Astron Corporation Limited - Annual Report 2022
HORIZONS
Donald Rare Earth & Mineral Sands Project
1
FOR VALUE DELIVERY
ABOUT ASTRON
Astron Corporation Limited
ARBN 154 924 553 Incorporated in Hong Kong,
Company Number: 1687414
Annual Report for the Year Ended 30 June 2022
Cautionary Statement
Corporate Governance Statement
Astron Corporation Limited’s Corporate Governance
Statement for 2022 can be found on Astron’s website
at: https://www.astronlimited.com.au/wp-content/
uploads/2022/10/2022-Appendix-4G-and-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 Corporation
Limited and its controlled subsidiaries (‘Astron Group’
or ‘Astron’) 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
include
“forward
“project”,
“believe”,
looking
This document may
statements” within the meaning of securities laws of
applicable jurisdictions. Forward looking statements
can generally be identified by the use of the words
“forecast”,
“expect”,
“anticipate”,
“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 Corporation Limited and its controlled
subsidiaries, 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 2022 Annual Report
CONTENTS
Tier 1 Global Resource – 50 years of critical
mineral supply
Highlights 2022
From the Chairman
From the Managing Director
Board and Senior Management
The Donald Rare Earth & Mineral Sands Project
Final Products & Applications
Rehabilitation & Environmental Management
Community Engagement
Other Assets
Astron China
Niafarang Mineral Sands Project
Ore Reserves and Mineral Resources
Annual Financial Statements
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6
7
9
14
16
24
26
28
30
31
32
36
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DONALD PROJECT – HORIZONS FOR VALUE DELIVERY
Tier 1 global resource – 50 years of critical minerals supply.
Astron plans the phased development of the Donald
Project which comprises the Donald deposit (MIN5532
& RL2002) and the Jackson deposit (RL2003). Given the
scale of the resource, the phased development of the
Donald Project has the potential to represent a globally
significant, long-life supply of the critical mineral
elements of zirconium, titanium, as well as rare earth
elements including neodymium and praseodymium.
Phase 1 is at an advanced stage of evaluation with the
Feasibility Study due for completion at the end of the
first quarter of 2023. Donald Phase 1 has the benefits
of a positively assessed Victorian Environmental Effects
Statement, a granted mining lease, company-owned
water rights and a defined timetable to development. It
is envisioned that production will be scaled up through
subsequent phases. Following the conclusion of Phase 1
development, the Company plans to incorporate on-site
production of the final mineral sands products of zircon
and titania, and evaluate rare earth processing and
other downstream options. The Company is focused on
capturing more value as the project progresses.
PHASE 1
MINING & CONCENTRATING
PHASE 2
PHASE 3
EXPANDED MINING & PROCESSING
FINISHED PRODUCT PRODUCTION
MINING, PRODUCTION &
DOWNSTREAM OPTIONS
From ~2024
From ~2027
From ~2030
Mining activities to commence
on granted mining licence
MIN5532
Represents 13% of total resources
7.5 Mtpa ore throughput
8-9 ktpa rare earth element
concentrate (REEC)
250-285 ktpa heavy mineral
concentrate (HMC)
35 year mine life potential
Progressive rehabilitation, return
of land to arable cropping use
Mine path extends into RL2002
Ore throughput increase to
15 Mtpa
17 ktpa of REEC
500 ktpa of HMC
Plan for on-site mineral
separation plant to produce final
products of zircon and titania
Evaluation of secondary rare
earth concentrate processing
options
Progressive resource-to-reserve
conversion to maintain multi-
decade mine life
Progressive rehabilitation, return
of land to arable cropping use
Potential to further increase
throughput
Second mine path, replication of
part of the existing facilities
Potential for rare earth processing
(cracking facility), zircon
processing (at Astron China
facilities), titania processing
options, including synthetic rutile
production
Progressive rehabilitation, return
of land to arable cropping use.
Phase 2 & 3 developments subject to evaluation and regulatory approvals.
Time frames are indicative only
4
Astron 2022 Annual Report
PHASE 2&3
PHASE 1
PHASE 3
5
HIGHLIGHTS – 2022
DONALD RARE EARTH &
MINERAL SANDS PROJECT
CHINA MINERAL
PROCESSING
• Detailed project configuration study undertaken
• Increased revenue from processing of
zircon middlings and rutile agglomeration
and higher end market prices
• Performance adversely affected by
increased raw materials costs and zircon
middlings commissioning, compounded by
significant production disruption by China
Government-based COVID-19 restrictions
(results announced August 2022)
• Drilling programme on MIN5532 to evaluate fine
grained component of ore body; expected to
enhance valuable rare earth element assemblage,
optimise mine plan
• Updated Ore Reserve and Mineral Resource
estimates (MR expected Q4 2022)
• Further evaluation and metallurgical processing
test work completed
• Detailed regulatory engagement for defined
approvals pathway
• Detailed engineering studies advanced as part of
Feasibility Study
• Further organisational strengthening (appointment
of Greg Bell as CFO – announced July 2022)
FINANCIAL
Sales revenue derived
from China operations
Group loss
Net assets
Cash and other
equivalents
$19.0
MILLION
15.7% increase
$9.5
MILLION
mainly reflecting
costs of China
operations and Donald
Project development
expenditure
$85
MILLION
$2.5
MILLION
6
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Astron 2022 Annual Report
FROM THE CHAIRMAN
Astron’s main focus through the year has been progressing the Donald Rare Earth
and Mineral Sands project towards commercialisation.
Donald Rare Earth and
Mineral
Project
Sands
represents a generationally
important project in the
space.
critical minerals
Specifically, Donald
is a
long-term
crucial new
source of zircon supply
in an environment where
the mainstays of global
supply are either rapidly
depleting or are adversely affected by geopolitical and/
or operational factors. The fact that Donald’s zircon ore
reserves represent over 5 years of total global zircon
supply (with a materially larger resource component)
attests to the importance of this new source of supply.
The deposit’s rare earth elements, which are estimated
to account for approximately half of the project’s
revenue stream, also represent a high value product
stream which is likely to find a ready market given
Australian and global trends in the use of rare earths.
The combination of significant zircon and rare earth
product streams provides diversification of the revenue
stream and will contribute to the competitive cash cost
(or revenue to cash cost ratio) position of the project.
Based on the size of the resource base, Donald is
expected to have a long, multi-decade, commercial life.
This adds another key feature in terms of the project’s
importance to customers as a stable, reliable and long-
term source of zircon, titania and rare earth elements.
The most appropriate means to develop the Donald
resource is in a number of phases. Phase 1 of the project
is based on the granted mining licence MIN5532 and
is planned to access approximately 13% of the total
Mineral Resource contained within the Donald project
tenements. It is expected that decisions to progress
subsequent development phases will be taken after the
commencement of first phase operations.
During the year the decision was made to review the
project configuration to establish the most efficient
means of getting the Donald Project into production.
This review was influenced by several criteria, including
ensuring close alignment of the project’s scope with the
requirements of the Environmental Effects Statement
and identifying the means to improve the capital
efficiency of the project’s initial development. The main
parameters of the modified project configuration are
detailed in this report.
Crucially for shareholders, the reconfigured approach
is expected to optimise the time for final regulatory
approvals and expedite progression of the project to
the final investment decision stage, while retaining
flexibility for project expansion in subsequent phases.
Access to technical laboratories for assay analysis,
disruptions to personnel availability due to continuing
COVID impacts and critical shortages in other areas –
as well as the decision to undertake the detailed project
review – have caused slippage in the original project
schedules.
During the year, the organisational structure of Astron
was supplemented by several key management
appointments. The new appointments are further
supplemented by the establishment of a group of
technically strong consultants that work closely with
the company. With the help of this team, the company
is advanced on its various project workstreams and
progressing well in its delivery of the technical and
economic feasibility study that is expected in the first
quarter of 2023.
On a personal note, directors have had the opportunity
– on at least one occasion – to meet with members
of the community, including farmers and local business
owners, as well as representatives of the the Shire
of Yarriambiack (part of the Minyip area). We were
pleased to provide those stakeholders, who are likely
to be most directly influenced by the development of
the project, with progress reports and assurances of
our commitment to the project. I was gratified by the
level of community support and goodwill towards the
project. It reinforced the importance of ensuring that
all aspects of the company’s operational, environmental
and community engagement practices are of the
highest order and meet the legitimate expectations of
our direct local constituents.
Astron has other components to its portfolio, including a
sophisticated minerals processing and trading operation
in China. The China operations have been adversely
affected by sustained COVID related production
restrictions and challenges with the availability of feed
material. The Board and management will be focusing
on the revenue generation potential of this part of the
portfolio as well as appropriate opportunities for the
integration of its capabilities into the Donald Project.
I acknowledge the commitment and hard work of our
Managing Director, Tiger Brown, our employees and
our essential consultants.
George Lloyd
Chairman
7
“
IT IS IMPORTANT FOR SHAREHOLDERS
TO RECOGNISE THE VALUE POTENTIAL
OF THE PHASED DEVELOPMENT OF THE
ENTIRE DONALD RESOURCE BASE.
“
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Astron 2022 Annual Report
FROM THE MANAGING DIRECTOR
Astron is now in the final stages of defining the design, engineering and financial
parameters for the first phase of the Donald Rare Earth and Mineral Sands Project.
The revised project concept now ensures an approach to project execution aligned
with a positively assessed Environmental Effects Statement, which should expedite final
regulatory approvals.
Benefits of Phased Development
Approach
• Aligns Phase 1 Project configuration, including
physical infrastructure and site services, with
the requirements of the Environmental Effects
Statement.
• Minimises the risks and time involved in securing
the remaining regulatory approvals (most notably,
the Work Plan).
• Improves the capital-efficiency of the Project.
• Mitigates some project execution risk, particularly
in terms of the sourcing and procuring of long
lead time items.
• Preserves the flexibility for subsequent phases
of the Project to recover the remaining large
Resource base.
• Enables production to be scaled up to meet
market demand.
• Allows progressive development of other value
adding components – on-site production of final
mineral sands products; enhanced rare earth
processing options; and upgrading options for
large titania production stream.
Donald Project parameters
were reviewed and revised
during the year. The major
revision of Phase 1 relates
to the production of a
heavy mineral concentrate
stream,
(HMC) product
rather than the production
of finished mineral sands
products of zircon and
change,
This
titania.
combined with the decrease in ore throughput while
expected to result in lower revenues and cash flows
initially, is expected to have the advantage of lowering
initial capital expenditure and lowering execution risk.
Despite the revision, the Company remains committed
to produce the rare earth element concentrate (REEC)
as a separate product stream on-site. This reflects
management’s recognition of the project’s rare earth
resource base and the project’s potential as a long-term
rare earth producer.
Phase 1 in its own right represents a significant new
development. The Ore Reserves accessed as part of this
initial phase will underpin a production stream of HMC
and REEC for 35 years. Yet this phase accesses only
13% of the total Mineral Resource for the Donald and
Jackson tenements.
It is important for shareholders to recognise the value
potential of the phased development of the entire
Project Reserve base. Phase 1 operating cash flows will
provide the opportunity for subsequent, and relatively
near term, value enhancement steps. Initially, the
plan would be to construct a mineral separation plant
on site to produce finished products of zircon and
titania. This will provide Astron with greater marketing
control of its products, utilising both its established
market connections built over 30 years of operations in
China, as well as international mineral sands customer
relationships in both the titania and zircon markets.
Subsequent phases will also allow the progression of
the necessary regulatory approvals to further extend
the mining throughput as well as replicate existing
facilities to materially increase throughput and double
overall production.
9
FROM THE MANAGING DIRECTOR
These opportunities have the ability to position Astron’s
Donald Project as one of the principal mineral sands
supply sources globally. The project has the added
advantage of offering customers supply certainty over
decades, removing some of the inherent insecurity
associated with some conventional coarse-grained
deposits.
The other major value opportunity resides with the
production and sales arrangements for rare earth
concentrate. Initially, and unlike some other planned
projects, the REEC will be separated at site which enables
its sale to Australian-based processors. We believe that
Australia’s critical minerals should, ideally, be used for
the benefit of the Australian economy. It is envisioned
that a work stream will be instigated once production
commences to determine what ultimate role Astron
should play to maximise value to its shareholders
and the Australian economy from the nature of its
involvement in rare earths. This is expected to include
the evaluation of potential processing options such as a
rare earth cracking facility. The high value component of
the rare earth as a part of the overall project economics,
and the scale of the rare earth resource, makes such
considerations appropriate.
The titania production stream, which represents a
combined titanium dioxide product suite of ilmenite,
leucoxene and rutile, with a 66 per cent TiO2 content,
also represents a potential for additional value capture.
Again, dedicated work streams will be developed to
maximise value from the titania production stream. We
are confident that the product could represent a direct
feed in the chloride slag pigment production process,
which is becoming the dominant pigment production
route in China. Further given the dearth of higher-grade
titanium production sources, including rutile, it will be
investigated whether the Donald titania may represent
a suitable feed source for synthetic rutile production.
Geological Analysis – Rare Earth
Revenue Upside
In March 2022, Astron undertook a drilling programme
over the MIN5532 tenement area. This programme
was designed to evaluate the finer +20-38 micron
fraction of the ore body. This fraction was not included
in the existing geological model of the resource as it
was assumed this fraction would not be economically
recoverable. The Company’s metallurgical test work,
including at pilot plant scale, has provided confidence
in the recovery of this finer fraction. Further, the rare
earth element stream is currently valued on a monazite,
light rare earth only basis and on its constituent
In
elements of neodymium and praseodymium.
addition, the xenotime component which has been
confirmed to be recoverable through the Company’s
metallurgical test work, and will be defined as part of
the new mineral resource will add further value to the
rare earth concentrate product stream. The inclusion of
the heavier and rarer rare earth elements of dysprosium
and terbium will make a significant contribution to the
revenue composition of the rare earth concentrate.
Following the completion of the geological analysis,
Astron plans to issue an updated Mineral Resource
Statement, as well as more detailed analysis of the
rare earth components of the ore. The Ore Reserves
Statement will be updated as a part of the Feasibility
Study, and
include the revenue
assumptions associated with the new rare earth
element mix.
is expected to
Feasibility Study
Astron is pursuing a defined work stream with the
intent of finalising the feasibility study for the project
and detailed economics, for release to the market in
the first quarter of 2023. The main work involves the
updating of the geological model, both in terms of the
implications of the analysis of the finer fraction of the
ore body on MIN5532 for valuable heavy mineral and
rare earth assemblage and content. This analysis will be
used to refine the mine plan (mine path, overburden and
depth of ore) which in turn will influence specifications
for the receipt of tenders from mining contractors.
All elements of the engineering design process from
on-site concentrating and processing infrastructure,
including mine tailings arrangements, through to power
and transport, will be completed. This will feed into a
Value Engineering process to determine capital and
operating expenditure, timing for commitment to main
items and ensure sufficient operability for potential
mine and processing expansions. Market engagement,
in terms of HMC toll processing arrangements, REEC
processing offtakes and further provision of product
samples to potential customers, will be progressed to
secure necessary arrangements.
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Astron 2022 Annual Report
Resource and Reserve Re-estimation
The 2016 Mineral Resource estimate for MIN5532, at a cut-off grade
of 1% Heavy Mineral (HM) is 454 million tonnes at a 4.4 per cent
HM grade. Contained within this Mineral Resource estimate, but
only within the area where composited samples have been taken
and analysed for valuable heavy minerals (VHM), is the VHM Mineral
Resource. The VHM Mineral Resource, reported as a percentage of
HM, is 317 million tonnes at a 5.1% HM grade
The difference between the HM Resource and the VHM Resource is
illustrated in the schematic of the west-east cross-section of MIN5532.
The HM Mineral Resource comprises the grey and red sections and
the VHM Mineral Resource the red only area. The green line is the
topographic surface.
Incorporation of VHM assemblage data from the 2022 drilling
programme for the portions of the Mineral Resource for which only
HM data existed previously, will enable the revised Mineral Resource
and Ore Reserve estimates to incorporate VHM assemblage data
for the full extent of the orebody. It is expected that this may lead
to an increase in the estimate of VHM Mineral Resources and Ore
Reserves contained within the orebody, with a consequent potential
for increase in the VHM and rare earth production levels from the
Phase 1 mining and ore processing. In addition, it may lead to a lower
stripping ratio over the entire resource, with an attendant reduction
in mining costs per tonne of ore.
11
FROM THE MANAGING DIRECTOR
For rare earths, the demand situation is premised
on favourable dynamics in terms of the range of
applications,
in a global environment where the
reduced reliance on carbon-based forms of energy has
spawned a range of new technologies. While multiple
supply sources are being incentivised, national critical
minerals access considerations can be expected to play
an increasing part in supply and demand dynamics
in specific jurisdictions. Astron is conscious that such
considerations and the manner in which it markets and
processes its rare earth production stream, will be an
important strategic consideration.
China Assets
As the Chairman has referred to, Astron owns an
important asset in China, in the form of a mineral
processing facility in the city of Yingkou and with it a
mineral sands research and development laboratory.
Astron also conducts minerals sands trading through
the operations. as well as a minerals trading capability.
This component of the portfolio has been in existence
since the late 1990s and has provided Astron with
significant industry IP and market connections.
While Astron intends to remain focused on its upstream
mining and processing opportunities, centred on the
Donald Project and the eventual commercialisation of
the Niafarang mineral sands deposit in Senegal, there
are considerable opportunities to maximise value from
the China part of the business. Revenue and EBITDA
generation from China will be addressed in detail as part
of the company’s current three-year planning horizon.
Favourable Market Dynamics
When contemplating a project which, at a minimum,
will have a 35-year life and potentially much longer, it
is difficult to talk about market conditions. Dependent
upon other sources of supply of mineral sands, given
Donald’s potential scale and longevity it may in some
measures actually influence the supply dynamics. This
is a factor the Board and management are cognisant of,
and the phased entry of Donald production will play a
role in this regard.
in their commercialisation by advances
Nonetheless, it appears evident that the mineral sands
market is at a crucial juncture. Much of the established
supply source from traditional coarse-grained deposits
is maturing and depleting. The industry has not been
noted for recent significant discoveries and, as has
been the case in other parts of the resources sector,
unconventional sources of supply become important,
aided
in
processing technology. This is the case with the fine-
grained or WIM-style deposits, notably Astron’s Donald
and Jackson deposits. After over a decade of research
and development work and more recent metallurgical
test work, fine grained deposits look to be an important
new supply source. In this regard, deposits such as
Donald have the potential to meet what is forecast
by industry bodies, such as TZ Minerals International
(TZMI) and Ruidow, as a serious supply shortage.
TZMI forecasts that global zircon supply will peak in
2023 at about 1.2 million tonnes per annum before
declining (in the absence of new supply) to close to 900
thousand tonnes per annum by 2030. The demand for
zircon is forecasted to increase at an annual rate of 2.8%,
potentially leading to a widening supply gap. This will
need to be met by new production sources, for which
the Donald Project is well placed.
Donald titania is expected to be a suitable feedstock, for
the production of chloride slag (a feedstock for chloride
pigment production). The market for chloride slag has
been growing rapidly, with TZMI forecasting demand in
the period from 2021 to 2024 to grow by over 130%.
This is largely associated with the accelerated adoption
of the chloride slag production process in China at a
time when traditional sources of chloride feedstock
supply are in decline.
12
Astron 2022 Annual Report
Organisational Development
Astron has been operating with a modest internal
establishment. In this regard, the company has been
fortunate to have had the services of some highly
technically proficient and experienced external
consulting organisations, including some that have
a depth in mineral sands project development and
operations. These have included people with technical
experience with companies such as CRA, Rio Tinto,
Richards Bay Minerals, QIT and Iluka Resources.
Given the stage of the Donald project, we have made
some key management appointments to take the
company through the next stage of its evolution. I would
like to welcome our new appointments, including
Sean Chelius as Donald Project Director, a person with
extensive resources experience internationally for over
30 years, as well as Dr John Yeates who has played an
invaluable role in Astron’s engagement with Victorian
regulators in mapping a pathway for final regulatory
approvals. More recently, we have secured the services
of experienced mineral sands executive, Greg Bell, who
will become our Chief Financial Officer. Greg brings a
depth of corporate advisory experience as well as senior
financial roles with Mineral Deposits Limited.
The management team recognises the opportunity
associated with Astron’s next phase of development as
a major upstream producer of rare earth and mineral
sands products. Furthermore, the team is motivated to
ensure that the Donald project is advanced during the
coming year to a stage where funding has been secured
and development is imminent.
I would like to thank my management team and our
external consultants for their commendable efforts.
To my Chairman, George Lloyd and my fellow
directors, I extend my appreciation for their tutelage
and dedication to the interests of the company and its
shareholders.
Tiger Brown
Managing Director
With the ability to secure a reliable titania feedstock
supply, as well as the continued supply of zircon
middlings for processing, the China operations have a
potential stable revenue base. The cessation of strict
government-mandated COVID-19 restrictions should
also ensure a more stable and consistent operational
setting for the Yingkou operation.
While not the current base case for the processing of
the Donald Project HMC, it is intended that testing and
evaluative work will be undertaken to determine the
feasibility and economic justification for the Yingkou
plant to process some or all of the Donald heavy mineral
concentrate production stream.
The section in the Annual Report on pg. 30 provides
some additional information on the fully owned Astron
Titanium (Yingkou) Limited.
Niafarang Project
Although the timetable for development remains
undetermined, the Company has received some
encouraging news in relation to the Niafarang mineral
sands project in Senegal. During the financial year,
Astron continued to work with regulators,
local
government agencies and the local community to
navigate a path forward in relation to the development
of the project. Subsequent to the Senegal national
elections, the Minister for Mines has indicated their
support for the progression of the Niafarang project,
which has been suspended following local unrest in
2020. Given this positive Government indication the
stronger community relationships and the easing of
COVID-19 restrictions, Astron is exploring opportunities
to advance the project, including the possibility of a
Public Private Partnership (PPP). During the year, the
Company submitted applications for the renewal of
mining licences, which had lapsed. Subject to these
being renewed, Astron will seek to re-establish the
necessary approvals and mining arrangements as the
basis for determining a plan and timeline for progression
of the project.
Gambia Settlement
Astron was awarded damages in its favour in 2015
associated with an International Centre for Settlement
of Investment Disputes (ISID) determination related
to the Gambian Government’s seizure of the Astron-
Carnegie minerals sands project in Gambia. The initial
award was in the vicinity of ~A$32 million. Progress has
been slow in recovering the award, but the Company
continues to utilise a global legal firm to seek recovery
of its entitlement.
13
BOARD AND SENIOR MANAGEMENT
George Lloyd
Chairman
George has over 30 years resource industry and corporate business development and finance
experience, including with RGC Limited, as well as serving as a senior executive and director
of a number of listed and unlisted companies with interests in engineering services industrial
minerals, base and precious metals, as well as energy sector. George is also the Chairman of
Ausenco Limited, a global engineering services provider.
Gerard King A.M.
Non Executive Director
Gerard is a former partner of Lavan & Walsh, which became Phillips Fox Perth. Experienced in
commercial contracting, mining law and corporate and ASX compliance. A former member
of the Australian Mining & Petroleum Lawyers Association Served as a non-executive director
for several companies.
Dr Mark Elliott
Non Executive Director
Mark has 27 years experience in corporate roles, both as chairman and managing director
on several ASX-listed and private companies. Involved in identifying and securing resource
projects, capital raisings, marketing and completing commercial agreements, feasibility
studies, mine development plans and their execution.
Tiger Brown
Managing Director
Tiger joined Astron in 2018, holding various business development planning and executive
roles in China and Australia prior to joining the board in 2019. Appointed managing director
in February 2019 and has overseen the detailed planning for the commercialisation of the
Donald project.
Rong Kang
Executive Director
Rong joined Astron in 1995 and has been a key contributor to the establishment of Astron’s
downstream processing and global marketing and sales activities, with a deep knowledge of
the mineral sands product market and its key participants. Board member since 2012.
Joshua Theunissen
General Counsel and Company Secretary
Joshua is a solicitor with over 25 years of corporate and commercial experience in areas
including commercial law, mergers and acquisitions, the Corporations Act and ASX Listing
Rules. Joshua has served as Australian company secretary and legal adviser for Astron since
2007.
14
Astron 2022 Annual Report
Greg Bell
Chief Financial Officer
Greg’s advisory and corporate experience spans more than 21 years, working initially in
corporate advisory and assurance services with Deloitte, followed by 8 years with Mineral
Deposits Limited (MDL) as Accounting Manager and then Chief Financial Officer. Subsequent
to MDL, Greg held both consulting and executive roles with international mineral sands and
resource companies, including in the critical minerals sector.
Sean Chellius
Donald Project Director
Sean joined Astron in January 2022 as the Project Director for the Donald Mineral Sands
and Rare Earth project. Sean has over 30 years international experience in mining project
planning and implementation, including full responsibility for taking projects from concept
through to commissioning and production. His experience involves project management
and engineering roles in Australia, South Africa, Zimbabwe, Papua New Guinea and Fiji with
BHP, Anglo American, Newcrest, Ausenco and Worley Parsons.
Tim Chase
General Manager Global Operations
Tim joined Astron in 2015 with over 25 years of experience in the mining industry, including
extensive experience in mineral sands project design and planning, project management and
execution, as well as operational roles. He was involved in the design and commissioning of
several mineral sands projects in the Murray Basin, Victoria and NSW.
Dr. John Yeates
Senior Approvals & Environment Manager
John has over 50 years’ experience in mining, agriculture, environmental research, policy
development, and project management within the mining sector, Government agencies
and environmental engineering consultancies across the Asia-Pacific region. John has
worked on greenfield and brownfield base metals, gold, and mineral sands projects in
Australia managing project approvals, stakeholder engagement, environmental compliance,
regulatory requirements and sustainability initiatives.
Peter Coppin
Senior Geologist
Peter has over 20 years’ experience in mining geology in Australia across multiple commodities
including mineral sands, gold and nickel, in both production and exploration teams.
15
Astron 2022 Annual Report
Donald Rare Earth &
Mineral Sands Project
16
16
Astron 2022 Annual Report
Project Description
The Donald Project is a tier-1 rare earth and mineral
sands resource located approximately 300 kilometres
north-west of Melbourne in regional Victoria. Given
the resource size of over 2.4 billion tonnes of of ore
at a grade of 4.8% heavy mineral, the planned phased
development of the Donald Project has the potential
to represent a globally significant, long-life supply of
the critical mineral elements of zirconium, titanium,
neodymium and praseodymium (rare earth elements).
The project is being planned for development when
the main, conventional sources of global mineral
sands production are either maturing and reaching
the end of their economic life or provide little potential
for expansion. In an environment of typically GDP
plus demand for zircon, as well as a strong appetite –
especially from China for higher grade titanium dioxide
feedstocks – the Donald Project is well positioned to be
a central part of ongoing global mineral sands supply.
The demand for critical rare earth elements also means
Donald, as a producer of rare earth concentrate, has a
high value and diversifying production stream.
The Donald Project is located within the Murray Basin
near the towns of Minyip of Donald in western Victoria.
This area has hosted a number of conventional, coarse-
grained mineral sands depositions. The development
of the Donald resource represents the advancement
of the first of the fine-grained or WIM-style deposits
to a production stage. Technological Advances in
processing technologies, much of it sponsored through
Astron’s work, now presents the opportunity for this
new form of resource to be commercially developed.
The initial phase will produce a rare earth concentrate
and a heavy mineral concentrate. Subsequent phases
provide the opportunity to scale up production levels,
produce final mineral sands products of zircon and
titania on site, as well as progress other downstream
processing options as they relate to rare earths and
the upgrading of the titania product to a higher value,
higher titanium dioxide content product.
17
DONALD RARE EARTH & MINERAL SANDS PROJECT
The scale and expected longevity of the Donald
resource base makes the pursuit and delivery of phased
value generation opportunities a unique feature of this
development.
The Donald and Jackson tenement holdings, comprise
a licenced area of 506 square kilometres. The area
planned to be developed is approximately 50 kilometres
from the regional centre of Horsham. The land to be
mined is mainly cleared, arable land used for cropping
and grazing. Mining and processing operations will have
minimal impact on native vegetation area, with mined
areas to be progressively rehabilitated throughout the
mine life.
The nature of mineral sands mining (progressive and
relatively shallow) means areas disturbed are amenable
to restoration to original land use patterns.
The location of the planned development means it
will be close to existing infrastructure (power, water
and transport). Astron’s presence in the area over at
least a decade has meant extensive engagement with
local stakeholders and a high level of acceptance of
the opportunities for employment, associated business
activities and regional and State economic benefits.
(left) shows
The diagram
the
relative size of planned mineral
sands projects, at various stages of
evaluation and regulatory approval.
The size of the bubble shows the
relative size of the Mineral Resource
and, on the horizontal axis, the
zircon
various
assemblage of
deposits. The Donald Project is one
of the largest new mineral sands
developments, but also one with
the highest zircon assemblage. Not
shown on this diagram is the rare
earth component of the deposit.
Its potential significance can be
conveyed by the expectation that
it will constitute approximately
50% of the revenue stream of the
project. These attributes provide
the Donald resource with a number
of key differentiating factors: scale
and longevity; zircon assemblage
assemblage
earth
and
characteristics.
rare
18
Astron 2022 Annual ReportDonald(ATR)Thunderbird(SFX)Avonbank(WIM)Ranobe(BSE)Coburn(STA)Fingerboards (KALBAR)Avonbank (WIM)Ranobe (BSE)Coburn (STA)Donald (ATR)Thunderbird (SFX)0.0000.5001.0001.5002.0002.5000.0000.1000.2000.3000.4000.5000.6000.700TiO2% of Ore1!Fingerboards(KALBAR)ZrO2% of Ore2
“
ASTRON’S PRESENCE OVER AT
LEAST A DECADE HAS MEANT
EXTENSIVE ENGAGEMENT WITH LOCAL
STAKEHOLDERS AND A HIGH LEVEL OF
ACCEPTANCE OF THE OPPORTUNITIES FOR
EMPLOYMENT, ASSOCIATED BUSINESS
ACTIVITIES AND REGIONAL AND STATE
ECONOMIC BENEFITS.
“
19
DONALD RARE EARTH & MINERAL SANDS PROJECT
Unparalleled Resource Position
The Donald resource represents one of the largest,
undeveloped mineral sands and rare earth deposits
globally, at an advanced stage of evaluation. The
Ore Reserves and Mineral Resource position has the
potential to support a major operation for over 50
years.
At a time of the maturation of traditional mineral
sands supply sources, the Donald Project represents
a valuable new source of long term supply zircon
and titania. The contained zircon reserves, in their
own right, represent approximately five years of total
global zircon production.
Donald also contains an attractive rare earths
assemblage,
significant
including a potential
proportion of the valuable heavy rare earth elements
of dysprosium and terbium.
20
Astron 2022 Annual Report
Project Configuration
Approval has been granted for initial mining and first
stage processing operations to be undertaken on
Mining Licence MIN5532 with is located with one
of the two larger Retention Licences (RL2002 and
RL2003).
Mining and processing during the first phase of
operations will access approximately 13% of the total
tenement Mineral Resources. Despite this, Phase 1
operations are licenced for 35 years.
Phase 1 Operations
• A conventional shallow, dry mining approach,
accessing ore from a single pit by use of excavator
and haul trucks.
• The rare earth element concentrate will be sold to
processors (either Australian based and/or overseas)
for separation into critical minerals.
• A low strip ratio of 2.2:1 over the life of Phase 1
mining, and 1.9:1 over the first four years.
• The heavy mineral concentrate will be processed
offshore into final products of zircon and titania.
• 7.5 million tonnes of ore will be mined each year,
with the production of a rare earth concentrate and
heavy mineral concentrate, containing zircon and
a mixed titania product (66% TiO2 content)
Donald Project Simplified Phase 1 Process Flow-Diagram
1
1
2
2
3
3
Open Pit Mining
Open Pit Mining
Topsoil, subsoil, overburden
Topsoil, subsoil, overburden
stored separately for rehabilitation
stored separately for rehabilitation
Ore
Ore
Mining Unit Plant
Mining Unit Plant
Trommel & Screen
Trommel & Screen
Wet Concentration
Wet Concentration
Plant
Plant
4
4
Mixed
Mixed
HMC
HMC
5
5
HMC
HMC
Rare Earth Flotation
Rare Earth Flotation
Rare Earth Mixed
Concentrate
Rare Earth Mixed
Concentrate
HMC Product
HMC Product
21
DONALD RARE EARTH & MINERAL SANDS PROJECT
Phase 1 Characteristics
Based on current geological analysis and pricing
assumptions, it is expected that the rare earth concentrate
production stream will constitute approximately 50%
of total Phase 1 project revenues. The heavy mineral
concentrate, comprising zircon and titania, will make up
the balance of revenue, with approximately 80% of the
heavy mineral concentrate revenue attributable to zircon
and 20% to titania.
Key Metrics1
Revenue p.a.
Capital Expenditure
Total Capital Requirement
~US$ 200m
~A$ 350m
~A$ 400m
Indicative Production Profile For Phase 1 Operation
On-Site-Products
Avg. of first
5 years
Avg.
of Phase 1
REEC
HMC
~9 ktpa
~8 ktpa
~285 ktpa
~250 ktpa
1. See ASX Announcement 18 Aug 2022, Donald Project Configuration Update
During Phase 1 of the project, heavy mineral concentrate
product stream pricing will reflect the zircon and titania
assemblages and the estimated costs involved in
transportation and processing to final products. Based
on long term zircon and titanium dioxide (chloride
ilmenite feedstock) forecast prices of circa US$1,700
and ~US$320 per tonne respectively, the heavy mineral
concentrate price is currently estimated to be in the
range of US$325 to US$450 per tonne ((US$/t FOB real
July 2022). The rare earth concentrate price, based on its
neodymium and praseodymium content, is estimated
to be around ~US$11,000 per tonne.
Final capital expenditure estimates and detailed project
economics will form part of the final feasibility study,
currently being undertaken and to be released in the
first quarter of 2023. Current estimates are that capital
expenditure will be approximately A$350 million, with
an expected total funding requirement of approximately
A$400 million.
Planned Work Streams and Project Timeline
The main work streams leading to the completion of the Feasibility Study, and an investment decision by the
Board of Astron, include:
• An updated geological model, including a revised
Mineral Resource and Ore Reserve Statement
incorporating an analysis of the finer fraction for
VHM and the rare earth mineral of xenotime;
• refinement of the mine plan, informed by the
foregoing analysis and receipt of tenders;
• tailings design, including the design of tailings
storage arrangements;
• confirmatory metallurgical test work on sonic
drilling samples;
• a Value Engineering process to determine optimal
capital expenditure, timing of commitment
and ensuring maximum flexibility in relation to
operability and operational expansion;
Milestones
Revised Mineral Resource Statement for MIN5532
Ore Reserve and Mineral Resource Statement
Feasibility Study completion
Work Plan for Victorian Regulatory Submission
FID and construction commencement
Commissioning
Production
22
• market engagement with processors for HMC
processing arrangements;
• engagement with rare earth processors for off-take
arrangements;
• environmental technical studies and risk
workshops to progress the Work Plan;
• continued stakeholder, community and landowner
engagement; and
• further key appointments to management and
operational teams.
Time Frame
Q4 2022
Q1 2023
Q1 2023
Q4 2023
Q1 2024
Q3 2025
Q4 2025
Astron 2022 Annual Report
Subsequent Development Phases
Further development and value-adding opportunities
for the Donald Project will be evaluated as part of early-
stage production. Subject to this evaluation, necessary
regulatory approvals and market conditions,the
following material value adding opportunities are
indicated below:
Phase 2
• Evaluation studies regarding rare earth element
concentrate processing options for Astron,
including – standalone facilities and joint processing
development options
• Downstream zirconium processing options
evaluated by Astron China for production of higher
value zirconium end products
• Mining and concentrating extension into RL2002
• Resource to reserve conversion work to maintain a
• Plan to increase mining throughput to 15 million
tonnes per annum (from 7.5 million tonnes)
• Construction of an on-site (or located nearby)
mineral separation plant to produce final products
including:
multi-decade production life
• Progressive rehabilitation and return of land to arable
cropping use
Phase 3
• M ining and concentrating extension into
– zircon premium and zircon standard
RL2002 and RL2003
– titania (suitable for chloride slag production)
• Further increase in mining throughput, potentially a
• The mineral separation plant will be designed to be
able to be scaled-up in a capital efficient manner
further doubling of Phase 2 ore throughput
• Advancement of REEC processing options
• Continued production of rare earth concentrate at
• Evaluation of titania processing options, including
higher volumes
synthetic rutile production
• Progressive rehabilitation and return of land to arable
cropping use
Rare earth chloride salts.
23
FINAL PRODUCTS & APPLICATIONS
The Donald Project will produce both a rare earth and mineral sands concentrate.
Downstream processing of both rare earth and mineral sand concentrates results in
a wide range of consumer, industrial, scientific and other applications.
Rare Earth Elements
The Donald Project’s rare earth element products are expected
to be highly attractive in terms of market applications, given
the rare earth assemblage contains a significant proportion of
valuable heavy rare earth elements of dysprosium and terbium.
Dysprosium and terbium are used in both electric and hybrid
vehicle technologies, as well as a range of other applications.
Initially, Astron intends to enter into off-take arrangements with
rare earth processors for its production of rare earth concentrate.
As this will be separated at the site of the Donald operation, the
company has enhanced flexibility to consider both domestic
and international processing options.
Wind turbines
Electric vehicles and batteries
Titania (titanium dioxide)
Paint & pigment production
The testing and market evaluative work undertaken by Astron
has confirmed that the Donald Project titania product is desirable
as a feed source for the production of chloride slag, which is
used as a feedstock for the production of chloride pigment, an
industry that is growing rapidly. As a 66% TiO2 product with low
calcium content, it has an application as a ‘sweetener’ (or higher
titanium dioxide content feed) to existing slag feeds, which tend
to be lower TiO2 content ilmenites.
24
Aerospace & industrial
Astron 2022 Annual Report
Zircon
Ceramics, kitchen & sanitaryware
The Donald Project HMC is expected to produce both a premium
and a secondary zircon product. The separation process to produce
final products is relatively simple, and high recoveries has been
demonstrated at both lab-scale and pilot-scale test work. Donald
premium zircon produced from the pilot scale test work has been
exhaustively tested and displays characteristics highly desirable for
the ceramics market. Through testing conducted at the company’s
laboratories and verified independently by the Foshan Ceramics
Institute (a leading Chinese ceramics institute), Donald premium
zircon rates favourably in terms of whiteness compared to competitor
products. Whiteness is a highly desirable characteristic for the main
ceramics end use market, which represent approximately 50% of the
annual zircon demand. The secondary zircon, containing over 65%
ZrO2 will have applications in the chemical zircon market, with its
range of attendant end-uses.
Casting & foundry applications
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.
25
REHABILITATION & ENVIRONMENTAL MANAGEMENT
The mineral sands industry is noted as having amongst the best land rehabilitation
credentials of all forms of extractive industry. This stems from an extended history
of rehabilitation practices in various land-use situations, as well as the nature of the
mining approach adopted.
The main elements of the planned mining approach for
the Donald Project include:
• Separate stockpiling of topsoil and overburden for
return to mined areas, as part of progressive mine
rehabilitation;
• combining tailings with sand (modified co-disposal
or ‘ModCod’) and initially pumping to a former pit
tailings storage facility and then subsequent pumping
to the mine pit for disposal, as part of progressive
rehabilitation of mined areas; and
• replacing topsoil and overburden according to the
original soil configuration, followed by revegetation
and return to farmland.
The nature of rehabilitation means that land contouring
can be undertaken to the landowners’ requirements,
including laser-levelling for crop usage and retention
of some extracted areas for water storage and dams.
Satellite monitoring can be undertaken to monitor
post-rehabilitation agricultural crop yields and Astron
intends to work with farmers and local landowners to
ensure optimum land rehabilitation arrangements.
Excavated test pit and land after rehabilitation.
26
Astron 2022 Annual Report
“
GIVEN MINERAL SANDS TYPICALLY
INVOLVES ACCESSING RELATIVELY
SHALLOW DEPOSITIONS, THE
MINING APPROACH IS AMENABLE
TO PROGRESSIVE REHABILITATION
PRACTICES, RETURNING LAND
TO ORIGINAL LANDFORMS.
“
27
COMMUNITY ENGAGEMENT
In March 2022, Donald Mineral Sands (DMS), the operating company for the Donald
Project, appointed a Community Liaison Officer to further develop links and
connections with the community and the implementation of the DMS Community
Engagement Plan.
The Mineral Resources (Sustainable Development) Act
1990 requires that community engagement plans be
prepared to document the commitments that a mining
licencee has made to engage with the community. DMS
has and will continue to engage with the community
through:
• The DMS Community Reference Group
• Public information sessions
• The DMS website, Facebook and LinkedIn pages
• A DMS community sponsorship programne
• A dedicated stand at the Wimmera Southern Mallee
Careers Expo
• An ongoing presence at the DMS office in Minyip
Public Information Sessions
One of the key activities of the Community Liaison
Officer has been to present on the progress of the
project to the communities of Minyip, Warracknabeal,
Murtoa and Rupanyup. Further sessions have also
been held with progress associations and Chambers of
Commerce. The community engagement requirements
of regulators requires that DMS demonstrates that it
has gauged the sentiment of local communities and
responded to any concerns and keep stakeholders
informed of the progress of the project.
Minyip public information sessions.
Community Reference Group
The DMS Community Reference Group (CRG) met
for the first time in 2022 with representatives from
local government,
local health services, tourism,
local progress associations, Catchment Management
Authorities and local statutory authorities. The CRG
meets every 3 to 4 months to:
• act as a conduit to provide feedback from the wider
community
• provide an avenue to facilitate the flow of
information from DMS back to stakeholders on all
aspects of the project; and
• allow CRG members to raise any issues or
opportunities in relation to the project and its
potential environmental, social and economic
aspects.
28
Project Director Sean Chelius presents a project overview
to the inaugural CRG meeting in June 2022.
Astron 2022 Annual Report
Community Sponsorship Programme
Each year DMS conducts a community sponsorship programme to support not-for-profit community
organisations seeking to enhance local communities near the Donald Project area.
The applications must promote clear and direct benefit to community wellbeing, categorised as:
• Environment
• Education, training, leadership
• Arts and cultural activities
• Sport
• Health
• Community development and wellbeing
In 2022 DMS supported the following organisations:
• Rupanyup Primary School
• Rupanyup Recreation Reserve
• Minyip Field & Game
• Donald P&A Society
• Murtoa Big Weekend
• Rupanyup Football & Netball Club
• Minyip Historical Society
• Minyip Progress Association
Board & senior management visit to site, July 2022
Western Victorian Careers Expo
DMS attended the Western Victorian Careers Expo
where over 2,000 school students, job seekers and
interested persons attended.
Community Liason Officer Paul Atherton
meeting with students.
29
OTHER ASSETS
Astron Titanium (Yingkou) Limited is a fully owned subsidiary of Astron Corporation
Limited. Astron Titanium is a specialist R&D, mineral processing and technology
company with over 30 years’ experience in the China minerals market.
Astron China
The company is managed by executive director, Kang
Rong, as Chief Marketing Officer and Head of China
Operations. The company operates a 150,000 tonnes
annual capacity mineral separation plant. The company
has production and intellectual property capabilities
in a range of minerals processing areas, including the
production of pure hafnium-free zirconia; a method
for reducing various impurities from zircon; fine rutile
recovery and agglomeration; the capability to produce
nuclear grade zirconium and zirconium oxychloride.
Astron Titanium was the first company to introduce
titanium slag into the China market and has long-
standing relationships with many of the customers and
processors in the mineral sands industry.
The Yingkou mineral separation plant currently
undertakes two main commercial operations. The
first being the processing of mineral concentrates
and various middlings (including zircon middlings
and rutile middlings) to final products of zircon and
rutile. The second relates to the company’s speciality
agglomeration technology that enables it to produce
pelletised rutile from finer rutile products and chloride
slag fines products that otherwise are of low value.
The agglomerated product has been supplied to
China-based chloride pigment producers as well as,
more recently, a major western chloride pigment
producer.
The China operations represent a separate revenue
and profit centre for Astron. In addition, there is the
potential for the Yingkou plant to play a role in either
the processing of heavy mineral concentrate from the
Donald Project or the agglomeration of the fine titania
product for use in a wider range of applications.
30
30
Astron 2022 Annual Report
Niafarang Mineral Sands Project
Astron holds the mining licence to a coastal zone of
under 400 square kilometres along a 75 kilometres
stretch of the Casamance coast of Senegal. The mineral
sands deposit has been delineated and contains coarse
grained ore capable of producing high grade ilmenite
and zircon. The planned mining approach involves
conventional dry mining techniques with nearby
concentrating and sale of concentrate to a toll processor.
Astron has acquired the necessary mining equipment
for the project, which is under storage in Dakar.
Some encouraging progress has been made in relation
to the project, although the timeframe for potential
development still remains undetermined. Subsequent
to the Senegal national elections, the Minister for Mines
indicated an intention to progress the project, potentially
through the formation of a Public Private Partnership
(PPP) between the Senegalese Government and local
communities (including the local Village Chief), for the
advancement of arrangements related to the project.
Astron has submitted applications for the renewal of
mining licences, which had lapsed. Subject to these
being renewed and the PPP process commencing,
Astron will seek to re-establish the necessary approvals
to determine a plan and timeline for progression of the
project.
With the freeing up of some
internal resources
associated with the progression through feasibility
stage of the Donald project, it is one of the priorities
to advance the Niafarang project to a stage where
a realistic commercial production timeline can be
established.
Niafarang Project Senegal
Senegal
Dakar
MBour
Niafarang Mineral Sands Project
Ziguinchor
reiterated
the
Astron has
development of the local area where mining operations
are planned and has committed to various community
support and sponsorship programmes.
its commitment
to
31
ORE RESERVES & MINERAL RESOURCES
STATEMENT
The following provides an overview of the JORC 2012 compliant Ore Reserves and
Mineral Resources for the Donald Rare Earth and Mineral Sands Project.
The Ore Reserves and Mineral Resources Statement is based on, and fairly presents,
information and supporting documentation prepared by a competent person and
the Ore Reserves and Mineral Resources as a whole have been approved by a named
competent person, as seen in the Competent Persons Statement on page 35.
There were no changes to the Ore Reserves and Mineral Resources Statement for the
Donald Project from 2021 to 2022.
Ore Reserves
The Ore Reserve Statement is reported in accordance with the guidelines of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition and ASX Listing Rules (JORC Code (2012). The
Statement includes a revised Ore Reserves estimate of the Donald project that complies with the requirements of the
JORC Code (2012).
Tonnes
(mt)
Slimes
(%)
Oversize
(%)
HM
(%)
Ilmenite
(%HM)
Leucoxene
(%HM)
Rutile
(%HM)
Zircon
(%HM)
Monazite
(%HM)
Table 1
Classification
Within ML5532
Proved
Probable
Total
170
24
194
14
13
14
Within RL2002 Outside of ML5532
Proved
Probable
Total
Total within RL2002
Proved
Probable
Total
Notes
140
268
408
310
292
602
19
16
17
16
16
16
12
12
12
7
14
12
10
14
12
5.3
4.9
5.3
5.6
4.0
4.5
5.4
4.1
4.8
31
33
32
31
32
32
31
32
32
22
21
22
18
19
19
20
20
20
7.1
6.7
7.0
9.6
7.5
8.4
8.2
7.4
7.9
19
20
19
21
17
19
20
17
19
1.9
2.0
1.9
1.8
1.6
1.7
1.8
1.6
1.7
1.
2.
The ore tonnes have been rounded to the nearest 1Mt and grades have been rounded to two significant figures.
The Ore Reserve is based on indicated and Measured Mineral Resource contained with mine designs above an economic cut-off. The economic cut-off is defi-
nited as the value of the products less the cost of processing.
3.
Mining recovery and dilution have been applied to the figures above.
Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition, sets out Minimum standards, recommendations and guidelines for
public reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves authored by the Joint Ore Reserves Committee of The Australian Institute of Mining
and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia.
32
Astron 2022 Annual Report
Mineral Resources (HM)
Table 2 Mineral Resource at a 1% Cut-off
Classification
Within MIN5532
Measured
Indicated
Inferred
Subtotal
Tonnes
(mt)
372
75
7
454
With RL2002 Outside of MIN5532
Measured
Indicated
Inferred
Subtotal
343
833
1,595
2,771
Total within Donald Deposit (RL2002)
Measured
Indicated
Inferred
Subtotal
715
907
1,603
3,225
Total within Jackson Deposit (RL2003)
Measured
Indicated
Inferred
Subtotal
Total Donald Project
Measured
Indicated
Inferred
Total
Note
0
1,903
584
2,487
715
2,811
2,187
5,712
HM
(%)
4.5
4.0
3.5
4.4
3.9
3.3
3.3
3.4
4.2
3.4
3.4
3.6
0.0
2.8
2.9
2.9
4.3
3.0
3.3
3.2
Slimes
(%)
Oversize
(%)
14.4
13.8
13.5
14.2
19.8
16.2
15.7
16.4
17.0
16.0
15.7
16.1
0.0
19.0
16.7
18.5
18.1
17.9
16.4
16.9
12.8
13.1
10.6
12.8
8.1
13.5
6.0
8.5
10.6
13.4
6.0
9.1
0.0
5.8
3.3
5.2
11.1
8.2
5.5
7.3
1. The total tonnes may not equal the sum of the individual resources due to rounding.
2. The cut-off grade is 1% HM.
3. The figures are rounded to the nearest: 10M for tonnes, one decimal for HM, Slimes and Oversize.
33
ORE RESERVES AND MINERAL RESOURCES
STATEMENT
Mineral Resources (HM)
Table 3 Mineral Resource where VHM Data is Available at a Cut-off of 1% HM
Slimes
(%)
Oversize
(%)
HM
(%)
Ilmenite
(%HM)
Leucoxene
(%HM)
Rutile
(%HM)
Zircon
(%HM)
Monazite
(%HM)
Classification Tonnes
Within MIN5532
Measured
Indicated
Inferred
Total
(mt)
264
49
5
317
14.2
13.6
13.5
14.1
Within RL2002 Outside of MIN5532
Measured
Indicated
Inferred
Total
185
454
647
1,286
19.1
15.9
15.2
16.0
Total within Donald Deposit (RL2002)
Measured
Indicated
Inferred
Total
448
503
652
1,604
16.2
15.7
15.2
15.6
Total within Jackson Deposit (RL2003)
Measured
Indicated
Inferred
Total
668
155
823
Total Donald Project
448
1,171
807
2,427
Measured
Indicated
Inferred
Total
Note
18.1
15.1
17.6
16.2
17.1
15.2
16.3
12.2
12.1
10.2
12.1
7.3
13.2
5.8
8.6
10.2
13.1
5.8
9.3
5.4
3.1
5.0
10.2
8.7
5.3
7.9
5.4
4.9
4.2
5.3
5.5
4.2
4.9
4.8
5.4
4.3
4.9
4.9
4.9
4.0
4.8
5.4
4.6
4.7
4.8
31
33
36
32
31
33
33
33
31
33
33
32
32
32
32
31
32
33
32
22
22
20
22
19
19
17
18
21
20
17
19
17
15
17
21
18
17
18
7
7
7
7
9
7
9
8
8
7
8
8
9
9
9
8
8
9
8
19
20
22
19
21
17
18
18
20
18
18
18
18
21
19
20
18
19
19
2
2
3
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
1. The total tonnes may not equal the sum of the individual resources due to rounding.
2. The cut-off grade is 1% HM.
3.
The figures are rounded to the nearest: 1mt for tonnes, one decimal for HM, Slimes and Oversize and whole numbers for zircon, ilmenite, rutile + anatase, leucox-
ene and monazite.
4. Zircon, ilmenite, rutile + anatase, leucoxene and monazite percentages are report as a percentage of the HM.
5.
6.
Rutile + anatase, leucoxene and monazite resource has been estimated using fewer samples than the other valuable heavy minerals. The accuracy and confi-
dence in their estimate is therefore lower.
For further details including JORC Code, 2012 Edition – Table 1 and cross sectional data, see previous announcements dated 7 April 2016, available at ASX’s
website at www.asx.com.au/asxpdf/20160407/pdf/436cjyqcg3cf47.pdf
34
Astron 2022 Annual Report
Competent Persons Statement
in
this
that
report
relates
information
The
to
Exploration Results and Mineral Resources for the
Donald Project is based on information compiled
by Mr Rod Webster, a Competent Person who is a
Member of the Australasian Institute of Mining and
Metallurgy and Australian Institute of Geoscientists.
Mr Webster is a full-time employee of AMC Consultants
Pty Ltd and is independent of DMS, the owner of the
Donald Project Mineral Resources. Mr Webster has
sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration
and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. There have been
no changes to Donald Project’s Mineral Resource
estimate during the 2022 financial year. Mr Webster
consents to the inclusion in the report of the matters
based on his information in the form and context in
which it appears.
The information in this document that relates to the
estimation of the Ore Reserves is based on information
compiled by Mr Pier Federici, a Competent Person who
is a Member of the Australasian Institute of Mining and
Metallurgy. Mr Federici is a full-time employee of AMC
Consultants Pty Ltd and is independent of Astron. Mr
Federici has sufficient experience that is relevant to
the style of mineralisation and type of deposit under
consideration and to the activity being undertaken
to qualify as a Competent Person as defined in the
2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’.
The Ore Reserves Statement was updated during the
2021 financial year to comply with the 2012 Edition
of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.
The Company confirms that the form and context in
which the Competent Persons’ findings are presented
have not modified from the relevant original market
announcement on 18 February 2021. Mr. Federici
consents to the inclusion in the report of the matters
based on his information in the form and context in
which it appears.
The information in this document that relates to the
metallurgical performance and outcomes of test work is
based on information compiled by Mr Ross McClelland, a
Competent Person who is a Member of the Australasian
Institute of Mining and Metallurgy. Mr McClelland
is the principal metallurgist and director of Metmac
Services Pty Ltd. Mr McClelland has been involved with
the metallurgical development of the Wimmera style
mineral sands resources for more than 30 years. He has
provided metallurgical consultation services to DMS for
more than 7 years. He qualifies as a Competent Person
as defined in the 2012 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. The Company confirms that the form
and context in which the Competent Persons’ findings
are presented have not been prematurely modified
from the relevant original market announcement.
35
ANNUAL FINANCIAL STATEMENTS
FOR ASTRON CORPORATION LIMITED
For the year ended 30th June 2022
Astron Corporation Limited ARBN 154 924
553 Incorporated in Hong Kong, Company
Number: 1687414
36
36
Astron 2022 Annual Report
Astron Corporation Limited
Company Number: 1687414
For the Year Ended 30 June 2022
CONTENTS
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position (continued)
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity (continued)
Consolidated Statement of Cash Flows
Declaration by Directors
Independent Auditor’s Report
Investor Information
Page
19
20
21
22
23
24
84
85
89
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
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 2022.
FINANCIAL HIGHLIGHTS
Net tangible asset value per share
Down
96.7%
Revenue, Interest Income and Other Income Up
5.8%
Cash-in-flow from operating activities
Down
$2,259,111
Loss before tax
Loss after tax attributable to members
Up
Up
$6,611,548
$6,070,076
Total comprehensive income
Down
$5,136,471
To
To
To
To
To
To
0.35cps
$19,244,260
$394,168
$7,018,342
$9,038,451
($8,137,462)
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 Donald Mineral Sands Pty
Limited to advance the Group’s holding of the Donald and Jackson mineral sands and rare earth element
deposits in regional Victoria to a final Feasibility Study and commercialisation stage. The project will
consist of an initial, first phase, involving the mining and concentrating of heavy mineral ore to produce
a rare earth element concentrate (“REEC”) and mineral sands heavy mineral concentrate (“HMC”) for
sale to domestic and international processors;
- The operation of titanium-based materials processing activities, including a mineral separation plant at
Yingkou, China, the evaluation and advancement of downstream applications for zircon and titanium,
as well as procurement and trading activities, through the Company’s wholly owned subsidiary, Astron
Titanium (Yingkou) Ltd; and
- 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 rare
earth and mineral sands and rare earth project and the Niafarang mineral sands 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 2022.
1
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
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. George Lloyd
Mdm. Kang Rong
Mr. Tiger Brown
Dr. Mark Elliott
Mr. Gerard King
Chairman and Non-executive director (Appointed on 20 July 2021)
Executive director
Managing Director
Non-executive director
Non-executive director
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 directors of the Company’s subsidiaries during the year and up to the date
of this report was as follows:
Mdm. Jian Ping
Mr. Zhao Zhiping (resigned on 11 February 2022)
Mdm. Li Linlin (resigned on 11 February 2022)
Mr. Xiao Lingen (appointed on 11 February 2022)
Mdm. Cui Ying (appointed on 11 February 2022)
Director Information
Mr. George Lloyd
Chairman (Non-Executive Director)
Qualifications
Bachelor of Engineering Science in Industrial Engineering
Experience
Master of Business Administration, University of New South Wales
Stanford University Executive Management Programme
FAICD
-
-
Board member since 20 July 2021
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 is Chairman of engineering services group Ausenco Pty Ltd
and Chairman of bauxite development company VBX Limited. He has
held numerous directorships of 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
Audit, Nomination and Remuneration Committee
Directorships held in other listed entities
Not currently a Director of any other listed company.
2
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
Mr. Tiger Brown
Managing Director
Qualifications
Experience
B.S. (Economics), Wharton School of Business, University of Pennsylvania.
- Board member since 4 December 2019
- Mr. Brown has worked with Astron business entities in China and
Australia before being appointed a director in the role of Executive
Director, Business Development. He was appointed Managing Director
effective 17 February 2021
Interest in Shares #
94,165,972 CDIs
Special Responsibilities
Managing Director and Nomination and Remuneration Committee
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) Ltd
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.
3
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
Dr. Mark Elliott
Qualifications
Experience
Non-Executive Director
Diploma in Applied Geology, Ballarat School of Mines; Ph.D, 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.
Interest in Shares #
346,400 CDIs
Special Responsibilities
Chair of the Audit, Nomination and 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. Gerard King
Qualifications
Non-executive
LLB, University of Western Australia
AICD
Experience
- Board Member since 6 December 2011 (Astron Pty 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
Audit 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.
4
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
2. Meetings of Directors
During the financial year, thirteen 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. George Lloyd
Mr. Tiger Brown
Mdm. Kang Rong
Dr. Mark Elliott
Mr. Gerard King
Directors' Meetings
Number
Number
attended
eligible to
attend
12
13
13
13
13
12
13
10
13
12
Share Options
During the year 3,900,000 options over issued shares or interests in the Group or a controlled entity were granted
and remain outstanding at 30 June 2022.
3. Operational and Financial Review
3.1 Business Highlights
-
Increased revenue from Astron’s China-based operations, associated with strong end market demand
and stronger prices, offset by increased costs associated with the higher cost of raw materials.
- China Government-based COVID-19 restrictions, and the commissioning of the mineral separation plant
to process zircon middling, impacted plant utilisation levels.
- Significant progress across multiple work streams associated with the advancement of the Donald Rare
Earth and Mineral Sands and Rare Earth Project, including finalisation of project configuration to
established the least-risk path for the Phase 1 commercialisation of the project. The project’s Feasibility
Study is scheduled for completion in the first quarter of calendar year 2023.
- Continued engagement with regulators and community groups in Senegal as a basis for the future
progression of the Niafarang mineral sands project to a construction and production stage.
3.2 Financial Results – Key Features
The main features of the 2022 financial results are provided below. Segmental results are provided on pages
42 to 45, which provide information on the financial performance for the main business entities and activities of
the Group.
5
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
Revenue
Sales revenue was $18,999,516, a 15.7 per cent increase (2021: $16,418,037), attributed to positive market
conditions in downstream markets. The revenue growth was limited by Chinese Government COVID-19 related
lockdowns which impacted Yingkou and the operations of the mineral separation plant during the second half of
2022, there were also some raw material feedstocks supply constraints which impacted revenue and have now
been resolved.
Expenses
The Company’s general and administrative expenses increased from 2021 to 2022 from $4,273,063 to
$7,642,970, reflecting increased expenditure associated with the advancement of the Donald Project to
Feasibility Study stage, product research and development expenses in China and non-recurring expenses in
relation to the proposed demerger.
Net Loss
In 2022, a net loss before tax of $7,018,342 was recorded. (2021: $406,794). The higher in net loss reflects the
higher cost of raw materials and repeated Covid restrictions in China, research and development with respect
to the Chinese products as the Group focused on the advancement of processing of alternative raw materials
through the plant, together with increased costs as the Group focuses on the advancement of the Donald project.
The change in profit was also a result of one-off incomes / expenses, in the form of an interest reversal in the
prior year, and write-off of certain Chinese assets in the current year.
Operating Cash Flow
The operational cashflows reduced due to the increase in costs associated with the Donald project
advancement, research and development in China, disruptions associated with COVID-19 restrictions in China,
and the higher cost of raw materials, which resulted in a cash inflow of $394,168 for the year from the Group’s
operations (2021: $2,653,279).
Net Assets
The Group’s net assets as at 30 June 2022 were $85,503,285, (2021: $92,474,241). The decrease in the value
of net assets was primarily the result of net loss of $9,038,451 (2021: $2,968,375) suffered by the Group for the
year ended 30 June 2022.
Operations review
Donald
Astron continued to advance Donald project through a number of work streams designed to progress the project
to a feasibility stage.
Finalised Project Parameters
As previously advised, the Board of Astron considered it appropriate to undertake a comprehensive review of
project parameters of the Donald Project as part of defining the final parameters for the Feasibility Study,
scheduled for completion at the end of the first quarter of 2023.
The review was undertaken with a view to establishing the least risk path towards the commercialisation of the
Phase 1 development of the Project on Mineral Licence 5532 (MIN5532), while maintaining flexibility to deliver
the value that the development of the broader tenement resources is expected to represent.
6
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
The outcome of this review was announced on 18 August 2022. The main outcomes of the review included:
– Reduction in ore throughput to 7.5 million tonnes per annum (“Mtpa”) from 12.5 Mtpa, resulting in a
roughly proportionate decrease in HMC and finished product production;
– Production on-site of two product streams: a rare earth element concentrate (“REEC”) and a valuable
heavy mineral concentrate (HMC), instead of the separation of the HMC on-site to produce zircon and
titania (66% TiO2 content) final products;
– The elimination of an on-site Wet High Intensity Magnetic System (“WHIMS”) plant and a dry mineral
separation plant;
– Off-site processing of the HMC product to final zircon and titania products by either a third- party
separation facility, or (subject to further evaluation) at the Company’s minerals processing facilities at
Yingkou, China – or a combination of both; and
– Reduction in the scale of the footprint of the processing plant and associated facilities with an attendant
reduction in materials required during the construction phase.
Astron intends to commercialise the Donald Project via a phased development model, with the first phase of
mining conducted on the granted mining licence (MIN5532) producing a HMC containing zircon and titanium
feedstock minerals, and a REEC containing monazite and xenotime.
Astron envisages that subsequent phases of the project (subject to regulatory approvals) may provide the
opportunity for an expansion of mining throughput and the construction of a mineral separation plant (“MSP”)
on-site, enabling final products of zircon and titania to be produced. The phased development of the resource
base, given its size and longevity, is viewed as the most capital-efficient manner of developing the project, with
Phase 1 project parameters aligned with the Environmental Effects Statement (2008) and required regulatory
approvals.
Approvals
The project is well advanced in terms of regulatory approvals, with a positively assessed Victorian Environmental
Effects Statement (“EES”). The main outstanding regulatory requirement is the work-plan permit. By aligning the
throughput and plant processes to the EES parameters, the Company believes it has the most expeditious
pathway for the receipt of all final permits, scheduled for completion in the fourth quarter of calendar year 2023.
Ore Body Geological Analysis
In March 2022, the Company completed an air core drilling programme on MIN5532, designed to:
Delineate the +20–38 micron fraction of the valuable heavy mineral (VHM) component of the deposit;
Provide a more detailed analysis of the rare earth minerals in the deposit, including the xenotime
component, and
Establish VHM assemblage data for portions of the resource for which this data is not currently available.
The +20–38 micron fraction of VHM is not included in the current geological model of the Resource as it was
assumed not to be recoverable. Astron’s subsequent metallurgical test work, including pilot plant recovery of
bulk samples, has provided confidence in the recovery of this material. It is expected that the incorporation of
this material will increase the size of the VHM resource in MIN5532.
Following completion of the analysis of the results of the 2022 drilling programme, revised Mineral Resources
and Ore Reserves estimates will be prepared for MIN5532, which will be incorporated into a revised mine plan
for inclusion in the Feasibility Study.
7
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
It is expected that the results of this analysis will make a material contribution to the ultimate production profile
of Phase 1 of the Project, without any significant affect upon the project configuration or capital costs. Appendix
5 contains further contextual information about the current resource evaluation.
Funding
Astron continues to develop its funding strategy which is expected to include a mix of equity and debt funding.
China Operations
The Chinese operations were cash neutral for the year. Revenue and gross margins were consistent when
compared to the prior year despite the difficult trading conditions.
The Company has continued to invest in research and development in its agglomeration technology for its rutile
products and the production process.
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
In Senegal, Astron has an operational readiness to progress development of the Niafarang project wirh the main
capital equipment having been purchased and in storage in Dakar and the detailed mine plan design and the
necessary documented procedures for recruitment and contract commencement complete. A Mining Licence
was granted in 2018, and following its expiry earlier in the calendar year, the Company is undertaking active
steps in the renewal of the licence. Through its engagement with the government, the Company is highly
confident in its ability to renew the Mining Licence. Progress awaits final Senegal Government approvals,
including final approval for a community resettlement programme. In this regard, discussions will continue in
relation to a suitable community relocation plan with the local and national governments.
The economic viability of the project continues to be assessed as favourable, particularly in the context of the
relatively short mine life and the strengthening of demand and pricing dynamics for the main project products of
zircon, ilmenite and rutile.
As the Group’s priority is the Donald Project, the Niafarang project is unlikely to commence production prior to
the 2024 year.
8
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
4. Business Risks
Supply Risk
The Company is dependent on the renewal of its exiting supply contracts for Rutile and Zircon middlings to be
processed through its plants in China. The Company is currently in advanced discussions with additional
feedstock suppliers.
Funding Risk
The Donald Project is expected to require a significant capital investment. The Company may seek to raise
funds through equity or debt financing or other means. The terms of such financing cannot be determined at this
point and 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 have been captured as potential risks in the risk matrix. Where foreseeable delays
which may cause either a delay in the completion of the Donald Project or an overrun in terms of capital
expenditure or operational costs, it will be allocated for in the functional revisions and mitigated at that point.
Geopolitical Risk
The Company intends to export its products from the Donald project to various markets. There is a risk that
geopolitical risks could adversely impact the proposed sales including intended dales to the Company’s
subsidiary operations in China.
Commercial and Contract Risk
Potential future earnings, profitability and growth are likely to be dependent upon the Company being able to
successfully implement 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.
Commodity Price Risk
The Company’s future revenues are expected to be derived mainly from mineral sands products, the 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 Group 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 Group.
COVID 19 Risk
The global economic outlook is facing uncertainty due to the current COVID-19 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. Further COVD-19 related restrictions as well as global supply chain disruptions may
adversely impact the Company’s Australian and China-based operations.
9
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
Environmental Regulation
The Group’s operations and projects in China, Australia and Senegal 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.
In Australia, the Environmental Effects Statement for the Donald Project has been approved. The Group
complies with all environmental regulations in relation to its operations and there were no reportable
environmental incidents from its Australian operations.
In China, the Group continues to work closely with the local authorities to ensure high standards are maintained.
In relation to the manufacturing processes in China, there are no outstanding exceptions as noted by regular
local government environmental testing and supervision.
To the best of the Directors' knowledge, the Group has adequate systems in place to ensure compliance with
the requirements of all environmental legislation within the jurisdictions in which it operates and is not aware of
any breach of those requirements during the financial year and up to the date of the Directors' Report.
Occupational Health and Safety
During the year there were 2 minor lost time injuries at the company’s operations in Yingkou, China. The
Company has undertaken steps including a health and safety audit of the plant and plant operations to improve
employee’s safety.
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/Shareholder support and will be pursued as required.
Matters subsequent to year end:
- The Company has signed new raw material contracts for both zircon middlings and rutile middlings and
is activity seeking further supply opportunities to provide long-term processing security.
- The Company announced an update to the Donald Project and reconfiguration of the project.
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 continuous new feedstock supply for the China mineral separation plant;
Finalise the renewal of the Niafarang Project’s Mining and Exploration Licences;
Complete the Donald Project Feasibility Study, complete detailed engineering and the economic analysis
of the Project; advance final regulatory approvals, update the Mineral Resource and Ore Reserve
Statement for the Donald Project; and
Continue engagement with the local community and regulators in relation to both the Donald Project and
the Senegal Project.
10
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
For the Donald Project, the following represent the key work streams:
An updated geological model, including a revised Mineral Resource and Ore Reserve Statement
incorporating an analysis of finer fraction for VHM and the rare earth mineral of xenotime;
refinement of the mine plan, informed by the foregoing analysis and receipt of tenders;
tailings design, including the design of tailings storage arrangements;
confirmatory metallurgical test work on sonic drilling samples;
a Value Engineering process to determine optimal capital expenditure, timing of commitment and
ensuring maximum flexibility in relation to operability and operational expansion;
market engagement with processors for HMC processing arrangements;
engagement with REEC processors for off-take arrangements;
environmental technical studies and risk workshops to progress the Work Plan; and
continued stakeholder, community and landowner engagement through community reference meetings,
community events, information days, etc;
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. The Board has approved the Employee Share Option Plan (the “ESOP”) and options
subsequent to shareholder approval were issued to Directors and other employees and consultants.
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
11
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
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.
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 (2021: 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.
Sales revenue (‘000)
Net Loss (‘000)
Share Price at Year-end
Dividends Paid (‘000)
KMP
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
-
2022
$
19,000
(9,038)
0.50
-
The following persons were KMP of the Group during the financial year:
Mr. George Lloyd
Mr. Tiger Brown
Position Held
Chairman-Non-executive
Chief Executive Officer and Managing Director
12
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
Mdm. Kang Rong
Dr. Mark Elliott
Mr. Gerard King
Mr. Sean Chelius
Mr. Tim Chase
Mr. Joshua Theunissen
Executive Director, Chief Marketing Officer & Head of China Operations
Non-Executive Director
Non-Executive Director
Donald Project Director
Head of Global Operations
General Counsel and Australian Company Secretary
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 2022
KMP
Mr. George Lloyd
Mdm. Kang Rong
Mr. Tiger Brown
Dr. Mark Elliott
Mr. Gerard King
Mr. Tim Chase
Mr. Sean Chelius
Mr. Joshua Theunissen
Total
Options Held
Balance
1/07/2021
Shares (sold)
/purchased
Shares
transferred
Balance
30/06/2022
-
4,000,100
94,165,972
346,400
49,138
-
-
100
98,561,710
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,000,100
94,165,972
346,400
49,138
-
-
100
98,561,710
Details of options held directly, indirectly, beneficially or potentially beneficially by KMP and their related
parties are as follows:
30 June 2022
KMP
Mr. George Lloyd
Mdm. Kang Rong
Mr. Tiger Brown
Dr. Mark Elliott
Mr. Gerard King
Mr. Sean Chelius
Mr. Tim Chase
Mr. Joshua Theunissen
Total
Balance
1/07/2021
Options
Issued
Options
Exercised
Balance
30/06/2022
-
-
-
-
-
-
-
-
-
800,000
-
-
800,000
-
600,000
500,000
200,000
2,900,000
-
-
-
-
-
-
-
-
-
800,000
-
-
800,000
-
600,000
500,000
200,000
2,900,000
13
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
Details of Remuneration
Details of compensation by key management personnel of Astron Corporation Limited Group are set out
below:
Year ended 30 June 2022
Short term benefits
Post-
employment
benefits
Cash, fees
salary &
commissions
$
Non-cash
Benefits/
Other
$
Share-based
payment
expenses
Termination
Payments
$
Superannuation
$
Total
$
% of
remuneration
that is
performance
based
Directors
Mr. George Lloyd
Mr Tiger Brown
Mdm Kang Rong (#1)
Dr Mark Elliott (#2)
Mr. Gerard King
Other KMP
Mr. Sean Chelius
Mr. Tim Chase
Mr. Joshua Theunissen (#1)
Note reference #:
93,129
99,999
250,000
60,000
85,000
-
-
-
-
-
151,782
248,333
94,371
3,157
10,658
-
170,189
-
-
(70,635)
-
135,687
113,073
45,229
1,082,614
13,815
393,543
1.
2.
Paid or payable to management company
Options valued in June 2021 were revalued on grant date in November 2021
Use of Remuneration Consultants
-
-
-
-
-
-
-
-
-
-
263,318
9,999
109,998
-
250,000
6,000
-
(4,635)
85,000
13,011
303,637
24,391
396,455
-
139,600
53,401 1,543,373
0%
0%
0%
0%
0%
0%
0%
0%
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.
Share Based Payments
During the 2022 year, the Group granted 2,100,000 (2021: 800,000) options to a Directors and KMPs with
shareholder approval which were valued at $393,543 (2021: $299,943).
Voting and comments at the Company’s 2021 Annual General Meeting
The Company received 87.31% of “yes” votes on its remuneration report for the 2021 financial year.
The Company did not receive any specific feedback at the AGM on its remuneration report.
14
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
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
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 2022.
END OF REMUNERATION REPORT
15
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
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
Non-audit services
Interim review
-
2022
$
2021
$
-
-
-
-
60,055
53,521
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 2022 has been received and can
be found on page 18 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.
DIVIDENDS PAID AND PROPOSED
No final dividend was proposed for the year ended 30 June 2022 (2021: Nil).
16
Astron Corporation Limited
Company Number: 1687414
Directors’ Report
30 June 2022
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 30 September 2022
Mr. Gerard King
17
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For The Year Ended 30 June 2022
Sales revenue
Cost of sales
Gross profit
Interest income
Other income
Distribution expenses
Marketing expenses
Occupancy expenses
Administrative expenses
Provision for impairment on receivables
Fair value loss on financial assets at fair value through profit or loss
Impairment of capital works in progress
Costs associated with Gambian litigation
Share based payments 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:
Foreign currency translation differences (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
6
7
2022
$
18,999,516
2021
$
16,418,037
(15,326,183)
(13,261,073)
3,673,333
3,346
241,398
(276,174)
(24,425)
(7,146)
3,156,964
7,996
1,770,134
(344,631)
(202,342)
(9,981)
(7,642,970)
(4,273,063)
(6,755)
(7,457)
(1,755,249)
-
(619,688)
(506,759)
(89,796)
(7,018,342)
(2,020,109)
(9,038,451)
27,359
(5,290)
-
34,668
(299,943)
(190,660)
(78,005)
(406,794)
(2,561,581)
(2,968,375)
900,989
900,989
(32,616)
(32,616)
(8,137,462)
(3,000,991)
(9,038,451)
(2,968,375)
Owners of Astron Corporation Limited
(8,137,462)
(3,000,991)
LOSS PER SHARE
Loss per share (cents per share)
Diluted loss per share (cents per share)
8
Cents
Cents
(7.38)
(7.38)
(2.42)
(2.42)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
19
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position
As at 30 June 2022
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
Convertible notes
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
25
24
2022
$
2021
$
2,447,986
2,570,438
46,112
46,112
13,510,716
14,017,427
2,746,131
2,786,296
7,575
15,032
18,758,520
19,435,305
23,605,398
25,848,730
76,701,459
71,357,885
8,374,798
8,321,690
2,974,558
2,912,843
111,656,213
108,441,148
130,414,733
127,876,453
11,791,607
10,297,353
2,962,559
2,105,940
13,668,492
13,213,255
4,622,272
-
201,624
108,826
33,246,554
25,725,374
10,928,950
8,908,841
735,944
767,997
11,664,894
9,676,838
44,911,448
35,402,212
85,503,285
92,474,241
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
20
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Financial Position (continued)
As at 30 June 2022
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Note
26
27
2022
$
2021
$
76,549,865
76,549,865
18,041,978
15,974,483
(9,088,558)
(50,107)
85,503,285
92,474,241
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
21
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Changes in Equity
For The Year Ended 30 June 2022
Year Ended 30
June 2022
Equity as at 1 July
2021
Loss for the year
Other
comprehensive
income
Exchange
differences on
translation of
foreign
operations
Total
comprehensive
income for the
year
Issuance of
convertible
notes (note 23)
Options granted to
Directors (note
26.4)
Options granted to
employee (note
26.4)
Options granted to
consultants
(note 26.4)
Total transactions
with owners
recognised
directly in equity
Equity as at 30
June 2022
Issued
capital
$
Retained
earnings
$
Share
based
payment
reserve
$
Foreign
currency
translation
reserve
$
Convertible
notes
equity
reserve
$
Capital
reserve
$
Total
equity
$
76,549,865
(50,107)
1,213,047
13,311,431
-
(9,038,451)
-
-
-
(9,038,451)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
99,554
384,447
135,687
619,688
-
900,989
900,989
-
-
-
-
1,450,005
92,474,241
-
(9,038,451)
-
-
-
-
-
-
-
900,989
(8,137,462)
546,818
99,554
384,447
135,687
1,166,506
-
-
-
-
-
546,818
-
-
-
546,818
76,549,865
(9,088,558)
1,832,735
14,212,420
546,818
1,450,005
85,503,285
22
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Changes in Equity (continued)
For The Year Ended 30 June 2022
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 27.4)
Options granted to Director
(note 26.4)
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
-
(32,616)
(32,616)
-
(2,968,375)
-
-
-
-
-
-
(2,968,375)
-
-
-
-
-
-
-
299,943
299,943
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
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
23
Astron Corporation Limited
ARBN 154 924 553
Consolidated Statement of Cash Flows
For The Year Ended 30 June 2022
Cash flows from operating activities:
Receipts from customers
Payments to suppliers and employees
Net cash inflows from operations
Refundable Australian R&D tax offsets received
Note
2022
$
2021
$
18,536,069
16,821,687
(18,141,901)
(14,574,470)
394,168
2,247,217
-
406,062
Net cash inflows from operating activities
32.1
394,168
2,653,279
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 outflows from investing activities
Cash flows from financing activities:
Interest received
Interest paid
Partial settlement of offtake agreement
Convertible notes issued
Repayment of borrowings
Proceeds from borrowings
-
-
409,520
404,901
(569,235)
(1,027,834)
(4,043,452)
(887,601)
(4,612,687)
(1,101,014)
3,346
7,995
(336,201)
(292,901)
(647,936)
(1,328,688)
5,000,000
-
(2,312,745)
(1,370,000)
2,167,011
3,632,861
Net cash inflows from financing activities
32.4
3,873,475
649,267
Net (decrease)/increase in cash and cash equivalents
(345,044)
2,201,532
Cash and cash equivalents at beginning of the year
Net foreign exchange differences
2,570,438
222,592
555,504
(186,598)
Cash and cash equivalents at end of the year
32.2
2,447,986
2,570,438
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
24
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
1. Corporate Information
The consolidated financial statements of Astron Corporation Limited for the year ended 30 June 2022
were authorised for issue in accordance with a resolution of the Directors on 30 September 2022 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 2022, the Group had a deficit of current assets over current liabilities of $14,488,034
(2021: $6,290,069) and incurred a net loss after tax of $9,038,451 (2021: $2,968,375). The loss was
significantly impacted by the Group’s increased head count specific to the Donald project and lower
margins on Chinese operations over 2021. 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 18 months from the end of the reporting period with the consideration the plans and
measures stated below, the business is a going concern.
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:
In the coming 18 months, the Group expects a sales mix more heavily weighted towards self-
manufactured rutile and zircon. The Group has recently signed contracts with suppliers and
expects the margins on these sales to be higher than the margins achieved in the 12 months to
30 June 2022.
The Directors anticipate that 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 believe its existing bank borrowings
in PRC of approximately $6.1 million will be renewed and rolled over during the next 12 months.
The Group expects to receive the gross balance of the sale of land receivable of approximately
$1.1 million (note 11.1) outstanding at 30 June 2022, in the next 12 months.
25
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
2. Summary of Significant Accounting Policies (continued)
2.1 Basis of Preparation (continued)
The Senegal project has faced delays in proceeding to operational status. The Directors do not
expect any material expenditure to be incurred for the next 12 months and production to
commence in 2025 at the earliest.
An undertaking by the majority shareholder to provide financial support where necessary to
enable the Group to meet its obligation and commitments until funding is raised to progress the
Donald project.
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 $8.3 million until such time when the Group has available funds
and is generating positive operating cash flows (refer note 30.6).
Assuming the plans and measures in the forecast can be successfully implemented as scheduled,
the directors are of the opinion that the Group will have sufficient working capital over the forecast
period to finance its operations and fulfil its financial obligations as and when they fall due.
Accordingly, the directors of the Group considered that it is appropriate to prepare the consolidated
financial statements on a going concern basis notwithstanding that there is a material uncertainty
related to the above events or conditions that may cast significant doubt about the Group’s ability to
continue as a going concern and, therefore, that it may be unable to realise its assets and discharge
its liabilities in the normal course of business.
Should the Group fail to achieve the plans and measures as scheduled, it might not be able to
continue as a going concern, and adjustments would have to be made to reduce the value of assets
to their net realisable amounts, to reclassify non-current assets and non-current liabilities as current
assets and current liabilities respectively and to provide for any further liabilities which might arise.
The effect of these adjustments has not been reflected in these consolidated financial statements.
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 2022. 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.
26
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
27
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 income 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.
28
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
instalments. 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.
29
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
30
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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, borrowings and the debt
element of convertible notes issued by the Group 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) Convertible notes
Convertible notes issued by the Group that contain both the liability and conversion option
components are classified separately into their respective items on initial recognition. Conversion
option that will be settled by the exchange of a fixed amount of cash or another financial asset for
a fixed number of the Company’s own equity instruments is classified as an equity instrument.
On initial recognition, the fair value of the liability component is determined using the prevailing
market interest rate of similar non-convertible debts. The difference between the proceeds of the
issue of the convertible notes and the fair value assigned to the liability component, representing
the conversion option for the holder to convert the notes into equity, is included in equity (convertible
notes equity reserve).
In subsequent periods, the liability component of the convertible notes is carried at amortised cost
using the effective interest method. The equity component, represented by the option to convert
the liability component into ordinary shares of the Company, will remain in convertible notes equity
reserve until the embedded option is exercised (in which case the balance stated in convertible
notes equity reserve will be transferred to issued capital. Where the option remains unexercised at
the expiry dates, the balance stated in convertible notes equity reserve will be released to the
retained earnings. No gain or loss is recognised upon conversion or expiration of the option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and
equity components in proportion to the allocation of the proceeds. Transaction costs relating to
the equity component are charged directly to equity. Transaction costs relating to the liability
component are included in the carrying amount of the liability portion and amortised over the period
of the convertible notes using the effective interest method.
31
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
2. Summary of Significant Accounting Policies (continued)
2.6 Financial Instruments (continued)
(v) 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.
(vi) 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.
(vii) 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.
32
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
33
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
34
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
35
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
36
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 2022 and 30 June 2021. 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.
37
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
38
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
2. Summary of Significant Accounting Policies (continued)
2.22 Adoption of HKFRS
(i) Adoption of new or revised HKFRSs - effective on 1 July 2021
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 9,
Interest Rate Benchmark Reform - Phase 2
HKAS 39, HKFRS 7, HKFRS
4 and HKFRS 16
Amendments to HKFRS 16
COVID-19 - Related Rent Concessions Beyond 30 June
2021
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.
The Group elected to apply the amendments prospectively to acquisitions for which the
acquisition date is on or after 1 July 2021.
(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 37
Amendments to HKAS 16
Onerous Contracts - Cost of Fulfilling a Contract1
Property, plant and equipment - Proceeds before
Annual Improvements to
HKFRSs 2018-2020
Amendments to HKFRS 3
Amendments to HKAS 1
HK Interpretation 5 (2020)
Amendments to HKAS 8
Amendments to HKAS 12
Intended Use1
Amendments to HKFRS 9 Financial Instruments and
HKFRS 16 Leases1
Reference to the Conceptual Framework2
Classification of Liabilities as Current or Non-current3
Presentation of Financial Statements – Classification by
the Borrower of a Term Loan that Contains a
Repayment on Demand Clause3
Definition of Accounting Estimates4
Deferred Tax Related to Assets and Liabilities arising
from a Single Transaction3
Amendments to HKAS 1 and
Disclosure of Accounting Policies3
HKFRS Practice Statement 2
1
2
3
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.
39
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 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 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.
40
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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. The Group is confident the balance of
$1.1 million due at year end (2021: $1.5 million). 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.
3.6 Going Concern basis
These consolidated financial statements have been prepared on a going concern basis, the validity
of which depends upon the financing plan assessed as detailed in note 2.1 to these consolidated
financial statements. However, because not all future events or conditions can be predicted, this
assumption is not a guarantee as to the Group’s and Company’s ability to continue as a going
concern.
41
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 Rare Earths & 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
42
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Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 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
2022
$
-
2021
$
-
18,999,516
16,418,037
Other countries
-
-
18,999,516
16,418,037
2022
$
67
3,256
23
3,346
2021
$
2022
$
2021
$
15
81,924,954
76,527,391
7,873
20,560,191
22,755,043
108
9,171,068
9,158,714
7,996
111,656,213
108,441,148
During 2022, $12,370,852 or 65% (2021: $11,203,149 or 68%) of the revenue depended on five
(2021: five) customers.
45
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
18,999,516
16,418,037
2022
$
2021
$
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
2022
$
2021
$
3,346
7,996
174,346
-
-
-
67,052
241,398
142,778
1,199,551
201,915
215,294
10,596
1,770,134
Note: Among the government subsidies recognised in the last financial year, an amount of $62,700 for 4
employees was 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.
46
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 26.4)
Superannuation
6.2 Other items
Finance costs:
- on borrowings and early redemption of note receivables
- on convertible notes
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)
Impairment of capital works in progress (note 16)
Written off of capital works in progress (note 16)
Provision for/(reversal of) impairment on receivables (note 11)
2022
$
1,334,318
223,928
619,688
93,179
2,271,113
2021
$
632,964
124,196
299,943
38,183
1,095,286
2022
$
2021
$
337,669
169,090
506,759
7,146
1,847,675
2,268,608
(593,260)
1,675,348
-
1,755,249
374,413
6,755
190,660
-
190,660
9,981
526,916
2,175,604
(593,260)
1,582,344
(34,668)
-
-
(27,359)
47
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
7.
Income Tax Expense
7.1 The components of tax expense comprise:
Current tax benefit in respect of current year
Deferred taxation:
- Unrealised inventory
- Capitalisation of expenditure on DMS project (net)
- Write-down of deferred tax assets
- Other movements
Total
2022
$
-
(2,020,109)
2021
$
406,062
(2,967,643)
(876,280)
(769,726)
(1,212,172)
-
68,343
(1,661,165)
(532,899)
(3,853)
(2,020,109)
(2,561,581)
The Company is subject to Australian Income Tax which is calculated at 25% (2021: 26%) 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
(7,018,342)
(406,794)
2022
$
2021
$
Prima facie tax payable on profit 25% (2021: 26%)
-
continuing operations
Add/(Less) tax effect of:
change in tax rates
non-deductible items - Gambia
non-deductible items
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
(1,754,586)
(1,754,586)
(342,648)
-
1,736,659
(45,275)
2,121,030
-
-
-
304,929
2,020,109
(105,766)
(105,766)
(353,133)
(9,014)
169,680
(330,960)
732,493
(406,062)
532,899
2,317,224
14,220
2,561,581
* Tax benefit relates to Australian Government Grant in relation to research & development tax
incentives on eligible expenditure related to the DMS project.
48
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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.
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:
2022
$
(9,038,451)
(9,038,451)
2021
$
(2,968,375)
(2,968,375)
2022
2021
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 2022 and 2021, no
adjustment has made as the exercise of the outstanding share options and convertible notes has an
anti-dilutive effect on the basic loss per share.
49
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
9. Auditors' Remuneration
Audit and review of financial statements
BDO Limited
10. Cash and Cash Equivalents
Cash on hand
Cash at bank
Total
2022
$
2021
$
299,503
299,503
195,181
195,181
2022
$
858
2,447,128
2,447,986
2021
$
4,571
2,565,867
2,570,438
Cash on hand is non-interest bearing. Cash at bank comprise bank current account balances and short-
term deposits at call bearing floating interest rates between 0.0% and 1.30% (2021: 0.0% and 1.30%).
Deposits have an average maturity of 90 days (2021: 90 days).
10.1 Concentration of risk by geography – cash and cash equivalents
Australia
China
Senegal
Total
2022
$
2,292,667
71,596
83,723
2,447,986
2021
$
771,882
1,773,122
25,434
2,570,438
50
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
10. Cash and Cash Equivalents (continued)
10.2 Concentration of risk by bank
Australia
Commonwealth Bank - S&P rating of AA-
(2021: AA-)
Westpac Bank - S&P rating of AA- (2021: AA-)
Bank of China - S&P rating of A (2021: A)
Other Australian banks
China
Bank of China - S&P rating of A (2021: A)
Construction Bank - S&P rating of A (2021: A)
China Zheshang Bank – Baa3 (2021: Baa3)
Shengjing Bank – unrated
Shanghai Pudong Development Bank - S&P rating of BBB
Other banks
Other countries
Other banks
Restrictions on cash
2022
$
2021
$
2,225,332
-
-
67,306
2,292,638
1,515
7
151
3,821
64,471
802
70,767
83,723
83,723
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
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% (2021: 13%) to be paid.
As at 30 June 2021, the Chinese domiciled cash at banks included $412,790 of cash restricted by
bank as security for certain note payables and letters of credit.
51
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
10. Cash and Cash Equivalents (continued)
10.3 Term deposits greater than 90 days
Term deposits with maturity over 90 days
2022
$
46,112
2021
$
46,112
As at 30 June 2022, term deposits with maturity over 90 days of $46,112 (2021: $46,112) bear fixed
interest rates of 0.9% (2021: 0.9%) and have a maturity of 3-6 months.
Restrictions on cash
The short-term deposits include $45,000 (2021: $45,000) of cash backed by Bank Guarantees for
the operations of the Donald 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- (2021: AA-)
Other
2022
$
46,112
2021
$
46,112
2022
$
35,000
11,112
46,112
2021
$
35,000
11,112
46,112
52
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
2022
$
2021
$
4,008,099
(40,693)
3,967,406
1,141,839
(50,812)
1,091,027
2,545,312
6,297,033
(390,062)
5,906,971
2,644,692
(38,758)
2,605,934
1,087,535
(41,870)
1,045,665
1,555,881
9,181,458
(371,511)
8,809,947
13,510,716 14,017,427
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 2022, there were receipts of Nil (2021: $404,901) with a gross
balance receivable of $1,141,839 (2021: $1,087,535). While the receivable is currently outside the
terms initially agreed, management considers the credit risk to be low.
As at 30 June 2022 the total amount outstanding before ECL provision was $1,141,839 (2021:
$1,087,535). 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 2023. The provision
has accordingly been determined on that basis. During the year ended 30 June 2022, the Group
received payment of Nil and the provision for expected credit loss of $6,755 (2021: reversal of
provision of expected credit loss of $22,947) was recognised for the year ended 30 June 2022. As
at 30 June 2022, the impairment provision for land sale receivable is $50,812 (2021: $41,870).
53
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
2022
$
3,967,406
3,967,406
2021
$
2,605,934
2,605,934
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 broughtto account impairment where
required.
As at 30 June 2022, the impairment provision for trade debtors is $40,693 (2021: $38,758).
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
$390,062 (2021: $371,511) 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
Total
2022
$
284,225
2,119,235
342,671
2,746,131
2021
$
653,510
1,937,319
195,467
2,786,296
There is no provision against inventory to net realisable value as of 30 June 2022 and 2021.
54
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
2022, 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.
For the year ended 30 June 2021, 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 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
2022
$
7,575
7,575
2021
$
15,032
15,032
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.
55
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
15. Subsidiaries
Financial Year 2022
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 Limited
(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
2022
Percentage
Owned
Ordinary
Shares
2021
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
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.
56
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
2022
$
2021
$
5,162,151
5,162,151
5,162,151
5,162,151
10,317,568
(4,217,896)
6,099,672
9,826,972
(3,396,417)
6,430,555
4,567,663
(3,855,813)
711,850
5,259,881
(1,976,775)
3,283,106
19,656,897
(6,188,865)
(1,836,307)
11,631,725
17,421,391
(4,699,498)
(1,748,975)
10,972,918
23,605,398
25,848,730
As at 30 June 2022, property, plant and equipment with carrying value of $6,306,982 (2021:
$3,919,730) 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.
57
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 2022
Balance at 1 July
Additions
Depreciation
Written off
Transfers #
Impairment ##
Foreign exchange movements
Capital
works in
progress
$
3,283,106
469,287
-
(374,413)
(1,049,734)
(1,755,249)
138,853
Land
$
Buildings
$
Plant and
equipment
$
Total
$
5,162,151
-
-
-
-
-
-
6,430,555
-
(642,701)
-
1,049,734
-
311,818
7,149,406
10,972,918 25,848,730
569,235
(1,592,796)
(374,413)
-
(1,755,249)
909,891
99,948
(950,095)
-
-
-
459,220
10,581,991 23,605,398
Balance at 30 June
711,850
5,162,151
Year ended 30 June 2021
Balance at 1 July
Additions
Depreciation
Disposals
Foreign exchange movements
2,299,985
975,946
-
-
7,175
5,162,151
-
-
-
-
7,343,705
-
(592,347)
(332,166)
11,363
11,842,170 26,648,011
1,027,834
(1,504,118)
(332,166)
9,169
51,888
(911,771)
-
(9,369)
Balance at 30 June
3,283,106
5,162,151
6,430,555
10,972,918 25,848,730
# The Group allocated the development costs in relation to the Mineral separation plant in China to capital
works in progress. The Mineral Separation Plant was commissioned in current year, and the development
expenditure was transferred from capital works in progress to plant and equipment accordingly.
## During the year, the Group brought to account an impairment provision against the carrying value of
construction in progress assets of $1,755,249. This was substantially an impairment of Chinese assets
associated with a discontinued production line, being the Zircon Opacifier project, which can generate cash
inflows independently of other assets. The Board determined that it will no longer continue the production
line due to the complexity and costs of bringing to market and its recoverable amount is considered to be
zero. In December 2021, the Board agreed that it would not proceed with the investment in the Zircon
Opacifier project and focus on the current operating separation and aggregation plant together with the
trading and as such brought to account the impairment.
58
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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
Total exploration and evaluation assets
(a) Exploration and evaluation assets
Notes
17(b)
17(b)
17(b)
17(a)(c)
17(a)(d)
17(f)
2022
$
2021
$
7,807,947
(7,487,231)
320,716
7,792,696
(7,487,231)
305,465
65,436,309
65,436,309
59,514,726
59,514,726
10,944,434
76,701,459
11,537,694
71,357,885
The movements represent additions, movements in foreign exchange and amortisation. Further
details of each sub-category under Exploration and Evaluation Assets is set out under (b), (c) and
(d) below. Capital expenditure commitments are detailed in note 31.2.
(b) Evaluation costs
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
2022
$
2021
$
7,487,231
(7,487,231)
-
7,487,231
(7,487,231)
-
320,716
320,716
305,465
305,465
7,807,947
(7,487,231)
320,716
7,792,696
(7,487,231)
305,465
(c) Exploration and evaluation expenditure
This expenditure relates to the Group's investment in the Donald Rare Earth and Mineral Sands
Project. As at 30 June 2022, the Group has complied with the conditions of the granting of MIN5532,
RL 2002, RL2003 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.
59
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
17. Exploration and Evaluation Assets (continued)
(c) Exploration and evaluation expenditure (continued)
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 licences, 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.
(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 2022
Balance at 1 July 2021
Additions *
Amortisation
Foreign exchange movements
Exploration
and evaluation
phase
$
Evaluation
costs
$
Water rights
$
Total
$
59,514,726
305,465
11,537,694
71,357,885
5,921,583
-
-
-
-
-
5,921,583
(593,260)
(593,260)
15,251
-
15,251
Balance at 30 June 2022
65,436,309
320,716
10,944,434
76,701,459
Year ended 30 June 2021
Balance at 1 July 2020
Additions *
Amortisation
Foreign exchange movements
Balance at 30 June 2021
57,862,304
304,515
12,130,954
70,297,773
1,652,422
-
-
-
-
950
-
1,652,422
(593,260)
(593,260)
-
950
59,514,726
305,465
11,537,694
71,357,885
* Additions of exploration and evaluation phase during the year included the amortisation of water
rights of $593,260 (2021: $593,260) which was capitalised during the year.
60
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
18. Development Costs
Balance at 1 July
Additions
Foreign exchange movements
Balance at 30 June
2022
$
8,321,690
213,444
(160,336)
2021
$
8,205,625
231,730
(115,665)
8,374,798
8,321,690
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
2022
$
2,912,843
(82,552)
144,267
2,974,558
2021
$
2,983,286
(78,226)
7,783
2,912,843
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 were 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 2022, right-of-use assets with carrying value of $1,607,182 (2021: $1,572,748) are pledged
as security over short- term loans (note 22(a)).
61
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
20. Trade and Other Payables
Unsecured liabilities
Trade payables
Note payables
Deposits received in advance
Other payables
(a) Other payables
Note
20(a)
2022
$
2021
$
5,046,228
3,088,652
25,544
3,631,183
11,791,607
2,579,057
2,732,227
24,330
4,961,739
10,297,353
Included in other payables was a balance of $1,860,399 (2021: $2,589,363) in aggregate due to 1
(2021: 2) related companies as detailed in note 30.6.
21. Contract Liabilities
Contract liabilities arising from:
Advance deposit for future provision of goods
(a) Sale of goods
Note
21(a)
2022
$
2021
$
2,962,559
2,962,559
2,105,940
2,105,940
Contract liabilities are amounts received by the Group as advances in relation to the sale of mineral
products, and are expected to be recognised as revenue in the next 12 months.
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
over 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.
62
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 RMB9,534,000 (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%). As a result, over provision of interest in the amount of
RMB5,925,137 (equivalent to $1,199,5510) was reversal and credit to income statement in June 2021.
Since the conciliation agreement and up till 30 June 2021, the Group had settled RMB5,986,000 of
the Final Balance, and the remaining balance of RMB3,548,000 was settled during the year. At 30
June 2022, no balance was due to Wensheng (2021: $732,290)
The remaining contract liabilities of $2,962,559 (2021: $1,373,650) 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.
22. Borrowings
Current
Other short-term borrowings
Bank borrowings
Advances from directors
Note
22(a)
22(b)
22(c)
2022
$
2021
$
1,121,463
6,067,630
6,479,399
1,301,871
3,715,112
8,196,272
13,668,492 13,213,255
(a) Other short-term borrowings
Other loans are Chinese subsidiary loans amounting to $1,121,463 (2021: $1,093,894) is
denominated in RMB and is interest bearing at 10% p.a and secured by certain right-of-use assets in
China amounting to $1,607,182 (2021: $1,572,748) (note 19). The remaining amount for 2021 of
$207,977is unsecured and interest free. The loans are repayable on or before 31 December 2022.
As explained in note 2.1, the Directors expect to renew/roll over these loans in the coming six months
before they become due and payable.
(b) Bank borrowings
The bank loans are Chinese subsidiary loans denominated in RMB, interest bearing between 3.85%
to 5.50% p.a. and repayable on or before 25 January 2023 (2021: 4.50% to 5.50%).
Those loans are pledged with property, plant and equipment amounting to $6,306,982 (2021:
$3,919,730) (note 16) of the Group, and the personal guarantee from its director of $6,067,630 (2021:
$1,651,161).
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.
63
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
22. Borrowings (continued)
(c) Advances from directors
At 30 June 2022, executive directors, Mdm Kang Rong and Mr. Tiger Brown had advanced the
Group $5,479,399 (2021: $7,196,272) and $1,000,000 (2021: $1,000,000) respectively for
working capital. The loans are provided interest free and repayable on demand.
23. Convertible Notes
In March 2022, Astron issued Convertible Notes (“the Notes”) to raise the principal amount of $5,000,000
and incurred $1,000,000 to pay interest on the Notes.
The Notes have a term of two years and are convertible into ordinary shares of the Company at A$0.54
per share (representing a 24% premium over the trailing 60-day VWAP). The Notes carry a 10% p.a.
coupon payable up front in the form of 10,000 additional notes (equivalent to AU$1 million) with the full
amount capitalised to the loan balance.
The Notes are secured by the 100% owned subsidiary, Donald Mineral Sands Pty Ltd, providing a first
ranking general security agreement, guarantee and registered mortgage over real property held.
The movements of the liability component and conversion option component of the Notes during the year
ended 30 June 2022 are as follows:
At 1 July 2021
Convertible notes issued
Effective interest expenses recognised to
profit or loss
At 30 June 2022
Categorised as:
At 30 June 2022:
Non-current portion
Current portion
Liability
component
of the
Notes
$
Conversion
option
component of
the Notes
$
Total
$
-
4,453,182
169,090
4,622,272
-
4,622,272
4,622,272
-
546,818
-
5,000,000
-
546,818
169,090
5,169,090
-
-
-
-
4,622,272
4,622,272
64
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
24. Provisions
Current
Employee entitlements
Non-current
Relocation provision
(a) Provision for Relocation
Note
2022
$
2021
$
201,624
108,826
(a)
735,944
767,997
The provision for relocation represents the estimated costs to relocate and compensate landowners
for the Senegal mineral sands project.
25. Deferred Tax
25.1 Liabilities
Current tax liability
Deferred tax liability arises from the following:
- Capitalised expenditure
- Unrealised inventory
- Provisions and other timing differences
2022
$
-
2021
$
-
11,214,337 10,002,165
(188,749) (1,065,029)
(28,295)
(96,638)
10,928,950
8,908,841
25.2 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.
Tax losses:
- Revenue losses (China)
- Revenue losses (Australia)
- Capital losses
2022
$
2021
$
2,590,373
3,657,924
1,998,411
790,807
12,694,612 12,694,612
65
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
26. Issued Capital
122,479,784 (2021: 122,479,784) Fully Paid Ordinary Shares
76,549,865 76,549,865
26.1 Reconciliation of ordinary shares (number)
2022
$
2021
$
At 1 July
At 30 June
26.2 Ordinary shares
2022
2021
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.
26.3 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 (including convertible notes)
Total equity
Net debt to equity ratio
2021
2022
$
$
13,213,255
18,290,764
85,503,285 92,474,241
21.39%
14.29%
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.
66
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
26. Issued Capital (continued)
26.4 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 last financial year, non-executive Director Dr. Mark Elliott was granted 800,000 options,
which were subject to shareholder approval and received on 30 November 2021. As at 30 June
2021, the Company estimated the grant date fair value with reference to the fair value as at the
reporting date (i.e. 30 June 2021) of $299,943 for the purpose of recognising the services received
from Dr. Mark Elliott. At 30 November 2021, the options was approved by the Board, which the fair
value of options granted to Dr. Mark Elliott was revalued to $229,308.
During the current year, the Company granted additional 3,100,000 options in total, comprising
800,000 to Mr George Lloyd, 1,700,000 to employees and 600,000 to Company consultants.
Vesting Conditions:
(i) Directors Options:
1,600,000 options which have no vesting conditions
(ii) Employee Options 1,700,000 Options:
1,400,000 options whereby 50% vest on issue, and 25% on the first and second anniversary
respectively, contingent on remaining employed. Unvested options lapse if employment
ceases.
300,000 with a vesting date 3 years from issue, to be exercised in the 2 years following
vesting, contingent on remaining employed, unvested options lapse if employment ceases.
(iii) Consultant Options 600,000 Options:
50% of the options vest on issue, and 25% on the first and second anniversary respectively,
contingent on remaining employed. 50% of unvested options lapse if cease being a
consultant.
67
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
26. Issued Capital (continued)
26.4 Share based payments (continued)
No share options were exercised during the year ended 30 June 2022 and 2021.
The movements of the share options granted under the ESOP during the current and prior years are
as follows:
2022
2021
Number of
options
Weighted
average
exercise price
$
Number of
options
Weighted
average
exercise price
$
Outstanding at 1 July
Granted
Outstanding at 30 June
800,000
3,100,000
3,900,000
0.3375
0.6532
0.5885
-
800,000
800,000
-
0.3375
0.3375
Exercisable at 30 June
3,900,000
0.5885
800,000
0.3375
The fair value of the options granted was using Black Scholes Option Pricing Model that takes into
account the following inputs:
Director Options
Number of options
Spot Price
Exercise Price
Valuation Date
Expiration date
Life of the Options
Expected volatility1
Risk Free Rate
Options fair value
Employee Options
Number of options
Spot Price
Exercise Price
Valuation Date
Expiration date
Life of the Options
Expected volatility1
Risk Free Rate
Options fair value
800,000
$0.30
$0.3375
30 November 2021
30 November 2024
3 years
90.23%
1.67%
$229,308
1,700,000
$0.42
$0.63
13 December 2021
13 December 2024
3 years
90.23%
1.67%
$384,447
Director Options
Number of options
Spot Price
Exercise Price
Valuation Date
Expiration date
Life of the Options
Expected volatility1
Risk Free Rate
Options fair value
800,000
$0.30
$0.72
30 November 2021
30 November 2024
3 years
90.23%
1.67%
$170,189
Consultants Options
Number of options
Spot Price
Exercise Price
Valuation Date
Expiration date
Life of the Options
Expected volatility1
Risk Free Rate
Options fair value
600,000
$0.42
$0.63
13 December 2021
13 December 2024
3 years
90.23%
1.67%
$135,687
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.
68
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
26. Issued Capital (continued)
26.4 Share based payments (continued)
As at 30 June 2022 and 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 2022 was $619,688 (2021: $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 2022. 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.
27. Reserves
27.1 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 2022 is $14,212,420 (2021:
$13,311,431).
27.2 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 2022 is $1,832,735 (2021:
$1,213,047).
27.3 Convertible notes equity reserve
The convertible notes equity reserve records the carrying value of equity component of unconverted
convertible notes issued by the Company. The reserve balance at 30 June 2022 is $546,818 (2021:
Nil).
27.4 Capital reserves
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 expired during
the year ended 30 June 2021. This amount has accordingly been transferred to capital reserve, as
set out in the Consolidated Statement of Changes in Equity on page 23.
69
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
28. Holding Company Statement of Financial Position
ASSETS
Current assets
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
Convertible notes
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Share based payment reserve
Foreign currency translation reserve
Convertible notes equity reserve
Retained earnings
TOTAL EQUITY
Notes
2022
$
2021
$
14,068,796
9,039,544
14,068,796
9,039,544
76,549,866
76,549,866
76,549,866
76,549,866
90,618,662
85,589,410
149,343
143,606
4,622,272
4,771,615
4,771,615
-
143,606
143,606
85,847,047
85,445,804
23
2
26
76,549,865
76,549,865
919,631
610,674
546,818
299,943
(52,315)
-
7,220,059
8,648,311
85,847,047
85,445,804
read in conjunction with the accompanying notes.
Mr. Tiger Brown
Mr. Gerard King
70
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
29. 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 25.0% (2021: 26.0%)
2022
$
2021
$
-
-
The above amount represents the balance on the franking account at the end of the financial year arising
from income tax payable.
30. Related Party Transactions
30.1 Parent entity
Astron Corporation Limited is the parent entity of the Group.
30.2 Subsidiaries
Interests in subsidiaries are disclosed in note 15.
30.3 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
2022
$
2021
$
1,082,614
393,543
13,815
1,489,972
713,483
299,943
9,923
1,023,349
53,401
53,401
1,543,373
23,315
23,315
1,046,664
71
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
30. Related Party Transactions (continued)
30.3 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
2022
$
2021
$
588,128
99,554
15,999
703,681
397,258
299,943
2,590
699,791
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 2022 and 2021.
30.4 Interest free loans
All subsidiary companies are wholly owned with any interest free loans being eliminated on
consolidation.
30.5 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.
30.6 Related party loans
As at 30 June 2022, executive Directors, Mdm Kang Rong and Mr Tiger Brown had advanced the
Group $5,479,399 (2021: $7,196,272) and $1,000,000 (2021: $1,000,000) respectively for
working capital. The loans are provided interest free and repayable on demand. At 30 June 2022,
no repayments have been made against these loans.
As at 30 June 2022 there are unpaid Directors and management fees payable to Directors’ related
entities as follows:
- Mdm Kang Rong, Juhua International Limited of $1,860,399 (2021: $1,693,732) (note 20(a));
As at 30 June 2021 there was other payable to Directors’ related entities as follows:
- Mdm Kang Rong, Shenyang Wanshan Hangtankeji Limited Company of $895,631 (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.
72
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
31. Commitments
31.1 Operating lease commitments
There are no non-cancellable operating leases contracted for but not capitalised in 2022 or 2021.
31.2 Capital expenditure commitments
Capital expenditure commitments contracted for:
- Chinese capital projects
- Senegal
- DMS
31.3 Water rights
2022
$
2021
$
265,835
696,814
55,000
1,017,649
134,532
747,272
55,000
936,804
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). Usage fee of $461,765 is charged for the year ended 30 June 2022.
31.4 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.
31.5 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 2022, the net book value of this land is $2,974,558 (2021: $2,912,843)
(note 19).
Minimum expenditure on exploration and mining licences
To maintain the Exploration and Mining License’s at Donald, the Group is required to spend
$1,911,800 (2021: $1,401,800) 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.
73
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
32. Cash Flow Information
32.1 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 of property, plant and equipment
Amorisation of right-of-use assets
Provision for/(Reversal of) impairment on receivables
Fair value loss on financial assets at fair value through profit or
loss
Reversal of costs associated with Gambian litigation
Impairment of construction in progress
Share based payment expenses
Finance costs
Reversal of interest expenses for offtake agreement
Gain on disposal of property, plant and equipment
Decrease/(Increase) in trade and other receivables
Decease in inventories
Increase/(Decrease) in trade and other payables and provisions
Written off of capital works in progress
Effects on foreign exchange rate movement
2022
$
(7,018,342)
2021
$
(406,794)
1,592,796
82,552
6,755
7,457
-
1,755,249
619,688
506,759
-
-
506,711
40,165
1,494,254
374,413
425,711
394,168
1,504,118
78,226
(27,359)
5,290
(42,599)
-
299,943
190,660
(1,199,551)
(215,294)
(3,376,241)
7,144,044
(1,596,192)
-
295,028
2,653,279
32.2 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
32.3 Loan facilities
Note
2022
$
2021
$
10
10
858
2,447,128
2,447,986
4,571
2,565,867
2,570,438
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
2022
$
2021
$
6,067,630
(6,067,630)
-
3,715,112
(3,715,112)
-
As at 30 June 2022 and 2021, its loan facilities were secured by assets held by its China subsidiary.
74
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
32. Cash Flow Information (continued)
32.4 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.
Borrowings
(note 22)
$
Contract
liabilities -
Wensheng
(note 21(a))
$
Convertible
Notes
(note 23)
$
At 1 July 2020
Changes from cash flows:
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from bank borrowings
Loan expense paid
10,917,671
3,908,307
-
(1,370,000)
3,632,861
(170,177)
(1,328,688)
-
-
-
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 and 1 July 2021
Changes from cash flows:
Convertible notes issued
170,177
-
32,723
-
(1,941,765)
94,436
13,213,255
732,290
Partial settlement of offtake agreement
-
(647,936)
Repayment of borrowings
Proceeds from bank borrowings
Loan interest paid
Total changes from financing cash flows
(2,312,745)
2,167,011
(337,669)
(483,403)
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
-
-
-
(647,936)
5,000,000
Interest expense
337,669
-
169,090
Settlement by delivery of products
Conversion option component of convertible
notes
Exchange adjustments
At 30 June 2022
-
-
(121,353)
-
-
(546,818)
600,971
36,999
-
13,668,492
-
4,622,272
75
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
32. Cash Flow Information (continued)
32.5 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.
32.6 Disposal of entities
There were no disposals of entities in the current or prior financial years.
32.7 Restrictions on cash
In 2021, bank balances included $412,790 of cash restricted by bank as security for certain note
payables and letter of credit.
33. Employee Benefit Obligations
As at 30 June 2022 and 2021, the majority of employees are employed in China. In accordance with
normal business practice in China, employee benefits such as annual leave must be fully utilised annually.
Chinese provisions for employee entitlements at year end would be insignificant.
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:
76
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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, most of (2021: 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, a small proportion 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 22% (2021: 12%) of the
Group’s trade debtors is from 7 (2021: 7) 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 $1,141,839 (2021: $1,087,535) 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
2022
$
2,447,986
46,112
7,603,745
10,097,843
2021
$
2,570,438
46,112
5,207,480
7,824,030
77
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 2022 and 2021:
Gross carrying amount
Lifetime expected credit loss
Net carrying amount
2022
$
40,693
(40,693)
-
2021
$
38,758
(38,758)
-
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 2022:
Current (not past due)
Expected
loss rate
%
Gross
carrying
amount
$
Loss
allowance
$
0.00%
3,967,406
3,967,406
-
-
The following table presented 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
-
-
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.
78
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 2022, the Group had cash of $2,570,438 (2021:
$555,504).
Maturity analysis
Carrying
Amount
$
Contractual
Cash flows
$
Note
< 6 months
$
> 6 months
$
Year ended 30 June 2022
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing
liabilities
Borrowings
Convertible notes
Total interest bearing liabilities
Total liabilities
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
20
20
22
22
23
20
20
22
22
8,134,880
3,631,183
6,479,399
8,134,880
3,631,183
6,479,399
8,134,880
3,631,183
6,479,399
18,245,462 18,245,462 18,245,462
-
-
-
-
7,189,093
4,622,272
7,189,093
5,455,484
5,000,000
-
5,455,484
11,811,365 12,189,093
30,056,827 30,434,555 23,700,946
1,733,609
5,000,000
6,733,609
6,733,609
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
4,809,006
4,809,006
23,486,278 23,486,278 19,771,166
1,093,894
1,093,894
3,715,112
3,715,112
3,715,112
79
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
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 2022 and 2021, 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
2022
$
2021
$
7,575
7,575
15,032
15,032
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 2022, the maximum exposure of price risk to the Group was the financial assets at
fair value through profit or loss for $7,575 (2021: $15,032). 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
2022
$
7,575
7,575
2021
$
15,032
15,032
80
Astron Corporation Limited
ARBN 154 924 553
Notes to the Consolidated Financial Statements
For The Year Ended 30 June 2022
34. Financial Risk Management (continued)
34.5 Price risk (continued)
Sensitivity Analysis
2022
$
2021
$
Increase/(Decrease) in
share price
Increase/(Decrease) in
share price
+10%
-10%
+10%
-10%
Listed equity shares on ASX
Profit before tax – increase/(decrease)
758
(758)
1,503
(1,503)
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 most of the Group’s cash and cash equivalents and term
deposits are held with institutions with a AA- to Baa3 credit rating while a small proportion is held
with an unrated bank in PRC.
81
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N
Astron Corporation Limited
ARBN 154 924 553
Notes to the Financial Statements
For The Year Ended 30 June 2022
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 25% (2021: 26%)
Total
34.7 Foreign currency risk
+ 1% (100 basis points)
-1% (100 basis points)
2022
$
24,471
461
(60,676)
(35,744)
8,936
(26,808)
2021
$
25,659
461
(37,151)
(11,031)
2,868
(8,163)
2022
$
(24,471)
(461)
60,676
35,744
(8,936)
26,808
2021
$
(25,659)
(461)
37,151
11,031
(2,868)
8,163
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.
83
Astron Corporation Limited
Declaration by Directors
For The Year Ended 30 June 2022
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 2022 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:
Mr Tiger Brown
Director
30 September 2022
Mr Gerard King
Director
84
Astron Corporation Limited
Investor Information
Investor Information
2022/2023 Financial Calendar (on or before)
Release of quarterly report
2022 Annual general meeting
Release of quarterly report
Release of half year report
Release of quarterly report
31 October 2022
30 November 2022
30 January 2023
28 February 2023
30 April 2023
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 30 September 2022.
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
144
182
62
128
35
Units
71,003
505,227
476,124
3,945,966
117,478,457
% of
Issued Capital
0.06
0.41
0.39
3.22
95.92
Total
Non CDI holders
1-1,000
1,001-5,000
Total
Unmarketable Parcels
551
122,476,777
100.00
5
1
6
307
2,700
3,007
Minimum $ 500.00 parcel at $0.63 per unit
Minimum
parcel size
794
Holders
107
Units
36,147
89
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
Citicorp Nominees Pty Limited
Juhua International Limited
Mr Guodong Gong
Mr Donald Alexander Black
Mr Darrell Vaughan Manton + Mrs Veronica Josephine Manton
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