Astron 2021 Annual Report
35 years’ experience in the mineral sands sector
FOCUS ON THE DEVELOPMENT
OF THE DONALD MINERAL SANDS
PROJECT
1
ABOUT ASTRON
Astron Corporation Limited
ARBN 154 924 553 Incorporated in Hong Kong,
Company Number: 1687414
Annual Report for the Year Ended 30 June 2021
Cautionary Statement
Corporate Governance Statement
Astron Corporation Limited’s Corporate Governance
Statement for 2021 can be found on Astron’s website at:
https://astronlimited.com.au/wp-content/uploads/2021/11/
Astron-Corporate-Governance-Statement.pdf
Certain sections of this report contain forward-
looking statements that are subject to risk factors
associated with, among others, the economic and
business circumstances occurring from time to time in the
countries and sectors in which the Astron Group operates.
It is believed that the expectations reflected in these
statements are reasonable but they may be affected by a
wide range of variables which could cause results to differ
materially from those currently.
Forward Looking Statements
This document may include “forward looking statements”
within the meaning of securities laws of applicable
jurisdictions. Forward looking statements can generally
be identified by the use of the words “anticipate”, “believe”,
“expect”, “project”, “forecast”, “estimate”, “likely”, “intend”,
“should”, “could”, “may”, “target”, “plan”, “guidance” and
other similar expressions. Indications of, and guidance
on, future earning or dividends and financial position
and performance are also forward-looking statements.
Such forward-looking statements are not guarantees of
future performance and involve known and unknown
risks, uncertainties and other factors, many of which
are beyond the control of Astron and its related bodies
corporate, together with their respective directors,
officers, employees, agents or advisers, that may cause
actual results to differ materially from those expressed or
implied in such statement. Actual results, performance
or achievements may vary materially from any forward-
looking statements and the assumptions on which those
statements are based. Readers are cautioned not to place
undue reliance on forward looking statements and Astron
assumes no obligation to update such information. Specific
regard should be given to the risk factors outlined in this
document (amongst other things). This document is not,
and does not constitute, an offer to sell or the solicitation,
invitation or recommendation to purchase any securities
and neither this document nor anything contained in it
forms the basis of any contract or commitment.
2
Astron 2021 Annual Report CONTENTS
History & Industry Experience
Donald Project - Key Attributes
From the Chairman
From the Managing Director
Donald Mineral Sands & Rare Earth Project
Ore Reserves – Global Scale & Significance
Project Concept
Metallurgical Test Work & Evaluation
Products & Characteristics
Evaluation & De-risking
Sustainability & Stakeholder Engagement
Project Advancement
Astron China
Financial Statements
Ore Reserves and Mineral Resources
4
6
8
10
12
13
14
15
16
18
20
24
26
28
124
3
HISTORY & INDUSTRY EXPERIENCE
Astron’s prime focus is the development of the Donald Mineral Sands and Rare
Earth Project in regional Victoria.
Astron’s mineral sands experience spans more than 35
years and includes:
• Expertise in downstream processing of mineral
sands into final products
• Sourcing and marketing of mineral sands products,
including ilmenite, for downstream processing in
China
• R&D capabilities, including the development of
processes for production of zirconia and zirconium
chemical products
• Trading and marketing activities, including
engagement with mineral sands customers in
China, Europe and North America
Astron’s technical capabilities and long mineral sands
market experience underpin the development of the
Donald project.
Astron’s mineral processing facilities, Yingkou, China
4
Astron 2021 Annual Report History & Evolution
Zirconium materials projects, China
Zircon flour, fused zirconium manufacturing facilities,
China
Listed on Australian Stock Exchange
Zircon sales, marketing, chemical product processing
activities established in China
Shenyang Astron Mining Industries established
Importation of zircon sand into China, export of zircon
chemicals
1985
1988
1992
1996
1997
Zirconium chemical production joint ventures to
expand zircon chemical production capacity
Bayuchuan manufacturing facility, China – fused
zirconia production
2000
Acquired Donald Mineral Sands resource, Victoria
(discovered by CRA)
Donald Project Environmental Effects Statement
approved
2001
Advanced Materials UK established – sales and product
services to European markets
2004
2008
2009
Downstream zirconium production subsidiaries sold to
Imerys S.A.
Retained mineral sands trading activities, Shenyang
Zircon, titanium technical R&D operations, Yingkou,
China
2010
Donald Project Mining Licence granted
Astron Corporation formed, ASX-listed, replacing Astron
Limited
2012
Detailed metallurgical evaluation for processing
fine-grained Donald mineral sands ore
Pilot wet concentrator plant treatment of Donald ore
2014
Construction of high purity zirconia production facility,
China (completed 2017)
2015
2017
Construction of mineral processing facility to produce
high quality TiO2 feedstocks for chloride pigment
industry (completed 2019)
Initial Mining Licence for Niafarang Mineral Sands
Project, Senegal granted
Excavation of test pit to recover Donald bulk ore sample
2019
Ore Reserve and Mineral Resource statement
Metallurgical test work continued, premium zircon
testing results
Donald heavy mineral concentrate produced for
separation testing
Hybrid mineral separation feasibility test work
commenced
2020
2021
5
DONALD PROJECT – KEY ATTRIBUTES
The Donald Minerals Sands and Rare Earth Project is located approximately
300 kilometres from Melbourne, Victoria and 70 kilometres from the regional
centre of Horsham
Location & scale
•
•
Located in the Wimmera region, Victoria, the area is
mainly cleared, mixed use farming land
Encompasses the Donald (RL2002, ML 5532) and
Jackson (RL2003) deposits
•
Resource area of 426 sq kms; Mining Licence
ML5532 area 28 sq kms
•
Astron owns ~15 sq kms of land in the project area
•
Secure water rights and close proximity to power
and other key infrastructure, including the Port of
Portland
6
Astron 2021 Annual Report Project characteristics
Project evaluation
•
•
At an advanced stage with all main regulatory
approvals (excluding Work Plan) in place
Extensive metallurgical and processing test work
(since 2019) provides confidence in high recoveries
at commercial scale
• Mineral Resources (2016) and Ore Reserves (2021)
•
•
•
Close-spaced drilling of ore body; plan to
undertake additional Mining Licence drilling which
may increase reserves, optimise mine planning and
mine operations
Successful rehabilitation of land disturbed for
test pit
Extensive stakeholder engagement, with
commitment to maximise local employment,
training and investment benefits
Current work streams
•
•
•
•
•
•
Further metallurgical test work, including pilot scale
mineral separation
Front end engineering, costing estimates and initial
infrastructure investment
Additional geological delineation drilling to
optimise mine planning
Community Reference Group and continuation
of stakeholder engagement
Completion of definitive feasibility study and
project economics (2nd quarter 2022)
Work Plan completion and submission for Victorian
Government approval
•
Project financing strategies
•
•
•
•
•
A tier-1 globally significant mineral sands ore body;
Ore Reserve with an expected production life of
over 40 years
One of the largest undeveloped zircon reserves
globally
Favourable zircon assemblage (the most valuable
mineral sands product) – with a high premium
zircon component
Rare earth elements represent a high proportion of
the project’s value, making Donald a strategic and
independent source of these critical minerals
Scale and longevity, together with premium zircon
and rare earth product streams, present a major
value opportunity
Development approach
•
Largely conventional mining approach – single pit,
use of excavator and haul trucks, contract mining
– low strip ratio at 2.6:1
– mobile mining unit plant prepares ore for wet
concentration plant (on site)
•
Heavy mineral concentrate (HMC) produced by
gravity separation
•
Rare earth concentrate produced by flotation
•
Electrostatic and electromagnetic processing of
HMC to final zircon products (premium zircon and
zircon 60), blended titania product (60% TiO2)
•
Two development stages (to spread risk, and to
phase capital expenditure and product market entry)
Stage 1
Stage 2
~120ktpa of zircon (~95ktpa premium
zircon); ~200ktpa of titania, ~16ktpa of
rare earth concentrates
After about 5 years and subject to
regulatory approvals, expected to double
Stage 1 production levels
•
•
Land disturbed by mining will be progressively
rehabilitated to original landform
Majority of workforce expected to be drawn locally,
focus on maximising regional participation and
benefits
7
FROM THE CHAIRMAN
Focus on the creation of value from the Donald Mineral Sands
and Rare Earth Project
Gerard King, AM
Astron’s focus during
the 2021 financial year
under our new Managing
Director, Mr Tiger Brown,
was on achieving material
progress towards the
commercialisation of the
Donald Mineral Sands and
Rare Earth Project. The
commercialisation of the
Donald Ore Reserves will
position Astron as a world class supplier of zircon,
titanium dioxide and rare earth products.
Astron’s future entails the development and operation
of the high margin, long-life Donald project which is
expected to be a globally significant source of mineral
sands products over more than 40 years. The Donald
project is expected to provide significant value and
other benefits to a range of stakeholders, not least our
shareholders.
Important work streams progressed during the year,
including Ore Reserve estimation; metallurgical
test work; product quality testing and definition of
the project concept and scope. This work forms
the foundations for the completion of a detailed
feasibility study, with associated project engineering,
to enable finalisation of capital cost estimates and
commencement of the project funding and final
regulatory approval activities.
Board & organisational
strengthening
It is recognised that new and supplementary
organisational skills and capabilities will be required
as part of Astron’s evolution. This includes a
strengthening of board and governance capabilities.
During 2021, Astron appointed two new, non-
executive directors: Dr Mark Elliott and Mr George
Lloyd. Both Mark and George are making a significant
contribution in assisting management with its
planning for the Donald project.
Dr Mark Elliott, Dip Appl Geol PhD
Mark is a geologist with 27 years professional
experience in corporate roles, both as chairman
and managing director of ASX-listed and
private companies in the mineral sands,
metals and energy sectors. Mark’s experience
includes feasibility studies, mine evaluation and
development, project execution, technical audits
and capital raisings. He is currently Chairman
of AuKing Mining Ltd and a director of Nexus
Minerals Ltd and Aruma Resources Ltd.
George Lloyd, BSc Eng (Industrial), MBA
George has over 30 years of resource industry
and corporate finance experience, serving as a
senior executive and director of listed and unlisted
companies in industrial minerals, mineral sands,
base and precious metals, and energy. Board roles
include Chairman of Ausenco Pty Ltd, a global
engineering, project delivery and operations
management company, and Chairman of VBX
Limited, a company developing bauxite resources
in Western Australia.
Astron has commenced a process of organisation
strengthening, in support of its activities to take
the Donald project through its development,
commissioning and production stages. Several key
appointments are expected to be announced over the
remainder of the 2021 calendar year.
Niafarang, Senegal
The Niafarang Mineral Sands project in Senegal has, by
necessity, taken on a somewhat secondary importance
as efforts are focussed on the Donald project. Despite
this, the project is, subject to the clearance of the
final regulatory approvals, at a stage where it can be
advanced rapidly and at minimal capital expenditure
(given in part that some of the main capital equipment
has been purchased).
8
Astron 2021 Annual Report
Gambian settlement
During the financial year, the company received
confirmation from International Centre for Settlement
of Investment Disputes (“ICSID”) that the annulment
application submitted by the Gambian government
in 2015 against was rejected for its entirety.
The award was awarded in 2015 in relation to the
seizure of Astron’s operations by The Gambian
government in 2008. Following the annulment
decision, the company is actively exploring avenues to
pursue the collection of the award and monetise the
judgment that is worth approx. A$30m.
Corporate priorities
This year’s report contains information on the Donald
project and its key work streams. Of forthcoming
prime importance will be the recapitalisation of
Astron’s balance sheet to allow the Donald project
to progress through various funding stages and
ultimate development. Other key priorities relate
to the development of a sustainability framework
to meet the highest environmental, regulatory
compliance and stakeholder engagement outcomes.
Planned demerger
Shareholders will be aware that in July 2021 approval
was granted at an EGM for the demerger of the
company’s China-based downstream processing
assets from its upstream assets, in the form of the
Donald Mineral Sands and Rare Earth Project in
Australia and the Niafarang Minerals Sands Project
in Senegal. The intent was to have the Donald and
Niafarang assets held within the publicly-listed Astron
Corporation and the China downstream assets held
in a separate, unlisted Hong Kong registered company.
The purpose was to ensure that Astron’s portfolio was
based on mineral sands mining and processing assets;
a structure the Board believed would be more suitable
for future investors in a listed resources company.
Furthermore, the development concept for the
Donald project now no longer relies on the use
of the company’s China downstream assets.
Directors announced on 21 October 2021 that the
shareholder approved demerger will not proceed. This
decision was taken in light of legal action, commenced
subsequent to shareholders approving the demerger.
On 10 September 2021, action brought by an individual
shareholder resulted in an interim injunction being
granted in the High Court of the Hong Kong Special
Administrative Region. This interim injunction has
restrained Astron from completing the demerger until
proceedings are finalised. An application to grant a
permanent injunction is to be heard by the Court on
21 December 2021. A ruling is not expected until the
first half of 2022, with the ultimate timing uncertain.
The Board of Astron is confident of its legal position.
Nonetheless, given the uncertainty of the time frame
to receive a Court ruling, it is the Board’s view that
this time period and the expense and distraction of
management resources on legal proceedings, might
potentially adversely affect the progression of the
Donald project.
Regrettably, but as a consequence of careful
consideration of the best interests of shareholders,
your Directors have determined it best not to proceed
with the demerger at this time. Shareholders can
rest assured that the management of the Donald
project and the China operations will continue to
be undertaken effectively, with dedicated personnel
associated with each.
In conclusion
The continued efforts in building organisational
capabilities, an aligned culture and the ability to deliver
excellent outcomes for all our stakeholders, are at the
forefront of board and management efforts.
I thank the Astron team and our consultants for their
contribution during the year, as well as the continuing
support from our shareholders and those that have an
expressed an interest in the next, exciting stage of the
company’s development.
9
FROM THE MANAGING DIRECTOR
The 2021 financial year has been a significant one for Astron. It has been my
privilege to lead the company and be involved in what will be a major
transformation with beneficial outcomes for our shareholders, our employees,
our customers, and the members of the communities in which we work
Tiger Brown
I have both a personal and
professional commitment to
Astron’s success. The Donald
project area was acquired
in 2004 in recognition that
existing global sources of
mineral sands were maturing
and that new sources would
be required to fulfil growing
demand. With approximately
40 per cent of global
mineral sands production sources now expected to be
exhausted within the next five years, the development
of the Donald project has become a key source of new
supply arrangements within the global mineral sands
market.
Donald’s rare earth component means that the project
will not only be a major source of high value zircon
and titanium dioxide but also an important source
of critical rare earth minerals, which are used in a
wide array of emerging and fast-growing applications
central to modern economies. Together, the zircon and
rare earth product streams are expected to account
for approximately 80 per cent of production revenues.
In this regard, Donald is unlike more conventional
mineral sands projects in which titanium dioxide
production comprises the major revenue component.
The Donald project represents a multi-generational
operation capable of delivering significant shareholder
value. It will also make a meaningful contribution to
the economy of regional Victoria as an important
source of employment, revenue creation and
associated economic activity. For customers, it will be
an important, long-term and reliable supply source.
Astron’s prime focus is upon the commercialisation
of the Donald project. Significant progress towards
this was made during the 2021 financial year. As a
result, the project is expected to move through the
detailed feasibility stage to capital commitment and
execution over the next 12 to 18 months. Under these
circumstances, first production is possible by early
2025.
Progress
Key work streams during the last 12 months included:
•
•
•
•
an Ore Reserves statement sufficient to underpin
a 40 year mine life. It is expected that, subject to
increased definition of the project’s Ore Resources,
the Donald project mine life will extend beyond
its current 25 year detailed mine plan to be a truly
generational project;
a decision to modify the project scope to include
mineral separation to final products in Australia.
This differs from the previous development
concept of processing heavy mineral concentrate
(HMC) overseas. The revised scope allows Astron
to have greater control over product quality and
production levels and is also expected to improve
overall project economics;
extensive metallurgical test work which has
advanced knowledge and confidence in the
project’s recovery of fine minerals;
metallurgical test work and pilot plant testing
achieving commercial scale recoveries across all
products. Test work has included:
– Froth flotation for the separation of monazite
and xenotime to produce a saleable rare earth
element concentrate from a HMC that has been
upgrade to >95% valuable HM content;
– whiteness testing of zircon relative to competitor
zircons, demonstrating that Donald premium
zircon rates highly in terms of whiteness and
brightness, both desirable characteristics for
the ceramics industry which accounts for
approximately half of global zircon demand; and
– ongoing test work for the production of a
titania product stream for application, subject
to completion of test work, as a feedstock for
chloride titanium slag production.
10
Astron 2021 Annual Report Organisational resources
Through the financial year, Astron strengthened its
technical capabilities across the main work streams
for the Donald project. We have engaged the services
of industry specialists covering metallurgical test
work, mineral sands processing, project planning,
detailed engineering and design, procurement and
project forecasting and economics. In the current year,
these consulting capabilities will be supplemented
by key internal appointments. These will be designed
to ensure that Astron has the appropriate skills and
capabilities to advance the project through planning,
design, construction, commissioning and ultimately
production, as well as enable Astron to have a
strong capacity to manage environmental planning,
regulatory approval and community and stakeholder
engagement.
The forthcoming twelve months is expected to see
the culmination of a range of work streams to ensure
a robust project suitable for securing funding and
Board development approval.
I look forward to keeping all stakeholders informed
of progress.
The Donald project is expected to display robust
financial characteristics. Detailed project economics
will be released following completion of the definitive
feasibility study, expected to be completed in mid-
2022.
In terms of industry competitiveness, the high zircon
assemblage characteristics of the orebody,
in combination with the revenue benefits from the
rare earth product stream, are expected to deliver
an attractive margin structure or revenue to cash
cost ratio.
Favourable market conditions
The timing for the commencement of the Donald
project is expected to be favourable, based on a
number of market factors, including:
• the existing major mineral sands product sources
are declining, with some experiencing country risk
challenges. In the case of zircon, the major source
of global production in South Australia is nearing the
end of its expected economic life;
• robust demand, particularly for zircon, given its
broad array of applications and end uses, from
consumer goods through to scientific and industrial
applications;
• increasing domestic and international demand for
rare earth elements; and
• strong demand in the Chinese slagging sector (the
target market for Donald’s titania product) for stable,
long-term titanium dioxide feedstock supply.
11
DONALD MINERAL SANDS & RARE EARTH PROJECT
A MAJOR NEW SOURCE
OF MINERAL SANDS
AND RARE EARTH SUPPLY
12
12
Astron 2021 Annual Report Ore Reserves – Global Scale & Significance
The Donald project comprises the Donald and the Jackson mineral sands deposits
Astron’s mineral sands resource base in Victoria
encompasses the two deposits: Donald (Retention
Licence 2002, which includes Mining Licence 5532)
and Jackson (Retention Licence 2003). The Donald
project entails the planned development of a well-
delineated resource encompassing an area of 427 sq
kms, with 250 sq kms of resource available within the
Donald deposit and 177 sq kms available within the
project’s southern, Jackson deposit.
Unlike typically shorter duration dunal deposits that
have been mined in the Murray Basin in Victoria
and New South Wales, Donald will represent the
development of the larger areal extent, offshore finer
grained WIM-style deposit, typically volumetrically
much larger, facilitating a longer mine life and
associated economies of scale. As such, Astron’s
Donald project has significant long term production
potential.
Astron released an updated Ore Reserves Statement
in 2021. The following charts and tables provide
information on the significance of the reserve and
resource base of the Donald Mineral Sands and Rare
Earth Project.
The Donald project has Ore Reserves of 602 million
tonnes (Mt), with an average HM grade of 4.8%, which
is wholly contained within the Donald deposit.
The Donald zircon Ore Reserves of 5.4 million tonnes
are equivalent to approximately 5 years of current
global zircon production. This represents the second
largest known potential source of zircon production. In
terms of premium grade zircon, Astron is conceivably
the largest new potential source of supply in the world.
The Donald project area contains inferred Mineral
Resources of 2.4 billion tonnes of ore with an average
HM grade of 4.8% which contains in situ resources of
22.1 million tonnes of zircon.
With the depletion of existing major zircon supply sources and limited, identified new material production
sources, the project - with zircon reserves equivalent to 5 years of global demand - has the potential to be a
pivotal source of global zircon supply both short and long-term (40 year+).
Total Resource (VHM)
Zircon Resource (VHM)
2.4B tonnes 1
22.1M tonnes 1
@ 4.8% Heavy Minerals (HM%) using 1%HM cut-off and VHM where appliable
One of the largest sources of zircon globally
Total Reserves
Zircon Reserves
602M tonnes 1
5.4M tonnes 1
@ 4.8% Heavy Minerals (HM) 310Mt of proved reserves and 292 Mt probable
Equivalent to 5 years of total global demand
1. See Astron Corporation’s ASX announcement on 18 Feb, 2021, “Donald Project Ore Reserves Update”
Refer pages 125 to 128 for Astron’s Ore Reserve and Mineral Resource statements.
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1. The chart has been prepared based on publicly released information by Astron. It does not include all the mineral sands deposits globally, such as the smaller operations
in Hainan Island, China, in Indonesia, more titanium di-oxide focused mineral sands productions such as various China-owned projects in Mozambique, and projects
where ore reserve data is not publicly available.
13
DONALD MINERAL SANDS & RARE EARTH PROJECT
Project Concept
Astron’s Donald operating model encompasses the
mining of ore, the gravity separation of ore to heavy
mineral concentrate (HMC), the separation of a
saleable rare earth mixed concentrate (REMC) from the
HMC by flotation, and processing of the HMC through
electromagnetic and electrostatic separation processes
to produce final products of zircon and titania (a mixed
titanium dioxide product). Astron intends to undertake
all aspects of the mineral sands operation in Australia.
This will ensure a high degree of control over final
product specifications, enable production levels to
be tailored to market conditions, as well as facilitate
the direct marketing and sale of products to end
customers. In this way Astron expects to de-risk the
operating model, have the ability to adapt production
settings to market conditions, and deliver attractive
project returns. In addition, Astron’s integrated pit
to product model is expected to maximise local
employment opportunities and regional economic
benefits.
Simplified Process Flow Diagram
Ore
Mining Unit
Plant
Wet Concentrator
Plant
Heavy Mineral Concentrate
Rare Earth
Flotation Plant
Float - sinks
Products
Rare Earth Mixed
Concentrate
Wet Magnetic
Separation Plant
Magnetic Titania
Product
Non-Magnetics
Titania Product
(Blended)
Non-Magnetic
Upgrade Plant
Hi-Titania (Hi-Ti)
Product
Zircon Upgrade
Plant
Premium Zircon
Zircon 60
14
Astron 2021 Annual Report Metallurgical Test Work & Evaluation
Astron has undertaken extensive technical evaluation,
utilising a range of industry specialists, in the areas of
fine minerals concentrating and processing to ensure
commercial recovery levels; long regarded as the
major hurdle for WIM-style or fine grained mineral
sands resources.
Mineral Technologies (MT), the global leader in mineral
sands processing technologies, was commissioned
by Astron to undertake the design, construction and
operation of a pilot wet concentration plant to treat
approximately 1,000 tonnes of Donald project ore,
recovered from a test pit on RL2002, and produce a
heavy mineral concentrate (HMC). MT also carried
out further processing of the HMC to produce final
products. This processing test work, on a pilot scale,
continued during 2021.
The processing approach, involving a hybrid
separation model, including flotation and the adaption
of conventional separation technologies, is expected to
achieve high product recoveries and a high value final
product mix. Specifically, it is expected that over 80%
of the zircon final product will be a premium (ceramic
grade) product with a ZrO2 assemblage above 66.0%,
with low impurities. Optimisation of the downstream
circuits has indicated the potential to significantly
improve ZrO2 recovery to 90.6% relative to HMC. The
metallurgical test work also produced a combined
titania concentrate with 64.9% titanium dioxide
content (TiO2). Opportunities have been identified to
lower the silica content within the titania concentrate
to enable direct processing in chlorinator slag plants.
The hybrid separation process is preferred due to its
simplicity and lower carbon emissions. It is expected
that it will involve only a single stage of material drying
in the circuit (as opposed to multiple stage drying), in
turn reducing energy costs.
The test work completed on the pilot HMC sample
has demonstrated that the use of up-front flotation
followed by gravity upgrading of the flotation
concentrate, could achieve recoveries between 87.6%
and 94.6% of rare earth minerals containing 51.2% total
rare earth elements (REE) with low impurities. Further
separation to a light rare earth concentrate with a
mineral assemblage of 51.3% of light REE (La, Ce, Pr,
Nd, Sm, Eu, Gd) and a heavy rare earth concentrate
containing 26.1% heavy REE (Tb, Dy, Ho, Er, Tm, Yb, Lu,
Y) has been achieved.
The test work has provided confidence in the
commercial scale recovery of fine minerals to both
HMC and final product, and that product attributes are
suitable to find ready market acceptance.
It is planned that Astron, through its current work
program with MT, will produce quantities of final
products to provide as product samples to a range of
potential customers. In this regard, Astron will utilise
its long-established customer relationships for market
testing and acceptance of its products.
Astron Donald Project site geotechnical drilling (2021)
Recoveries of in-size and in-SG Valuable Heavy Minerals(VHM)1
1
ZrO2
1
CeO2
1
TiO2
Feed Preparation Plant Recoveries2
96.9%
97.9%
98.1%
Wet Concentrator Plant Recoveries to HMC2
93.8%
94.3%
88.5%
Mineral Separation Plant Recoveries to final products
90.8%
94.6%
-3
1 In-size and in-SG heavy minerals (VHM) refers to the -250+um, +4.05SG fraction, the recovery of ZrO2 is used as a tracker for zircon recovery,
CeO2 is used as a tracker for Rare earth recovery, and TiO2 is used as a tracker for titanium recovery
2 For further information see Astron’s announcement on 15th May 2020, “Completition of wet concentrator piloting works” and on pg 2 of
Astron’s “Quarterly Activities Report” announced on 29 Jan 2021
3 For further information see Astrons announcement on 14 May 2021, “Clarify Donald Mineral Separation Metallurgica Testwork”. Astron continues
to investigate the final anticipated TiO2 recoveries to final product through its planned pil scale test work
15
DONALD MINERAL SANDS & RARE EARTH PROJECT
Product Characteristics
Zircon
Zircon
Zircon will be the major contributor to the Donald
project’s revenue stream. Approximately 80% of
Donald’s zircon is expected to be premium grade
with a minimum 66% zirconia content. Whiteness
testing of Donald’s premium zircon has confirmed
its high quality characteristics and suitability for
premium market applications, including ceramics.
In addition, the fine grained nature of Donald zircon
means that it requires less grinding by zircon flour
and ceramics
manufacturers than most zircon products currently in
the market. This represents a potential cost saving for
customers and can be expected to enhance the
market acceptance and value of Donald zircon.
Product samples are being progressively provided
to customers for testing and market acceptance as
a precursor to negotiation of commercial off-take
agreements.
Final Products and Attributes
Zircon whiteness testing has confirmed the high quality of Donald zircon – suitable for premium market
applications, including ceramics.
Premium
Zircon
Zircon 60
Titania
ZrO2 > 66%
ZrO2 ~ 60%
TiO2 ~ 60%
Fine-grained,
Low impurities, high
brightness/ whiteness
Chemical & other
applications; value-add
opportunities
Suitable for feed to slag
plants for chlorinator
feedstock
Rare Earth
Concentrate
NdPr > 10%
Attractive RE Assemblage;
high value component
For further information see Astron’s announcement on 12 May 2021, “Updated Donald Project Premium Zircon Test Results.
16
Astron 2021 Annual Report
Titania (titanium dioxide)
Rare Earth Elements
Astron intends to produce a mixed titania product
(~60s% TiO2), expected to be suitable for slag
production by both the chloride and the sulphate
pigment production routes. Relative to the zircon and
rare earths component of the production stream, the
titania product is forecast to represent the lowest value
proportion of the project’s product mix, contributing
approximately 15% to 20% of total revenue.
Nonetheless, with longer term offtake arrangements,
this component of the product stream of the Donald
project will contribute a stable and useful component
of the overall revenue stream.
Donald will represent a sizeable source of rare earth
element production, with the project expected to
produce approximately 16 ktpa of a rare earth mineral
concentrate (REMC) in Stage 1. The REMC product
is expected to display attractive characteristics, with
over 90% rare earth phosphates and 14.1% by weight
of heavy rare earth elements. High value components
of Neodymium (Nd), and Praseodymium (Pr) will
represent 17% and 5% respectively of the rare earth
elements in the rare earth concentrate.
Premium Zircon Product CIE Whiteness Test Results
Donald premium zircon test results compare favourably with other zircon products
on key characteristics, notably whiteness
Donald Project
Competitor 1
Competitor 2
Competitor 3
Product
L - Brightness
A – Red-Green Scale
B Yellow-Blue Scale
Donald Premium Zircon
Competitor Zircon 1
Competitor Zircon 2
Competitor Zircon 3
94.84
94.39
93.57
94.32
0.12
1.02
0.86
0.23
3.86
4.08
3.82
4.22
Note:
Results are measured on the CIE whiteness scale, L represents ‘brightness’, A represents ‘red-to-green’ scale, B represents ‘yellow-to-blue’ scale.
The CIE system is used to characterise colour by a luminance parameter and two colour co-ordinates.
Results were produced using a calibrated ‘brightness tester’ and standard deviation error can be expected.
Refer ASX Release, 7 April 2021.
17
DONALD MINERAL SANDS & RARE EARTH PROJECT
Evaluation & De-Risking
Donald Mineral Sands’ Project excavation test pit.
Resource characteristics
The Donald project has been extensively delineated
with a total of 2,789 holes drilled. The mining lease area
consists of 387 closely spaced drill holes. An Ore Reserve
statement was issued on 18 February 2021 based on the
2016 Mineral Resource estimates. The statement was
prepared by AMC consultants.
Astron plans to conduct limited additional drilling for the
purpose of updating the Heavy Mineral (HM) modelling
for the initial mining areas and to define in greater detail
the valuable heavy mineral (VHM) component of the
HM on the western side of the Mining Licence. Analysis
of the results is expected to also facilitate evaluation
of the potential to increase the recovery of the minus
38 micron component of the ore body, as well as
evaluate the monazite deposition more broadly. It is
expected that the results from this drilling and evaluation
will contribute to enhanced VHM recovery and the
optimisation of mine planning (including a possible
reduced mine stripping ratio) which, in turn, will
contribute to improved operational efficiencies. This
work is viewed as a valuable adjunct to the already
extensive knowledge of the ore body. The information
derived from this drilling program will also contribute to
project planning, evaluation and economic modelling
Regulatory approvals
The Donald project is at an advanced stage of regulatory
approval as shown in the accompanying table. The
major outstanding regulatory requirement for Stage 1
is the approval of a Work Plan in accordance with the
requirements of the Environmental Effects Statement
(EES). This will be progressed over the next 18 to 24
months, for submission to the Victorian Government
during calendar year 2022. As part of its regulatory and
voluntary plans for engagement with key stakeholders,
Astron has formed a Community Reference Group to
undertake on-going discussion on all project parameters
as they relate to local communities and stakeholders.
Approval Requirement
Environmental Effects Statement
Completed
✔
Environmental protection & bio-diversity conversation
approval
Mining Licence granted
Water Rights
Cultural Heritage Management Plan
Radiation License
Export Permit
Work Plan
18
✔
✔
✔
✔
✔
✔
Date
2008
2009
2010
2012
2014
2014
2019
Expiry
N/A
2034
2030
2041
(with option
to renew)
Life of Mine
2023
2022
Pending
Pending
Life of Mine
Astron 2021 Annual Report
Project resources
Astron has drawn upon the best available technical
expertise, encompassing the engineering, metallurgical
and geological capabilities required to progress the
Donald project to a commercialisation stage.
A recent appointment has been the retention of
a specialist project management and engineering
consultancy, with Australian and international mineral
sands expertise in all phases of project development,
project commissioning and operations. This group, along
with internal resources, will play a key role in providing
Astron with the project management and planning
expertise necessary for detailed project engineering,
definitive feasibility study preparation and optimisation,
project economic modelling, and project management
services, including scheduling and cost control, contract
management and procurement management.
Key internal organisational appointments will be made
over the forthcoming year.
19
DONALD MINERAL SANDS & RARE EARTH PROJECT
Sustainability & Stakeholder Engagement
Sustainable development entails consideration of people, the environment and
the economy as an integral part of a mining development project. As part of the
development and operation of the Donald Mineral Sands and Rare Earth Project,
Astron and its employees will focus on the highest standards in terms
of sustainability principles and practices
The environment
The commitment to the highest standards of
environmental management is a cornerstone
of planning for the Donald project and key to
the company’s reputation and standing within
the local and wider communities.
Aligning with Sustainable
Development Goal 6:
Clean Water and Sanitation.
Water used in mining and
processing operations will be
recycled as efficiently as possible,
with water usage, recycling levels,
and flocculant use monitored and reported.
Regulatory requirements, related to water
management, storage and retention – all of which
will form part of the EES Work Plan – will be subject to
regular reporting.
During 2022, studies are planned
to determine how to integrate
hybrid energy solutions into
the Donald mineral sands
operation, with the objective
of minimising carbon dioxide
emissions consistent with Astron’s
commitment to Sustainable Development Goal 7:
Affordable and Clean Energy. This work will explore
renewable energy options, such as the integration of
solar and battery options and offsite wind power into
site plans.
The establishment of emissions
policies and the reporting of energy
usage and carbon dioxide emissions,
will form an integral part of
management reporting to the Board
and will be incorporated into the
company’s sustainability reporting.
Astron Corporation Limited Supports
the UN Sustainable Development Goals
As a framework for the company’s activities, Astron
intends to develop policies and procedures for
environmental management and community/
stakeholder engagement that are consistent with the
United Nations Sustainable Development Goals (SDGs).
The SDGs encompass objectives across the three
main dimensions of economic prosperity, social
inclusion and environmental conservation. Each
is designed to support the United Nations’ 2030
Agenda for Sustainable Development, with the intent
of contributing to the protection of the planet from
degradation through sustainable consumption and
production, sustainable management of natural
resources and taking action on climate change
The Board, management and employees of Astron
recognise that the Donald project has a role to play
in contributing to improving economic prosperity,
including that of the region in which it operates,
through payment of royalties and taxes, creating
long-term skilled local employment, as well as through
indirect employment and business development
opportunities. Furthermore, a contribution will be
made to improving social outcomes by supporting the
community through direct investment and capacity-
building in local organisations, infrastructure and with
individuals.
Astron intends to fulfil its role in environmental
management through ensuring that its operating
practices meet or exceed all regulatory requirements
and by seeking to minimise any potential adverse
impacts from its operations, most notably by the
highest standards in water management, carbon
emissions management and the rehabilitation of
areas disturbed by mining.
20
Astron 2021 Annual Report
Land management & rehabilitation
All mining activity disturbs
natural land forms. The mineral
sands sector in Australia has an
extensive and largely successful
track record in restoring land
disturbed by mining to prior land
use patterns, whether agricultural,
native vegetation or other forms.
The nature of mineral sands mining – relatively
shallow mining of typically free-flowing material, with
the ability to store topsoil and overburden – means it
amenable to effective rehabilitation outcomes.
Central to Astron’s land management strategies is
comprehensive planning for progressive rehabilitation,
along with the avoidance or minimisation of damage
to native and remnant vegetation. The intention
is that agricultural land soil profiles are restored to
original conditions and usages.
The progressive opening of a shallow pit for mining,
and the subsequent relocation of mining equipment,
allows for the progressive filing of the mining void and
continual rehabilitation of the mined areas while
mining is occurring. In this way, the area which is
disturbed or ‘open’ will be typically much less than
that for other forms of extractive mining.
Astron’s rehabilitation practices have been
demonstrated by the rehabilitation of the test pit
which was excavated in 2018 to recover a bulk sample
of ore for process test work. The test pit area has
been restored and subsequently sown to wheat, with
encouraging results in terms of crop coverage and
yields. The rehabilitated area (see image above) is
an example of the rehabilitation outcomes expected
across the mine path for the Donald project.
As part of rehabilitation, soil testing (including top soil
depth, salinity, moisture content and compaction),
yield monitoring and laser mapping will be
undertaken to establish benchmarks for monitoring
rehabilitation progress. Astron will also undertake
agronomic assessments and ensure engagement
with land owners as central components of the
rehabilitation planning and management processes.
21
DONALD MINERAL SANDS & RARE EARTH PROJECT
Our Community
Astron’s vision for the Donald project is to provide a positive and lasting benefit
for local communities, with a commitment to developing mutually beneficial
relationships based on open and substantive communication
As the Donald Mineral Sands and Rare Earth Project
progresses to an operational stage, an understanding
is continuing to be built by the company and its
people of the needs of our neighbours, community
members, employees and local organisations, to better
achieve the objective of aligning the project with the
expectations of stakeholders.
As the Donald project is expected to be operating for
more than 40 years in the Wimmera region, it is critical
to the company and its people that Astron’s presence
is accepted as an integral and beneficial part of the
community.
The Donald project workforce will be largely drawn
from, and reside in, the region in which the project is
located. This will contribute to maximising regional
benefits, with local employment in turn supporting
health and community services, sport and recreation
clubs, early childhood services and enrolments in local
schools.
Astron is committed to supporting local employment
by building local capacity and skills and increasing and
diversifying the opportunities for economic growth
in the region, a commitment which is aligned with
Sustainable Development Goal
8: Decent Work and Economic
Growth.
The company’s Procurement
Policy includes provisions to
support local businesses and
services, ranging from catering
services to trades specialists. Project personnel will
also work with local organisations to maximise
opportunities for local investment.
Community Reference Group
Astron has established a Community Reference Group
(CRG), the members of which include representatives
from local government, Victorian statutory
organisations, Indigenous organisations, community
groups and local landowners.
The CRG will allow communication and collaboration
on the development of the project and, in particular,
ensure stakeholder contributions and requirements
are built into operational and community engagement
plans.
Community investment: office equipment purchased
for Minyip SES.
Welcome to country at a Donald Mineral Sands Project sponsored Yarrilinks plantout day.
22
Astron 2021 Annual Report Community Investment Program
Astron conducts a Community Investment Program.
In 2021, investments were made in a number of
community and industry
initiatives and programs, in
accordance with the company’s
commitment to the principles of
Sustainable Development Goal
3: Good Health and Well-Being.
The 2021 program prioritised community participation
and safety with funds and in-kind support provided in
a range of areas, from community infrastructure and
safety upgrades, local history research, community
participation and community sports development
(refer below)
Astron also supported the Victorian Mines Rescue
Competition, a mine rescue and emergency response
capacity-building event that attracts teams from all
over Australia.
Organisation
Sector
Project
Rupanyup Community Garden
Community
Power installation to community garden
Minyip 150th Celebration Committee
Community
Publication of a book detailing the 150 year history of Minyip
Marnoo Hall Incorporated
Community
“Light up our Lives” safety lighting for town hall entrance
Donald Pony Club
Community
Redevelopment of club entrance gate
Donald Pastoral & Agricultural Society
Community Events
Bus and driver hire, to maximise community participation
Donald Golf and Bowls Club
Community Sport
Organisational sponsorship
Minyip Murtoa Football Netball Club
Community Sport
Sponsorship of the club Buddy Program
Rupanyup Bowls Club
Community Sport
Prize money for inter-club bowls tournament
Warrack Eagles Football and Netball Club
Community Sport
Sponsorship of club dinner
Donald Netball Club
Community Sport
Sponsorship of coaching, umpiring and player development event
Australian Science Teachers Association
Education
Purchase of geology educational resources for two local schools
Minerals Council of Australia
Industry Safety
Sponsorship of mines rescue safety training event
Community investment: Minyip Murtoa football and netball club buddy program.
23
DONALD MINERAL SANDS & RARE EARTH PROJECT
Project Advancement
A range of key work streams are or will be in progress
over the course of the coming 12 months, with the aim
that the detailed feasibility study, including a detailed
economic assessment of the project, will be completed
during the second quarter of calendar year 2022.
A pilot plant processing trial is currently underway
and will be completed in the 2021 calendar year. The
results from this trial will enable an engineering design
study to be carried out leading to the preparation of
updated economic analyses of the project. Results
from the pilot plant processing will also be used to
support the engineering design study which will
include preparation of the process model and flow
sheet.
The current indicative timetable for the Donald
project is based on the expectation of securing
Victorian Government regulatory approval of the
Work Plan in accordance with the requirements of
the EES, the completion of project engineering and
obtaining project funding by mid 2023. This would be
followed by the start of construction, and anticipated
first production after 18 months, with a period for
commissioning and ramp up of production in late
2024 and into the first quarter of 2025. The indicative
schedule will be refined, along with project economics,
as the main work streams progress. The company
will provide updates, through ASX releases, of any
modifications to its planned schedule.
June – December 2021
• Further metallurgical test work, including pilot scale
mineral separation (as described)
• Initial capital raising strategies finalised to fund
project delineation work
• Provision of product samples for customer testing
• Design of processing plant and identification of
infrastructure requirements
• costing estimates and update infrastructure design
• Noise monitoring and attenuation, dust, water usage
and other studies
• Logistics and transportation studies
• Establishment of project owners’ group, as well as
key organisational appointments for the project
implementation stage
• Ongoing stakeholder engagement through the
Community Review Group
Excavated test pit on Donald tenements, subsequently rehabilitated.
24
Astron 2021 Annual Report
January – June 2022
Mid 2023
• Further geological delineation drilling to optimise
• Victorian Government EES Work Plan approval
mine planning
(targeted first half calendar year 2023)
• Review and completion of reserve drilling results and
any necessary refinements to mine planning
• Project execution decision by Board of Astron
• Start of 21 months construction phase
• Customer off-take arrangements advanced
• Completion of definitive feasibility study and
projects economics (mid 2022)
July – December 2022
• Second phase funding to progress through to
execution phase
• Ordering and procurement of key long lead items
• Work Plan completion and submission for Victorian
Government approval
Early 2025
• Project commissioning and ramp up to full
production (subject to above timelines and
completion of DFS)
Typical land form which will comprise the predominant form of land usage to be mined and subsequently
rehabilitated as part of the Donald project mine path.
25
ASTRON CHINA
Specialty titanium production company with expertise in
zirconium downstream applications.
Astron’s Chinese operations have the capability to
produce nuclear grade zirconia (hafnium-free zirconia),
with a mineral separation plant for the commercial
recovery of rutile from titanium dioxide bearing heavy
mineral ores.
In October 2019, Astron Titanium completed
construction of one the largest rutile production facilities
in China. The mineral separation plant is located in
the business district of Yingkou, within the Yingkou
Comprehensive Free Trade Zone. The location is in close
proximity to transport systems that integrate sea, land
and air transport facilities, providing ready access for
import and export opportunities, as well as domestic
trade transport. Astron’s operations are located 40
kilometres from the Port of Bayuquan, an important hub
port and the largest cargo port in the northeast of the
country and the key port of the Liaodong Bay Economic
Zone.
The mineral separation plant has a design capacity
of 300,000 tonnes per annum of feedstock. The plant
produces high quality rutile (the highest titanium
dioxide content product) from a plant configuration that
integrates floatation, spiral plants, shaking tables and
electrostatic separation.
Plant capacity during its Phase 1 operation is 150,000
tonnes per annum of feedstock, capable of producing up
to 50,000 tonnes per annum of final rutile products. The
configuration of the mineral separation plant is scalable,
with a capacity to double production. In addition to the
mineral separation plant, there is a specialised titanium
dioxide agglomeration plant. In total, there are two
operating facilities, as well as warehouse facilities, with
sufficient unallocated floor space for expansion.
The mineral separation plant is operated by an
experienced, technical workforce, with accredited quality
standards to ensure high commercial recoveries, product
quality and high environmental standards. Astron’s China
operations obtained the approval of the city of Yingkou’s
environmental assessment authorities and reported zero
environmental discharges during financial year 2021,
with recycling of all production water. There were no
safety incidents reported.
In the 2021 financial year, the plant produced 9,040
tonnes of rutile, with output limited by feedstock
availability, due to Astron completing heavy mineral
recovery from its Savannah, Georgia, US operations.
The company is in advanced discussions with other
feedstock providers to secure alternative feed for the
plant. Sales of rutile during 2021 were 14,500 tonnes,
compared with 9,690 tonnes in 2020.
Spiral banks at Astron’s Yingkou mineral separation plant, China.
26
Astron 2021 Annual Report Shaking tables, Astron’s Yingkou mineral separation plant, China and storage bins below.
Market experience & outlook
Looking ahead
Astron has nearly four decades of operational experience
in China and maintains close connections with a range
of mineral sands customers, both within the country and
internationally.
The outlook for the rutile market in the short to medium
term remains positive, with global rutile supply having
been impacted by the suspension of major production
sources.
In China, due to technical advances in chloride pigment
production technology and capacity, as well as higher
environmental standards in relation to pigment
production, the demand for higher grade titanium
dioxide feedstocks, such as rutile, have increased.
The company is in active discussions with a number
of different entities to secure feedstock for the Yingkou
mineral separation plant. It has also re-entered the
trading business, purchasing high-grade titanium dioxide
feedstocks for the supply of product to a range of
customers in China.
Management in China is considering a number of
asset restructuring opportunities, including the sale
of non-core real estate holdings and other assets,
as a way of focussing the business on its high value
opportunities and contributing to a reduction in the
liabilities associated with this part of the business. These
measures are being accelerated in light of the deferral
of the proposed demerger of the China downstream
processing assets from Astron’s upstream operations
and in light of Astron’s overall funding and balance sheet
requirements for the Donald project.
27
ANNUAL FINANCIAL STATEMENTS
FOR ASTRON CORPORATION LIMITED
For the year ended 30th June 2021
Astron Corporation Limited
ARBN 154 924 553
Incorporated in Hong Kong,
Company Number: 1687414
28
Astron 2021 Annual Report Astron Corporation Limited
Company Number: 1687414
For the Year Ended 30 June 2021
CONTENTS
Financial Statements
Directors’ Report
Declaration of Independence by Auditor
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (continued)
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Declaration by Directors
Independent Auditor’s Report
Investor Information
Page
30
45
46
47
48
49
50
51
113
114
119
29
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
The Directors of Astron Corporation Limited (the “Company”) present their report on the consolidated entity
(“Group” or “Astron”), consisting of Astron Corporation Limited and the entities it controlled at the end of, and
during, the financial year ended 30 June 2021.
FINANCIAL HIGHLIGHTS
Net tangible asset value per share
Down
15.9%
Revenue, Interest Income and Other Income Up
107.3%
Cash-in-flow from operating activities
Profit before tax
Profit after tax attributable to members
Total comprehensive income
Up
Up
Up
Up
$4,005,584
$5,797,909
$3,324,445
$3,547,706
To
To
To
To
To
To
10.5cps
$18,196,167
$ 2,653,279
($ 406,794)
($ 2,968,375)
($ 3,000,991)
PRINCIPLE ACTIVITIES / BUSINESS ENTITIES
Astron Corporation Limited is a Hong Kong incorporated company listed on the Australian Securities Exchange.
The principal activities undertaken by wholly owned subsidiary companies include the following:
-
- Exploration, evaluation and project work through Astron Pty Limited and Astron Donald Mineral Sands
Ltd to advance the Group’s holding of the Donald and Jackson mineral sands deposits in regional
Victoria to a definitive feasibility and commercialisation stage involving the mining, concentrating and
processing of mineral sands products and rare earth mineral concentrate for sale to international and
domestic customers;
the operation of titanium-based materials processing activities, including a mineral separation plant at
Yingkou, China through the company’s wholly owned subsidiary, Astron Titanium (Yingkou) Ltd, as well
as procurement and trading activities, as well as the evaluation and advancement of downstream
applications for zircon and titanium;
as part of the raw material feed source for Astron’s China operations, the Group commenced excavation
and loading of ilmenite ore from Savannah, Georgia in the United States of America during the 2019
financial year; this activity was completed during 2021;
the evaluation and the progression of regulatory approvals for the potential development of the
Niafarang mineral sands deposit in Senegal.
-
-
Revenue is currently generated from the Group’s China-based processing operations. Both the Donald mineral
sands project and the Niafarang project are at a pre-execution and pre-production stage.
There were no significant changes to the Group structure in the financial year ended 30 June 2021.
30
1
Astron 2021 Annual Report
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
1 General Information
1.1 Directors
The following persons were Directors of Astron Corporation Limited for part of the financial year and up to the
date of this report:
Names
Mr. Gerard King
Mdm. Kang Rong
Mr. Tiger Brown
Dr. Mark Elliott
Mr. George Lloyd
Non-executive director
Executive director
Managing Director
Non-executive director (Appointed on 22 January 2021)
Non-executive director
(Appointed subsequent to the end of the financial year on 20 July
2021)
Directors of the Company’s subsidiaries
During the year and up to the date of this report, all the directors of the Company were also directors of certain
subsidiaries of the Company. Other director of the Company’s subsidiaries during the year and up to the date
of this report was as follows:
Mr. Zhao Zhiping
Mdm. Jian Ping
Mdm. Li Linlin
Director Information
Mr. Gerard King
Qualifications
Experience
Chairman (Non-executive)
LLB, University of Western Australia, AICD
- Board Member since 6 December 2011 (Astron Pty Limited (formerly
known as “Astron Limited”): 5 November 1985)
- Former partner of law firm Phillips Fox with over 30 years of experience
in corporate and business advisory roles including as a director of a
number of Australian public companies.
Interest in Shares
49,138 CDIs
Special Responsibilities
Mr. King is the Chairman of the Board and the Chairman of the
Remuneration & Nomination Committee.
Directorships held in other listed entities
Not currently a Director of any other listed company.
31
2
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Mr. Tiger Brown
Qualifications
Managing Director
B. S.
Pennsylvania.
(Economics), Wharton School of Business, University of
Experience
- Board member since 4 December 2019
- Mr Brown has worked within Astron’s business entities in China and
Australia before being appointed a director in the role of Executive
Director, Global Operations and Finance. He was appointed Managing
Director effective 17 February 2021
Interest in Shares #
94,165,972 CDIs
Special Responsibilities
Managing Director
Directorships held in other listed entities
Not currently a Director of any other listed company.
Mdm. Kang Rong
Executive Director and Chief Executive of Astron Titanium (Yingkou)
Qualifications
B.E.(Chem), Shanghai University; Executive MBA, Chungking Graduate
School
Experience
- Board member since 31 January 2012 (prior to that of Astron Pty Limited
from 21 August 2006)
- Worked as a Chemical Production Engineer at Shenyang Chemical
Company (a major Chinese company based in Shenyang, Liaoning
Province, China) before moving to Hainan Island to work in sales and
administration roles for Japanese trading company, Nissei, Ltd.
- Mdm Kang Rong joined Astron in 1995 as marketing manager of
Shenyang Astron Mining Industry. Subsequently, she has overseen
Astron’s China operations and global sales activities.
Interest in Shares #
4,000,100 CDIs
Special Responsibilities
Chief Executive of Astron’s China-based processing and
operations, Astron Titanium (Yingkou) Ltd
trading
Directorships held in other listed entities
Not currently a Director of any other listed company.
Dr. Mark Elliott
Qualifications
Experience
32
Non- Executive Director
Diploma in Applied Geology, Ballarat School of Mines; PhD, University of
New South Wales, FAICD, FAusIMM (CP Geo), FAIG
- Dr Elliott has chartered professional accreditation as a geologist. He
commenced his career as a senior geologist with Anaconda Australia
Inc. He subsequently held roles as Chairman and Managing Director of
ASX-listed and private companies, including Mako Gold Ltd, HRL
Holdings Ltd, Chinalco Yunnan Copper Resources Limited and
Zirtanium Limited.
3
Astron 2021 Annual Report
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Interest in Shares #
346,400 CDIs
Special Responsibilities
Remuneration Committee
Directorships held in other listed entities
Chairman of AuKing Mining Limited, Non-executive director of Nexus
Minerals Limited and Aruma Resources Limited
Mr. George Lloyd
Non- Executive Director
Qualifications
Bachelor of Engineering Science in Industrial Engineering,
Master of Business Administration, University of New South Wales
Stanford University Executive Management programme
FAICD
Experience
-
Board member since 20 July 2021
- Mr Lloyd’s professional career has encompassed roles with RGC
Limited; Elders Resources Limited; Southern Pacific Petroleum NL,
Central Pacific Minerals NL and Australian Gas Light Company.
- Mr Lloyd has held numerous directorships of both public listed and
private companies, including Metro Mining Limited, Pryme Energy
Limited, Cape Alumina Limited, Equatorial Mining Limited, Goldfields
Limited and AurionGold Limited
Interest in Shares #
Nil
Special Responsibilities
Remuneration Committee
Directorships held in other listed entities
Not currently a Director of any other listed company.
# Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.
2. Meetings of Directors
During the financial year, four meetings of Directors (excluding committees of Directors) were held for Astron
Corporation Limited. Attendances by each Director at Directors’ meeting, audit and risk committee and
remuneration and nominating committee meetings during the year were as follows:
Astron Corporation Limited
Mr. Gerard King
Mr. Tiger Brown
Mdm Kang Rong
Dr Mark Elliott
Directors' Meetings
Number
Number
attended
eligible to
attend
7
7
7
2
7
7
7
2
33
4
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Share Options
No options over issued shares or interests in the Group or a controlled entity were granted during or since
the end of the financial year. There were no options outstanding at the date of this report with the exception
of the Dr Mark Elliott options which were approved at the meeting of shareholders on 19 July 202. However
these 800,000 options have not yet been issued.
3. Operational and Financial Review
3.1 Business Highlights
-
-
-
Increased revenues and higher earnings from Astron’s China-based operations associated with higher
production and sales and an improvement in market conditions.
Significant progress across multiple work streams associated with the advancement of the Donald
Mineral Sands Project, most notably an updated Ore Reserve Statement.
Continued engagement with regulators and community groups in Senegal as a basis for the future
progression of this project to a construction and production stage.
3.2 Financial Results – Key Features
The main features of the 2021 financial results are provided below. Segmental results are provided on page
70 to 73, which provide information on the financial performance for the main business entities and activities
of the Group.
Revenue
Sales revenue was $16,418,037, a 94.8 per cent increase (2020: $8,430,039), associated with a full year of
production from Astron’s mineral separation plant in Yingkou, which was commissioned during the first half of
the 2020 financial year. In 2021 sales of rutile were 14,504 tonnes (2020: 9,692 tonnes). Plant production
included raw material held in inventory as well as work-in-progress material. A strengthening in rutile prices
year-on-year, also contributed to the recovery in revenue.
Expenses
stayed
The company’s administrative expenses
company had a slightly decrease in administrative expenses of $175,644 to $4,273,063 from $4,448,707.
roughly consistent year-on-year,
from 2020
to 2021,
the
Net Profit
In 2021, Net Loss was $2,968,375, representing a significant improvement over the prior year (2020: loss of
$6,292,820). The increase is associated with improved plant performance and product recoveries and
an adjustment related to capital expenditure on DMS project.
Operating Cash Flow
Increased revenue contributed to an increase to $2,653,279 in the Group’s cashflow from operations (2020:
cash outflow of $1,352,305). Improvements in the company’s gross margin, with consistent year on year
overhead expenditure further contributed to the group’s return to positive cashflow from operating activities.
34
5
Astron 2021 Annual Report Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Net Assets
The group’s net assets decreased to $92,474,241, (2020: $93,725,284). The net assets were impacted by an
adjustment related to capital expenditure on DMS project and the transfer of balance to capital reserve
relating to amount due to a related party. The settlement of the company’s Senegal off-take with Hainan
Wensheng contributed to the position through the decrease in the company’s total current liabilities to
$25,725,374 (2020: $29,267,009). Intangible assets increased following further exploration expenditure
capitalised in respect of the Donald Mineral Sands and Senegal Niafarang projects. Investment in the Donald
Mineral Sands Project increased year on year reflecting on the company’s current priorities and its
commitment to progress the Donald project.
Operations review
Donald
Throughout the financial year, Astron continued to advance its Donald project (“DMS”).
The Donald project ore reserves were updated in the financial year, along with baseline financial models on
the basis of shipping heavy mineral concentrate to China for processing further confirming the project’s value,
in the form of a positive NPV and rapid payback, using the assumptions of current global product pricing and
updated costs.
Updated Project concept
Following recent metallurgical test work and internal studies, Astron intends to change its operating model
from exporting heavy mineral concentrate to China for processing of final products to now undertaking all
aspects of the mineral sands operation in Australia. The change in execution strategy is expected to ensure a
high degree of control over final outcomes (product recoveries and specifications) and markets and enable
Astron to have the ability to quickly adapt its production settings to changing customer requirements. The
change is expected to ultimately de-risk the operations.
Approvals
The project is well advanced in its regulatory approvals, with an approved Victorian Environmental
Effects
Statement (E.E.S) and the final regulatory hurdle being the work-plan permit. The company is actively
taking
steps towards the finalisation of the work-plan.
Exploration Improvement
The company plans to conduct further in-fill drilling in MIN5532 in late 2021 and early 2022 to improve the
overall resource through including the -38 +20-micron fraction within the contained minable HM%, and further
delineate the project’s rare earth resource.
Funding
Astron continues to develop its funding strategy which could include a mix of equity, internally generated
cash flows and debt funding. Astron continues to work with entities interested in assisting with this project.
35
6
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Senegal
Exploration
No additional exploration field activities have occurred in the year. Application, renewal applications and studies
have been undertaken by Astron’s consultant in Senegal (Harmony group) to re-establish approvals for expired
exploration leases. The current exploration licence remains in a maintenance position where Astron has the
right to apply for drilling exploration and planning which will see the licence reactivated for explorative purposes.
The exploration renewal process has commenced and awaiting the mines department review on the overall area
and associated graticules.
Mining Licence
Mining Licence was awarded to the Group in June 2018. In Senegal Astron has an operational readiness –
procedures are in place, approvals for recruitment, contract commencement is slowly progressing under the
current pandemic circumstances. Capital equipment is in place in Dakar, local representation remains in place
and the detailed mine design ready to implement.
The Senegal Government continues to move slowly in considering final approvals for the community
resettlement program. Discussions continue in the development of the community relocation plan with local and
federal governments. Covid 19 has had a noticeable impact in developing community engagement process and
government support processes also impacting the development.
Overall project viability continues to increase in line with the global market demand for the final products of Rutile
and Zircon.
4. Business Risks
Supply Risk
The company has exhausted its available feedstock from its Savannah operations in the current financial
year. The lack of additional supply may affect the Chinese operations through increased downtime. The
company is currently in active negotiations with alternative feedstock suppliers.
Funding Risk
Donald Project is expected to require significant investment. The Company may seek to raise funds through
equity or debt financing or other means. There can be no assurance that additional finance will be available
when needed, or if available, the terms of the financing may not be favourable to the Company and their
Securityholders. Difficulty in accessing capital may result in delays in execution timelines for the project.
Project Execution Risk
Project timeframes, capital expenditure, equipment availability, ability to access key personnel –or a combination
of these and other factors –may cause either a delay in the completion of the Donald Project or an overrun in
terms of capital expenditure or operational costs.
36
7
Astron 2021 Annual Report Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Commercial and Contract Risk
Potential future earnings, profitability, and growth are likely to be dependent upon the Company being able to
successfully implement some of its business plans. The ability of the Company to do so is dependent upon a
number of different factors, including matters which may be beyond the control of the Company. The Company
may not be successful in securing identified customers and market opportunities. Whilst the company will have
various contractual rights in the event of non-compliance by a contracting party, no assurance can be given that
all contracts to which the Company is a party will be fully performed by all contracting parties. In addition, no
assurance can be given if a contracting party does not comply with any contractual provisions, the Company will
be successful in securing compliance.
Commodity Price Risk
The Company’s possible future revenues are expected to be derived mainly from mineral sands products, sale
of rare earth concentrate and from royalties gained from potential joint ventures or other arrangements.
Consequently, the Company’s potential future earnings will likely be closely related to the price of such minerals,
which may fluctuate, as well as exchange rate risks for products sold when denominated in currencies other
than the Australian dollar
Exchange Rate Risk
The revenue, earnings, assets and liabilities of the Company may be exposed adversely to exchange rate
fluctuations. The company’s revenue may be denominated in a foreign currency, and as a result, fluctuations in
exchange rates could result in unanticipated and material fluctuations in the financial results of the company.
Covid 19 – Impact Risk
The global economic outlook is facing uncertainty due to the current COVID-19 (Novel Coronavirus) pandemic,
which has been having, and is likely to continue to have, a significant impact on global capital markets,
commodity prices and foreign exchange rates. While to date COVID-19 has not had a material impact on the
Company’s operations to date, the closure of state borders in Australia may adversely impact the company in
its implementation of the project execution plan for the Donald project. Global supply chain disruptions may
adversely impact the company’s Chinese operations.
Environmental Regulation
The Company’s operations and projects are subject to the laws and regulations of all jurisdictions in which it has
interests and carries on business, regarding environmental compliance and relevant hazards. The Group's
operations are in China, Senegal and Australia.
In Australia, our Environmental Effects Statement for the Donald mine has been approved. The Group complied
with all environmental regulations in relation to mining operations and there were no reportable environmental
matters from the Australian operations.
In China, the Group continues to work closely with the local authorities to ensure high standards are maintained.
In relation to the proposed manufacturing processes in China, there are no outstanding exceptions as noted by
regular local government environmental testing and supervision. Further the development projects will be
implemented with best practice standards carefully monitored by the local authorities.
To the best of the Directors' knowledge, the Group has adequate systems in place to ensure compliance with
the requirements of all environmental legislation described above and are not aware of any breach of those
requirements during the financial year and up to the date of the Directors' report.
37
8
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Occupational Health and Safety
During the year there were no lost time injuries.
Significant Changes in State of Affairs
There have been no significant changes in the Group's state of affairs during the financial year.
5. Looking ahead
Matters Subsequent to the end of the Financial Year
The Group has funding options available to provide support for ongoing operations. These funding options could
be a mix of third parties or Director support and will be pursued as required.
Matters subsequent to year end:
- Mr George Lloyd was appointed to the Board of Directors as a non-executive Director on 20 July 2021
- The Group resolved to demerge its Chinese operations which was approved at an Extraordinary
General Meeting by shareholders on 19 July 2021
- On 10 September 2021 an interim Court injunction was granted in Hong Kong preventing the completion
of the demerger in its current form at least until 21 December 2021 when the matter is set to be heard
in the High Court of Hong Kong
- On 21 October 2021 the Group announced that due the uncertainty surrounding the interim Court
injunction the Group has made the decision not to proceed with the planned demerger and focus on the
commercialisation of the Donald project
In September Astron China obtained a new loan facility of 2.1million AUD to facilitate operations.
-
There are no other matters or circumstances that have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Group, the results of those operations or
the state of affairs of the Group in future financial years.
Likely Developments
During the next financial year, the Group expects to:
-
-
-
Secure a new feed supply for the Chinese operations plant
Update the Donald Mineral Sands definitive feasibility study, complete additional infill drilling, advance
capex optimisation resulting from the pilot tests and develop funding alternative: and
Continue engagement with the local community and the regulators in respect to the Senegal project.
Work continues on the Donald project technical optimisation, including further work on mining method refinement,
tailing treatment majorization, processing flow process, updating and comparing logistics options. Astron will
work towards an update of its D.F.S during the financial year.
When final approvals are received with respect to the Senegalese Niafarang project and it commences into
production, the Group will have an additional revenue source, which will have an immediate impact on the
financial position of the Group. The Group’s business strategies continue to be based on being a high-quality
producer of zircon and titanium (together with associated products) focused on sales and marketing activities in
China.
38
9
Astron 2021 Annual Report
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
6. Remuneration Report
Policy for determining the nature and amount of Key Management Personnel (“KMP”) remuneration
The remuneration policy of the Group has been designed to align Director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering potential
long-term incentives based on key performance areas affecting the Group's financial results. The board of
Astron Corporation Limited believes the remuneration policy to be appropriate and effective in its ability to
attract and retain the best executives and Directors to run and manage the Group, as well as create goal
congruence between Directors, executives and shareholders.
The board's policy for determining the nature and amount or remuneration for the board members and senior
executives of the Group is as follows:
•
•
•
The remuneration policy for the executive Directors and other senior executives was developed by the
remuneration committee and approved by the board after seeking professional advice from an
independent external consultant.
All executives receive a market related base salary (which is based on factors such as length of service
and experience), other statutory benefits and potential performance incentives.
The remuneration committee reviews executive packages annually by reference to the Group’s
performance, executive performance and comparable information from industry sectors.
The performance of executives is measured against criteria agreed with each executive and is based
predominantly on the forecast growth of the Group’s profits and shareholders’ value. All bonuses and
incentives are linked to the performance of the individual and are discretionary. The objective is designed to
attract the highest caliber of executives and reward them for performance that results in long term growth in
shareholder wealth.
At the discretion of the Committee from time to time shares are issued to executives to reflect their
achievements. There are presently no option-based schemes in place in the year ended 30 June 2021. The
Board has approved the Employee Share Option Plan (the “ESOP”) subsequently in July 2021, which
granted 800,000 options to non-executive Director Dr. Mark Elliott.
Where applicable executive Directors and executives receive a superannuation guarantee contribution
required by the government, which is currently 10.0%, and do not receive any other retirement benefits.
Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards
superannuation.
If shares are given to Directors and/or executives, these shares are issued at the market price of those
shares.
The board policy is to remunerate non-executive Directors at market rates for time, commitment and
responsibilities. The Board determines payments to the non-executive Directors and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is
sought when required. The maximum aggregate amount of fees that can be paid to non-executive Directors
is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive Directors are
not linked to the performance of the Group. However, to align Director's interests with shareholder interests,
the Directors are encouraged to hold shares in the Group.
Performance based remuneration
As part of each executive Director and executive’s remuneration package there is a discretionary bonus
element. The intention of this program is to facilitate goal congruence between Directors/executives with that
of the business and shareholders.
39
10
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
In determining whether or not each executive Director and executive's bonus is due, the remuneration
committee bases the assessment on audited figures and independent reports where appropriate.
The remuneration committee reserves the right to award bonuses where performance expectation has prima
facie not been met but it is considered in the interests of the Group to continue to reward that individual.
Discretionary bonuses of $Nil (2020: $Nil) were paid during the year. There is a potential discretionary bonus
available to Mr Tim Chase of up to $50,000. There are no other bonus arrangements entered into with KMP’s.
Other KMPs are entitled to the annual bonus program of the Group, which will be based on the performance
of the group and at the discretion of the Board. The terms of the bonus program are in the process of being
defined.
Company performance, shareholder wealth and directors and executive’s remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders and Directors
and executives. This has been achieved by awarding discretionary bonuses to encourage the alignment of
personal and shareholder interests. The Group believes this policy to have been effective in increasing
shareholder wealth and the Group's consolidated statement of financial position over the past five years.
The following table shows the sales revenue, profits and dividends for the last five years for the listed entity,
as well as the share price at the end of the respective financial years.
2017
$
1,900
(2,591)
0.16
-
2018
$
5,014
(4,671)
0.20
-
2019
$
7,977
(1,913)
0.20
-
2020
$
8,430
(6,293)
0.17
-
2021
$
16,418
(2,968)
0.58
-
Sales revenue (‘000)
Net Loss (‘000)
Share Price at Year-end
Dividends Paid (‘000)
KMP
The following persons were KMP of the Group during the financial year:
Mr. Gerard King
Mr. Tiger Brown
Mdm Kang Rong
Dr Mark Elliott
Mr. Tim Chase
Mr. Joshua Theunissen
Position Held
Chairman-Non-executive
Managing Director
Chief Operating Officer and Deputy Managing Director (Executive)
Non-executive
Project Executive
Australian Company Secretary
40
11
Astron 2021 Annual Report
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Shareholdings
Details of equity instruments (other than options and rights) held directly, indirectly, beneficially or
potentially beneficially by KMP and their related parties are as follows:
30 June 2021
KMP
Mr. Gerard King
Mdm Kang Rong
Mr. Tiger Brown
Dr. Mark Elliott
Mr. Tim Chase
Mr. Joshua Theunissen
Total
Details of Remuneration
Balance
1/07/2020
Shares (sold)
/purchased
Shares
transferred
Balance
30/06/2021
49,138
4,000,100
94,165,972
346,400
-
100
98,561,710
-
-
-
-
-
-
-
-
-
-
-
-
-
-
49,138
4,000,100
94,165,972
346,400
-
100
98,561,710
Details of compensation by key management personnel of Astron Corporation Limited Group are set out
below:
Year ended 30 June 2021
Short term benefits
Post-
employment
benefits
Cash, fees
salary &
commission
s
$
Non-cash
Benefits/
Other
$
Share-based
payment
expenses
Termination
Payments
$
Superannuation
$
Total
$
% of
remuneration
that is
performance
based
120,000
-
250,000
27,258
240,000
76,225
713,483
-
-
-
-
-
-
-
299,943
9,923
-
-
-
9,923
299,943
-
-
-
-
-
-
-
-
-
-
120,000
-
250,000
2,590
329,791
20,725
270,648
-
76,225
23,315 1,046,664
0%
0%
0%
0%
0%
0%
Directors
Mr. Gerard King
Mr Tiger Brown (#2)
Mdm Kang Rong (#1)
Dr Mark Elliott
Other KMP
Mr. Tim Chase
Mr. Joshua Theunissen (#1)
Note reference #:
1.
2.
Paid or payable to management company
Mr Tiger Brown has forgone any remuneration for the year ended 30 June 2021, and as such there is no
remuneration unpaid
Use of Remuneration Consultants
The Board have previously employed external consultants to review and to provide recommendations in
respect of the amount and elements of executive remuneration, including short-term and long-term incentive
plan design. No remuneration consultants were employed during the year.
Termination Payment
No termination payments were paid during the year to KMP.
12
41
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Share Based Payments
During the 2021 year, the Group granted 800,000 options to a Director with shareholder approval which were
valued at $299,943. No further share-based payments were made during the year ended 30 June 2021 or 30
June 2020.
Voting and comments at the Company’s 2020 Annual General Meeting
The Company received 96.44% of “yes” votes on its remuneration report for the 2020 financial year.
The Company did not receive any specific feedback at the AGM on its remuneration report.
Year ended 30 June 2020
Mr. Gerard King
Mr. Alexander Brown (#1)
Mdm Kang Rong (#1)
Mr Tiger Brown
Other KMP
Mr. Tim Chase
Mr. Joshua Theunissen (#1)
Short term benefits
Post-
employment
benefits
Cash, fees
salary &
commissions
$
Non-cash
Benefits/
Other
$
Termination
Payments
$
Superannuation
$
Total
$
% of
remuneration
that is
performance
based
120,000
104,167
250,000
-
240,000
54,353
768,520
-
-
-
-
9,672
-
9,672
-
-
-
-
-
-
-
-
-
-
-
120,000
104,167
250,000
-
20,531
270,203
-
54,353
20,531
798,723
0%
0%
0%
0%
0%
0%
Note reference #:
1.
Paid or payable to management company
Service Contracts
Service contracts (or letters of engagement) have been entered into by the Group, or are in the process of
being entered into, with all key management personnel and executives, describing the components and
amounts of remuneration applicable on their initial appointment, including terms, other than non-executives
who have long established understanding of arrangements with the Group. These contracts do not fix the
amount of remuneration increases from year to year. Remuneration levels are reviewed generally each
year by the Remuneration Committee to align with changes in job responsibilities and market salary
expectations.
Other key management personnel have ongoing contracts with a notice period of three months for key
management personnel. There are no non-standard termination clauses in any of these contracts.
The Remuneration Committee considers the appropriate remuneration requirements. In August 2012, the
Group engaged external consultants to review the Group’s salary and incentive benchmarks. No
consultants were engaged to review Group remunerations during the year ended 30 June 2021.
END OF REMUNERATION REPORT
42
13
Astron 2021 Annual Report
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
Indemnifying Officers or Auditor
Insurance premiums paid for Directors
During the year, the Group paid a premium in respect of a contract indemnifying Directors, secretaries and
executive officers of the company and its controlled entities against a liability incurred as Director, secretary
or executive officer. The contract of insurance prohibits disclosure of the nature of the cover.
The Company has not otherwise, during or since the end of the financial year, except to the extent permitted
by law, indemnified or agreed to indemnify an officer or auditor of the company or any of its controlled
entities against a liability incurred as such an officer or auditor.
Non-audit services
During the financial year, the following fees for non-audit services were paid or payable to the auditor, BDO
Limited, or their related practices:
Other Services
Taxation services
Other assurance services
2021
$
2020
$
-
-
-
-
The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by
another person or firm on behalf of the auditor), is compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-audit services by the auditor, as set out above, did not
compromise the auditor independence requirements of the Hong Kong Institute of Certified Public
Accountants (“HKICPA”) for the following reasons:
•
•
all non-audit services have been reviewed by the Board to ensure that they do not impact the integrity
and objectivity of the auditor; and
none of the non-audit services undermine the general principles relating to auditor independence as
set out by the HKICPA.
Auditors’ Independence Declaration
The lead auditors’ independence declaration for the year ended 30 June 2021 has been received and
can be found on page 45 of the financial report.
Directors’ declaration regarding HKFRS compliance statement
The Directors’ declare that these annual financial statements have been prepared in compliance with Hong
Kong Financial Reporting Standards.
43
14
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2021
DIVIDENDS PAID AND PROPOSED
No final dividend was proposed for the year ended 30 June 2021 (2020: Nil).
Proceedings on Behalf of Company
No person has applied to the Court for leave to bring proceedings on behalf of the company, or to intervene
in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the
company for all or part of those proceedings.
Signed in accordance with a resolution of Directors:
Mr. Tiger Brown
Dated this 3 November 2021
Mr. Gerard King
44
15
Astron 2021 Annual Report 45
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For The Year Ended 30 June 2021
Sales revenue
Cost of sales
Gross profit
Interest income
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Reversal of provision for impairment on receivables
Fair value loss on financial assets at fair value through profit or loss
Costs associated with Gambian litigation
Employee share option expenses
Finance costs
Other expenses
Loss before income tax expense
Income tax expense
Net loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Decrease in foreign currency translation reserve (tax: Nil)
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Loss for the year attributable to:
Owners of Astron Corporation Limited
Total comprehensive income for the year attributable to:
Note
5
5
5
6
6
6
6
6
6
7
2021
$
2020
$
16,418,037
8,430,039
(13,261,073)
(8,258,584)
3,156,964
7,996
1,770,134
(344,631)
(202,342)
(9,981)
171,455
2,159
344,246
(583,907)
(218,110)
(48,479)
(4,273,063)
(4,448,707)
27,359
(5,290)
34,668
(299,943)
(190,660)
(78,005)
469,657
(5,044)
(136,006)
-
(1,651,551)
(100,416)
(406,794)
(6,204,703)
(2,561,581)
(88,117)
(2,968,375)
(6,292,820)
(32,616)
(32,616)
(255,877)
(255,877)
(3,000,991)
(6,548,697)
(2,968,375)
(6,292,820)
Owners of Astron Corporation Limited
(3,000,991)
(6,548,697)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
46
17
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income (continued)
For The Year Ended 30 June 2021
LOSS PER SHARE
Loss per share (cents per share)
Diluted loss per share (cents per share)
Note
8
2021
Cents
2020
Cents
(2.42)
(2.42)
(5.14)
(5.14)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
47
18
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position
As at 30 June 2021
ASSETS
Current assets
Cash and cash equivalents
Term deposits greater than 90-days
Trade and other receivables and prepayments
Inventories
Financial assets at fair value through profit or loss
Available-for-sale financial assets
Total current assets
Non-current assets
Property, plant and equipment
Exploration and evaluation assets
Development costs
Right-of-use assets
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Long-term provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
2
Note
10
10.3
11
12
14
16
17
18
19
20
21
22
23
24
23
2021
$
2020
$
2,570,438
46,112
555,504
46,112
14,017,427
11,039,026
2,786,296
9,930,340
15,032
20,322
19,435,305
21,591,304
25,848,730
26,648,011
71,357,885
70,297,773
8,321,690
8,205,625
2,912,843
2,983,286
108,441,148
108,134,695
127,876,453
129,725,999
10,297,353
13,125,453
2,105,940
5,106,984
13,213,255
10,917,671
108,826
116,901
25,725,374
29,267,009
8,908,841
5,941,198
767,997
792,508
9,676,838
6,733,706
35,402,212
36,000,715
92,474,241
93,725,284
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
48
19
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position (continued)
As at 30 June 2021
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Note
25
26
2021
$
2020
$
76,549,865
76,549,865
15,974,483
14,257,151
(50,107)
2,918,268
92,474,241
93,725,284
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
read in conjunction with the accompanying notes.
Mr. Tiger Brown
Mr. Gerard King
49
20
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Changes in Equity
For The Year Ended 30 June 2021
Year Ended 30 June 2021
Equity as at 1 July 2020
Loss for the year
Other comprehensive income
Exchange differences on
translation of foreign
operations
Total comprehensive income
for the year
Capital contribution
(note 29.6)
Options granted to Director
(note 25.4)
Total transactions with
owners recognised
directly in equity
Issued
capital
$
Retained
earnings
$
Share
based
payment
reserve
$
Foreign
currency
translation
reserve
$
Capital
reserve
$
76,549,865
2,918,268
913,104
13,344,047
-
(2,968,375)
-
-
-
-
-
-
(2,968,375)
-
-
-
-
-
-
-
299,943
299,943
-
(32,616)
(32,616)
-
-
-
Total
equity
$
93,725,284
(2,968,375)
(32,616)
(3,000,991)
-
-
-
-
1,450,005
1,450,005
-
299,943
1,450,005
1,749,948
Equity as at 30 June 2021
76,549,865
(50,107)
1,213,047
13,311,431
1,450,005
92,474,241
Year Ended 30 June 2020
Equity as at 1 July 2019
Loss for the year
Other comprehensive income
Exchange differences on
translation of foreign operations
Total comprehensive income for
the year
Issued
capital
$
Retained
earnings
$
Share
based
payment
reserve
$
Foreign
currency
translation
reserve
$
76,549,865
9,211,088
913,104
13,599,924
-
-
-
(6,292,820)
-
(6,292,820)
-
-
-
-
(255,877)
(255,877)
Equity as at 30 June 2020
76,549,865
2,918,268
913,104
13,344,047
Capital
reserve
$
Total
equity
$
-
-
-
-
-
100,273,981
(6,292,820)
(255,877)
(6,548,697)
93,725,284
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
50
21
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Cash Flows
For The Year Ended 30 June 2021
Cash flows from operating activities:
Receipts from customers
Payments to suppliers and employees
Net cash inflow/(outflow) from operations
Refundable Australian R&D tax offsets received
Note
2021
$
2020
$
16,821,687
10,136,280
(14,574,470)
(12,112,055)
2,247,217
(1,975,775)
406,062
623,470
Net cash inflow/(outflow) from operating activities
31.1
2,653,279
(1,352,305)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment
Receipts from partial settlement of land receivable
11.1
Acquisition of property, plant and equipment
Capitalised exploration and evaluation expenditure
Net cash outflow from investing activities
Cash flows from financing activities:
Interest received
Interest paid
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from borrowings
409,520
404,901
-
1,483,981
(1,027,834)
(2,123,232)
(887,601)
(1,831,166)
(1,101,014)
(2,470,417)
7,995
2,160
(292,901)
(631,177)
(1,328,688)
(205,753)
(1,370,000)
(8,187,404)
3,632,861
12,034,612
Net cash inflow from financing activities
31.4
649,267
3,012,438
Net increase/(decrease) in cash and cash equivalents
2,201,532
(810,284)
Cash and cash equivalents at beginning of the year
Net foreign exchange differences
555,504
1,687,549
(186,598)
(321,761)
Cash and cash equivalents at end of the year
31.2
2,570,438
555,504
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
51
22
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
1. Corporate Information
The consolidated financial statements of Astron Corporation Limited for the year ended 30 June 2021
were authorised for issue in accordance with a resolution of the Directors on 3 November 2021 and
relate to the consolidated entity consisting of Astron Corporation Limited (“the Company”) and its
subsidiaries (collectively “the Group”).
The financial statements are presented in Australian dollars ($).
Astron Corporation Limited is a for-profit company limited by shares incorporated in Hong Kong whose
shares are publicly traded through CHESS Depository Interests on the Australian Securities Exchange
(“ASX”).
2. Summary of Significant Accounting Policies
2.1 Basis of Preparation
The financial statements have been prepared in accordance with Hong Kong Financial Reporting
Standards and Interpretations (hereinafter collectively referred to as the (“HKFRS”) issued by the
Hong Kong Institute of Certified Public Accountants (“HKICPA”) and the provisions of the Hong Kong
Companies Ordinance which concern the preparation of financial statements.
The financial statements have also been prepared on a historical cost basis, except for certain
financial instruments which are measured at fair value as explained in the accounting policies set out
below.
Going Concern
As at 30 June 2021, the Group had a deficit of current assets over current liabilities of $6,290,069
(2020: $7,675,705) and incurred a net loss after tax of $2,968,375 (2020: $6,292,820), the loss was
a significant improvement over 2020 due to improved trading conditions. The deficit of current assets
over current liabilities and losses are conditions along with the other matters set out below indicate
that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as
a going concern. The consolidated financial statements have been prepared on the going concern
basis, which assumes the continuity of normal business activity and the realisation of assets and
settlement of liabilities in the normal course of business. The directors are of the view that based
on a cash flow forecast covering 16 months from the end of the reporting period with the
consideration the plans and measures stated below, the business is a going concern as the short-
term needs of the Group to meet its ongoing operating costs and committed project expenditure are
forecast to be covered by the existing resources on hand for at least the next 12 months from the
date of this report (the “forecast period”).
The Group is confident it will have sufficient funds to meet its ongoing needs for at least the
next 12 months from the date of this report based on the following:
•
The three year Savannah, USA contract to obtain ilmenite sands at very low prices came to an
end during the year ended 30 June 2021. The Group is in negotiations with suppliers based in
India to source ilmenite sands, the base raw ingredient for its rutile products. Pending the
successful conclusion of these negotiations, the directors have assumed the Group will need to
source ilmenite sands on the open market at market prices. In addition the directors have
assumed a sales mix more heavily weighted towards rutile agglomerate products, as the sales
margins are higher on these products compared to the predominantly rutile products it sold in
the year just ended, as well as sales of rutile with higher Ti02 (titanium dioxide) content
compared to the previous year just ended. The directors are confident that it can transition sales
of these products to its new and existing rutile customer base and expand its market share in
the PRC market.
52
23
Astron 2021 Annual Report Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.1 Basis of Preparation (continued)
•
•
The Group has recently signed contracts with two India-based suppliers of rutile products and
expects around 30% of its Projected 2022 sales will comprise trading sales of rutile. While
margins on these trading sales is lower than for the Group’s self-manufactured rutile sales,
they expect these trading sales of rutile to make a useful contribution to the Group’s sales and
cash flows.
The directors have assumed the Group will be able to raise significant new funding, whether
through capital raisings, private placement or otherwise, in the coming 12 months to progress
development activities relating to the Donald Project and progress the project.
• With regard to the Group’s bank borrowings, the directors expect to borrow a further $2.1
million (which has already been secured from a bank based in PRC) and has also assumed its
existing bank borrowings of approximately $3.7 million will be renewed and rolled over during
the next 12 months. The directors expect a net $1.3 million in borrowings from third parties to
be repaid during the next 12 months.
•
•
•
The Senegal project has faced delays in proceeding to operational status. The directors do not
expect the commencement of production at its Senegal site in the coming 12 months.
The Group is confident the PRC market for mineral sands and the trading of mineral sands will
further develop with increasing demand over the forecast period.
The undertakings by two of the directors not to demand repayments due to them and their
related entities of approximately $10.8 million until such time when the Group has available
funds and is generating positive operating cash flows (refer note 29.6).
These consolidated financial statements do not include any adjustments relating to the recoverability
and classification of recorded asset amounts or to the amounts and classification of liabilities that
might be necessary should the Group not continue as a going concern.
The following significant accounting policies have been adopted in the preparation and presentation
of the financial statements.
2.2 Basis of Consolidation
The Group financial statements consolidate those of the Parent Company and all of its subsidiaries
as of 30 June 2021. The Parent controls a subsidiary if it is exposed, or has rights, to variable returns
from its involvement with the subsidiary and has the ability to affect those returns through its power
over the subsidiary.
All transactions and balances between Group companies are eliminated on consolidation, including
unrealised gains and losses on transactions between Group companies. Where unrealised losses
on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for
impairment from a group perspective. Amounts reported in the financial statements of subsidiaries
have been adjusted where necessary to ensure consistency with the accounting policies adopted by
the Group.
Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the
year are recognised from the effective date of acquisition, or up to the effective date of disposal, as
applicable.
53
24
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.3 Foreign Currency Translation
The functional and presentation currency of the Company and its Australian subsidiaries is Australian
dollars (“$”).
Foreign currency transactions are translated into the functional currency using the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the end of the reporting period. Foreign exchange
gains and losses resulting from settling foreign currency transactions, as well as from restating
foreign currency denominated monetary assets and liabilities, are recognised in profit or loss except
when they are deferred in other comprehensive income as qualifying cash flow hedges or where they
relate to differences on foreign currency borrowings that provide a hedge against a net investment in
a foreign entity.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when fair value was determined.
The functional currency of the overseas subsidiaries is primarily Chinese Renminbi (“RMB”). The
assets and liabilities of these overseas subsidiaries are translated into the presentation currency of
the Company at the closing rate at the end of the reporting period and income and expenses are
translated at the weighted average exchange rates for the year. All resulting exchange differences
are recognised in other comprehensive income as a separate component of equity (foreign currency
translation reserve). On disposal of a foreign entity, the cumulative exchange differences recognised
in foreign currency translation reserves relating to that particular foreign operation are recognised in
the profit and loss.
2.4 Revenue Recognition
Revenue is recognised at the fair value of the consideration received or receivable. Amounts
disclosed as revenue are net of returns, trade allowances and duties and taxes paid. The following
specific recognition criteria must also be met before revenue is recognised:
Sale of goods
Revenue from contracts with customers is recognised when control of goods or services is
transferred to the customers at an amount that reflects the consideration to which the Group expects
to be entitled in exchange for those goods or services, excluding those amounts collected on behalf
of third parties. Revenue excludes value added tax or other sales taxes and is after deduction of any
trade discounts.
Depending on the terms of the contract and the laws that apply to the contract, control of the goods
or service may be transferred over time or at a point in time. Control of the goods or service is
transferred over time if the Group’s performance:
-
-
-
provides all of the benefits received and consumed simultaneously by the customer;
creates or enhances an asset that the customer controls as the Group performs; or
does not create an asset with an alternative use to the Group and the Group has an enforceable
right to payment for performance completed to date.
If control of the goods or services transfers over time, revenue is recognised over the period of the
contract by reference to the progress towards complete satisfaction of that performance obligation.
Otherwise, revenue is recognised at a point in time when the customer obtains control of the goods
or service.
54
25
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.4 Revenue Recognition (continued)
Sale of goods (continued)
When the contract contains a financing component which provides the customer a significant benefit
of financing the transfer of goods or services to the customer for more than one year, revenue is
measured at the present value of the amounts receivable, discounted using the discount rate that
would be reflected in a separate financing transaction between the Group and the customer at
contract inception. Where the contract contains a financing component which provides a significant
financing benefit to the Group, revenue recognised under that contract includes the interest expense
accreted on the contract liability under the effective interest method. For contracts where the period
between the payment and the transfer of the promised goods or services is one year or less, the
transaction price is not adjusted for the effects of a significant financing component, using the
practical expedient in HKFRS 15.
Customers obtain control of the goods when the goods are delivered to and have been accepted.
Revenue is thus recognised upon when the customers accepted the goods. There is generally only
one performance obligation.
Contract liabilities
A contract liability represents the Group’s obligation to transfer goods to a customer for which the
Group has received consideration (or an amount of consideration is due) from the customer.
Interest income
Interest incoem is recognised as it accrues using the effective interest method. The effective interest
method uses the effective interest rate which is the rate that exactly discounts the estimated future
cash receipts over the expected life of the financial asset.
Rental income
Rental income is accounted for on a straight-line basis over the lease term. Contingent rentals are
recognised as income in the periods when they are earned.
55
26
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.5 Income Tax
The income tax expense for the year is the tax payable on the current year's taxable income based
on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax base of assets and liabilities and their
carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for all temporary differences, between carrying
amounts of assets and liabilities for financial reporting purposes and their respective tax bases, at
the tax rates expected to apply when the assets are recovered or liabilities settled, based on those
tax rates which are enacted or substantively enacted for each jurisdiction. Exceptions are made for
certain temporary differences arising on initial recognition of an asset or a liability if they arose in a
transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit.
Deferred tax assets are only recognised for deductible temporary differences and unused tax losses
if it is probable that future taxable amounts will be available to utilise those temporary differences
and losses.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying
amount and tax bases of investments in subsidiaries, associates and interests in joint ventures where
the parent entity is able to control the timing of the reversal of the temporary differences and it is
probable that the differences will not reverse in the foreseeable future.
The Group has implemented the tax consolidation legislation for the whole of the financial year. The
stand-alone taxpayer within a group approach has been used to allocate current income tax expense
and deferred tax balances to wholly owned subsidiaries that form part of the tax consolidated group
where the head entity has assumed all the current tax liabilities and the deferred tax assets arising
from unused tax losses for the tax consolidated group via intercompany receivables and payables
because a tax funding arrangement has been in place for the whole financial year. The amounts
receivable/payable under tax funding arrangements are due upon notification by the head entity,
which is issued soon after the end of each financial year. Interim funding notices may also be issued
by the head entity to its wholly owned subsidiaries in order for the head entity to be able to pay tax
installments. These amounts are recognised as current intercompany receivables or payables.
To the extent that research and development costs are eligible activities under the “Research and
development tax incentive” programme, a 43.5% refundable tax offset is available for companies with
annual turnover of less than $20 million. The Group recognises refundable tax offsets received in the
financial year as an income tax benefit, in profit or loss.
56
27
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments
(i) Financial assets
A financial asset (unless it is a trade receivable without a significant financing component) is initially
measured at fair value plus, for an item not at fair value through profit or loss (“FVTPL”), transaction
costs that are directly attributable to its acquisition or issue. A trade receivable without a significant
financing component is initially measured at the transaction price.
All regular way purchases and sales of financial assets are recognised on the trade date, that is,
the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are
purchases or sales of financial assets that require delivery of assets within the period generally
established by regulation or convention in the market place.
Equity instruments
On initial recognition of an equity investment that is not held for trading, the Group could irrevocably
elect to present subsequent changes in the investment’s fair value in other comprehensive income.
This election is made on an investment-by-investment basis. Equity investments at fair value
through other comprehensive income are measured at fair value. Dividend income are recognised
in profit or loss unless the dividend income clearly represents a recovery of part of the cost of the
investments. Other net gains and losses are recognised in other comprehensive income and are
not reclassified to profit or loss. All other equity instruments are classified as FVTPL, whereby
changes in fair value, dividends and interest income are recognised in profit or loss.
(ii)
Impairment loss on financial assets
The Group recognises loss allowances for expected credit loss (“ECL”) on trade receivables, other
receivables, and other financial assets measured at amortised cost. The ECLs are measured on
either of the following bases: (1) 12 months ECLs: these are the ECLs that result from possible
default events within the 12 months after the reporting date: and (2) lifetime ECLs: these are ECLs
that result from all possible default events over the expected life of a financial instrument. The
maximum period considered when estimating ECLs is the maximum contractual period over which
the Group is exposed to credit risk.
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the
difference between all contractual cash flows that are due to the Group in accordance with the
contract and all the cash flows that the Group expects to receive. The shortfall is then discounted
at an approximation to the assets’ original effective interest rate.
For trade receivables, the Group applies the simplified approach and has calculated ECLs based
on lifetime ECLs. The Group has established a provision matrix that is based on the Group’s
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment.
For other debt financial assets, the ECLs are based on the 12-months ECLs. However, when there
has been a significant increase in credit risk since origination, the allowance will be based on the
lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECL, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both
quantitative and qualitative information analysis, based on the Group’s historical experience and
informed credit assessment and including forward-looking information.
57
28
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments (continued)
(ii)
Impairment loss on financial assets (continued)
The Group assumes that the credit risk on a financial asset has increased significantly if it is more
than 30 days past due.
The Group considers a financial asset to be credit-impaired when: (1) the borrower is unlikely to
pay its credit obligations to the Group in full, without recourse by the Group to actions such as
realising security (if any is held); or (2) the financial asset is more than 90 days past due.
Interest income on credit-impaired financial assets is calculated based on the amortised cost (i.e.
the gross carrying amount less loss allowance) of the financial asset. For non credit-impaired
financial assets interest income is calculated based on the gross carrying amount.
(iii) Financial liabilities
The Group classifies its financial liabilities, depending on the purpose for which the liabilities were
incurred. Financial liabilities at fair value through profit or loss are initially measured at fair value
and financial liabilities at amortised costs are initially measured at fair value, net of directly
attributable costs incurred.
Financial liabilities at amortised cost
Financial liabilities at amortised cost including trade and other payables and borrowings are
subsequently measured at amortised cost, using the effective interest method. The related interest
expense is recognised in profit or loss.
Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as
through the amortisation process.
(iv) Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset or
financial liability and of allocating interest income or interest expense over the relevant period. The
effective interest rate is the rate that exactly discounts estimated future cash receipts or payments
through the expected life of the financial asset or liability, or where appropriate, a shorter period.
(v) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct
issue costs.
The Hong Kong Companies Ordinance, Cap. 622 (“the Ordinance”), came into operation on 3
March 2014. Under the Ordinance, shares of the Company do not have a nominal value.
Consideration received or receivable for the issue of shares on or after 3 March 2014 is credited to
share capital. Commissions and expenses are allowed to be deducted from share capital under
s. 148 and s. 149 of the Ordinance.
58
29
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2.
Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments (continued)
(vi) Derecognition
The Group derecognises a financial asset when the contractual rights to the future cash flows in
relation to the financial asset expire or when the financial asset has been transferred and the
transfer meets the criteria for derecognition in accordance with HKFRS 9.
Financial liabilities are derecognised when the obligation specified in the relevant contract is
discharged, cancelled or expires.
2.7 Cash and Cash Equivalents
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents includes
cash on hand and at banks, deposits held at call with financial institutions, other short term, highly
liquid investments with maturities of three months or less, that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts.
For the purpose of the Consolidated Statement of Cash Flows, movements in term deposits with
maturity over three months are shown as cash flows from investing activities.
2.8 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises all direct materials,
direct labour and an appropriate portion of variable and fixed overheads. Fixed overheads are
allocated on the basis of normal operating capacity. Costs are assigned to inventories using the
weighted average cost basis. Net realisable value is the estimated selling price in the ordinary course
of business, less the estimated selling cost of completion and selling expenses.
59
30
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.9 Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any
accumulated depreciation and impairment losses.
All other plant and equipment is stated at historical cost, including costs directly attributable to
bringing the asset to the location and condition necessary for it to be capable of operating in the
manner intended by management, less depreciation and any impairments.
Freehold land is not depreciated. Leasehold improvements are depreciated over the shorter of either
the unexpired period of the lease or the estimated useful lives of the improvements.
Depreciation on other assets is calculated on a straight-line basis over the estimated useful life of
the asset as follows:
Class of Asset
Leasehold Buildings
Freehold Land
Plant and Equipment
50 years
Indefinite
3-20 Years
The assets' residual value and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
Gains and losses on disposals are calculated as the difference between the net disposal proceeds
and the asset's carrying amount and are included in profit or loss in the year that the item is de-
recognised.
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour,
borrowing costs (if any) and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably.
Additional costs incurred on impaired capital works in progress are expensed in profit or loss.
60
31
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.10 Leases
All leases (irrespective of they are operating leases or finance leases) are required to be captialised
in the statement of financial position as right-of-use assets and lease liabilities, but accounting policy
choices exist for an entity to choose not to capitalise (i) leases which are short-term leases and/or
(ii) leases for which the underlying asset is of low-value. The Group has elected not to recognise
right-of-use assets and lease liabilities for which at the commencement date have a lease term of
12 months or less. The lease payments associated with those leases have been expensed on
straight-line basis over the lease term.
Right-of-use asset
The right-of-use asset should be recognised at cost and would comprise: (i) the amount of the initial
measurement of the lease liability; (ii) any lease payments made at or before the commencement
date, less any lease incentives received; (iii) any initial direct costs incurred by the lessee and (iv)
an estimate of costs to be incurred by the lessee in dismantling and moving the underlying asset to
the condition required by the terms and conditions of the lease, unless those costs are incurred to
produce inventories. Except for right-of-use asset that meets the definition of an investment property
or a class of property, plant and equipment to which the Group applies the revaluation model, the
Group measures the right-of-use assets applying the cost model. Under the cost model, the Group
measures the right-of-use assets at cost, less any accumulated depreciation and any impairment
losses, and adjusted for any remeasurement of lease liability. Lease assets are depreciated on a
straight-line basis over their expected useful lives on the same basis as owned assets, or where
shorter, the term of the relevant lease.
The following payments for the right-of-use the underlying asset during the lease term that are not
paid at the commencement date of the lease are considered to be lease payments: (i) fixed
payments less any lease incentives receivable; (ii) variable lease payments that depend on an
index or a rate, initially measured using the index or rate as the commencement date; (iii) amounts
expected to be payable by the lessee under residual value guarantees; (iv) the exercise price of a
purchase option if the lessee is reasonably certain to exercise that option and (v) payments of
penalties for terminating the lease, if the lease term reflects the lessee exercising an option to
terminate the lease.
61
32
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.11 Intangibles
Research and development costs
Research costs are expensed as incurred. Development costs incurred on an individual project is
capitalised if the product or service is technically feasible, adequate resources are available to
complete the project, it is probable that future economic benefits will be generated and expenditure
attributable to the project can be measured reliably. Expenditure capitalised comprises costs of
services and direct labour. Other development costs are expensed when they are incurred. The
carrying value of development costs is reviewed annually when the asset is not yet available for use,
or when events or circumstances indicate that the carrying value may be impaired.
Capitalised development costs are amortised over the periods the Group expects to benefit from
selling the products developed. The amortisation expense is recognised in profit or loss.
Exploration and Evaluation Expenditure
(i) Costs carried forward
Costs arising from exploration and evaluation activities are carried forward provided that the
rights to tenure of the area of interest are current and such costs are expected to be recouped
through successful development, or by sale, or where exploration and evaluation activities have
not, at reporting date, reached a stage to allow a reasonable assessment regarding the
existence of economically recoverable reserves. Expenditure incurred is accumulated in
respect of each identifiable area of interest.
Water rights
The Group has capitalised water rights. The water rights are amortised over the term of the
right. The carrying value of water rights is reviewed annually or when events or circumstances
indicate that the carrying value may be impaired.
(ii) Costs abandoned area
Costs carried forward in respect of an area of interest that is abandoned are written off in the
year in which the decision to abandon is made.
(iii) Regular review
A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
(iv) Costs of site restoration
Costs of site restoration are to be provided once an obligation presents. Site restoration costs
include the dismantling and removal of mining plant, equipment and building structures, waste
removal and rehabilitation of the site in accordance with clauses of the mining permits. Such
costs will be determined using estimates of future costs, current legal requirements and
technology on a discounted basis.
62
33
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.12 Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that
individual assets are impaired. Where impairment indicators exist, recoverable amount is
determined and impairment losses are recognised in the profit and loss where the asset's carrying
value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value
less costs to sell and value in use. For the purpose of assessing value in use, the estimated future
cash flows are discounted to their present value using a pretax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset.
Where it is not possible to estimate recoverable amount for an individual asset, recoverable amount
is determined for the cash generating unit to which the asset belongs.
2.13 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to
the cost of those assets, until such time as the assets are substantially ready for their intended use
or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
2.14 Provisions
Provisions for legal claims, service warranties and make good obligations are recognised when the
Group has a present legal or constructive obligation as a result of a past event, it is probable that
that an outflow of economic resources will be required to settle the obligation and the amount can
be reliably estimated. Provisions are not recognised for future operating losses.
Where the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pretax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
2.15 Employee Benefit Provisions
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave expected to be settled within 12 months of the end of the reporting period are recognised
in respect of employees' services rendered up to the end of the reporting period and measured at
amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick
leave are recognised when leave is taken and measured at the actual rates paid or payable.
Liabilities for wages and salaries and annual leave are included as part of “Other Payables”.
Bonus plan
The Group recognises an expense and a liability for bonuses when the entity is contractually obliged
to make such payments or where there is past practice that has created a constructive obligation.
Retirement benefit obligations
The Group contributes to employee superannuation funds in accordance with its statutory
obligations. Contributions are recognised as expenses as they become payable.
63
34
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.16 Share Based Payments
The Group may provide benefits to employees (including Directors) of the Group in the form of share-
based payment transactions, whereby employees render services in exchange for shares ("equity
settled transactions"). Such equity settled transactions are at the discretion of the Remuneration
Committee.
The fair value of options or rights granted is recognised as an employee benefit expense with a
corresponding increase in equity (share-based payment reserve). The fair value is measured at
grant date and recognised over the period during which the employees become unconditionally
entitled to the options. Fair value is determined using a Black-Scholes option pricing model. In
determining fair value, no account is taken of any performance conditions other than those related
to the share price of Astron Corporation Limited ("market conditions"). The cumulative expense
recognised between grant date and vesting date is adjusted to reflect the Directors’ best estimate of
the number of options or rights that will ultimately vest because of internal conditions of the options
or rights, such as the employees having to remain with the Group until vesting date, or such that
employees are required to meet internal KPI. No expense is recognised for options or rights that do
not ultimately vest because internal conditions were not met. An expense is still recognised for
options or rights that do not ultimately vest because a market condition was not met.
Where the terms of options or rights are modified, the expense continues to be recognised from
grant date to vesting date as if the terms had never been changed. In addition, at the date of the
modification, a further expense is recognised for any increase in fair value of the transaction as a
result of the change.
Where options are cancelled, they are treated as if vesting occurred on cancellation and any
unrecognised expenses are taken immediately to profit or loss. However, if new options are
substituted for the cancelled options or rights and designated as a replacement on grant date, the
combined impact of the cancellation and replacement are treated as if they were a modification.
When shareholders’ approval is required for the issuance of options or rights, the expenses are
recognised based on the grant-date fair value according to the management estimation. This
estimate is re-assessed upon obtaining formal approval from shareholders.
2.17 Dividends/Return of Capital
No dividends were paid or proposed for the years ended 30 June 2021 and 30 June 2020. There is
no Dividend Reinvestment Plan in operation.
2.18 Segment Reporting
Segment revenues, expenses, assets and liabilities are those that are directly attributable to a
segment and the relevant portion that can be allocated to the segment on a reasonable basis.
Segment assets include all assets used by a segment and consist primarily of operating cash,
receivables, inventories, property, plant and equipment and other intangible assets. Segment
liabilities consist primarily of trade and other creditors, employee benefits and provisions.
64
35
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.19 Earnings Per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the Company
by the weighted average number of ordinary shares outstanding during the financial year, adjusted
for bonus elements in ordinary shares during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the basic earnings
by the after tax effect of dividends and interest associated with dilutive potential ordinary shares.
The weighted average number of shares used is adjusted for the weighted average number of
ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares
into ordinary shares.
2.20 Goods and Services Tax (“GST”)/Value Added Tax (“VAT”)
Revenues, expenses are recognised net of GST/VAT except where GST/VAT incurred on a
purchase of goods and services is not recoverable from the taxation authority, in which case the
GST/VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item.
Receivables and payables are stated with the amount of GST/VAT included. The net amount of
GST/VAT recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the consolidated statement of financial position.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or
payable to, the taxation authority.
2.21 Government grant
Government grants are not recognised until there is reasonable assurance that the Group will
comply with the conditions attaching to them and that the grants will be received. Grants that
compensate the Group for expenses incurred are recognised as income or deducted in the related
expenses, as appropriate, in profit or loss on a systematic basis in the same periods in which the
expenses are incurred.
Grants that compensate the Group for the cost of an asset are recognised as deferred income in the
consolidated statement of financial position and transferred to profit or loss on a systematic and
rational basis over the useful lives of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or
for the purpose of giving immediate financial support to the Group with no future related costs are
recognised in profit or loss in the period in which they become receivable and are recognised as
other income, rather than reducing the related expense.
65
36
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS
(i) Adoption of new or revised HKFRSs - effective on 1 July 2020
The HKICPA has issued a number of new or amended HKFRSs that are first effective for the
current accounting period of the Group:
• Amendments to HKFRS 3, Definition of a Business
• Amendments to HKAS 1 and HKAS 8, Definition of Material
• Amendments to HKAS 39, HKFRS 7 and HKFRS 9, Interest Rate Benchmark Reform
• Amendments to HKFRS 16, COVID-19-Related Rent Concessions
Other than the amendments to HKFRS 3, none of these new or amended HKFRSs has
material impact on the Group’s results and financial position for the current or prior period
and/or accounting policies. Impact on the application of amendments to HKFRS 3 is
summarised below.
Amendments to HKFRS 3 Definition of a Business
The amendments clarify the definition of a business and introduce an optional concentration
test that permits a simplified assessment of whether an acquired set of activities and assets
is not a business. The election to apply the concentration test is made for each transaction.
The concentration test is met if substantially all of the fair value of the gross assets acquired
is concentrated in a single identifiable asset or group of similar identifiable assets. If the
concentration test is met, the set of activities and assets is determined not to be a business.
If the concentration test is failed, the acquired set of activities and assets is further assessed
based on the elements of a business.
The Group elected to apply the amendments prospectively to acquisitions for which the
acquisition date is on or after 1 July 2020.
66
37
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS (continued)
(ii) New or revised HKFRSs that have been issued but are not yet effective
The following new or revised HKFRSs, potentially relevant to the Group’s financial statements,
have been issued, but are not yet effective and have not been early adopted by the Group.
The Group’s current intention is to apply these changes on the date they become effective.
Amendments to HKAS 1
HK-Int 5 (2020)
Classification of Liabilities as Current or Non-current4
Presentation of Financial Statements - Classification by
Amendments to HKAS 16
Amendments to HKAS 37
Amendments to HKFRS 3
Amendments to HKAS 39,
HKFRS 7, HKFRS 9 and
HKFRS 16
Annual Improvements to
HKFRSs 2018-2020
the Borrower of a Term Loan that Contains a
Repayment on Demand Clause4
Proceeds before Intended Use2
Onerous Contracts - Cost of Fulfilling a Contract2
Reference to the Conceptual Framework3
Interest Rate Benchmark Reform – Phase 21
Amendments to HKFRS 9 Financial Instruments and
HKFRS 16 Leases2
1
2
3
4
Effective for annual periods beginning on or after 1 January 2021
Effective for annual periods beginning on or after 1 January 2022
Effective for business combinations for which the date of acquisition is on or after
the beginning of the first annual period beginning on or after 1 January 2022.
Effective for annual periods beginning on or after 1 January 2023
The directors anticipate that all of the relevant pronouncements will be adopted in the Group’s
accounting policy for the first period beginning after the effective date of the pronouncement.
The directors are currently assessing the possible impact of these new or revised standards
on the Group’s results and financial position in the first year of application. Those new or
revised HKFRSs that have been issued but are not yet effective are unlikely to have material
impact on the Group’s results and financial position upon application.
67
38
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
3. Critical Accounting Estimates and Judgments
In the application of the Group’s accounting policies, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods.
3.1 Impairment assessment of intangible assets and property, plant and equipment (“PPE”)
The Group assesses impairment at the end of each reporting period by evaluating conditions specific
to the Group that may lead to impairment of intangible assets and PPE. Where an impairment trigger
exists, the recoverable amount of the asset is determined. Fair value less costs to dispose
calculations are performed in assessing recoverable amounts incorporate a number of key estimates
and judgements.
The Group has used a combination of independent and Director valuations to support the carrying
value of intangible assets while the Group also uses bankable feasibility status reports where these
are available. The Group’s main intangible assets are its exploration and evaluation assets related
to the Donald Mineral Sands project located in Victoria, Australia and its development costs incurred
on the Niafarang project in Senegal. The valuations use various assumptions to determine future
cash flows based around risks including capital, geographical, markets, foreign exchange and
mineral price fluctuations.
All other assets have been assessed for impairment based on either their value in use or fair value
less costs to sell. The impairment assessments inherently involve significant judgements and
estimates to be made.
Capitalisation of Exploration and Evaluation Assets
The Group has continued to capitalise expenditure, incurred on the exploration and evaluation of the
Donald Mineral Sands project in Victoria, Australia in accordance with HKFRS 6. This has occurred
because the technical feasibility and economic viability of extracting the mineral resources have not
been completed and hence are not demonstrable at this time. The Group has assessed that the
balances capitalised will be recoverable through the project’s successful development.
Capitalisation of Development Assets
The Group has continued to capitalise expenditure, in accordance with HKAS 38, incurred on the
development of the Niafarang Mineral Sands project in Senegal. The Group has assessed that the
balances capitalised will be recoverable through the project’s successful development.
68
39
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
3. Critical Accounting Estimates and Judgments (continued)
3.2 Provision for Expected Credit Losses of Receivables
The provision for impairment of receivables assessment requires a degree of estimation and
judgement. The level of provision is assessed by taking into account the recent sales experience, the
aging of receivables, historical collection rates and specific knowledge of the individual debtors’
financial position. The Group has an outstanding receivable for the disposal of surplus land in China
from 2015, further details of which are set out in note 11.1. During the year, the Group made progress
with $1.1 million due at year end (2020: $1.5 million). The Group is confident the balance will be
settled within the next twelve months.
3.3 Income Tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgment is
required in determining the provision for income tax. There are transactions and calculations
undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain. The group recognises tax receivables and liabilities based on the Group’s current
understanding of the tax law. Where the final tax outcome of these matters is different from the
carrying amounts, such differences will impact the current and deferred tax provisions in the period
in which such determination is made.
3.4 Deferred Tax Assets
Deferred tax assets have not been recognised for capital losses and revenue losses as the utilisation
of these losses is not considered probable at this stage.
3.5 Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable
evidence available at each reporting date. The future realisation of these inventories may be affected
by future technology or other market-driven changes that may reduce future selling prices.
69
40
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
4. Segment Information
4.1 Description of Segments
The Group has adopted HKAS 8 Operating Segments from whereby segment information is
presented using a 'management approach', i.e. segment information is provided on the same basis
as information used for internal reporting purposes by the Managing Director/President (chief
operating decision maker) who monitors the segment performance based on the net profit before tax
for the period. Operating segments have been determined on the basis of reports reviewed by the
Managing Director/President who is considered to be the chief operating decision maker of the Group.
The reportable segments are as follows:
• Donald Mineral Sands (“DMS”): Development of the DMS mine
• China: Development and construction of mineral processing plant and mineral trading
• Senegal: Development of the Niafarang mine
• Other: Group treasury and head office activities
70
41
Astron 2021 Annual Report
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4
72
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
4. Segment Information (continued)
4.3 Geographical Information
Although the Group is managed globally, it operates in the following main geographical areas:
Hong Kong
The Company was incorporated in Hong Kong.
Australia
The home country of Astron Pty Limited (formerly known as “Astron Limited”) and one of the operating
subsidiaries which performs evaluation and exploration activities. Interest and rental income is
derived from Australian sources.
China
The home country of subsidiaries which operate in the mineral trading and downstream development
segment.
Other
The Group is focused on developing mineral sands opportunities, principally in Senegal with a view
to integrating into the Chinese operations.
Sales revenue
Interest income
Non-current assets
Australia
China
2021
$
-
2020
$
-
16,418,037
8,430,039
Other countries
-
-
16,418,037
8,430,039
2021
$
15
7,873
108
7,996
2020
$
2021
$
2020
$
245
76,527,391
75,466,807
1,429
22,755,043
23,011,947
485
9,158,714
9,655,941
2,159
108,441,148
108,134,695
During 2021, $11,203,149 or 68% (2020: $5,627,444 or 67%) of the revenue depended on five (2020:
five) customers.
5. Revenue and Other Income
Revenue from contracts with customers within the scope of
HKFRS 15
Timing of revenue recognition – at a point in time
- sale of goods
16,418,037
8,430,039
2021
$
2020
$
73
44
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
5. Revenue and Other Income – Continued
Interest income
Other income:
rental income
-
reversal of interest expenses for offtake agreement (note 21(a))
-
- government subsidies (note)
- gain on disposal of property, plant and equipment
- other income
Total other income
2021
$
2020
$
7,996
2,159
142,778
1,199,551
201,915
215,294
10,596
1,770,134
174,482
-
-
-
169,764
344,246
Note: Among the government subsidies, an amount of $62,700 (2020: Nil) for 4 employee is a government
grant obtained from the JobKeeper program launched by the Australian Government supporting
the payroll of the Group’s Australian employees. There was no voluntary repayments of JobKeeper
payments received made by the Group.
74
45
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
6. Loss Before Income Tax Expense
Loss before income tax expense is arrived at after charging/crediting:
6.1 Employee benefits (including directors’ remuneration):
Salaries and fees
Non-cash benefits
Employee share option expenses (note 25.4)
Superannuation
6.2 Other items
Finance costs:
- on borrowings and early redemption of note receivables
- on Wensheng deposits (note 21(a))
Short-term lease charges in respect of premises
Research and development costs
Depreciation and amortisation
Less: capitalisation of water rights amortisation (note 17(f))
Costs associated with Gambia litigation (note 13)
Reversal of provision for impairment on receivables (note 11)
2021
$
632,964
124,196
299,943
38,183
1,095,286
2020
$
677,573
182,333
-
42,105
902,011
2021
$
2020
$
190,660
-
190,660
9,981
526,916
2,175,604
(593,260)
1,582,344
(34,668)
(27,359)
629,216
1,022,335
1,651,551
48,479
783,206
2,234,886
(593,261)
1,641,625
136,006
(469,657)
75
46
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
7.
Income Tax Expense
7.1 The components of tax expense comprise:
Current tax benefit in respect of current year
Deferred taxation:
- Unrealised inventory
- Loss recognised/(carried forwards) for the year
- Capitalisation of expenditure on DMS project (net)
- Write-down of deferred tax assets
- Other movements
Total
2021
$
406,062
(2,967,643)
(769,726)
-
(1,661,165)
(532,899)
(3,853)
2020
$
623,470
(711,587)
(1,026,798)
210,949
42,547
-
61,715
(2,561,581)
(88,117)
The Company is subject to Australian Income Tax which is calculated at 26% (2020: 27.5%) of its
estimated assessable profit. No Australian Income Tax has been provided in the financial statements
as the Company did not derive any estimated assessable profit in Australia for the current and prior
years.
7.2 The prima facie tax on loss before income tax is reconciled to the income tax as follows:
Loss before income tax expense
(406,794)
(6,204,703)
2021
$
2020
$
Prima facie tax payable on profit 26% (2020: 27.5%)
-
continuing operations
Add/(Less) tax effect of:
change in tax rates
non-deductible items - Gambia
non-taxable items
tax losses not recognised on overseas entities
research & development tax incentive *
-
-
-
-
-
- write-down of deferred tax assets
-
adjustment related to capitalise expenditure on DMS
project
impact of overseas tax differential
-
Income tax expense
(105,766)
(105,766)
(1,706,293)
(1,706,293)
(353,133)
(9,014)
(161,280)
732,493
(406,062)
532,899
2,317,224
14,220
2,561,581
-
37,402
(149,411)
2,534,088
(623,470)
-
-
(4,199)
88,117
* Tax benefit relates to Australian Government Grant in relation to research & development tax
incentives on eligible expenditure related to the DMS project.
76
47
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
7.
Income Tax Expense (continued)
7.3 Income tax rates
Australia
In accordance with the Australian Income Tax Act, Astron Pty Limited and its 100% owned Australian
subsidiaries have formed a tax consolidated group, tax funding or sharing agreements have been
entered into. Australia has a double tax agreement with China and there are currently no impediments
to repatriating profits from China to Australia. Dividends paid to Astron Pty Limited from Chinese
subsidiaries are non-assessable under current Australian Income Tax Legislation.
China (including Hong Kong)
The Company is subject to Hong Kong tax law.
The Group’s subsidiaries in China and are subject to Chinese income tax laws. Chinese taxation
obligations have been fully complied based on the regular tax audits performed by the Chinese tax
authorities.
7.4 Items not chargeable or not deductible for tax purposes
Items not chargeable or deductible for tax purposes for the Group principally represent costs
associated with the Gambian litigation and other costs incurred but not related to operations.
77
48
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
8. Loss Per Share
8.1 Reconciliation of loss used in the calculation of loss per share:
Loss attributable to owners
Loss used to calculate basic and diluted loss per share
8.2 Weighted average number of ordinary shares:
2021
$
2020
$
(2,968,375)
(2,968,375)
(6,292,820)
(6,292,820)
2021
2020
Weighted average number of ordinary shares outstanding
during the year for the purpose of basic and diluted loss per
share
122,479,784
122,479,784
8.3 Dilutive shares
For the purpose of calculating diluted loss per share for the year ended 30 June 2021 and 2020, no
adjustment has made as the exercise of the outstanding share options has an anti-dilutive effect on
the basic loss per share.
9. Auditors' Remuneration
Audit and review of financial statements
BDO Limited
10. Cash and Cash Equivalents
Cash on hand
Cash at bank
Total
2021
$
2020
$
195,181
195,181
197,877
197,877
2021
$
4,571
2,565,867
2,570,438
2020
$
41,798
513,706
555,504
Cash on hand is non-interest bearing. Cash at bank comprise bank current account balances and short-
term deposits at call bear floating interest rates between 0.0% and 1.30% (2020: 0.0% and 0.01%).
Deposits have an average maturity of 90 days (2020: 90 days).
78
49
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
10. Cash and Cash Equivalents (continued)
10.1 Concentration of risk by geography – cash and cash equivalents
Australia
China
Hong Kong
USA
Senegal
Total
10.2 Concentration of risk by bank
Australia
Commonwealth Bank - S&P rating of AA-
(2020: AA-)
Westpac Bank - S&P rating of AA- (2020: AA-)
Bank of China - S&P rating of A (2020: A)
Other Australian banks
China
Bank of China - S&P rating of A (2020: A1)
Construction Bank - S&P rating of A (2020: A)
China Zheshang Bank – Baa3 (2020: BA1)
Shengjing Bank – unrated
Shanghai Pudong Development Bank - S&P rating of BBB
Other banks
Other countries
Other banks
Restrictions on cash
2021
$
771,882
1,773,122
-
-
25,434
2,570,438
2020
$
237,194
260,153
2,250
27,813
28,094
555,504
2021
$
2020
$
735,134
-
-
36,672
771,806
2,465
102
7,175
1,032,669
633,333
92,883
1,768,627
25,434
25,434
187,105
1,646
12,050
36,279
237,080
10,861
122
206,141
1,330
-
14
218,468
58,158
58,158
The Chinese domiciled cash on hand may have some restriction on repatriation to Australia
depending on basis on which the funds are transferred to Australia. Depending on the basis, there
may be taxes (including withholding tax) of 13% (2020: 13%) to be paid.
As at 30 June 2021, the Chinese domiciled cash at banks included $412,790 (2020: Nil) of cash
restricted by bank as security for certain note payables and letters of credit.
79
50
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
10. Cash and Cash Equivalents (continued)
10.3 Term deposits greater than 90 days
Term deposits with maturity over 90 days
2021
$
46,112
2020
$
46,112
As at 30 June 2021, term deposits with maturity over 90 days of $46,112 (2020: $46,112) bear fixed
interest rates of 0.9% (2020: 0.9%) and have a maturity of 3-6 months.
Restrictions on cash
The short-term deposits include $45,000 (2020: $45,000) of cash backed by Bank Guarantees for
the operations of the Donald Mineral Sands project.
10.4 Concentration of risk by geography – term deposits
Australia
10.5 Concentration of risk by bank – term deposits
Australia
Commonwealth Bank-S&P rating of AA- (2020: AA-)
Other
2021
$
46,112
2020
$
46,112
2021
$
35,000
11,112
46,112
2020
$
35,000
11,112
46,112
80
51
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
11. Trade and Other Receivables and Prepayments
Current assets:
Trade debtors
Impairments
Net trade debtors
Land sale receivable
Impairments
Net land sale receivables
Sundry receivable
Prepayments
Impairments
Net prepayments
Total
11.1 Land sale receivable
Note
11.2
11.3
11.1
11.4
11.4
2021
$
2020
$
2,644,692
(38,758)
2,605,934
1,087,535
(41,870)
1,045,665
1,555,881
9,181,458
(371,511)
2,653,109
(38,637)
2,614,472
1,495,660
(65,062)
1,430,598
545,760
6,818,551
(370,355)
8,809,947
14,017,427
6,448,196
11,039,026
During the year ended 30 June 2014, the Group entered into an agreement to transfer 1,065,384
sqm of land held in Yingkou Province in China to a state-owned entity. As the under-development
of this land resulted from a change of government development plans and restructure, this land
transfer has been subsidised by the Chinese Government. Final contracts over the land sale have
been exchanged and the disposal was brought to account in the year ended 30 June 2015. The net
proceeds receivable amounted to $20,356,248.
The land contract is unconditional, and payment is binding on the buyer being the Yingkou
Government and its related entities, but the payments expected have been delayed. During the year
ended 30 June 2021, there were receipts of $404,901 (2020: $1,483,981) with a gross balance
receivable of $1,087,535 (2020: $1,495,660). While the receivable is currently outside the terms
initially agreed, the Group is confident all of the amounts outstanding will be received.
As at 30 June 2021 the total amount outstanding before ECL provision was $1,087,535 (2020:
$1,495,660). The directors continue to believe this remaining balance will be recovered in full as it
is owed by a Chinese government entity but estimate it will now be settled in 2022. The provision
has accordingly been determined on that basis. During the year ended 30 June 2021, the Group
received payment of $404,901 and therefore reversal of expected credit loss of $22,947 (2020:
$201,090) was recognised for the year ended 30 June 2021. As at 30 June 2021, the impairment
provision for land sale receivable is $41,870 (2020: $65,062).
81
52
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
11. Trade and Other Receivables (continued)
11.2 Ageing analysis
The ageing analysis of trade debtors, based on due dates, is as follows:
0-30 days (not past due)
Total
2021
$
2020
$
2,605,934
2,605,934
2,614,472
2,614,472
At the end of the reporting period, the Group’s trade debtors are predominantly receivable from
Chinese trading partners. The Chinese debtors are regularly reviewed and as is common practice
in China the terms may be extended to preserve client relationships. Where applicable the Group
has impaired significantly overdue receivables.
It is the Group’s policy that where possible that sales are made in exchange for notes (guaranteed
by a Chinese bank) minimising the Group’s exposure to an impairment issue.
11.3 Impairment on trade debtors
At year end, the Group has reviewed its trade debtors and brought to account impairment where
required.
During the year ended 30 June 2021, no reversals of expected credit loss (2020: $268,567) on trade
debtors was recognised for the year ended 30 June 2021. As at 30 June 2021, the impairment
provision for trade debtors is $38,758 (2020: $38,637).
11.4 Prepayments
At year end, the Group had made advances for property, plant and equipment purchases.
Included in prepayments is an amount of RMB1,800,000 carried forward from 2008, equivalent to
$371,511 (2020: $370,355) which is the prepayment for construction. This amount has been fully
impaired due to low possibility of collection.
12. Inventories
Raw materials
Work-in-progress
Finished goods
Goods in transit
Total
2021
$
653,510
1,937,319
195,467
-
2,786,296
2020
$
3,308,399
107,213
6,321,450
193,278
9,930,340
There is no provision against inventory to net realisable value as of 30 June 2021 and 2020.
82
53
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
13. Investments in Gambia
Carnegie Minerals (Gambia) Limited is a 100% subsidiary of the Company. It was incorporated to
commence mining activities in Gambia. The investments and receivables associated with the company
have been impaired in full. The original agreement prior to the seizure of the assets was that Astron Pty
Limited had an obligation to fund the development and operating costs of the mine by way of loans.
As announced to the ASX on 23 July 2015, the Group has received a successful finding in its favour. The
Group and the Gambian government made submissions on damages to the International Centre for
Settlement of Investment Disputes (“ICSID”). ICSID has determined the award including damages in
favour of Astron.
The determination was for US$18,658,358 in damages for breach of the mining licence, interest of
US$993,683, arbitration costs of US$445,860 (minus any sums refunded to Astron by ICSID on its final
accounting) and £2,250,000 for legal costs. In total this is approximately $31 million.
On 2 December 2015, the Group notified the ASX that Gambia had submitted an application for annulment
to ICSID, on the grounds of the constitution of the arbitral tribunal, and arguments about admissibility and
jurisdiction. An application for annulment is the only form of action open to Gambia under the ICSID rules,
as there is no form of appeal process.
The ICSID panel of 3 arbitrators has confirmed that the Award should not be annulled in whole or in part
in July 2020. The Group has been ordered to meet one half of the cost of the Committee being
US$221,992 payable to Gambia and shall be offset against sums due under the Award. As of 30 June
2021, no assets arising from this matter were recognised.
When the Group receives a settlement, an additional contingent legal fee of £171,000 (equivalent to
approximately $307,000) is payable to Clyde & Co.
During the year, the Group incurred additional legal and other related expenses to the Gambian
proceedings in the amounts of $7,931. However, a reversal of $42,599 was recognised due to an over-
provision of prior year expenses, therefore a net credit of $34,668 (2020: $136,006 expense) was
recognised in the year ended 30 June 2021.
14. Financial Assets At Fair Value Through Profit Or Loss
Equity securities
- Listed in Australia
Total financial assets at fair value through profit or loss
2021
$
2020
$
15,032
15,032
20,322
20,322
Financial assets at fair value through profit or loss represent listed equity investments in Australia. These
financial assets comprise investments in the ordinary issued capital of three public companies listed on
the ASX. The cost of these investments was $1,877,716. There are no fixed returns or fixed maturity date
attached to these investments.
There will be no capital gains tax payable on the sale of these assets due to existing capital losses carried
forward. For listed equity securities and preference shares, fair value is determined by reference to closing
bid prices on the ASX.
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
15. Subsidiaries
Financial Year 2021
Parent entity
Astron Corporation Limited
Subsidiaries of parent entity
Astron Pty Limited
Astron Mineral Sands Pty Limited
Astron Titanium (Yingkou) Co Ltd
Astron Titanium (Yingkou) Hong Kong Holdings Limted
(note ii)
Carnegie Minerals (Gambia) Inc
Carnegie Minerals (Gambia) Limited
Camden Sands Inc
Coast Resources Limited
Dickson & Johnson Pty Limited
Donald Mineral Sands Pty Ltd
Sovereign Gold Pty Limited
WIM 150 Pty Limited
Astron Senegal Holding Pty Ltd
Senegal Mineral Resources SA
Senegal Mineral Sands Ltd
Zirtanium Pty Limited
(i) Equity
Percentage
Owned
Ordinary
Shares
2021
Percentage
Owned
Ordinary
Shares
2020
Country of
incorporation
Hong Kong
Australia
Australia
China
Hong Kong
USA
The Gambia
USA
Isle of Man
Australia
Australia
Australia
Australia
Hong Kong
Senegal
Hong Kong
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
The proportion of ownership interest is equal to the proportion of voting power held.
(ii) Disposal/Acquisition of subsidiaries
During the current and prior years, no subsidiaries were disposed.
No subsidiaries were acquired during the current and prior years while Astron Titanium (Yingkou)
Hong Kong Holdings Ltd was incorporated in Hong Kong on 3 June 2021.
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
16. Property, Plant and Equipment
Land
At cost
Total land
Buildings
At cost
Less accumulated depreciation
Net carrying value
Capital works in progress
At cost
Less accumulated impairment losses
Total capital works in progress
Plant and equipment
At cost
Less accumulated depreciation
Less accumulated impairment losses
Net carrying value
Total property, plant and equipment
16.1 Assets pledged as security
2021
$
2020
$
5,162,151
5,162,151
5,162,151
5,162,151
9,826,972
(3,396,417)
6,430,555
10,252,018
(2,908,313)
7,343,705
5,259,881
(1,976,775)
3,283,106
4,270,613
(1,970,628)
2,299,985
17,421,391
(4,699,498)
(1,748,975)
10,972,918
17,347,239
(3,761,533)
(1,743,536)
11,842,170
25,848,730
26,648,011
As at 30 June 2021, property, plant and equipment with carrying value of $3,919,730 (2020:
$3,957,471) were pledged as security for short term loans (note 22(b)).
16.2 Capital works in progress
Capital works in progress represent plant and equipment being assemble and/or constructed. They are
not ready for use and not yet being depreciated.
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
16. Property, Plant and Equipment (continued)
16.3 Movements in net carrying values
Movement in the carrying amount for each class of property, plant and equipment between the
beginning and the end of the current financial year.
Year ended 30 June 2021
Balance at 1 July
Additions
Depreciation
Disposals
Capital
works in
progress
$
Land
$
Buildings
$
Plant and
equipment
$
Total
$
2,299,985
5,162,151
7,343,705
11,842,170 26,648,011
975,946
-
-
-
-
-
-
-
51,888
1,027,834
(592,347)
(911,771)
(1,504,118)
(332,166)
-
(332,166)
11,363
(9,369)
9,169
Foreign exchange movements
7,175
Balance at 30 June
3,283,106
5,162,151
6,430,555
10,972,918 25,848,730
Year ended 30 June 2020
Balance at 1 July
Additions
Depreciation
Transfers #
Foreign exchange movements
1,931,553
4,338,027
8,351,503
11,599,344 26,220,427
1,235,095
824,124
-
64,014
2,123,233
-
(850,462)
(16,201)
-
-
-
(561,821)
(997,889)
(1,559,710)
-
850,462
-
(445,977)
326,239
(135,939)
Balance at 30 June
2,299,985
5,162,151
7,343,705
11,842,170 26,648,011
# The Group allocated the development costs in relation to the Mineral separation plant in China
to capital works in progress. Once the Mineral Separation Plant had been commissioned the
development expenditure was transferred from capital works in progress to plant and equipment.
17. Exploration and Evaluation Assets
Evaluation costs
Cost
Accumulated impairment loss
Net carrying value
Exploration expenditure capitalised - DMS project
Exploration and evaluation phases
Net carrying value
Water rights - DMS project
Net carrying value
Note
17(b)
17(b)
17(b)
17(a)(c)
17(a)(d)
2021
$
2020
$
7,792,696
(7,487,231)
305,465
7,791,746
(7,487,231)
304,515
59,514,726
59,514,726
57,862,304
57,862,304
11,537,694
12,130,954
Total exploration and evaluation assets
17(f)
71,357,885
70,297,773
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
17. Exploration and Evaluation Assets (continued)
(a) Exploration and evaluation assets
The Group has presented “Exploration and Evaluation assets” separately on the face of the
consolidated statement of financial position since 2018 financial year. Previously these assets were
included as a sub-category under “Intangible Assets”.
The movements represent additions, movements in foreign exchange and amortisation. Capital
expenditure commitments are detailed in note 30.2.
(b) Evaluation costs and impairment losses
TiO2 project
Cost
Less accumulated impairment losses
Net carrying value
Capitalised testing and design
Cost
Net carrying value
Total
Cost
Less accumulated impairment losses
Total evaluation costs
(c) Exploration and evaluation expenditure
2021
$
2020
$
7,487,231
(7,487,231)
-
7,487,231
(7,487,231)
-
305,465
305,465
304,515
304,515
7,792,696
(7,487,231)
305,465
7,791,746
(7,487,231)
304,515
This expenditure relates to the Group's investment in the Donald Mineral Sands Project. As at 30
June 2021, the Group has complied with the conditions of the granting of MIN5532, RL 2002 (formerly
EL4433), RL2003 (formerly EL4432, and incorporating the former RL 2006) and EL5186. As such,
the Directors believe that the tenements are in good standing with the Department of Economic
Development, Jobs, Transport and Resources (which has incorporated the responsibilities previously
administered by the Department of Primary Industries) in Victoria, who administers the Mineral
Resources Development Act 1990.
During the year, DMS continued to develop the technical aspects of the fine grain materials
separation and associated value add, refined the valuation model, achieved bulk sample approvals
and licenses, reviewed logistics and handling opportunities and marketing of the Donald feedstock.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent upon
the successful development and commercial exploitation or alternatively sale of the area of interest.
87
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
17. Exploration and Evaluation Assets (continued)
(d) Water rights
In 2012, the Group acquired rights to the supply of water for the Donald project. The water rights are
amortised over 25 years (subject to the extension of this term) in line with entitlements.
In July 2018, a “Deed of Variation” was signed between Grampians Wimmera Mallee Water
Corporation (“GWM Water”) and Donald Mineral Sands Pty Ltd., a wholly owned subsidiary of the
Company. The variation provides for an extension of the term of the original agreement of up to 4
years subject to terms and conditions. The amortisation period of the water rights have accordingly
been extended by 4 years to a total period of 29 years to December 2040.
(e) Finite lives
Intangible assets, other than goodwill have finite useful lives. To date, other than water rights, no
amortisation has been charged in respect of intangible assets due to the stage of development for
each project.
(f) Movement in net carrying values
Year ended 30 June 2021
Balance at 1 July 2020
Additions *
Amortisation
Foreign exchange movements
Exploration
and Evaluation
Phase
$
Evaluation
costs
$
Water rights
$
Total
$
57,862,304
304,515
12,130,954
70,297,773
1,652,422
-
-
-
-
950
-
1,652,422
(593,260)
(593,260)
-
950
Balance at 30 June 2021
59,514,726
305,465
11,537,694
71,357,885
Year ended 30 June 2020
Balance at 1 July 2018
Additions *
Amortisation
Foreign exchange movements
Balance at 30 June 2020
56,368,885
307,284
12,724,215
69,400,384
1,493,419
-
-
-
-
-
1,493,419
(593,261)
(593,261)
(2,769)
-
(2,769)
57,862,304
304,515
12,130,954
70,297,773
* Additions of exploration and evaluation phase during the year included the amortisation of water
rights of $593,260 (2020: $593,261) which was capitalised during the year.
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
18. Development Costs
Balance at 1 July
Additions
Foreign exchange movements
Balance at 30 June
2021
$
8,205,625
231,730
(115,665)
2020
$
7,804,124
374,957
26,544
8,321,690
8,205,625
The mining license of the Senegal project was granted in June 2017, the registered mining license was
received in October 2017 and the environmental approval was obtained in August 2017. As a result of
these developments, the directors considered the Senegal project had demonstrated it was technically
feasible and commercially viable. Accordingly, under HKFRS 6 and the Group’s accounting policies, this
project and the costs capitalised to date should no longer be accounted for as an exploration and
evaluation asset, but rather as an asset in its own right. The costs associated with the Senegal project
have therefore been classified as “Development costs” since the year ended 30 June 2018.
19. Right-Of-Use Assets
Balance at 1 July
Amortisation
Foreign exchange movements
Balance at 30 June
2021
$
2,983,286
(78,226)
7,783
2,912,843
2020
$
3,090,641
(81,915)
(25,440)
2,983,286
During the year ended 30 June 2014, management entered into an agreement to transfer 1,065,384 sqm
of land held in Yingkou province China to a state-owned entity, representing approximately 83% of the
total land held by the Group in Yingkou province. As the under-development of this land resulted from a
change of government development plan and restructure, this land transfer has been subsidised by the
Chinese Government. Final contracts over the land sale were exchanged and the disposal was brought
to account in the year ended 30 June 2015. The net proceeds amounting to $20,356,248 to be received
in instalments, further details of this land sale receivable are set out in note 11.1. The remaining 17% of
the land, representing 214,802m2 is shown as Right-of-Use Asset.
In addition to the land referred to above, the Group also owns a nearby piece of land measuring
approximately 18,302m2 located at Bayuquan District, Yingkou Province, China. Both pieces of land are
held on long term leases with lease terms ranging from 48 to 54 years.
As at 30 June 2021, right-of-use assets with carrying value of $1,572,748 (2020: $2,199,235) are pledged
as security over short- term loans (note 22).
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
20. Trade and Other Payables
Unsecured liabilities
Trade payables
Note payables
Deposits received in advance
Other payables
(a) Other payables
Note
20(a)
2021
$
2020
$
2,579,057
2,732,227
24,330
4,961,739
10,297,353
3,493,930
2,299,386
13,375
7,318,762
13,125,453
Included in other payables was a balance of $2,589,363 (2020: $2,893,737) in aggregate due to 2
related companies as detailed in note 29.6.
21. Contract Liabilities
Contract liabilities arising from:
Advance deposit for future provision of goods
(a) Sale of goods
Note
21(a)
2021
$
2020
$
2,105,940
2,105,940
5,106,984
5,106,984
Included in contract liabilities at 30 June 2021 is the balance of an initial deposit of RMB20 million
(approximately equivalent to $4.1 million) which was received during the 2018 financial year. This
deposit was in connection with the Senegal offtake agreement (the “Agreement”) with Hainan
Wensheng High-tech Minerals Co., Ltd. (“Wensheng”). Under the Agreement, the Group is
required to deliver 50,000 tons/year of Titanium Mineral Sands (“the mineral sands”) to Wensheng
in the PRC for a three year period commencing May 2018. The Agreement makes provision for
penalties payable by each side for not meeting their obligations by applying a penalty interest of
24% p.a. against the RMB20 million advance deposit. Payment to the Group under the Agreement
is based on the actual amount of zircon, ilmenite and rutile, etc. contained in the mineral sands,
which is only determined once the mineral sands is shipped and processed by Wensheng in the
PRC.
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
21. Contract Liabilities (continued)
(a) Sale of goods (continued)
Delivery of the mineral sands has fallen behind the schedule as a result of the deferral of
commencement of operations of the Senegal project, details of which are set in the various
announcements made by the Group since 2018. The Group has been in continuous dialogue with
Wensheng since deliveries have fallen behind schedule, and has made partial repayments of
the deposit from time to time. Nonetheless Wensheng had threatened to take legal action and
pursue damages against the Group for not complying with its contractual obligations. These
threats came to a head in December 2020 when Wensheng took legal action against the Group
in The First Intermediate People's Court of Hainan Province at a court hearing held on 18
December 2020. However, through a court mediation process, a settlement was reached with
Wensheng on 18 May 2021. Under the conciliation agreement, the total amount due to
Wensheng, including interest and other legal costs was agreed at approximately RMB
9,534,000 (the ‘Final Balance’). The agreed settlement amount was less than the amount
accrued by the Group (being balance deposit due and penalty interest accrued at 24%), giving
rise to a reversal of accrued offtake interest expense of $1,199,551 which has been recognized
in “Other income” (note 5) in the current year. Since the conciliation agreement and up till 30
June 2021, the Group has settled RMB5,986,000 of the Final Balance, leaving a residual
amount due to Wensheng of $732,290 at 30 June 2021 (2020: $3,908,307). Management expect
to settle this balance before the end of the next financial year.
The remaining contract liabilities as at 30 June 2021 of $1,373,650 (2020: $1,198,677) represent
amount received by the Group in advance in relation to the sale of mineral products, and is
expected to be recognised as revenue in the next 12 months.
91
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
22. Borrowings
Current
Other short-term borrowings
Bank borrowings
Advances from directors
Note
22(a)
22(b)
22(c)
2021
$
2020
$
1,301,871
3,715,112
8,196,272
13,213,255
1,709,329
3,106,874
6,101,468
10,917,671
(a) Other short-term borrowings
Other loans are Chinese subsidiary loans amounting to $1,093,894 (2020: $1,090,492) is
denominated in RMB and is interest bearing at 10% p.a and secured by certain right-of-use assets
in China amounting to $1,572,748 (2020: $1,609,727) (note 19). The remaining amount is
unsecured and interest free. The loans are repayable on or before 31 December 2021.
(b) Bank borrowings
The bank loans are Chinese subsidiary loans denominated in RMB, interest bearing between
4.50% to 5.50% p.a. and repayable on or before 30 June 2022 (2020: 5.00% to 7.50%).
Those loans are pledged with property, plant and equipment amounting to $3,919,730 (2020:
$3,957,471) (note 16) and certain right-of-use assets amounted of $589,508 in 2020 (note 19) of
the Group, and the personal guarantee from its director of $1,651,161 (2020: $1,440,273).
The loan agreements have been entered into by Astron’s operating subsidiary and the parent
company does not provide any parent company guarantees over the borrowings.
(c) Advances from directors
At 30 June 2021, executive directors, Mdm Kang Rong and Mr. Tiger Brown had advanced the
Group $7,196,272 (2020: $5,851,468) and $1,000,000 (2020: $250,000) respectively for working
capital. The loans are provided interest free and repayable on demand.
23. Provisions
Current
Employee entitlements
Non-current
Relocation provision
(a) Provision for Relocation
Note
2021
$
2020
$
108,826
116,901
(a)
767,997
792,508
The provision for relocation represents the estimated costs to relocate and compensate landowners
for the Senegal mineral sands project.
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
24. Deferred Tax
24.1 Liabilities
Current tax liability
Deferred tax liability arises from the following:
- Capitalised expenditure
- Tax loss
- Unrealised inventory
- Provisions and other timing differences
2021
$
-
2020
$
-
10,002,165
-
8,341,000
(532,899)
(1,065,029) (1,834,755)
(32,148)
(28,295)
24.2 Deferred tax assets not brought to account
Deferred tax assets are not brought to account, as benefits will only be realised if the conditions for
deductibility set out in note 2.5 occur.
8,908,841
5,941,198
Tax losses:
- Revenue losses (China)
- Revenue losses (Australia)
- Capital losses
2021
$
2020
$
1,998,411
790,807
12,694,612
1,167,983
-
13,538,262
93
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
25. Issued Capital
122,479,784 (2020: 122,479,784) Fully Paid Ordinary Shares
76,549,865
76,549,865
25.1 Reconciliation of ordinary shares (number)
2021
$
2020
$
At 1 July
At 30 June
25.2 Ordinary shares
2021
2020
122,479,784 122,479,784
122,479,784 122,479,784
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held.
At the shareholders meetings, each ordinary share is entitled to one vote when a poll is called;
otherwise each shareholder has one vote on a show of hands.
25.3 Capital risk management
The Group considers its capital to comprise its ordinary share capital, reserves, accumulated
retained earnings and net debt.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a
consistent return for its equity shareholders through a combination of capital growth and dividends.
In order to achieve this objective, the Group has made decisions to adjust its capital structure to
achieve these aims, either through altering its dividend policy, new share issues, or share buy backs,
the Group considers not only its short-term position but also its long term operational and strategic
objectives.
Borrowings
Total equity
Net debt to equity ratio
2021
$
13,213,255
92,474,241
2020
$
10,917,671
93,725,284
14.29%
11.65%
There have been no significant changes to the Group’s capital management objectives, policies and
processes in the year nor has there been any change in what the Group considers to be its capital.
94
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
25. Issued Capital (continued)
25.4 Share based payments
The Company operates the Employee Share Option Plan (“the ESOP”) for the purpose of providing
incentives or rewards to the Eligible Participant there under for their contribution to the Group and/or
to enable the Group to recruit and retain high-calible employees and attract human resources that
are valuable to the Group. The ESOP is to extend to directors, employees, contractors or prospective
participants who meet that criteria on appointment (“Eligible Participant”) (or “the Eligible Associate
of such person”) of the Company or an associated body corporate of the Company as the Board
may in its discretion determine.
The maximum aggregate number of the share of the ESOP and the Performance Rights Plan shall
not at any time exceed 5% of the Company's total issued shares (being up to 6,123,988 securities).
The exercise price of an Option is to be determined by the Board at its sole discretion.
The exercise period commences on the Option Commencement Date and ends on the earlier of:
(a) the expiration of such period nominated by the Board at its sole discretion at the time of the grant
of the Option but being not less than two years;
(b) an associated body corporate ceases because of an Uncontrollable Event, the earlier of:
(1) the expiry of the Option Period; or
(2) six months (or such other period as the Board shall, in its absolute discretion, determine) from
the date on which the Eligible Participant ceased that employment or engagement;
(c) an associated body corporate ceases because of a Controllable Event:
(1) the expiry of the Option Period; or
(2) six months (or such other period as the Board shall, in its absolute discretion, determine) from
the date on which the Eligible Participant ceased that employment or engagement;
(d) the Eligible Participant ceasing to be employed or engaged by the Company or an associated
body corporate of the Company due to fraud, dishonesty or being in material breach of their
obligations to the Company or an associated body corporate.
During the year non-executive Director Dr. Mark Elliott was granted 800,000 options, which were
subject to shareholder approval received subsequent to year end. The Company estimated the grant
date fair value with reference to the fair value as at the reporting date (i.e. 30 June 2021) for the
purpose of recognising the services received from Dr. Mark Elliott during the year, The movements
of the share options granted under the ESOP during the current and prior years are as follows:
Outstanding at 1 July
Granted
Outstanding at 30 June
Exercisable at 30 June
2021
Number of
options
Weighted
average
exercise price
$
-
800,000
800,000
-
0.3375
0.3375
800,000
0.3375
No share options were exercised during the year ended 30 June 2021.
95
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
25. Issued Capital (continued)
25.4 Share based payments (continued)
The fair value of the options granted was using Black Scholes Option Pricing Model that takes into
account the following inputs:
Number of options
Share Price at year end
Exercise Price
Valuation Date
Expiration date
Life of the Options
Expected volatility1
Risk Free Rate
800,000
$0.58
$0.3375
30 June 2021
30 June 2024
3 years
79.30%
1.52%
1 Expected volatility, determined based on a statistical analysis of daily share prices over one year,
and early exercise behavior and expected life of share options, determined based on the market
research data and historical data respectively, may not necessarily be the actual outcome.
As at 30 June 2021, there were no further key executives that had any rights to acquire shares in
terms of a share-based payment scheme for employee remuneration.
The fair value of the share options granted in 2021 was $299,943 (note 6.1) which had been
recognised as employee share option expense with the corresponding balance credited to the share
based payment reserve in 2021. No liabilities were recognised as these were all equity-settled share-
based payment transactions.
A share based payment of $913,104 was recognised in 2017 after certain milestones with respect
to the Senegal project were achieved by a project consultant. This represents a 3% equity interest
in the project, calculated by reference to the Senegal project’s fair value and to be satisfied by the
issue of shares in a Senegalese subsidiary.
26. Reserves
26.1 Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of
foreign controlled subsidiaries. The reserve balance at 30 June 2021 is $13,311,431 (2020:
$13,344,047).
26.2 Share based payment reserve
The share-based payment reserve records the amount of expense raised in terms of equity-settled
share-based payment transactions. The reserve balance at 30 June 2021 is $1,213,047, of which
$299,943 was recognised during year ended 30 June 2021 and $913,104 was recognised during
the year ended 30 June 2017. The options granted to a director of the Company during the current
year are detailed in note 25.4.
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Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
27. Holding Company Statement of Financial Position
ASSETS
Current assets
Cash and cash equivalents
Amounts due from a subsidiary
Total current assets
Non-current assets
Investment in subsidiary
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Accruals and other payables
Amount due to a subsidiary
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share based payment reserve
Foreign currency translation reserve
Retained earnings
TOTAL EQUITY
2
Note
2021
$
2020
$
-
9,039,544
9,039,544
2,250
-
2,250
76,549,866
76,549,866
76,549,866
76,549,866
85,589,410
76,552,116
143,606
-
143,606
143,606
139,423
714,443
853,866
853,866
85,445,804
75,698,250
25
76,549,865
76,549,865
299,943
(52,315)
-
(64,505)
8,648,311
(787,110)
85,445,804
75,698,250
read in conjunction with the accompanying notes.
Mr. Tiger Brown
Mr. Gerard King
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
28. Dividends
During the current and prior years, no dividend was proposed or paid.
Franking account balance:
Franking credits available for the subsequent financial years based on a
tax rate of 26.0% (2020: 27.5%)
286,770
286,770
The above amount represents the balance on the franking account at the end of the financial year arising
from income tax payable.
2021
$
2020
$
29. Related Party Transactions
29.1 Parent entity
Astron Corporation Limited is the parent entity of the Group.
29.2 Subsidiaries
Interests in subsidiaries are disclosed in note 15.
29.3 Transactions with key management personnel
Key management of the Group are the executive members of the Board of Directors. Key
Management Personnel remuneration includes the following expenses:
Short term employee benefits:
- Salaries and fees
- Share based payment expenses
- Non-cash benefits
Total short-term employee benefits
Post-employment benefits
- Superannuation
Total post-employment benefits
Total Key Management Personnel remuneration
2021
$
2020
$
713,483
299,943
9,923
1,023,349
23,315
23,315
1,046,664
768,520
-
9,672
778,192
20,531
20,531
798,723
98
69
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
29. Related Party Transactions (continued)
29.3 Transactions with key management personnel (continued)
Directors’ Emoluments
Directors’ emoluments disclosed pursuant to Section 383 of the Hong Kong Companies Ordinance
(Cap.622) and the Companies (Disclosure of Information about Benefits of Directors) Regulation
(Cap.622G) are as follows:
Short term employee benefits
Salaries and fees (note)
Share-based payment expenses
Post-employment benefits
Total directors’ emoluments
2021
$
2020
$
397,258
299,943
2,590
699,791
474,167
-
-
474,167
Note:
The amount includes management fees of $250,000 payable to Juhua International Limited of which
the beneficial owner is Mdm Kang Rong in both 2021 and 2020.
In 2020, the amount included management fees of $104,167 that the Company understood was
payable to Firback Finance Ltd, of which Mr Alex Brown (Deceased) had a relevant interest and was
a former director of the Company.
29.4 Interest free loans
All subsidiary companies are wholly owned with any interest free loans being eliminated on
consolidation.
29.5 Management services provided
Management and administrative services are provided at no cost to subsidiaries. Astron Pty Limited
predominantly incurs directors fees, management and administration services for the Group.
Although these costs are applicable to Group as a whole, these costs are not reallocated/recharged
to individual entities within the Group.
29.6 Related party loans
As at 30 June 2021, executive Directors, Mdm Kang Rong and Mr Tiger Brown had advanced the
Group $7,196,272 (2020: $5,851,468) and $1,000,000 (2020: $250,000) respectively for working
capital. The loans are provided interest free and repayable on demand. At 30 June 2021, no
repayments have been made against these loans.
As at 30 June 2021 there are unpaid Directors and management fees payable to Directors’ related
entities as follows:
- Mdm Kang Rong, Juhua International Limited of $1,693,732 (2020: $1,443,732) (note 20(a));
-
# Mr Alex Brown (Deceased), Firback Finance Limited of Nil (2020: $1,450,005) (note 20(a)).
99
70
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
29. Related Party Transactions (continued)
29.6 Related party loans (continued)
# Since at least 1 July 2014, the Company had entered into an unwritten informal agreement with
Firback Finance Ltd (“Firback”) under which the services of Mr. Alex Brown, the former President,
Managing Director and major shareholder of the Company until his death on 30 November 2019,
was supplied to the Company (the “Firback Contract”). Under the terms of the Firback Contract,
an accumulated amount of $1,450,005 was outstanding and due to Firback. Firback has since
been wound up and no longer exists. It was further noted that prior to being wound up, Firback
had not made any demand for payment of the balance outstanding, nor given notice of
assignment of the outstanding amount to the Company so the Company considers the Firback
contract is at an end. This amount has accordingly been transferred to capital reserve, as set
out in the Consolidated Statement of Changes in Equity on page 50.
As at 30 June 2021 there are other payable to Directors’ related entities as follows:
- Mdm Kang Rong, Shenyang Wanshan Hangtankeji Limited Company of $895,631 (2020: Nil)
(note 20(a)).
The above liabilities have been subordinated and will not be called upon unless and until such time
that the Company has available funds or is generating positive operating cash flows from operations.
30. Commitments
30.1 Operating lease commitments
Non-cancellable operating leases contracted for but not capitalised in the financial statements as at
2020 was $8,290. There is no non-cancellable operating leases contracted for but not capitalised in
2021.
30.2 Capital expenditure commitments
Capital expenditure commitments contracted for:
- Chinese capital projects
- Senegal
- DMS
30.3 Water rights
2021
$
2020
$
134,532
747,272
55,000
936,804
237,665
747,272
55,000
1,039,937
In accordance with the terms of the contract with GWM Water, the usage fee in 2018 was $218,178
per quarter for the remaining life of the water rights. GWM Water has agreed an extension of up to
4 years subject to terms and conditions in accordance with the “Deed of Variation” as set out in note
17(d). No usage fee was charged in 2021.
100
71
Astron 2021 Annual Report Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
30. Commitments (continued)
30.4 Guarantees between subsidiaries
Astron Pty Limited has provided a letter of support to the Victorian Department of Economic
Development, Jobs, Transport and Resources to fund any expenditure incurred by Donald Mineral
Sands Pty Limited.
30.5 Other commitments and contingencies
Land
In 2008, Astron Titanium (Yingkou) Co Ltd holds two land sites acquired from the Chinese
Government. The Group is discussing possible changes to the usage rights with the Government.
The Directors believe that no significant loss will be incurred by the Group in relation to the right-of-
use assets. As at 30 June 2021, the net book value of this land is $2,912,843 (2020: $2,983,286).
Minimum expenditure on exploration and mining licenses
To maintain the Exploration and Mining License’s at Donald, the Group is required to spend
$1,401,800 (2020: $1,201,800) on exploration and development expenditure over the next year. The
minimum expenditure amount per annum will normally increase over the life of an exploration license.
The amount of this expenditure could be reduced should the Group decide to relinquish land.
31. Cash Flow Information
31.1 Reconciliation of cash provided by operating activities with loss before income tax
Loss before income tax expense
Non-cash flows in loss from ordinary activities
Depreciation and amortisation
Reversal of provision for impairment on receivables
Fair value loss on financial assets at fair value through profit or
loss
Reversal of costs associated with Gambian litigation
Share based payment expenses
Reversal of interest expenses for offtake agreement
Gain on disposal of property, plant and equipment
(Increase)/Decrease in trade and other receivables
Decease/(Increase) in inventories
(Decrease)/Increase in trade and other payables and provisions
Effects on foreign exchange rate movement
2021
$
2020
$
(406,794)
(6,204,703)
1,582,344
(27,359)
1,641,625
(469,657)
5,290
(42,599)
299,943
(1,199,551)
(215,294)
(3,376,241)
7,144,044
(1,596,192)
485,688
5,044
-
-
-
-
848,020
(2,581,503)
4,612,142
796,727
2,653,279
(1,352,305)
101
72
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
31. Cash Flow Information (continued)
31.2 Reconciliation of cash
Cash at the end of the financial year as shown in the
cash flow statement is reconciled to items in the
consolidated statement of financial position as
follows:
Cash on hand
Cash at bank
31.3 Loan facilities
Note
2021
$
2020
$
10
10
4,571
2,565,867
2,570,438
41,798
513,706
555,504
Details of the loan facilities of the Group at reporting dates are as follows:
Available loan facilities
Utilised loan facilities (note 22(b))
Unused loan facilities
2021
$
2020
$
3,715,112
(3,715,112)
-
4,526,572
(3,106,874)
1,419,698
As at 30 June 2021 and 2020, its loan facilities were secured by assets held by its China subsidiary.
102
73
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
31. Cash Flow Information (continued)
31.4 Non-cash financing activities
No dividends were paid in cash or by the issue of shares under a dividend reinvestment plan during
the current year and prior year.
The table below details changes in the Group’s liabilities arising from financing activities. Liabilities
arising from financing activities are those for which cash flows were or future cash flows will be,
classified in the Group’s consolidated statement of cash flows from financing activities.
At 1 July 2019
Changes from cash flows:
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from bank borrowings
Loan expense paid
Total changes from financing cash flows:
Interest expense
Exchange adjustments
At 30 June 2020 and 1 July 2020
Changes from cash flows:
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from bank borrowings
Loan expense paid
Borrowings
(note 22)
$
Contract
liabilities -
Wensheng
(note 21(a))
$
7,133,146
4,151,473
-
(8,187,404)
12,034,612
(259,193)
3,588,015
(205,753)
-
-
-
(205,753)
259,193
(62,683)
-
(37,413)
10,917,671
3,908,307
-
(1,328,688)
(1,370,000)
3,632,861
(170,177)
-
-
-
Total changes from financing cash flows:
2,092,684
(1,328,688)
Interest expense
Settlement by deliver of products
Exchange adjustments
At 30 June 2021
170,177
-
-
(1,941,765)
32,723
13,213,255
94,436
732,290
103
74
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
31. Cash Flow Information (continued)
31.5 Acquisition of entities
During the current or last years, the Company did not invest any funds into its Chinese subsidiaries.
During the current year, the Group did not acquire any new entities.
31.6 Disposal of entities
There were no disposals of entities in the current or prior financial years.
31.7 Restrictions on cash
Bank balances include $412,790 (2020: Nil) of cash restricted by bank as security for certain note
payables and letter of credit.
32. Employee Benefit Obligations
As at 30 June 2021 and 2020, the majority of employees are employed in China. In accordance with
normal business practice in China, employee benefits must be fully utilised annually. Chinese provisions
for employee entitlements at year end would be insignificant.
33. Events After The Reporting Period
Subsequent to the year end, the Group obtained shareholders’ approval on 19 July 2021 at an
Extraordinary General Meeting to demerge its downstream processing assets in China from its ownership
of upstream assets (centered on the Donald mineral sands project in Victoria and Niafrang mineral sands
project in Senegal). Under the demerger proposal, shareholders would proportionately receive shares in
an unlisted Hong Kong entity, which would wholly-own the downstream processing assets in China.
On 10 September 2021, a legal action related to the demerger proposal was brought against the
Company in the High Court of the Hong Kong Special Administrative Region. The Court granted an interim
injunction to restrain the Company from completing the demerger until the proceedings are finalised.
After careful consideration of all the facts and circumstances, including the distraction of management
time, legal costs, the uncertainty and delay arising from these proceedings, the best interests of
shareholders and, in particular, a commitment to progressing the Donald mineral sands project to a
commercialization stage, the Board of the Company decided not to proceed with the demerger. The Board
intends to formally rescind the resolution approving the demerger at the next Annual General Meeting.
Further details of this decision are set out in the Company’s announcement dated 21 October 2021.
No other matters or circumstances have arisen since the end of the financial year which significantly
affect or may significantly affect the operations of the Group, the results of those operations or the state
of affairs of the Group in future financial years.
104
75
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management
34.1 General objectives, policies and processes
In common with all other businesses, the Group is exposed to risks that arise from its use of financial
instruments. This note describes the Group’s objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its
objectives, policies and processes for managing those risks or the methods used to measure them
from previous periods unless otherwise stated in this note. The principal financial instruments from
which financial instrument risk arises are cash at banks, term deposits greater than 90 days, trade
and other receivables and payables and financial assets at fair value through profit or loss.
The Board has overall responsibility for the determination of the Group’s risk management objectives
and policies. The Groups' risk management policies and objectives are therefore designed to
minimise the potential impacts of these risks on the results of the Group where such impacts may
be material. The Group has significant experience in its principal markets which provides the
Directors with assurance as to the effectiveness of the processes put in place and the
appropriateness of the objectives and policies it sets. The Group engages a number of external
professionals to ensure compliance with best practice principles.
The overall objective of the Board is to set polices that seek to reduce risk as far as possible without
unduly affecting the Group’s competitiveness and flexibility. Further details regarding these policies
are set out below:
105
76
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management (continued)
34.2 Credit risk
Credit risk is the risk that the other party to a financial instrument will fail to discharge their obligation
resulting in the Group incurring a financial loss. This usually occurs when debtors or counterparties
to derivative contracts fail to settle their obligations owing to the Group.
In respect of cash investments, around half of cash, cash equivalents and term deposits greater
than 90 days are held with institutions with a AA- to Baa3 credit rating. As set out in note 10.2, the
other half of the Group’s cash was held with a local PRC bank which did not have any credit rating.
In respect of trade receivables, there is concentration of credit risk as 12% (2020: 14%) of the
Group’s trade debtors is from 7 (2020: 5) customers. Group policy is that sales are only made to
customers that are credit worthy. Trade receivables are predominantly situated in China.
Other receivables include $1,087,535 (2020: $1,495,660) being the gross land sale receivable from
the Yingkou Provincial government. The directors are of the opinion that the credit risk on this
receivable to be low for the reasons set out in note 11.1.
Credit risk is managed on a Group basis and reviewed regularly by management and Audit & Risk
Committee. It arises from exposures to customers as well as through certain derivative financial
instruments and deposits with financial institutions.
Refer to note 10 for concentration of credit risk for cash and cash equivalents.
The maximum exposure of the Group to credit risk at the end of the reporting period is as follows:
Cash & cash equivalents
Term deposits with maturity over 90 days
Trade and other receivables
Total
2021
$
2,570,438
46,112
5,207,480
7,824,030
2020
$
555,504
46,112
4,590,830
5,192,446
106
77
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management (continued)
34.2 Credit risk (continued)
The Group measures loss allowances for trade receivables at an amount equal to lifetime ECLs,
which is calculated using a provision matrix. As the Group’s historical credit loss experience does
not indicate significantly different loss patterns for different customer segments, the loss allowance
based on past due status is not further distinguished between the Group’s different customer bases.
The following table presents the gross carrying amount and the lifetime expected credit loss in
respect of individually assessed trade receivables as at 30 June 2021 and 2020:
Gross carrying amount
Lifetime expected credit loss
Net carrying amount
2021
$
38,758
(38,758)
-
2020
$
38,637
(38,637)
-
The following table presents the gross carrying amount under collective measurement (after
individual assessed loss allowance) and the provision for impairment loss in respect of collectively
assessed trade receivables as at 30 June 2021:
Current (not past due)
Expected
loss rate
%
Gross
carrying
amount
$
Loss
allowance
$
0.00%
2,605,934
2,605,934
-
-
The following table presents the gross carrying amount under collective measurement (after
individual assessed loss allowance) and the provision for impairment loss in respect of collectively
assessed trade receivables as at 30 June 2020:
Current (not past due)
Expected
loss rate
%
Gross
carrying
amount
$
Loss
allowance
$
0.00%
2,614,472
2,614,472
-
-
Expected credit loss is close to zero as the trade receivables have no recent history of default, the
impact of the expected loss from collectively assessed trade receivables to be immaterial.
107
78
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management (continued)
34.3 Liquidity risk
Liquidity risk is the risk that the Group may encounter difficulties raising funds to meet commitments
associated with financial instruments, e.g. borrowing repayments. The Group manages liquidity risk
by monitoring forecast cash flows. As at 30 June 2021, the Group had cash of $2,570,438 (2020:
$555,504).
Maturity analysis
Carrying
Amount
$
Contractual
Cash flows
$
Note
< 6 months
$
> 6 months
$
Year ended 30 June 2021
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing
liabilities
Borrowings
Total interest bearing liabilities
Total liabilities
Year ended 30 June 2020
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing
liabilities
Borrowings
Total interest bearing liabilities
Total liabilities
20
20
22
22
20
20
22
22
5,311,284
4,961,739
8,404,249
5,311,284
4,961,739
8,404,249
5,311,284
4,961,739
8,404,249
18,677,272
18,677,272
18,677,272
-
-
-
-
4,809,006
4,809,006
23,486,278
4,809,006
4,809,006
23,486,278
1,093,894
1,093,894
19,771,166
3,715,112
3,715,112
3,715,112
5,793,316
7,318,762
6,720,305
5,793,316
7,318,762
6,720,305
5,566,987
7,318,762
6,720,305
226,329
-
-
19,832,383
19,832,383
19,606,054
226,329
4,197,366
4,197,366
24,029,749
4,197,366
4,197,366
24,029,749
2,758,671
2,758,671
22,364,725
1,438,695
1,438,695
1,665,024
108
79
Astron 2021 Annual Report
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management (continued)
34.4 Fair value
The fair values of listed investments have been valued at the quoted market price at the end of the
reporting period. Other assets and other liabilities approximate their carrying value.
At 30 June 2021 and 2020, the aggregate fair values and carrying amounts of financial assets and
financial liabilities approximate their carrying amounts.
Financial assets at fair value through profit or loss are recognised in the statement of financial
position of the Group according to the hierarchy stipulated in HKFRS 7.
Financial assets at fair value
through profit or loss
ASX Listed equity shares - Level 1
The Group does not have any Level 2 or 3 financial assets.
34.5 Price risk
2021
$
2020
$
15,032
15,032
20,322
20,322
Given that price movements are not considered material to the Group, the Group does not have a
risk management policy for price risk. However, the Group's management regularly review the risks
associated with fluctuating input and output prices.
As at 30 June 2021, the maximum exposure of price risk to the Group was the financial assets at
fair value through profit or loss for $15,032 (2020: $20,322). 100% of the Group’s holding is in the
mining or energy sector.
The Group’s exposure to equity price risk is as follows:
Carrying amount of listed equity shares on ASX
2021
$
2020
$
15,032
15,032
20,322
20,322
109
80
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management (continued)
34.5 Price risk (continued)
Sensitivity Analysis
2021
$
2020
$
Increase/(Decrease) in
share price
Increase/(Decrease) in
share price
+10%
-10%
+10%
-10%
Listed equity shares on ASX
Profit before tax – increase/(decrease)
1,503
(1,503)
2,032
(2,032)
The above analysis assumes all other variables remain constant.
34.6 Interest rate risk
The Group manages its interest rate risk by monitoring available interest rates and maintaining an
overriding position of security whereby around half the Group’s cash and cash equivalents and term
deposits are held with institutions with a AA- to Baa3 credit rating while the other half is held with an
unrated bank in PRC.
110
81
Astron 2021 Annual Report
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B
111
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2021
34. Financial Risk Management (continued)
34.6 Interest rate risk (continued)
Sensitivity analysis
The following table shows the movements in profit due to higher/lower interest costs from variable
interest rate financial instruments in Australia and China.
Cash at bank
Term deposits greater than 90-days
Borrowings
Tax charge of 26% (2020: 27.5%)
Total
34.7 Foreign currency risk
+ 1% (100 basis points)
-1% (100 basis points)
2021
$
25,659
461
(48,090)
(21,970)
5,712
(16,258)
2020
$
5,137
461
(41,974)
(36,376)
10,003
(26,373)
2021
$
(25,659)
(461)
48,090
21,970
(5,712)
16,258
2020
$
(5,137)
(461)
41,974
36,376
(10,003)
26,373
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of
goods and services in currencies other than the Group's measurement currency. The Group
manages this risk through the offset of trade receivables and payables where the majority of trading
is undertaken in either the USD or RMB. Current trading terms ensure that foreign currency risk is
reduced by sales terms being cash on delivery where possible.
112
83
Astron 2021 Annual Report
Astron Corporation Limited
Declaration by Directors
For The Year Ended 30 June 2021
The Directors of the company declare that:
1. The financial statements, comprising the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of financial position, consolidated statement of cash
flows, consolidated statement of changes in equity, accompanying notes, are in accordance with Hong
Kong Financial Reporting Standards and give a true and fair view of the consolidated entity’s financial
position as at 30 June 2021 and of its performance for the year ended on that date.
2.
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.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the Directors by:
Tiger Brown
Director
3 November 2021
Mr Gerard King
Director
84
113
114
Astron 2021 Annual Report 115
116
Astron 2021 Annual Report 117
118
Astron 2021 Annual Report Astron Corporation Limited
Investor Information
Investor Information
2021/2021 Financial Calendar (on or before)
Release of quarterly report
2021 Annual general meeting
Release of quarterly report
Release of half year report
Release of quarterly report
31 October 2021
30 November 2021
30 January 2022
27 February 2022
30 April 2022
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this
report is as follows.
The information is current as at 28 September 2021.
Shareholders’ interests
(a) Distribution of equity securities
The number of shareholders by size of holding in each class of share are:
Range of Units Snapshot
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
Total holders
125
119
39
110
35
Units
57,030
337,867
300,887
3,769,391
118,011,602
% of
Issued Capital
0.05
0.28
0.25
3.08
96.34
Total
Non CDI holders
1-1,000
1,001-5,000
Total
Unmarketable Parcels
428
122,476,777
100.00
5
1
6
307
2,700
3,007
Minimum $ 500.00 parcel at $0.41 per unit
Minimum
parcel size
1,220
Holders
137
Units
70,796
90
119
Astron Corporation Limited
Investor Information - continued
(b) Twenty largest CDI holders
The twenty largest CDI holders are as follows:
Rank Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Kobe Investments Ltd
FSC Investment Holdings Ltd
Juhua International Limited
Mr Guodong Gong
Mr Donald Alexander Black
HSBC Custody Nominees (Australia) Limited
Mr Darrell Vaughan Manton + Mrs Veronica Josephine Manton
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