917
Total assets
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Consolidated statement of financial position
Exploration and evaluation expenditure
Total non-current assets
Total assets
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
19,619,206
(1,863,643)
17,755,563
(1,863,643)
(1,920,913)
(3,129,996)
16,489,210
1,863,643
1,863,643
1,863,643
-
(57,270)
(1,266,353)
-
16,489,210
PREVIOUSLY REPORTED
1 JULY 2020
$
9,218,491
9,601,502
12,685,125
(975,517)
(1,045,173)
(1,754,476)
10,930,649
CHANGE
$
(975,517)
(975,517)
(975,517)
975,517
975,517
975,517
RESTATED
1 JULY 2020
$
8,242,974
8,625,985
11,709,608
-
(69,656)
(778,959)
-
10,930,649
The voluntary change in accounting policy has no impact on the historically presented consolidated statement of
profit or loss and other comprehensive income, or consolidated statement of cash flows.
69
ANNUAL REPORT 2022 Financial report (audited)
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.
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 exploitation 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 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 a
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 2022 the Group incurred
a net loss of $8,733,119 (30 June 2021: $6,443,299),
and experienced net cash outflows from operating
and investing activities of $14,969,612 (30 June 2021:
$6,017,586). At 30 June 2022, the Group has cash
reserves of $32,853,203 (30 June 2021: $4,904,719).
The Group has prepared a cash flow forecast for
the period ending 30 September 2023.The forecast
indicates that the Group will have sufficient funding
to meet all expected cash outflows, including its
currently envisaged exploration activities, as well as
the procurement of certain long lead items, and some
construction activities should a development decision
be made with respect to the Great White Kaolin Project.
70
When a final investment decision is made in relation to
the GWKP, the cash flow forecast will be updated to
identify all funding required i.e. Debt and/or equity, to
allow development to be completed, and support the
Group’s working capital requirements until such time
that the Project is in commercial production.
The Directors are satisfied therefore, that the going
concern basis of preparation is appropriate.
Economic Uncertainty and COVID-19
Management have considered the impact of
external influences, such as the geopolitical unrest in
Europe and the COVID-19 pandemic, on the Group’s
operations and financial performance and note the
Group may be exposed to risks, such as supply chain
disruptions, inflation and volatile commodity prices.
In preparing the consolidated financial report,
Management has considered the impact of COVID-19
and the Russia-Ukraine war on the various balances
and accounting estimates in the financial report,
including the carrying values of exploration and
evaluation assets. Management determined that
there was no significant impact on these balances and
accounting estimates.
Whilst the Russia-Ukraine war and the COVID-19
pandemic have presented significant challenges
throughout the Australian economy and resources
sector over the last year, the Company remains well
positioned to execute its strategy. There were no
material impacts on the Financial Report as at 30 June
2022. The Company will continue to monitor any future
consequences due to the potential uncertainty in the
medium to long term.
Significant items impacting 30 June 2022
financial year results
The financial performance and position of the Group
was significantly impacted by the acquisition of
Minotaur Exploration Limited. The acquisition was
made in February 2022.
For detailed information related to the acquisition
please refer to note 29.
Accounting Policies
a) Cash and cash equivalents
Cash and cash equivalents comprise cash on
hand, cash in banks and deposits held at call which
are subject to insignificant risk of changes in value.
b) Employee benefits
A liability is recognised for benefits accruing to
employees in respect of wages and salaries,
annual leave and sick leave in the period the
related service is rendered at the undiscounted
amount of the benefits expected to be paid in
exchange for that service.
Liabilities recognised in respect of short-
term employee benefits are measured at the
undiscounted amount of the benefits expected to
be paid in exchange for the related service.
ANDROMEDA METALS LIMITED Financial report (audited)
Liabilities recognised in respect of other long-term
employee benefits are measured at the present
value of the estimated future cash outflows expected
to be made by the Group in respect of services
provided by employees up to the reporting date.
Contributions to accumulated benefit
superannuation plans are expensed when incurred.
c) Exploration and evaluation expenditure
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
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;
¬ any proceeds received that are not attributable
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.
ii) at least one of the following conditions is
d) Financial assets
also met:
– the exploration and evaluation expenditures
are expected to be recouped through
successful development and exploitation
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.
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:
71
ANNUAL REPORT 2022
Financial report (audited)
¬
¬
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
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. 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.
72
f)
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 Financial report (audited)
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 enacted 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
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.
73
ANNUAL REPORT 2022
Financial report (audited)
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 (refer Note 10)
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
74
ANDROMEDA METALS LIMITED Financial report (audited)
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 15.
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.
75
ANNUAL REPORT 2022 ¬
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.
Financial report (audited)
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.
76
ANDROMEDA METALS LIMITED Financial report (audited)
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
netted against the exploration asset to which they
relate in the statement of financial position.
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 Business Combinations
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.
r) Asset acquisitions
The acquisition of assets that do not represent
a business combination in accordance with
AASB 3 Business Combinations are accounted
for as an asset acquisition. Accordingly, when an
asset acquisition does not constitute a business
combination, the cost of acquisition is allocated
to the identifiable assets and liabilities based on
their relative fair values at the date of purchase.
Transaction costs of the acquisition are included in
the capitalised cost of the asset. No goodwill arises
on the acquisition and no deferred tax will arise due
to the initial recognition exemption for deferred tax
under AASB 112 Income Taxes.
77
ANNUAL REPORT 2022
Financial report (audited)
4 LOSS FROM OPERATIONS
Other income
Interest income on bank deposits
Loss on disposal of assets (i)
Government grants (ii)
Fair value movement in equity investment held at fair value through
profit & loss
Other
YEAR ENDED
30/06/22
$
39,297
(2,224)
538,693
(124,950)
1,700
452,516
YEAR ENDED
30/06/21
$
8,636
-
52,825
-
-
61,461
i)
Loss on the disposal of assets related to the disposal of office equipment.
ii) Research & Development tax incentive accrued of $516,693 and $22,000 grant received for the Entrepreneurs
program
Other expenses
Employee benefit expense:
Post-employment benefits:
Accumulated benefit superannuation plans
267,827
116,190
Share based payments:
Equity settled share-based payments (i)
Other employee benefits
2,280,129
3,574,562
6,122,518
3,997,664
1,807,761
5,921,615
Less amounts capitalised in exploration and evaluation expenditure
(2,030,688)
(1,444,862)
Depreciation of plant and equipment
Short-term rental expenses
4,091,830
4,476,753
191,021
37,138
93,227
21,276
i)
Share based payments relate to the amortisation of shares, options or performance rights granted to employees.
Share based payments do not represent cash payments and may or may not be exercised by the employee.
78
ANDROMEDA METALS LIMITED
Financial report (audited)
5 INCOME TAX
YEAR ENDED
30/06/22
$
YEAR ENDED
30/06/21
$
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%
(8,733,119)
(6,435,782)
(2,619,936)
(1,930,735)
Share based payments
Non deductable expenses
Non-assessable income
Other
Deferred tax assets not brought to account
Tax expense
684,039
173,412
(155,008)
-
1,917,493
-
1,199,299
-
-
(52,929)
791,882
7,517
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
30/06/22
$
(83,488)
30/06/21
$
(164)
Exploration and evaluation expenditure
(4,131,169)
(3,903,293)
Assets available for sale
Property Plant and equipment
Investments
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:
(75,000)
(72,644)
26,769
1,384,148
42,999
66,251
-
(2,842,134)
2,842,134
-
-
(17,589)
76,386
107,267
17,468
32,364
33,450
(3,654,111)
3,654,111
-
A deferred tax asset has not been recognised in respect of the following items:
Tax losses-revenue
30/06/22
$
30/06/21
$
14,820,396
9,897,066
Exploration and evaluation expenditure
33,865,690
-
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.
The above unrecognised tax losses do not include any amounts relating to Minotaur Exploration Limited,
which was acquired during the period. At the date of this report the Company is assessing the availability and
recoverability of any pre-acquisition losses.
79
ANNUAL REPORT 2022 Financial report (audited)
d) Movement in recognised temporary differences and tax losses
Opening balance
Recognised in equity
Recognised in income
Closing balance
Tax consolidation
30/06/22
$
-
-
-
-
30/06/21
$
-
7,517
(7,517)
-
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. The Minotaur losses acquired have not been disclosed in the above figures as per Note 5(c).
6 CURRENT TRADE AND OTHER RECEIVABLES
Interest receivable
Government grant receivable
Prepaid expenses
GST receivable
Other receivables and prepayments
7 OTHER NON-CURRENT FINANCIAL ASSETS
Deposits (Note 22(d))
Equity investments at fair value through profit & loss (i)
Environmental bonds
30/06/22
$
9,917
865,108
268,376
89,145
14,665
1,247,211
30/06/22
$
258,284
46,940
67,000
372,224
30/06/21
$
107
631,846
163,141
58,833
-
853,927
30/06/21
$
132,500
-
52,000
184,500
i) Shares owned in listed companies with fair value based on the quoted share price on the ASX with fair value
recognised in Note 4.
80
ANDROMEDA METALS LIMITED
Financial report (audited)
8 EXPLORATION AND EVALUATION EXPENDITURE (IV)
Costs brought forward (as originally presented)
Government grants received prior 1 July 2020
Costs brought forward (as restated for change in policy)
Expenditure incurred during the year (i)
Acquisition additions of Minotaur (refer note 29)
Government grants received / receivable
Impairment of exploration and evaluation expenditure
Expenditure impaired (ii)
Expenditure written off (iii)
Transfer to assets held for sale (refer note 8(b))
30/06/22
$
11,316,819
-
11,316,819
3,714,818
124,066,962
(1,041,224)
138,057,375
(422,114)
(18,230)
(250,000)
(690,344)
137,367,031
30/06/21
$
RESTATED
9,218,491
(975,517)
8,242,974
4,023,911
-
(888,126)
11,378,759
(37,893)
(24,047)
-
(61,940)
11,316,819
i)
ii)
Expenditure net of joint venture contributions
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 $422,114 (2021: $37,893) 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.
iii) Expenditure written off relates to exploration and evaluation expenditure associated with tenements or parts
of tenements that have been surrendered, or exploration to identify new exploration targets where no tenure is
currently held by the Company.
iv) 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.
iv) During the year the Group amended its accounting policy with respect to the treatment of government grants
received in relation to exploration related activities. Refer note 3 for further information.
8(b) Assets held for sale
Selected exploration & evaluation assets have been actively marketed with sales discussions well advanced
as at 30 June 2022. An exploration asset has consequently been written down to the expected value of the
sales proceeds. The excess carrying value of the exploration asset has been impaired prior to the asset being
reclassified into assets held for sale.
ASSETS HELD FOR SALE
Carrying value in exploration & evaluation
Exploration impaired prior to transfer to assets held for sale
Assets held for sale
$
555,839
(305,839)
250,000
81
ANNUAL REPORT 2022 Financial report (audited)
9 PLANT AND EQUIPMENT
LAND &
BUILDINGS
PLANT &
EQUIPMENT
WORK IN
PROGRESS
MOTOR
VEHICLES
FURNITURE
& FITTINGS
OFFICE & IT
EQUIPMENT
RIGHT OF
USE ASSETS
TOTAL
2021/22
Gross carrying amount
Opening balance
-
45,998
38,288
4,792
62,488
205,243
185,268
542,077
Additions
736,180
404,974
60,856
-
-
6,972
(6,972)
(12,120)
-
-
-
-
2,307
58,309
851,978
2,114,604
-
-
-
-
(46,532)
(97,992)
(142,439)
(299,083)
736,180
445,824
92,172
4,792
18,263
165,560
894,807
2,357,598
Transfer from WIP
Disposals and
write-offs
Balance
30 June 2022
Accumulated depreciation
Opening balance
-
(24,428)
Depreciation
(15,026)
(36,518)
-
12,120
(15,026)
(48,826)
Disposals and
write-offs
Balance
30 June 2022
Net book value
30 June 2022
-
-
-
-
(3,945)
(46,568)
(150,902)
(103,274)
(329,117)
(264)
(3,600)
(27,763)
(107,850)
(191,021)
-
44,370
97,930
142,439
296,859
(4,209)
(5,798)
(80,735)
(68,685)
(223,279)
721,154
396,998
92,172
583
12,465
84,825
826,122
2,134,319
25,715
-
3,736
45,302
169,245
142,439
386,437
20,283
38,288
1,056
17,186
35,998
42,829
155,640
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45,998
38,288
4,792
62,488
205,243
185,268
542,077
(20,240)
(4,188)
-
(24,428)
-
-
-
-
(3,736)
(45,039)
(137,200)
(29,675)
(235,890)
(209)
(1,529)
(13,702)
(73,599)
(93,227)
-
-
-
-
-
(3,945)
(46,568)
(150,902)
(103,274)
(329,117)
21,570
38,288
847
15,920
54,341
81,994
212,960
2020/21
Gross carrying amount
Opening balance
Additions
Transfer from WIP
Disposals and
write-offs
Balance
30 June 2021
Accumulated depreciation
Opening balance
Depreciation
Disposals and
write-offs
Balance
30 June 2021
Net Book Value
30 June 2021
-
-
-
-
-
-
-
-
-
-
82
ANDROMEDA METALS LIMITED Financial report (audited)
The Group has two leases, one for office premises and the other for equipment. The average lease term is 4.5 years
(2021: 1.7 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 $102,271.
10 INVESTMENT IN JOINT VENTURE
30/06/22
$
107,850
10,206
37,138
30/06/21
$
73,599
2,338
21,276
Investment in joint venture (i)
-
282,638
i) Relates to investment in Natural Nanotech Pty Ltd. As at 30 June 2021, Andromeda had joint control by virtue of
having one of two board positions. The remaining interest in NNT that was not previously owned by the Group was
acquired in February 2022 as part of the acquisition of Minotaur, and consequently is now accounted for as part
of the consolidated group. Refer note 29 for further information.
11 CURRENT LIABILITIES – TRADE AND OTHER PAYABLES
Trade payables and accruals (i)
Other payables (ii)
30/06/22
$
1,966,169
-
1,966,169
30/06/21
$
880,176
230,000
1,110,176
i) Trade payables and accruals principally comprise amounts outstanding for trade purchases in relation to
exploration activities 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 agreed credit terms.
ii) Amount relates to share placement funds received directly by the Company prior to the associated shares being
issued. After year end, the shares associated with these funds were issued and the amount was transferred to
Share Capital.
12 CURRENT LIABILITIES – PROVISIONS
Employee benefits – annual leave
Movement in employee benefits
Balance at the beginning of the year
Leave accrued
Leave taken
Closing value
30/06/22
$
185,337
185,337
41,933
202,234
(58,830)
185,337
30/06/21
$
41,933
41,933
12,178
56,950
(27,195)
41,933
83
ANNUAL REPORT 2022 Financial report (audited)
13 LEASE LIABILITIES
Maturity analysis:
Year 1
Year 2
Year 3
Year 4
Year 5
Less unearned interest
Closing value
Analysed as:
Current
Non-current
30/06/22
$
190,865
196,585
200,015
193,733
131,924
913,122
(66,985)
846,137
165,974
680,163
846,137
30/06/21
$
58,257
14,857
12,381
-
-
85,495
(1,930)
83,565
56,974
26,591
83,565
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 – long service leave
30/06/22
$
35,498
30/06/21
$
30,679
84
ANDROMEDA METALS LIMITED Financial report (audited)
15 ISSUED CAPITAL
3,108,008,432 fully paid ordinary shares (2021: 2,160,727,827)
219,302,341
56,981,743
30/06/22
$
30/06/21
$
2,107,500 treasury stock (2021: 2,107,500)
Movement in issued shares for the year:
(52,221)
(52,221)
219,250,120
56,929,522
NUMBER
YEAR ENDED
30/06/22
$
NUMBER
YEAR ENDED
30/06/21
$
Fully paid ordinary shares
Balance at beginning of financial year
2,160,727,827
56,981,743 1,532,863,256
47,878,739
-
-
-
(25,056)
Placement at 15.0 cents
299,999,219
44,999,913
Costs associated with the issue of shares
Exercise of listed options
-
-
(2,303,816)
-
614,184,571
7,370,215
Exercise of unlisted options
23,273,333
1,622,283
10,180,000
651,520
Conversion of performance rights
3,500,000
1,032,500
3,500,000
1,032,500
Transfer from options reserve
-
-
Shares issued as part of acquisition of Minotaur (i)
620,508,053
116,969,718
Related income tax
-
-
-
-
-
66,308
-
7,517
Balance at end of financial year
3,108,008,432
219,302,341
2,160,727,827
56,981,743
Treasury stock
Balance at beginning of financial year
(2,107,500)
(52,221)
(2,107,500)
(52,221)
Shares issued from treasury stock
-
-
-
-
Balance at end of financial year
(2,107,500)
(52,221)
(2,107,500)
(52,221)
Total issued capital
3,105,900,932
219,250,120 2,158,620,327
56,929,522
Fully paid shares carry one vote per share and carry the right to dividends.
i) Represents the value of shares at the date of issue. Details of the acquisition are disclosed in Note 29 below.
Financial year ended 30 June 2021
There were no shares issued as part of a capital raising or settlement of Directors’ fees during the year.
Financial year ended 30 June 2022
On 27 July 2021 the Company issued 299,999,219 ordinary shares under a placement to professional and
sophisticated investors and existing shareholders at an issue price of 15.0 cents per share raising $44,999,913
before costs.
85
ANNUAL REPORT 2022 Financial report (audited)
Share options on issue
As at 30 June 2021 there was a total of 86,320,000 unlisted options on issue.
17,500,000 unlisted options issued 20 December 2019 having an exercise price of 1.2 cents and an expiry date of
15 November 2021. During the year 17,500,000 options were exercised leaving no remaining options.
48,820,000 unlisted options issued on 24 December 2019 with an exercise price of 6.4 cents and an expiry
date of 28 November 2022. During the year 5,500,000 of these options were exercised leaving 43,320,000
remaining options.
20,000,000 unlisted options were issued on 24 December 2019, 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 leaving 20,000,000
options remaining.
During the year the Company issued the following unlisted options:
y On 2 December 2021, 820,000 zero priced options were issued with an expiry date of 31 December 2025.
On 30 June 2022, 273,333 of these options vested and were converted to fully paid ordinary shares. With the
restructure of Non-executive Director remuneration, all unvested options (546,667 options) were cancelled on
30 June 2022 leaving no remaining options.
y On 2 December 2021, a further 6,160,000 unlisted options were issued, which vest 31 December 2023, with
an exercise price of 0.2375 cents and expiry date of 31 December 2025. None of these unlisted options were
exercised during the year leaving 6,160,000 options remaining.
As at 30 June 2022 there was a remaining total of 69,480,000 unlisted options on issue.
Performance rights
As at 30 June 2021 there was a total of 19,750,000 performance rights on issue.
14,250,000 performance rights issued on the 26 November 2020 expiring on the 26 November 2023. The vesting
condition is the commencement of mining at the Great White Deposit (or equivalent deposit). During the year
3,691,150 performance rights were forfeited due to resignation leaving 10,558,850 remaining.
3,500,000 performance rights issued on the 24 December 2020 expiring on the 24 December 2022. The vesting
condition was the completion of the DFS for the Great White Kaolin Project. During the year the vesting conditions
were met and 3,500,000 were exercised leaving none remaining.
2,000,000 performance rights issued on the 24 December 2020 expiring on the 24 December 2022. The vesting
condition was the approval of the Mining Lease application for the Great White Kaolin Project. During the year the
vesting conditions were met however they were not exercised leaving 2,000,000 remaining.
During the year, the Company issued the following performance rights:
y On 26 August 2021, 5,639,475 performance rights were issued with an expiry date of 23 December 2023.
67.7% of the performance rights to vest upon the commencement of mining and 32.3% of the performance rights
to vest upon the first shipment of kaolin product.
y On 25 November 2021, 2,760,000 performance rights were issued with an expiry date of 30 June 2024.
Pursuant to shareholder approval at the 2021 AGM, the performance rights will vest and be convertible into fully
paid ordinary shares in the Company upon commercial shipment of a refined kaolin product, with the following
graduated hurdles:
i)
ii)
50,000 tonnes shipped will result in 20% of performance rights to vest;
115,000 tonnes shipped will result in 50% of performance rights to vest;
iii)
165,000 tonnes or more shipped will result in 100% of performance rights to vest.
At grant date the performance rights had a fair value of $0.16 per right.
On 2 December 2021, 2,625,000 performance rights were issued with an expiry date of 30 June 2024. the
performance rights will vest and be convertible into fully paid ordinary shares in the Company upon commercial
shipment of a refined kaolin product, with the following graduated hurdles:
i)
ii)
50,000 tonnes shipped will result in 20% of performance rights to vest;
115,000 tonnes shipped will result in 50% of performance rights to vest;
iii)
165,000 tonnes or more shipped will result in 100% of performance rights to vest.
At grant date the performance rights had a fair value of $0.16 per right.
On 2 December 2021, an additional 750,000 performance rights were issued with an expiry date of 31 December
2023. 55% of the performance rights to vest upon the achievement of several business development hurdles and 45%
to vest upon the commencement of mining. At grant date the performance rights had a fair value of $0.16 per right.
As at 30 June 2022 there was a remaining total of 24,333,325 performance rights on issue.
86
ANDROMEDA METALS LIMITED Financial report (audited)
16 RESERVES
Share option reserve (i)
NCI acquisition reserve (ii)
30/06/22
$
30/06/21
$
5,938,472
5,838,594
926,813
-
6,865,285
5,838,594
i)
The share option reserve arises from the issuance of share options and performance rights to Directors,
employees and consultants.
ii) The NCI acquisition reserve represents the incremental increase (or decrease) in the Andromeda share price
on the acquisition of non-controlling interests post the date control was obtained. This reserve relates to the
acquisition of Minotaur.
17 LOAN FUNDED EMPLOYEE SHARE PLAN
The Loan Funded Employee Share Plan (LFESP) is an ownership-based compensation plan for executives, employees
and consultants established in November 2015.
At 30 June 2022 the number of shares granted to executives and employees was nil 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 no
shares were transferred to executives and employees through the settlement of their respective interest-free loans.
18 KEY MANAGEMENT PERSONNEL COMPENSATION
The Key Management Personnel of Andromeda Metals Limited during the year were:
M Wilkes
Non-executive Chairman (commenced 6 April 2022)
R G J Grivas
Non-executive Chairman (resigned 20 January 2022)
J E Marsh
Managing Director
J F Ranford
Operations Director
A N Shearer
Non-executive Director (resigned 23 August 2022)
M Holzberger Non-executive Director (commenced 23 September 2021)
M Zannes
Chief Financial Officer
Tim Anderson Chief Commercial Officer (commenced 1 December 2021)
N J Harding
Executive Director and Company Secretary (resigned 10 August 2021)
The aggregate compensation of Key Management Personnel of the Group is set out below:
Short-term employee benefits
Other non-cash benefits
Post-employment benefits
Leave benefits
Cash bonus
Share-based payments (i)
YEAR ENDED
30/06/22
$
1,601,533
71,232
103,973
84,600
-
1,876,305
3,737,643
YEAR ENDED
30/06/21
$
1,214,296
-
57,229
48,672
-
3,997,664
5,317,861
i)
Share based payments do not represent cash payments to key management personnel and the related shares
may or may not ultimately vest.
87
ANNUAL REPORT 2022 Financial report (audited)
19 REMUNERATION OF AUDITORS
Deloitte and related network firms*
Audit or review of financial reports
Group
30/06/22
$
30/06/21
$
100,670
100,670
95,888
95,888
*The auditor of Andromeda is Deloitte Touche Tohmatsu.
20 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 26 to the
financial statements.
Interests in joint arrangements
Details of interests in joint arrangements are disclosed in Note 21 to the financial statements.
b) Key Management Personnel compensation
Details of Key Management Personnel compensation are disclosed in Note 18.
c) Transactions with Key Management Personnel
Other than as disclosed in Note 18 and Note 20(b), there were no transactions with Key Management Personnel or
their personally related entities during the year ended 30 June 2022 (2021: Nil).
21 THIRD PARTY INTERESTS
The Group had interests in unincorporated joint arrangements at 30 June 2022 as follows:
Great White Kaolin Joint Venture (note i) – halloysite-kaolin evaluation
and development
Halloysite Nanotechnology Joint Venture (note ii) - halloysite research
Eyre Kaolin Joint Venture (note iii)
Wudinna Gold Joint Venture (note iv) – gold exploration
Moonta Copper ISR Joint Venture (note v) – copper in-situ recovery
Moonta Porphyry Joint Venture (note vi) – copper/gold exploration
PERCENTAGE
INTEREST 2022
PERCENTAGE
INTEREST 2021
100%
100%
-
35%
100%
90%
75%
50%
-
50%
100%
90%
i) Under the terms of the Great White Kaolin Joint Venture Agreement with Minotaur Exploration Limited (Minotaur)
announced 26 April 2018, the Company reached Stage 2 during the December 2020 Quarter, earning a
75% interest in the Project. On 10 November 2021 the Company announced that it had entered into a Bid
Implementation Agreement, pursuant to which Andromeda would offer to acquire all issued ordinary shares
of Minotaur by way of an off-market takeover offer. On 7 February 2022 the Company announced that it had
acquired Minotaur (Note 29) and subsequently consolidation of the GWKP.
ii) The Halloysite Technology Joint Venture was 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 Project. On 10 November
2021 the Company announced that it had entered into a Bid Implementation Agreement, pursuant to which
Andromeda will offer to acquire all the issued ordinary shares of Minotaur by way of an off-market takeover offer.
On 7 February 2022 the Company announced that it had completed the acquisition on Minotaur (Note 29) and
consolidated the ownership of this joint venture to 100%.
88
ANDROMEDA METALS LIMITED
Financial report (audited)
iii) The Heads of Agreement with private entity Peninsula Exploration Pty Ltd (Peninsula) to form the Eyre Kaolin
Project Joint Venture (EKJV) was announced 12 August 2021. Under the terms of the agreement the Company is
to sole fund $140,000 (exclusive of tenement rents) on the project tenements within 12 months of commencement
of the EKJV. Andromeda's Stage 1 expenditure obligation of $750,000 (exclusive of tenement rents and which
is inclusive of the minimum expenditure requirement) within 3 years of commencement to earn a 51% interest in
the EKJV (Stage 1 commitment). Andromeda can elect to sole fund an additional $2 million over a further 3 years
on meeting Stage 1 to earn an additional 29% interest, taking its overall interest in the EKJV to 80% (Stage 2
commitment).
iv) Under the terms of the Wudinna Farm-in and Joint Venture Agreement, Lady Alice Mines Pty Ltd (LAM) was
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, which was met. On 8 February 2022 the Company announced that
LAM had given notice that it had met Stage 2 of the earn in having spent an additional $1,650,000, increasing
its equity to 65%. and could now elect to spend an additional $1,250,000 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 was acquired by
London Stock Exchange listed entity Cobra Resources PLC in calendar year 2019 and acts as the operator of the
joint venture.
v) 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.
vi) 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 shares.
The amount included in mining tenements, exploration, and evaluation (Note 8) includes $136,752,414 (2021:
$11,957,945) relating to the above joint arrangements.
22 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:
2022
$
663,333
439,583
1,190,833
2021
$
1,322,225
628,650
492,383
b) Natural Nanotech
The Group has commitments to fund research partnerships that have been entered into by NNT which is now a
fully owned subsidiary of the Group following the acquisition of Minotaur during the year.
Total expenditure commitments at balance date in respect of the research funding 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:
2022
$
1,750,000
1,605,000
1,920,000
2021
$
562,500
500,000
1,250,000
89
ANNUAL REPORT 2022 Financial report (audited)
c) Service agreements
Details of the current services and consultancy agreements are set out below:
2022
KEY MANAGEMENT PERSONNEL
TERMS
J F Ranford
R G J Grivas (i)
N J Harding (ii)
Monthly rate of $30,000 for 3 days week
Daily rate of $1,000 per day as required
Daily rate of $920
i) Mr Grivas resigned as a Director of the Company on 20 January 2022 and the agreement is no longer
in effect
ii) Mr Harding resigned as a Director of the Company on 10 August 2021 and the agreement is no longer in effect
2021
KEY MANAGEMENT PERSONNEL
TERMS
N J Harding
J F Ranford
R G J Grivas
Daily rate of $920
Monthly rate of $25,000 for 3 days week
Daily rate of $1,000 per day as required
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. The rate was increased to $1,000 per day for the year
ended 30 June 2021 A total of $79,500 (2021: $104,700) was paid under this agreement during the year. The
agreement has been terminated as a result of Mr Grivas’ resignation on 20 January 2022.
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. The agreement has been terminated as a result of Mr Harding’s
resignation subsequent on 10 August 2021.
d) Bank guarantees
The Group has provided restricted cash deposits of $258,284 as security for the following unconditional
irrevocable bank guarantees:
¬
Environment bonds of $10,008 (2021: $10,000) to the Minister for Mineral Resources Department,
South Australia,
¬ A rent guarantee of $32,526 (2021: $32,500) to the landlord of the Company’s leased office premises. This has
been returned in August 2022.
¬ A cash deposit of $90,225 (2021: $90,000) to secure a credit card facility
¬ A rent guarantee of $125,525 (2021: Nil) to the landlord of the Company’s leased office premises.
90
ANDROMEDA METALS LIMITED
Financial report (audited)
23 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
2022
$
2021
$
32,853,203
4,904,719
1,247,211
372,224
1,966,169
846,137
185,337
853,927
184,500
1,110,176
83,565
41,933
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 by $200,224 and decrease by $44,294 (2021: increase by $28,446 and
decrease by $9,242). 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 cash holding compared to the
prior year and very low prevailing interest rates.
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.
91
ANNUAL REPORT 2022 Financial report (audited)
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.
WEIGHTED AVERAGE
EFFECTIVE
INTEREST RATE
%
$
LESS THAN ONE
YEAR
ONE TO TWO
YEARS
TWO TO THREE
YEARS
THREE TO FOUR
YEARS
FOUR TO FIVE
YEARS
$
-
$
-
$
-
$
-
2022
Non-interest bearing
-
1,966,169
Interest bearing
3.23%
187,566
187,088
184,337
172,683
114,462
2021
Non-interest bearing
-
1,110,176
-
-
Interest bearing
2.31%
56,974
14,338
12,253
-
-
-
-
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.
24 SEGMENT INFORMATION
The Group’s focus is on developing its kaolin halloysite assets, including the Great White Kaolin Project and associated
technologies. The decision to allocate resources to other projects in which the Group has an interest is predominantly
based on available cash reserves, technical data and the expectations of future commodity prices. 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. Overall, the Group has a number of exploration licenses in Australia which are managed
on a portfolio basis. Accordingly, the Group effectively operates as one segment, being exploration in Australia.
25 EARNINGS PER SHARE
Basic earnings per share – Profit / (loss)
Diluted earnings per share – Profit / (loss)
YEAR ENDED 30/06/22
CENTS PER SHARE
YEAR ENDED 30/06/21
CENTS PER SHARE
(0.33)
(0.33)
(0.33)
(0.33)
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
$
$
(8,733,119)
(6,443,299)
NUMBER
NUMBER
- Weighted average number of ordinary shares
2,661,699,070
1,967,778,546
92
ANDROMEDA METALS LIMITED Financial report (audited)
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
$
$
(8,733,119)
(6,443,299)
NUMBER
NUMBER
– Weighted average number of ordinary shares
2,661,699,070
1,967,778,546
As at 30 June 2022, the following potential ordinary shares are
excluded from the weighted average number of ordinary shares for
the purposes of diluted profit / (loss) per share:
YEAR ENDED 30/06/22
NUMBER
YEAR ENDED 30/06/21
NUMBER
-
988,913
69,480,000
86,320,000
2,107,500
2,107,500
71,587,500
89,416,413
OWNERSHIP INTEREST
- Listed share options
- Unlisted share options
- Treasury shares
26 CONTROLLED ENTITIES
NAME OF ENTITY
Parent entity
Andromeda Metals Limited
Subsidiaries
Adelaide Exploration Pty Ltd
Peninsula Resources Ltd
ADN LFESP Pty Ltd
Mylo Gold Pty Ltd
Frontier Exploration Pty Ltd
Andromeda Industrial Minerals Pty Ltd
Andromeda Green Technologies Pty Ltd
Andromeda IP Pty Ltd
Minotaur Exploration Ltd
Minotaur Industrial Minerals Pty Ltd
Great Southern Kaolin Pty Ltd
Natural Nanotech 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
Australia
Australia
Australia
Australia
Australia
Australia
(i)
(ii)
(ii)
(ii) (iii)
(ii)
(ii)
(ii)
(ii)
(ii)
(ii)
(ii)
(ii)
(ii)
2022
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
iii) The Company acts as the trustee to the Loan Funded Employee Share Plan.
2021
%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
93
ANNUAL REPORT 2022 Financial report (audited)
27 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 / (loss)
30/06/22
$
30/06/21
$
32,669,615
5,301,299
141,510,640
12,454,265
174,180,255
17,755,564
2,206,356
1,209,084
715,661
2,922,017
57,270
1,266,354
219,250,119
56,922,005
5,938,472
5,838,594
(53,930,353)
(46,271,389)
171,258,238
16,489,210
YEAR ENDED
30/06/22
$
YEAR ENDED
30/06/21
$
(7,582,717)
(6,435,782)
-
-
(7,582,717)
(6,435,782)
Commitment for expenditure and contingent liabilities if the parent entity
Note 22 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
28 SUBSEQUENT EVENTS
On 26 July 2022, Andromeda signed a legally binding offtake Agreement with the Vietnam and Hong Kong based
Asia Mineral Resources (AMR) to supply halloysite-kaolin from the Great White Project. The Agreement is for
31,000 tonnes, with a minimum of 23,500 and maximum of 38,500 tonnes of Great White KCMTM90 over the first three
years of production. Additionally, on 8 August 2022 Andromeda signed another legally binding offtake Agreement,
with respected Japanese porcelain manufacturer Plantan Yamada to supply halloysite-kaolin from the Great White
Kaolin Project. The Agreement is for 35,000 tonnes, with a minimum of 27,000 and maximum of 43,000 tonnes of
Great White KCMTM90 over the first three years of production. These Agreements further underpin the development
of the GWKP, were signed at prices in excess of the pricing assumed in the DFS, of between A$425 and A$465 per
tonne, and are subject to standard conditions precedent.
On 18 August 2022, Andromeda announced the signing of Land Acquisition Agreements including the purchase of
freehold land underlying the GWKP mining lease (ML 6532 and MPL 164) and the lodgement of its PEPR with South
Australia's Department for Energy and Mining, for approval. The Agreement and lodgement significantly de-risk the
Project’s development and increases confidence as the group moves towards making a Final Investment Decision
with respect to the GWKP.
On 24 August 2022, Andromeda’s Independent Non-executive Director, Mr Andrew Shearer resigned as a
Non-executive Director due to the increasing demands of his executive and other roles. The Board wishes to express
its appreciation for the significant contribution Mr Shearer has made since his appointment in October 2017.
For the Drummond Epithermal Gold Project subsequent to the end of FY22, the Company has determined that
94
ANDROMEDA METALS LIMITED Financial report (audited)
maximum shareholder value is achieved through accepting an offer from Rush Resources Limited (Rush) to purchase
the project for approximately $250,000 worth of fully paid ordinary shares in Rush. A binding Term Sheet has been
signed and is subject to a number of conditions precedent. The Drummond project has been classified as held for
sale in this report and written down to the expected value of the sales proceeds of $250,000.
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.
29 ASSET ACQUISITION
Minotaur Exploration Limited
On 10 November 2021, Andromeda announced the unanimously recommended off-market takeover offer of Minotaur.
The deal was designed to consolidate the Great White and Natural Nanotech joint ventures as 100% owned under
Andromeda. The offer of 1.15 new Andromeda shares for every Minotaur share was seen as an accretive transaction
for Andromeda. The bid was subject to a number of conditions precedent.
On 7 February 2022, Andromeda announced the offer made under its off-market takeover bid for all the securities in
Minotaur was free from all Conditions set out in section 14.7 of the associated Bidder’s Statement. As at 9.00am on
7 February Andromeda’s relevant interest in Minotaur was 79.16% with Andromeda’s share price being $0.19 cents per
share. At the closing of the offer period on 25 February 2022 Andromeda’s relevant interest had increased to 92.12%
with Andromeda’s share price being $0.17 cents per share. On this date Andromeda also announced the intention to
commence the compulsory acquisition of the remaining shares in Minotaur to bring Andromeda’s interest to 100%. The
compulsory acquisition was completed on 29 March 2022 with the ADN share price at $0.18 cents per share.
The Group has determined that the acquisition of Minotaur does not represent a business combination in accordance
with AASB 3 Business Combinations. As such the acquisition has been accounted for as an asset acquisition and
accordingly the cost of acquisition has been allocated to the identifiable assets and liabilities on the basis of their
relative fair values at the date of purchase. Additionally, no deferred tax will arise due to the initial recognition
exemption for deferred tax under AASB 112 Income Taxes.
Consideration related to the acquisition is detailed below:
Purchase consideration
Ordinary shares issued (620,508,053)
Acquisition related costs
NCI reserve
Carrying value of previously held interest in NNT (note 10)
Total purchase consideration
$
116,969,718
2,348,383
926,813
276,822
120,521,736
The fair value of Andromeda shares issued to Minotaur shareholders is based on the share price on 7 February 2022
(acquisition date) of $0.19 cents and issued capital was recorded at this value for the 79.16% or relevant interest on
this date. Shares issued after the acquisition date relating to the close of the offer period on 25 February 2022 (12.96%
at $0.1835) and the compulsory acquisition on 29 March 2022 (7.88% at $0.18) were recorded in share capital at the
relevant share price. The difference between the share price at the date of acquisition and the subsequent share
issues has been recorded in the NCI reserve.
Net assets acquired
Cash & cash equivalents
Other current assets
Net trade receivables / payables
Exploration and evaluation assets
Andromeda loan/cash calls payable (i)
Net identifiable assets acquired
$
1,178,858
171,890
77,374
124,066,962
(4,973,348)
120,521,736
i)
Payables to Andromeda become intercompany entries upon consolidation and have been eliminated
accordingly. All amounts outstanding between Minotaur and Andromeda were pre-existing arrangements at the
date of acquisition.
95
ANNUAL REPORT 2022 Directors’ Declaration
The Directors declare that:
a) 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;
b) 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;
c) 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
d) 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
Mick Wilkes
Non-executive Chair
Adelaide, South Australia
30 September 2022
96
ANDROMEDA METALS LIMITED Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
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 2022, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the 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:
• giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial performance for
the year then ended; and
• 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 & 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 Company, 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.
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.
Liability limited by a scheme approved under Professional Standards Legislation
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Key Audit Matter
How the scope of our audit responded to the Key Audit Matter
Accounting for exploration and evaluation
expenditure
As at 30 June 2022, the Group has capitalised
$137.4 million of exploration and evaluation
expenditure as disclosed in Note 8.
This balance includes additions of $124.1
million related to the acquisition of Minotaur
Exploration Limited, and additions of $3.7
million relating to exploration and evaluation
activities undertaken during
the year.
Additionally, during the year the Group
recognised an impairment expense of $0.4
million related to exploration and evaluation
assets.
Significant judgement is applied in
determining the treatment of exploration
and evaluation expenditure including:
conditions
• whether
the
capitalisation are satisfied;
for
•
• which elements of exploration and
evaluation expenditure qualify for
capitalisation;
the Group’s intentions and ability to
future work
proceed with a
program;
the likelihood of licence renewal or
extension; and
the expected or actual success of
resource evaluation and analysis.
•
•
The timing of when assets are transferred
from exploration and evaluation to property,
plant and equipment often
involves
significant judgement due to the assessment
of
feasibility and commercial
viability being unique for each project / area
of interest.
technical
Acquisition of Minotaur Exploration Limited
gained
On 7 February 2022 (acquisition date), the
of Minotaur
Group
control
the
and
Exploration
compulsory acquisition process commenced
on 25 February 2022 with 100% control
obtained on 29 March 2022.
Limited
(MEP)
Our procedures associated with exploration and evaluation
expenditure incurred during the year included, but were not limited
to:
•
•
Evaluating the design and implementation of the process
and controls associated with the capitalisation of
exploration and evaluation expenditure; and
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.
Our procedures associated with assessing the carrying value of
exploration and evaluation assets included, but were not limited to:
•
Evaluation of the design and implementation pf processes
and controls in respect of 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 programs in the respective areas of
interest; and
• Assessing whether any facts or circumstances existed to
suggest impairment testing was required.
Our procedures associated with assessing the classification of
exploration and evaluation assets included, but were not limited
to:
• Assessing whether any exploration projects / areas of
interest had reached a stage that demonstrated technical
feasibility and commercial viability based on amongst
other things review of board of directors minutes,
investor presentations released by the Company and
corporate budgets; and
• Assessing the nature and status of work programs
associated with exploration projects to identify whether
they indicate that a final investment decision has been
made.
We also assessed the appropriateness of the disclosures included
in Note 8 to the financial statements.
Our procedures included, but were not limited to:
• Obtaining and assessing the key controls management has
in place with respect to the accounting for this transaction;
• Obtaining the report by management’s experts and
reviewing their conclusions made in relation to the
appropriate accounting for the transaction, the fair value
of the consideration paid and the allocation of the
purchase price to the assets and liabilities acquired;
This acquisition was completed for a total
consideration of $120.5 million and was
accounted for as an asset acquisition, as
disclosed in Note 29.
Accounting for this acquisition requires
judgement to determine
if this was a
business combination or an asset acquisition,
the fair value of consideration paid and the
allocation of the purchase price to assets and
liabilities acquired.
This
is a key audit matter due to the
significance of the acquisition and impact on
the Group’s statement of financial position.
•
•
•
•
•
•
•
Assessing the independence, competence and objectivity
of management’s experts;
Assessing the nature of the transaction with regards to the
requirements of AASB 3 Business Combinations to
conclude on the appropriateness of the acquisition being
accounted for as an asset acquisition, as opposed to a
business combination;
Assessing the reasonableness of the acquisition date,
being the date that Andromeda obtained control over
Minotaur Exploration Limited;
Reading the relevant purchase agreements to identify all
components of consideration;
Assessing the determination of the fair value of the total
consideration paid and relative fair value of assets
acquired and liabilities assumed;
Assessing the reasonableness of the deferred tax impact
of the acquisition; and
Testing the mathematical accuracy of the fair value of the
consideration paid and allocation of the purchase price to
the assets and
labilities calculations prepared by
management.
We also assessed the appropriateness of the disclosures included
in Note 29 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 2022, 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.
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
intentional omissions,
misrepresentations, or the override of internal control.
involve collusion, forgery,
• 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.
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 41 to 61 of the Directors’ Report for the year ended 30
June 2022.
In our opinion, the Remuneration Report of Andromeda Metals Limited, for the year ended 30 June 2022, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Perth, 30 September 2022
Shareholder information
as at 26 September 2022
DISTRIBUTION AND NUMBER OF SHAREHOLDERS
RANGE OF UNITS
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Rounding
Total
TOTAL HOLDERS
469
2,113
2,139
6,647
3,349
UNITS
94,985
6,598,501
16, 859,497
258, 459,113
2,827,996,336
3,110,008,432
% UNITS
0.00
0.21
0.54
8.31
90.93
0.01
100.00
5,157 shareholders hold less than a marketable parcel of shares
TOP 20 SHAREHOLDERS
RANK
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
NAME
UNITS
% UNITS
BURATU PTY LTD
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