20Annual
Report 23
Astron Corporation Limited
RARE EARTHS
A CRITICAL OPPORTUNITY
1
ABOUT ASTRON
Astron Corporation Limited
ARBN 154 924 553 Incorporated in Hong Kong,
Company Number: 1687414
Annual Report for the Year Ended 30 June 2023
Cautionary Statement
Corporate Governance Statement
Astron Corporation Limited’s Corporate Governance
Statement for 2023 can be found on Astron’s
website at: https://www.astronlimited.com.au/wp-
content/uploads/2023/09/20230929-Appendix-4G-
Corproate-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”,
This document may
looking
statements” within the meaning of securities laws of
applicable jurisdictions. Forward looking statements
can generally be identified by the use of the words
“anticipate”,
“forecast”,
“expect”,
“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 2023 Annual Report CONTENTS
Critical Minerals for a Sustainable Future
Rare Earths
Mineral Sands
Donald Highlights
Definitive Feasibility Study Findings
From the Chairman
From the Managing Director
Experienced Team to Deliver the Donald Project
The Donald Project
Resource and Reserve updates
Phased Development Pathway
Mining Operations
Work Plan
Critical Minerals
Marketing & Products
Other Assets
ESG & Community engagement
Ore Reserves & Mineral Resources Statement
Annual Financial Statements
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5
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10
12
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22
23
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26
27
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30
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34
42
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CRITICAL MINERALS FOR A SUSTAINABLE FUTURE
The global push towards electrification and reduction in fossil fuels
consumption represents the most significant structural change in
global energy markets since the Industrial Revolution.
A sustainable world will require a new suite of minerals – critical
minerals for a sustainable future.
4
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Astron 2023 Annual Report RARE EARTHS
To meet global emissions targets the International Energy Agency has estimated
that, by 2030, electric vehicles will need to represent more than 60% of new vehicles
sold globally and that wind electricity generation capacity is required to increase
annually by 17%.
In these circumstances, the global demand for rare earths is expected to increase three and a half fold by 2030 and experience
a further doubling in the period from 2030 to 2040.
Astron’s Donald Rare Earth and Mineral Sands Project, with its significant size and advanced regulatory approvals, represents a
significant source of rare earth minerals – one of a handful of deposits that is able to be developed within a short time frame.
5
MINERAL SANDS
In addition to being a globally significant rare earths project, the Donald Project, with
the largest zircon resources in the world, is also a major potential source of zircon
and titanium minerals. This diverse mineral characterisation distinguishes Donald
from all other development-ready mineral sands and rare earth projects.
Based on the Phase 1 Donald Project Definitive Feasibility Study, which was released on 26 April 2023, the project has
a revenue split of 57% rare earths and 43% mineral sands over its greater than 40-year mine life.
With over 35 years of market experience in mineral sands downstream processing, Astron is looking forward to
leveraging its strong market connections and knowledge in the development of the Donald Project.
Titanium – applications:
Paint & pigment production
Medical devices – hips & artificial joints
Aerospace
Medical devices
Steel
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Astron 2023 Annual Report
Zircon – Applications:
Ceramics, kitchen & sanitaryware
Solar Panels
Ship building - UV resistance
Ceramics
Foundary Applications
7
Donald Highlights
Astron’s prime focus is on the development of the Donald Rare Earth and Mineral
Sands Project (Donald Project) in regional Victoria.
Over the last financial year, Astron made significant
strides towards the development of this project, including
reviewing the scope of the Project to maximise capital
efficiency, the execution of an updated memorandum
of understanding with the local shire, the release of
the Phase 1 Donald Project Definitive Feasibility Study,
and the updated Ore Reserves and pre-feasibility study,
covering Phase 2 of the project. These are concrete
milestones towards the construction of what will be a
globally significant critical minerals operation.
Project Re-Scope
A review of the Donald Project’s parameters was
undertaken during the year. The purpose was to
establish the least-risk path to commercialisation for
Phase 1. This has resulted in capital efficiencies for
Phase 1 while maintaining flexibility to deliver additional
value from subsequent phases. Importantly, the Phase
1 Donald Project is financially viable as a standalone
project and is not dependent on subsequent phases to
deliver attractive returns. Updated operations for mining
phases are detailed on pages 23-25.
Memorandum of Understanding
A memorandum of understanding was signed with
Yarriambiack Shire Council to support the development
of the project and deliver related benefits to the local
community. A large portion of the Phase 1 project area
is located within Yarriambiack Shire.
Mineral Resource and Reserve
Updates
Two new Ore Reserve estimates were released during
the year. These cover the mining licence MIN5532,
which is the site of the Phase 1 project, and retention
licence RL2002, which is the proposed site of the Phase
2 project. The outcome has been an increase in Reserves
for both areas and an increase in the Mineral Resources
contained within MIN5532. The Ore Reserves updates
increased the total Donald Project Ore Reserve by 37%
to 825Mt with an increase in heavy mineral Reserves of
29% to 36.9Mt.
Phase 1 Definitive Feasibility Study
Astron released a Definitive Feasibility Study (DFS) for
the Phase 1 Project on 26 April 2023. It was based on
a complete technical, environmental, logistical and
economic evaluation of the project and detailed the
extensive work carried out in de-risking operations
on the MIN5532 mining licence. The DFS supports a
substantial return on investment with high confidence
based on AACE Class 2 capital expenditure estimates.
All main regulatory approvals are completed or well
advanced in preparation for a Final Investment Decision
(FID) planned for 1H 2024 and first production in 1H
2026.
Phase 2 Pre-Feasibility Study
for
The Pre-feasibility study (PFS) for Phase 2 operations,
to be established on retention licence RL2002, was
released on 27 June 2023 and shows the significant
the next phase of project
potential upside
development. Phase 2 operations involve a duplication
of Phase 1 mining operations with the addition of a
mineral separation plant (MSP) which is sized to process
the heavy mineral concentrate (HMC) from both the
Phase 1 and the Phase 2 Projects and produce final
zircon and titania products on-site. Together, the Phase
1 and Phase 2 projects utilise about 43% of the Donald
Project Mineral Resources over a combined mine life of
58 years.
The combined Phase 1 and Phase 2 Donald Project is
forecast to generate an after tax NPV of $2.2 billion, at an
IRR of 30.3%. Phase 2 construction is projected to start
in 2029, with commissioning leading to commercial
operations towards the end of 2030. It is expected that
the equity requirements for Phase 2 will be largely
funded through internally generated cashflows from
Phase 1.
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Astron 2023 Annual Report
9
DEFINITIVE FEASIBILITY STUDY FINDINGS
Phase 1 – Demonstrating robust economic returns
Phase 1 of the Donald Project is forecast to generate an after tax NPV of $852 million over a 41.5-year
mine life, at an IRR of 25.8%. Phase 2 construction is projected to start in 2H 2024 with commissioning
leading to commercial production 1H 2026. It is expected that Phase 1 of the Project will employ
over 500 FTEs across the local region, including 180 FTEs directly employed by the Company.
Phase 1 financial characteristics include:
UTILISING
POST-TAX NPV
MINE LIFE
17%
OF TOTAL
MINERAL RESOURCE
m
$852
@ 8% REAL
DISCOUNT RATE
41.5yrs
TOTAL CAPEX
EMPLOYMENT
COMMISSIONING
m
$392
>500
AACE CLASS 2 ESTIMATE
12% CONTINGENCY
FTE OF DIRECT AND
INDIRECT OPPORTUNITIES
1H 2026
DEFINED TIME TO
CASHFLOW GENERATION
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Astron 2023 Annual Report
Phase 2 – Significant Further Upside
The combined Phase 1 and Phase 2 Donald Project is forecast to generate an after tax NPV of $2.2
billion over a 58-year mine life, at an IRR of 30.3%. Phase 2 construction is projected to start in 2029,
with commissioning leading to commercial operations towards the end of 2030. It is expected that
Phase 2 equity will be largely funded through internally generated cashflows from Phase 1. Combined
Phase 1 and Phase 2 financial characteristics:
UTILISING
POST-TAX NPV
MINE LIFE
43%
OF TOTAL
MINERAL RESOURCE
$2.2B
@ 8% REAL
DISCOUNT RATE
58yrs+
INCREMENTAL
CAPEX
m
$566
AACE CLASS 3 ESTIMATE
23% CONTINGENCY
EMPLOYMENT
COMMISSIONING
>1,000
FTE OF DIRECT AND
INDIRECT OPPORTUNITIES
2H 2030
PLANNED
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FROM THE CHAIRMAN
Dear Shareholder
Astron made significant progress towards the commercial development of the
Donald Rare Earth and Mineral Sands Project during the year ended 30 June 2023.
This has been made possible through the dedication and hard work of our people,
the support of the community in which we work, and the continuing interest and
support of our shareholders..
Donald’s development comes
at a time of intense public
interest in critical minerals.
Rare earth elements, as well
as being essential to the clean
energy transition, are crucial
components in a wide range of
high-tech products including
and
defence,
electric motor applications.
Zircon and titanium minerals are vital ingredients in
global infrastructure, urbanisation and construction.
These minerals are facing supply-chain challenges
that can only be addressed through the development
of new projects. The Donald Project, with a granted
mining licence, a positively assessed Environmental
Effects Statement and a world leading resource is in a
unique position to meet these challenges.
aerospace
The development philosophy for Phases 1 and 2 of
the Donald Project is to minimise execution risk and
ensure the timely and efficient delivery of the project
through the application of well-proven, conventional
technologies, best practice environmental management
and honest community engagement.
The most important achievement for the year was the
completion of the Definitive Feasibility Study (DFS) for
Phase 1 of the Donald Project which confirmed that
the project was both technically and economically
robust. Importantly, Phase 1 operations can stand alone
economically and are not dependent on subsequent
stages of development to provide attractive shareholder
returns. The DFS provides the foundation for developing
the project financing plan, progressing detailed product
off-take discussions, advancing construction and
operational planning, and finalising regulatory approvals
in anticipation of a construction start in the second half
of 2024 and first production in the first half of 2026.
The Pre-Feasibility Study (PFS) for Phase 2 of the Donald
Project, also completed during the year, confirmed the
project’s place as a Tier-1 rare earth and mineral sands
project of long-term global significance. Construction
for Phase 2 of the project is planned to commence in
2029 with first production towards the end of 2030.
Furthermore, the utilisation of just over 43% of the
Donald Project Mineral Resource over the combined
Phase 1 and Phase 2 projects’ 58-year life is a clear
indication of the potential for further value creation by
way of scale expansion as well as the production of a
wide range of materials that are essential to life in the
21st century.
Based on the DFS, with a capital cost of $364 million
(real, 2023 AUD), Phase 1 operations generate an
average annual revenue of $314 million and return an
average annual EBITDA of $148 million over its 41.5-
year life. The PFS for the combined Phase 1 and Phase 2
operations indicated that, for an additional investment
of $566 million, the project generates an average annual
revenue of $678 million and returns an average annual
EBITDA of $363 million over its 58-year life. The revenue
to cash cost (RCC) ratio of 2.15 for the combined project
is anticipated to be in the first quartile of the RCC
curve for similar projects. It is a very strong indication
of Donald’s robust economics as well as its ability to
withstand adverse commodity price movements.
Other important achievements through the year included
the execution of a memorandum of understanding with
the Yarriambiack Shire Council, the appointment of a
debt funding advisor, the commencement of detailed
discussions with potential product off-take partners
and the preparation of a work plan for submission to
Victorian Government regulators.
The memorandum of understanding with
the
Yarriambiack Shire Council provides for Astron and the
shire to work cooperatively to maximise the mutually
beneficial community and economic outcomes from
the project.
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Astron 2023 Annual Report
The appointment of a debt advisor to assist with project
financing arrangements was a significant milestone;
with its attractive margins and long life, it is expected
that the project will be able to secure debt funding on
favourable terms.
While Astron commenced the process of engagement
with potential product off-take partners in the early
stages of project evaluation, the completion of the DFS
has facilitated the start of detailed discussions with a
number of parties with the goal of securing firm off-
take agreements prior to the start of construction.
In order to commence construction, Astron must
also agree the terms of a work plan with the Victorian
Government. The work plan describes the nature and
scale of the proposed mining activities, identifies and
assesses all risks the works may pose to the environment
and to the public, details the nature of community
engagement, and includes a risk management plan for
the purpose of eliminating or minimising identified risks
and monitoring performance. The Company is very
advanced towards finalisation of the work plan.
A major focus for the year, and subsequently, has been
the building of the Astron team to progress the Donald
Project through development, construction and into
operations. We are fortunate that, in having a world class
project in an exciting sector of the minerals industry, we
are able to attract people of the highest calibre.
The Company’s mineral processing operations
in
Yingkou, China, following a COVID-19 pandemic-
related operational hiatus through a large portion of
the past two years, has upgraded processing facilities
and is negotiating feedstock arrangements with several
large international customers with a view to resuming
full scale operations before the end of 2023. The Mining
Licence for the Niafarang Mineral Sands project in
Senegal was renewed during the year and the Company
is pursuing farm-out opportunities to enable the
commencement of operations there without exposure
to additional financial risk.
The year just completed has required considerable
efforts from all members of the Astron team. We are
extremely grateful for their commitment and hard work.
George Lloyd
Chairman
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“
EXCITEMENT CONTINUES TO BUILD
AROUND APPLICATIONS OF RARE
EARTHS AS THEY ARE RECOGNISED
AS THE BUILDING BLOCKS FOR THE
EVOLUTION IN ELECTRIC VEHICLES
AND RENEWABLE ENERGY. “
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Astron 2023 Annual Report
FROM THE MANAGING DIRECTOR
The Donald Project is a long-life mining asset, comprising a world class reserve of rare
earths, zircon and titanium minerals with the potential to generate significant value
through low-risk conventional mining and heavy mineral processing operations.
The Phase 1 Donald Project
Definitive Feasibility Study (DFS),
which was released in April
2023, confirmed Donald as a
Tier 1, globally significant critical
minerals project. The DFS is the
culmination of many years of
metallurgical testing, detailed
design
engineering,
community engagement and
regulatory approvals.
and
Economically, the Phase 1 project is expected to
deliver an NPV8 of $852 million on an initial capital
investment of $364 million. Average annual free cash
flow is estimated at $110 million per annum for the
first five years, and $103 million per annum over the
remainder of the 41.5-year mine life. For a project that
generates impressive long-term value it has a relatively
short payback period of under four years to be followed
by many decades of mining operations to drive
sustainable, long-term investment returns. The Project’s
return profile is attractive and, based on conservative
estimates, delivers a post-tax and inflation-adjusted real
internal rate of return of 25.8%.
Importantly, the Phase 1 project demonstrates a small
portion of the full potential of the Donald Project. Once
operational, Phase 1 cash-flows are anticipated to
be applied to the equity requirements of the Phase 2
project – for which the indicative project economics (at
PFS level) show an incremental NPV of $1.4B, and an
extension of the Phase 1 plus Phase 2 mine life from
41.5 years to 58 years delivering approximately twice
the Phase 1 rates of production. The Donald Project will
allow Astron to be a part of the global critical minerals
landscape for many decades.
Excitement continues to build around applications
of rare earths as they are recognised as the building
blocks for the global shift towards electric vehicles and
renewable energy. A 3MW wind turbine uses close to 40
kilograms of rare earths and, if the world is to achieve
its emissions targets, rare earth demand must increase
significantly.
The zircon component of Donald’s reserves, a high
proportion of which has premium quality characteristics,
will make a significant contribution to the ceramics
markets where demand continues to grow due to the
continuing global urbanisation trend.
Existing rare earths and zircon supplies are both
expected to be constrained by 2026, when Donald
Phase 1 is planned to be in production. Donald’s
proposed scale and development timing are crucial
not only to supporting the energy transition, but also
to meeting the supply requirements for the zircon
industry, for which a large proportion of current supply
is expected to deplete over the next 3 to 5 years.
Personnel Appointments
With the significant advances made to the Donald
Project through the year, Astron has increased its
internal capability with the addition of several highly
skilled professionals. In October 2022, Greg Bell joined as
Chief Financial Officer; Greg has experience in executive
roles at international mineral sands companies and has
been integral to our work in completing the recent
feasibility studies and engaging in offtake and financing
negotiations. In May 2023, Jessica Reid joined as the
General Manager of Sustainability; Jessica, who has
extensive experience in navigating regulatory pathways,
is leading our efforts on preparing and submitting the
mining work plan. The Company has also employed
Karen Shelton as HR Manager and Samantha Flockhart
as Commercial Manager to ensure that it is well-
prepared for the upcoming Project construction period.
Social Licence
Astron is particularly proud of its strong standing in
the local community which it has cultivated over
many years. We look forward to continuing to work
constructively with local shire councils to bring long-
term economic benefits to the region.
15
FROM THE MANAGING DIRECTOR
Next Steps – Donald Project
Looking ahead to Financial Year 2024, there are four
key work areas being addressed in taking the Donald
Project to construction:
1. Obtaining final approvals for the Phase 1 project -
All key regulatory approvals for Phase 1 have been
obtained apart from the Mining Work Plan. It is
anticipated that this will be submitted in 2H 2023,
and approved in 1H 2024.
2. Obtaining project off-takes for the Phase 1 project
products – given the positive market dynamics
and strong anticipated product quality, Astron has
received significant interest in both its REEC and the
HMC product. Term sheet execution is planned for
2H 2023.
3. Finalising project engineering and project contracts
– the Astron team has completed the DFS to an
American Association of Cost Estimators (AACE)
level 2 estimate for both capital and operating costs.
This provides the basis for key contract tendering,
which has commenced.
4. Obtaining project financing – including debt and
equity. Astron is aiming to fund the Phase 1 execution
investment with a split of 60% debt and 40% equity.
ICA Partners have been appointed as our debt advisor
to secure appropriate debt financing to support
construction. ICA Partners are a globally recognised
resource specialist firm, experienced
in critical
mineral projects’ financing. Market soundings of
potential financiers has been completed with strong
interest from domestic and foreign institutions.
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Astron 2023 Annual Report
China
Gambia
As outlined in previous years, in 2015 Astron was
awarded damages through an International Centre for
Settlement of Investment Disputes (ISID) determination
in relation to the Gambian Government’s seizure of
the Astron-Carnegie minerals sands project in Gambia.
Recovery of the initial award of approximately A$32
million continues to be slow, however the Company
has entered into a litigation funding agreement to
expedite the recovery of this award at no further cost
to the Company. During the year, correspondence in
relation to the claim was sent to government officials in
Gambia as well as to the International Monetary Fund.
The Company will continue to vigourously pursue
recovery of the outstanding amount.
I wish to express my gratitude to members of our
team and our contractors for their hard work over the
previous year. I look forward, with great excitement, to
the year ahead to bring to life a world-scale deposit. To
my Chairman, George Lloyd, and my fellow directors,
I extend my appreciation for your dedication to the
interests of the Company and its shareholders.
Tiger Brown
Managing Director
FY2023 was a challenging year for Astron’s Chinese
operations. Continuing Covid-19 restrictions, including
serious lockdowns experienced across major cities in
the first half of the financial year, and the on-going
industry re-opening difficulties in the latter half of the
financial year contributed partly to the lower revenue
for the year, which dropped from $19.0m in FY2022 to
$14.5m in 2023. In addition, supply chain difficulties, and
difficulties in sourcing concentrate product meant that
a larger proportion of the revenue this year was derived
from relatively low margin trading activities, rather than
from processing plant operations.
A business review of the Chinese operations, which
considered among other things the difficulties in
securing long-term feedstock, led to a change in
operating strategy with the objective of opening up
the plant to a wider range of concentrate feedstocks
(including in preparation for Donald HMC). This resulted
in the installation of new separation spirals in the mineral
separation plant and has made a positive contribution
towards securing a number of long-term feedstock
supply arrangements. The new process flowsheet is
being commissioned and the plant is expected to reach
stable production in the first half of 2024.
Senegal
The Company continued to progress the Niafarang
Project through the year, most notably with the renewal
of the Company’s mining licence to March 2027. The
renewal of the mining licence has resulted in increasing
local community support for the project, including by
the local governor and local media representatives.
Astron will continue to explore relevant opportunities
to advance the project, including through possible
farm-out arrangements, Public Private Partnerships or
other mutually beneficial structures.
17
EXPERIENCED TEAM TO DELIVER THE DONALD PROJECT
A highly experienced Board & Management team with extensive experience
in corporate development.
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.
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.
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.
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Astron 2023 Annual Report EXPERIENCED TEAM TO DELIVER THE DONALD PROJECT
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.
Sean Chelius
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.
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.
Jessica Reid
General Manager Sustainability
Experienced environmental and social professional workin=g across Australia and PNG
on natural resource and major infrastructure projects for over 18 years as Principal at
Teltra Tech (formerly Coffey). Previous experience includes the delivery of Donald Project
ESS and Gippsland Renewable Energy Zone in VIC, environmental approvals for the Wafi-
Golpu Project, OK Tedi Life Extension in PNG
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Astron 2023 Annual Report
Astron 2023 Annual Report
The Donald Project
The Donald Rare Earth & Mineral Sands Project (Donald Project) is a globally
significant rare earth and mineral sands project located in the Wimmera
region of Victoria, approximately 300km north-west of Melbourne. The project
comprises the granted mining licence MIN5532 (the site of the first phase
development of the project), retention licence RL2002 (which is the site of the
second phase of project development), and retention licence RL2003 covering
a total project area of almost 43,000 hectares.
LOCATION
The area is mainly cleared land, used for cropping and grazing, and is located
close to supporting infrastructure. The Project encompasses two deposits: Donald
(RL2002, which contains MIN5532) and Jackson (RL2003).
Development will follow a two-phase process. Phase 1 activities are located on MIN5532, and Phase 2 will occur on
RL2002. The Jackson deposit, which is contained within RL2003, is available for subsequent development.
The Donald Project comprises a total Mineral Resource of 2.6 billion tonnes of ore at 4.6% HM content and includes
the world’s largest zircon resource with over 22Mt of in-situ zircon content. The rare earth bearing monazite content
alone, which equates to approximately 1.6Mt of total rare earth oxide (TREO) equivalents, ranks the Project as the
third largest of its kind outside of China. Detailed delineation of the xenotime content of the total deposit is expected
to increase the Project’s total rare earth element content.
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20
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Astron 2023 Annual Report
MIN5532 with an area of 27km2,
is the site of Phase 1 of the
Donald Project which supports a
41.5-year mine life.
Combined, MIN5532 and RL2002
supports a mine life of 58 years.
21
DONALD RARE EARTH & MINERAL SANDS PROJECT
Resource and Reserve updates
MIN5532 Reserve update
See pages 34-41 for detailed tables of current reserves
and resources.
MIN5532 Drilling Program
& Resource update
An updated Mineral Resource estimate for MIN5532
was released in December 2022. It was based on a 245
Reverse-Circulation Air Core (RCAC) drillhole program
completed
in March 2022. The updated Mineral
Resource estimate for MIN5532 is 525 Mt at 4.0% total
heavy minerals (HM) containing in-situ HM content of
21Mt including approximately 3.4Mt of zircon, and over
500kt of rare earth bearing monazite and xenotime.
The 2022 drill program covered 97% of MIN5532 to
expand the estimated valuable heavy minerals (VHM)
content within the known mineralisation of MIN5532, in
areas not previously subject to VHM analysis. Analysis
for xenotime and the 20 to 38 micron (μm) fine-grained
mineralisation fraction, known to contain rare earth
minerals and zircon, was also targeted. The updated
MIN5532 resource defines HM grain size between
20μm and 250μm as a resource. For the remainder of
the Donald deposit, the HM in-size range remains 38μm
to 90μm.
The drilling program targeted areas outside of the
previously defined ore body. In addition to the broader
in-size particle range, this resulted in a 66% increase in
the total Mineral Resource.
Following the updated Mineral Resource estimate for
MIN5532, and in conjunction with work associated
with the DFS, an updated Ore Reserve estimate for
MIN5532 was released on 31 March 2023. The total Ore
Reserves of MIN5532 increased by 59.3% to 309Mt. Total
in-situ heavy mineral (HM) reserves increased by 32%
to 13.6Mt, including increases in-situ valuable mineral
reserves of zircon by 15% to 2.2Mt, monazite by 25% to
245kt and a maiden in-situ xenotime reserve of 90kt.
RL2002 Reserve update
A Pre-Feasibility Study (PFS) for the development of
the Donald Phase 2 project was carried out during the
year. The Phase 2 development is located on RL2002
with operations proposed to the south and the north
of MIN5532. In conjunction with the release of Phase 2
PFS results, an updated Ore Reserve estimate for RL2002
was released in June 2023. The updated RL2002 Ore
Reserve increased by 27% to 516Mt at 4.6% HM grade,
including a 27% increase in zircon reserves to 4.4Mt and
an increase of 29% in monazite reserves to 0.4Mt
Following the updated Ore Reserve estimates for both
MIN5532 and RL2002, the combined Ore Reserve
estimate for the Donald Project now stands at 825Mt at
4.5% HM grade with 36.9Mt of heavy minerals, including
6.6Mt of zircon and 720kt of monazite and xenotime.
22
Astron 2023 Annual Report Complete design and
tender, submit Work Plan
Phase 1 commission
3Q23 4Q23 1Q24
3Q25
4Q25
Rare Earths
Mineral Sands
Phased Development Pathway
Mining
Concentrating
Mineral
Processing
Chemical
Processing
Metallisation
Phase 1 + 2a
Phase 2b
Phase 3
Production of a rare earth
element concentrate and
heavy mineral concentrate
with readily available
and established markets.
Quickest path to positive
cashflow and minimising
upfront capital and
shareholder dilution.
Forecast NPV of $1.8B over
58 years of project life.
Planned separation of
heavy mineral concentrate
into final zircon and high
quality titanium feedstock
products, establishing a
long-term stable source of
raw materials and direct
customer relationships.
Incremental NPV of $431m,
payback of 1.5 years
Further expansion of ore
throughput and evaluation
of the production of a rare
earth mixed carbonate
using readily available
technologies to expand
Donald rare earth products
to a broader customer base.
Preliminary investigations
on-going under partnership
model.
Phase 3
and beyond
With over 35 years of
experience in the mineral
sands industry, Astron
has technical expertise in
chemical processing of
mineral sands products
and holds specialist
technologies exemplified
by the extraction of
zirconium and hafnium,
and technology to produce
zirconium sponge, which
has energy and defence
applications.
Forecast
NPV $1.8B
58 years+
mine life
Incremental
NPV8 $431m
Payback
period
1.5 years
Further
downstream
processing
Partnership
model
Specialist
processing
technologies
>35 years
Mineral Sands
Industry
Experience
23
Mining Operations
Over the 41.5 year Phase 1 project
life, mining
operations will produce, on average, 7.5Mtpa of ore for
processing to produce, on average, 229ktpa of heavy
mineral concentrate (HMC) and 7.2ktpa of rare earth
concentrate (REEC).
The key features of Phase 1 operations, to be carried
out on MIN5532, are:
• Conventional truck and shovel open-pit mining
activities to be carried out by an independent
contractor;
• Ore will be pumped to a Wet Concentrator
Plant (WCP) to Produce a mixed Heavy Mineral
Concentrate (HMC); and
• The mixed HMC will be fed to the concentrate
upgrade plant (CUP) where it will be separated by
flotation into final products of a rare earth element
concentrate (REEC) and an HMC containing zircon
and titanium dioxide minerals.
Phase 1 Operations Diagram
24
Astron 2023 Annual Report Phase 2 operations will be carried out on RL2002 to
the north and south of MIN5532. Phase 2 has been
separated into two sub-phases:
Phase 1 has an average strip ratio of 1.6:1, which
increases to 2.2:1 for the total Phase 1 and Phase 2
projects.
• Phase 2a operations involve a duplication of
Phase 1 operations approximately doubling ore
throughput and production of HMC and REEC.
Technical processing risks have been mitigated
through pilot plant scale testing of the HMC and REEC
processing flow sheets including:
• Phase 2b involves the construction of a mineral
separation plant (MSP) to process HMC into final
downstream zircon and titania products. The MSP,
with a throughput of 15Mtpa, will be capable of
processing the HMC streams from both the Phase
1 and Phase 2a operations.
• WCP pilot plant (2019) - 1,000 tonnes of ore was
processed using full-scale spirals, achieving high
recoveries to a high grade HMC Product with >95%
HM grade,
• CUP Pilot Plant (2021) - Eight tonnes of HMC derived
from Donald ore was separated into a high quality
REEC, with >60% total rare earth element oxides
(TREO
.
Regulatory approvals
The Donald Rare Earth and Minerals Sands Project has been subject to detailed evaluation over many years, with all
main regulatory approvals completed or well advanced. It is the only critical minerals project in Victoria that has the
benefit of the positively assessed EES, a federal EPBC licence and a granted mining licence. In addition, it owns water
rights which are sufficient to meet the requirements of the Phase 1 and Phase 2 operations.
Advanced Regulatory Approval Status
Key Approval Requirement
Environmental Effects Statement
EPBC (federal)
Cultural Heritage Management Plan
Mining Licence - MIN55321
Water Rights2
Radiation Licence3
Work Plan
Notes
Completed
✓
✓
✓
✓
✓
✓
✓
Pending
Date
2008
Mar-09
Jan-14
Aug-10
Jan-12
Dec-20
Target
EOY 2023
Expiry
N/A
2034
Life of mine
Aug-30
Jan-41
Dec-23
Life of mine
1.
Renewal of a Mining Licence in Victoria involves an application to the government outlining the term of the licence renewal,
the reasons for renewal (such as an operating mine), details of the proposed operations for the renewal term and estimated
expenditure for the following five years. The maximum term for a mining licence in Victoria is 20 years.
2. Water Rights include a 6.975 GL water entitlement purchased with option to renewal from GWM Water in 2012 for A$17m,
sufficient for Phase 1 & Phase 2.
3.
Radiation Licence was first issued in 2014 and have since been renewed periodically.
25
25
Work Plan
Astron is in the final stages of completing the Mining
Work Plan which is scheduled to be submitted to the
Victorian state regulators in early 4Q 2023. The Work
Plan collates numerous studies relating to the efficient
and low-impact delivery of the Donald Project. Examples
of recent work includes:
• Phased approach to land access agreements
• Reducing environmental impact of offsite infrastructure
through shared land use of power and water infrastructure
• The use of rail for the bulk of final products to minimise
impact of vehicles
• The environmental risk workshop held in June this year
26
Astron 2023 Annual Report1Q234Q234Q231H241H261H26Complete design andtender, submit Work PlanPhase 1 commissionExecute offtake agreementsProduction andbegin shipmentFID, construction,commence EarthworksFeasibility studycompletedDevelopment timetable – Phase 1Critical Minerals Critical Minerals
“Critical minerals are metallic or non-metallic
materials that are essential to our modern
technologies, economies and national security, and
whose supply chains are vulnerable to disruption.”
Why is it important?
Critical minerals, including rare earth elements, are
used to manufacture key technologies. This includes
the technologies that will help us transition to net zero
emissions, such as:
• electric vehicles (EVs)
• batteries
• permanent magnets
• wind turbines
• solar photovoltaics (PV)
• hydrogen electrolysers
• energy-efficient technologies like LEDs.
Critical minerals, and the technologies they enable,
have important applications across a range of sectors
such as:
• defence
• space
• energy
• transport
• agri-tech
• medicine
• computing
• telecommunications.
Global supply chains operate most efficiently when
they are diverse and transparent. Supply chains that are
highly concentrated are fragile, volatile and unreliable.
In these cases, markets cannot adequately price and
manage risks, meaning businesses cannot compete
on a level playing field. As a result, there is a role for
governments to work with the private sector to build
diverse, resilient and sustainable critical minerals supply
chains.
Net zero 2050
Net zero is cutting greenhouse gas emissions to as
close to zero as possible, with any remaining emissions
to be re-absorbed from the atmosphere by oceans and
forests. According to the United Nations, the transition
to net-zero is one of the greatest challenges human-kind
has ever faced. It requires a complete transformation
of how we produce, consume and move around and
will involve the replacement of hydrocarbon fuels with
electrical energy from renewables, such as wind and
solar. A new suite of materials is needed is propel this
transition.
Astron recognises the Donald Project’s potential to
advance Australia’s commitment to the development of
sustainable and inclusive mining practices and sourcing
of critical minerals, as part of its role as a signatory of
the Sustainable Critical Minerals Alliance.
27
MARKETING & PRODUCTS
Rare earths market
Donald’s REEC, which contains the rare earth bearing
minerals monazite and xenotime, will be sold to
customers for downstream processing. Total rare earth
oxide (TREO) demand is forecast to increase from 2022
to 2035 at a CAGR of 6.0%, driven by the expansion of
the permanent magnet sector, in line with increasing
demand for electric vehicles, wind turbines and electric
motor applications.
China has historically dominated rare earth supply,
accounting for 70%1 of world mine production in 2022.
Major rare earth element applications
Increasing demand for rare earths has
improved
the economics of prospective mining projects, with
numerous projects outside of China aiming to reach
production by 2033. Of these, 14 rare earth projects
(including Donald) have completed feasibility studies
and only three projects have commenced production.
Supply from developing projects is not expected to
come online in time to meet forecast demand, with
shortages for certain rare earth elements expected from
as early as next year. The Donald Project’s advanced
timetable allows it to come online at an opportune time
to benefit from these favourable market dynamics.
Solar Arrays
Wind turbines
Battery Alloys
Electric Vehicles
Donald project REEC attributes
important characteristic of the Donald REEC,
An
which differentiates the project from many of the
western world rare earth producers, is its high heavy
rare earth element content which is contained in the
mineral xenotime. Xenotime is a source of the valuable
heavy rare earths Dysprosium and Terbium which are
particularly important in the production of powerful,
heat tolerant magnets with special applications in electric
vehicles. The global heavy rare earth market is dominated
by Myanmar and south China producers. Conversely,
monazite contains the lighter rare earths neodymium and
praseodymium which have broader applications and are
less valuable. The Donald Deposit has a high xenotime to
monazite ratio of greater than 0.3:1.
.
1 https://www.reuters.com/markets/commodities/chinas-rare-earths-dominance-focus-after-mineral-export-curbs-2023-07-05/
28
Astron 2023 Annual Report Mineral Sands Market
Zircon Attributes
Today, there are 3.5Mt of mineral sands-based heavy
mineral concentrates products being supplied to China,
however, there is at least 7Mt of HMC separation capacity
within China. This creates a favourable dynamic for
Astron to supply Chinese MSPs with Donald HMC. The
HMC market is highly correlated with its end products,
which are mainly zircon and titanium dioxide minerals.
Metallurgical test work undertaken on Donald HMC
indicates a high proportion of premium grade zircon can
be commercially recovered. Furthermore, the test work
shows Donald zircon has high whiteness levels and
low levels of impurities in comparison with competing
zircon products. This provides a distinct competitive
advantage for supply to the ceramics market.
HMC product
Titania Attributes
Titanium feedstocks are primarily used in the production
of TiO2 pigment, which has a wide range of applications
including paint, plastics, and coatings. To meet the
requirements of the pigment production process,
relatively low grade TiO2 minerals can be processed into
intermediate products with higher TiO2 content, such
as titanium slag. Test work indicates that Donald Project
titania is a desirable feedstock for producing titanium
slag a for the Chloride TiO2 pigment process, known as
chloride slag. As a 66% TiO2 product, with low calcium
content, Donald titania has a particular application as a
“sweetener” (or higher titanium dioxide content) feed to
existing chloride slag feeds.
Titania Market
Astron’s titanium dioxide product can be regarded
as a hybrid TiO2 product (referred to as titania) which
contains a spectrum of TiO2 minerals ranging from
ilmenite to rutile. With an average TiO2 grade of 66%,
it is particularly well-suited to producing chloride slag
feedstock for the chloride pigment production process.
The chloride slag based pigment production process
is the fastest growing segment of the pigment market.
Most of the growth is expected to come from China,
where capacity is forecast to grow at 10%pa with an
estimated 913,000 tonnes of capacity installed by 2030.
China is rapidly adopting chloride pigment process
technologies to provide an onshore source of chloride
pigment for high-end applications.
As forecast by mineral sands and pigment specialists,
TZ Minerals International (TZMI) Pty Ltd, global chloride
slag demand will increase by an 8.6% CAGR to 2030,
influencing demand for high-quality ilmenite feedstock
to slag production.
Extensive metallurgical
test work undertaken by
Astron, with the support of Mineral Technologies, has
determined the specifications for the Donald HMC
product. Following removal of the rare earth content,
the Project will target a 95% heavy mineral grade,
resulting in a higher proportion of valuable minerals
and lower waste than is typically found in heavy mineral
concentrates. In addition, given its favourable zircon
assemblage, the Donald HMC is expected to contain
higher zirconium dioxide (ZrO2) concentration than
competitor HMCs, increasing its value to mineral sands
processors.
The Company has conducted separation testing of
Donald HMC into final products at laboratory and
pilot plant scales. Zircon recovery was 85%, with 71%
recovered as premium zircon and 14% as secondary
zircon. Recovery of combined titania product was
86%. The test work demonstrates the ability to achieve
commercial recoveries of final products from Donald’s
HMC product.
Zircon market
Declining zircon supplies globally have created
economic tailwinds for producers. The current global
zircon consumption is approximately 1.2Mtpa. This
is forecast to grow to 1.6Mtpa by 2030, an annual
compound growth rate of 2.8%. Ceramics is the major
end-use for zircon, accounting for approximately
half of zircon global demand. Demand is driven by
urbanisation and consumption trends, notably in China,
which accounts for approximately half of zircon global
demand.
In the short term, economic conditions in China are
reducing demand. However, in the medium term, supply
forecasts indicate that production will be insufficient
to meet current levels of demand. Historically, zircon
supply has been concentrated between a small
number of key players accounting for about 60% of
global supply. However, due to maturation and/or
grade decline, these suppliers only accounted for 45%
of global zircon production in 2021. The increasing
scarcity is projected to create supply shortages, and
the Donald Project represents a timely source that will
benefit from increasing prices.
29
OTHER ASSETS
Astron Titanium (Yingkou) Ltd
Astron titanium (Yingkou) Limited is a wholly-owned
subsidiary of Astron Corporation Limited focused
on specialist mineral sands product R&D, mineral
processing and chemical processing, with over 30
years’ experience in the China minerals Market.
The Company operates a 150,000 tonnes annual
feed capacity mineral separation plant with a focus
on the recovery of rutile minerals from rutile bearing
concentrates.
In 2023, China Government-based
COVID-19 restrictions, along with the variability and
scarcity of stable sources of raw materials, significantly
hampered the utilisation of the Yingkou Mineral
Separation Plant. The plant was placed on care and
maintenance in Mid-March whilst negotiations for raw
materials supply were finalised.
In 2023, efforts were made by the Chinese team to improve
the processing capacity to accommodate a wider range of
feedstock sources, including zircon-bearing materials, to
assist in securing material purchase agreements as well as
with a view to the requirements for the future processing
of a proportion of the Donald HMC.
Following these upgrades to the plant, completed
subsequent to year-end, it is anticipated that operation
will resume in October 2023, following finalisation of
raw material supply contracts.
The China operations represent a separate revenue and
profit centre for Astron.
30
Astron 2023 Annual Report Niafarang Project Senegal
Dakar
Senegal
MBour
Niafarang Mineral Sands Project
Ziguinchor
Niafarang Mineral Sands Project
Astron holds the mining licence to a high-grade
1.9km2 mineral sands resource on the Casamance
coast of Senegal. The mining licence area has been
well-delineated and is capable of producing high grade
ilmenite and high-quality zircon. Mining plans have
been developed and, in prior years, significant work
was undertaken to facilitate an early commencement
of mining operations. The mining licence is contained
within a currently expired, but subject to renewal,
exploration
licence covering a highly mineralised
coastal zone of almost 400km2 that stretches 75
kilometres north-south along the Casamance coast.
The planned mining approach involves conventional
dry mining with nearby concentrating and the sale of
concentrate to a toll processor or to Astron’s Chinese
facilities in Yingkou.
The Niafarang Mining Licence was renewed in February
2023. Continued engagement with regulators and
community groups in Senegal provides the basis for
the future progression of the Niafarang mineral sands
project to a construction and production stage.
31
ESG & Community engagement
Stakeholder Engagement
Economic impact study
Astron recognises the importance of its social licence
to operate and is committed to working with the
communities in which its activities are located to
maximise benefits to all stakeholders.
Australia
During the year, Donald Mineral Sands staff have
continued to engage with State and Federal members
of parliament, local community groups and Shire
Councils to provide project updates and discuss issues
of concern including labour, housing and opportunities
for local businesses.
Community Sponsorships
Astron completed another round of the DMS Community
sponsorship program with funding provided to four
community projects and events. The Company was able
to sponsor the Donald Golf and Bowls Club senior and
junior golf tournaments, contributed to a new printer for
the monthly Minyip Lions Club community newsletter,
supported the Murtoa show and are sponsoring the live
music and film presentation at Murtoa’s Big Weekend.
In November 2022, Deloitte’s Access Economics team
undertook a detailed economic impact analysis (EIA) of
Phase 1 operations on MIN5532. The study focused on
the impact of employment, economic flow-on benefits
and improved social infrastructure to the local project
area and the wider Victoria region. Economic impacts are
long-lasting over the 40 year life of Phase 1 operations.
Key economic findings for the local project area
include:
• Increased economic activity by a present value of
$2.2 billion
• Average annual economic boost in output of $205
million
• Creation of 150 full time equivalent (FTE) direct jobs
(including contractors)
32
Astron 2023 Annual Report Memorandum of Understanding with Yarriambiack Shire Council
On 23 November 2022, Astron signed a Memorandum of
Understanding (MOU) with Yarriambiack Shire Council (YSC).
The MOU provides for Astron and YSC to cooperate to support
the timely delivery of the Donald Project, and to maximise the
commensurate benefits of the Projects development to the local
region. The Astron team look forward to having a meaningful,
long-term relationship with residents and stakeholders.
Astron Corporation Limited Chairman Mr George Lloyd and
CEO Mr Tiger Brown pictured signing the MOU with Yarriambiack Shire
Council Mayor Cr Kylie Zanker (centre) and
Chief Executive Officer Ms Tammy Smith (right)..
Test Pit rehab update
Over 1,000 tonnes of ore was extracted from a test pit during metallurgical work for the DFS. The disturbed land was
rehabilitated in 2018 and has since been used for agriculture operations. Multiple successful harvests, including this
year’s harvest of barley crop, continue to demonstrate the effectiveness of Astron’s rehab process in action.
Excavated test pit and land after rehabilitation.
33
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 40.
Ore Reserves
Astron announced updated Ore Reserves totalling 309Mt at 4.4% HM for MIN5532 on 31 March 2023 (Table 1). The Ore Reserve
estimate is based on the MIN5532 Mineral Resource estimate, announced to the ASX on 1 December 2022 that used heavy
liquid separation analysis to estimate tonnes, HM, slimes and oversize plus valuable heavy mineral data.. Measured and Indicated
Mineral Resources were converted to Proved and Probable Ore Reserves respectively, subject to mine design, modifying factors
and underlying economic evaluation.
Astron announced updated RL2002 Ore Reserves totalling 516Mt at 4.6% HM on 27 June 2023 (Table 1). The Ore Reserve
estimate is based on the RL2002 Mineral Resource estimate, announced to the ASX on 7 April 2016. Measured and Indicated
Mineral Resources were converted to Proved and Probable Ore Reserves respectively, subject to mine design, modifying factors
and underlying economic evaluation.
Based on the announced updates to the Ore Reserves for MIN5532 and RL2002, total Ore Reserves of the Donald Deposit
increased by 223Mt (37%). Total in-situ zircon reserves increased by 22.6% to 6.7Mt and in-situ monazite reserves increased by
32.0% to 648.2kt.
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).
Table 1: Ore Reserve for the Donald Deposit (MIN5532 and RL2002)
as at 30 June 2023
Classification
Tonnes
(mt)
Total
HM (%)
Slimes
(%)
Oversize
(%)
Zircon Rutile
Ilmenite Leucoxene Monazite Xenotime
% of total HM
MIN5532
Proved
Probable
Total
263
46
309
4.4
4.1
4.4
Within RL2002 outside of MIN5532
Proved
Probable
Total
152
364
516
Total Donald Deposit
Proved
Probable
Total
415
410
825
5.6
4.1
4.6
4.8
4.1
4.5
15.4
19.7
16.1
7.1
13.7
11.7
12.4
14.4
13.4
9.8
11.1
10.0
18.8
15.7
16.6
13.1
15.2
14.1
16.7
15.3
16.5
21.1
17.1
18.6
18.6
16.9
17.8
5.5
5.5
5.5
9.4
7.5
8.2
7.2
7.3
7.2
21.6
21.3
21.6
31.3
32.8
32.3
25.7
31.5
28.4
25.9
20.1
25.1
18.2
19.3
18.9
22.6
19.4
21.2
1.8
1.8
1.8
1.8
1.6
1.7
1.8
1.6
1.7
0.67
0.64
0.66
-
-
-
See Notes
See Notes
See Notes
34
Astron 2023 Annual Report Table 2: Ore Reserve for the Donald Deposit (MIN5532 and RL2002)
as at 30 June 2022
% of total HM
Classification
Tonnes
(mt)
Total
HM (%)
Slimes
(%)
Oversize
(%)
Zircon Rutile
Ilmenite Leucoxene Monazite Xenotime
MIN5532
Proved
Probable
Total
170
24
194
5.3
4.9
5.3
Within RL2002 outside of MIN5532
Proved
Probable
Total
140
268
408
Total Donald Deposit
Proved
Probable
Total
310
292
602
19.1
15.8
16.9
5.4
4.1
4.8
14.2
13.4
14.1
7.1
14.4
11.9
16.4
15.6
16.0
11.9
12.5
12.0
5.6
4.0
4.5
9.8
14.2
11.9
18.8
20.2
19.0
7.1
6.7
7.0
31.0
32.3
18.4
19.5
31.8
19.0
19.9
17.3
18.8
8.2
7.4
7.9
31.4
33.2
31.6
9.6
7.5
8.4
31.2
32.4
31.7
22.1
21.3
22.0
21.2
17.0
18.8
20.4
19.7
20.1
1.9
2.0
1.9
1.8
1.6
1.8
1.8
1.6
1.7
-
-
-
-
-
-
See Notes
See Notes
See Notes
Notes to Tables 1 & 2:
1.
The ore tonnes have been rounded to the nearest 1Mt and grades have been rounded to one decimal place except for xenotime which is rounded
to two decimal places.
2. The Ore Reserve is based on Indicated and Measured Mineral Resource contained within mine designs above an economic cut-off.
3. A break-even cut-off has been applied defining any material with product values greater than processing cost as Ore.
4. Mining recovery and dilution have been applied to the figures above.
5.
The updated RL2002 Ore Reserve does not include an announced figure on xenotime due to historical samples used in the Ore Reserve calcu-
lation not being analysed for xenotime. Further drilling work consisting of a maximum of 958 drillholes may be undertaken to further define the
Ore Reserve and delineate the xenotime content. Metallurgical test work confirms the existence of xenotime to be relatively consistent across the
mineral deposit, which represents upside to the announced combined rare earth mineral figures. Thus, the xenotime content of the entire Donald
Deposit has not been stated.
6. The rutile grades are a combination of rutile and anatase minerals.
7.
The Ore Reserve estimates have been compiled in accordance with the guidelines defined in the 2012 JORC Code
The Ore Reserve estimate was prepared by AMC Consultants Pty Ltd, an experienced and prominent mining engineering
with appropriate mineral sands experience in accordance with the JORC Code (2012 Edition). The Ore Reserve is
estimated using all available geological and relevant drill hole and assay data, including mineralogical sampling and
test work on mineral recoveries and final product qualities.
The Company is not aware of any new information or data that materially affects the information included in the Ore
Reserve estimate and confirms that all material assumptions and technical parameters underpinning the estimate
continue to apply and have not materially changed.
35
Ore Reserves & Mineral Resources Statement
Mineral Resources
Mineral Resources only used heavy liquid separation analysis to estimate tonnes, HM, slimes and oversize for the
Donald Project using a 1% HM cut-off grade. Resources were last estimated for MIN5532 on 1 December 2022 with
RL2002 and RL2003 on 7 April 2016. These Mineral Resources represent resource estimates with and without valuable
heavy mineral (VHM) data to provide a guide to the total potential tonnes and HM% for the Donald and Jackson
deposits. Resources without VHM data were not used in the Ore Reserve Estimation by AMC. The Mineral Resources
for the Donald and Jackson deposits based on 1% HM cut-off grade is shown in Table 2.
Based on the updated Mineral Resource for MIN5532 as outlined above, total Mineral Resources reported above a
1% total HM cut-off increased by 69Mt (1.2%), highlighted by a 3.1% increase in inferred resources to 737Mt.
Table 3: Mineral Resource above a 1% total HM cut-off as at 30 June 2023
Tonnes
(mt)
Total HM
(%)
Slimes
(%)
Oversize
(%)
394
110
20
525
343
833
1,595
2,771
737
943
1,615
3,296
-
1,903
584
2,487
737
2,846
2,199
5,783
4.2
3.5
2.3
4.0
3.9
3.3
3.3
3.4
4.1
3.3
3.3
3.5
-
2.8
2.9
2.9
4.1
3.0
3.2
3.2
16
24
22
18
20
16
16
16
18
17
16
17
-
19
17
19
18
18
16
17
10
11
14
10
8
14
6
9
9
13
6
9
-
6
3
5
9
8
5
7
Classification
Within MIN5532
Measured
Indicated
Inferred
Subtotal
Within RL2002 outside of MIN5532
Measured
Indicated
Inferred
Subtotal
Total within Donald Deposit (RL2002)
Measured
Indicated
Inferred
Subtotal
Total within Jackson Deposit (RL2003)
Measured
Indicated
Inferred
Subtotal
Total Donald Project
Measured
Indicated
Inferred
Total
36
Astron 2023 Annual Report Table 4: Mineral Resource above a 1% total HM cut-off as at 30 June 2022
Tonnes
(mt)
Total HM
(%)
Slimes
(%)
Oversize
(%)
Classification
Within MIN5532
Measured
Indicated
Inferred
Subtotal
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
-
1,903
584
2,487
715
2,811
2,187
5,712
4.5
4.0
3.5
4.4
3.9
3.3
3.3
3.4
4.2
3.4
3.4
2.9
-
2.8
2.9
2.9
4.3
3.0
3.3
3.2
14.4
13.8
13.5
14.2
20
16
16
16
17.0
16.0
15.7
18.5
-
19
17
19
18.1
17.9
16.4
16.9
12.8
13.1
10.6
12.8
8
14
6
9
10.6
1.4
6.0
5.2
-
6
3
5
11.1
8.2
5.5
7.3
Notes to Tables 3 & 4:
1. MRE is based on heavy liquid separation (HLS) analysis only.
2. The total tonnes may not equal the sum of the individual resources due to rounding.
3.
4.
The cut-off grade is 1% HM.
The figures are rounded to the nearest: 1M for tonnes, one decimal for HM and whole numbers for slimes and oversize.
37
The Mineral Resources for the Donald deposit based on 1% HM cut-off grade and valuable heavy mineral data are
shown in Table 5. The generation of the Ore Reserve estimates outlined Table 1 for the proposed Phase 1 and 2 of the
Donald Project is based on the Measured and Indicated resources outlines in Table 5 below.
Based on the updated Mineral Resource estimate for MIN5532 announced on 1 December 2022, total Mineral
Resources where VHM data is available reported above 1% total HM cut-off increased by 207Mt (8.5%) highlighted by
increases in Measured resources of 131Mt and Indicated resources of 61Mt. Contained rare earth minerals increased by
approximately 200kt as a result of an increase in monazite and the addition of a 135kt maiden resource.
Table 5: Mineral Resource where VHM data is available reported above a 1%
total HM cut-off as at 30 June 2023
Classification
Tonnes
(mt)
HM
(%)
Slimes
(%)
Oversize
(%)
Zircon
Rutile/
Anatase
Ilmenite Leucoxene Monazite Xenotime
% of total HM
Within MIN5532
Measured
Indicated
Inferred
Subtotal
394
110
20
525
4.2
3.5
2.3
4.0
Within RL2002 outside of MIN5532
Measured
Indicated
Inferred
Subtotal
185
454
647
1,286
5.5
4.2
4.9
4.8
16
24
22
18
19
16
15
16
Total within Donald Deposit (RL2002)
Measured
Indicated
Inferred
Subtotal
579
564
667
1,811
4.6
4.1
4.8
4.6
17
17
15
16
Total within Jackson Deposit (RL2003)
Measured
Indicated
Inferred
Subtotal
-
668
155
823
Total Donald Project
Measured
Indicated
Inferred
Total
579
1232
822
2,634
-
4.9
4.0
4.8
4.6
4.5
4.7
4.6
-
18
15
18
17
18
15
17
10
11
14
10
7
13
6
9
9
13
6
9
-
5
3
5
9
9
5
8
16
15
13
16
21
17
18
18
18
17
18
18
-
18
21
19
18
17
18
18
7
6
7
7
9
7
9
8
8
7
9
8
-
9
9
9
8
8
9
8
21
19
19
21
31
33
33
33
25
31
33
30
-
32
32
32
25
31
33
31
24
18
20
23
19
19
17
18
22
19
17
19
-
17
15
17
22
18
17
18
1.8
1.7
1.4
1.8
2.0
2.0
2.0
2.0
1.9
2.0
2.0
1.9
-
2.0
2.0
1.0
1.9
2.0
2.0
2.0
0.66
0.61
0.55
0.65
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
38
Astron 2023 Annual Report Table 6: Mineral Resource where VHM data is available reported above a 1%
total HM cut-off as at 30 June 2022
Classification
Tonnes
(mt)
HM
(%)
Slimes
(%)
Oversize
(%)
Zircon
Rutile/
Anatase
Ilmenite Leucoxene Monazite Xenotime
% of total HM
Within MIN5532
Measured
Indicated
Inferred
Subtotal
264
49
5
317
5.4
4.9
4.2
5.3
14.2
13.6
13.5
14.1
Within RL2002 outside of MIN5532
Measured
Indicated
Inferred
Subtotal
185
454
647
1,286
5.5
4.2
4.9
4.8
19
16
15
16
Total within Donald Deposit (RL2002)
Measured
Indicated
Inferred
Subtotal
448
503
652
1,604
5.4
4.3
4.9
4.9
16.2
15.7
15.2
15.6
Total within Jackson Deposit (RL2003)
Measured
Indicated
Inferred
Subtotal
-
668
155
823
Total Donald Project
Measured
Indicated
Inferred
Total
448
1,171
807
2,427
Notes to Tables 5 & 6
-
4.9
4.0
4.8
5.4
4.6
4.7
4.8
-
18
15
18
16.2
17.1
15.2
7.9
12.2
12.1
10.2
12.1
7
13
6
9
10.2
13.1
5.8
9.3
-
5
3
5
10.2
8.7
5.3
7.9
19
20
22
19
21
17
18
18
20
18
18
18
-
18
21
19
20
18
19
19
7
7
7
7
9
7
9
8
8
7
8
8
-
9
9
9
8
8
9
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
2
2
3
2
2.0
2.0
2.0
2.0
2
2
2
2
-
2.0
2.0
1.0
2
2
2
2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. MRE is based on heavy liquid separation analysis and where valuable heavy minerals (VHM) have been determined.
2. The total tonnes may not equal the sum of the individual resources due to rounding.
3.
4.
5.
6.
The cut-off grade is 1% HM.
The figures are rounded to the nearest: 1Mt for tonnes, one decimal for HM, monazite, whole numbers for slimes, oversize, zircon, rutile + anatase,
ilmenite and leucoxene and two decimals for xenotime.
Zircon, ilmenite, rutile+anatase, leucoxene, monazite and xenotime percentages are reported as a percentage of HM.
Rutile + anatase, leucoxene and monazite resource has been estimated using fewer samples than the other valuable heavy minerals outside
MIN5532. The accuracy and confidence in their estimate is therefore lower.
The 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 Australia 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.
39
Governance and internal controls
Mineral Resources and Ore Reserves are compiled by qualified Astron personnel and / or independent consultants
following industry standard methodology and techniques. The underlying data, methodology, techniques and
assumptions on which estimates are prepared are subject to internal peer review by senior Company personnel, as
is JORC compliance. Where deemed necessary or appropriate, estimates are reviewed by independent consultants.
Competent Persons named by the Company are members of the Australasian Institute of Mining and Metallurgy and /
or the Australian Institute of Geoscientists and qualify as Competent Persons as defined in the JORC Code 2012.
Competent persons statement
The information in this document that relates to the estimation of the RL2002 Mineral Resources 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 Astron Corporation Limited, 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’. The Company confirms that the form
and context in which the Competent Persons’ findings are presented have not materially modified from the relevant
original market announcement.
The information in this document that relates to the MIN5532 Mineral Resource estimate is based on, and fairly reflects,
information and supporting documentation compiled by Mrs Christine Standing, a Competent Person who is a Member
of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mrs Standing is a
full-time employee of Optiro Pty Ltd (Snowden Optiro) and is independent of Astron Corporation Limited, the owner
of the Mineral Resources. Mrs Standing 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 Company confirms that the form and context in which the Competent Persons’ findings are presented have not
materially modified from the relevant original market announcement.
The information in this document that relates to the estimation of the Ore Reserves for MIN5532 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 Corporation
Limited. 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 Company
confirms that the form and context in which the Competent Persons’ findings are presented have not materially
modified from the relevant original market announcement.
The information in this report that relates to the RL2002 Ore Reserve estimate is based on, and fairly reflects, information
and supporting documentation compiled by Mr Pier Federici FAusIMM(CP), a Competent Person who is a Fellow of
the Australasian Institute of Mining and Metallurgy. Mr Federici is a full-time employee of AMC Consultants Pty Ltd
(AMC) and is independent of Astron Corporation Limited, the owner of the Ore Reserve. 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’. 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.
40
Astron 2023 Annual Report Supporting information required under ASX listing rules, chapter 5
The supporting information below is required, under Chapter 5 of the ASX Listing Rules, to be included in market
announcements reporting estimates of Mineral Resources and Ore Reserves.
Previously reported information
This report includes information that relates to Exploration Results, Mineral Resources and Ore Reserves prepared and
first disclosed under the JORC Code 2012 and a Bankable Feasibility Study. The information was extracted from the
Company’s previous ASX announcements as follows:
• RL2002 Ore Reserve Update – “RL2002 Ore Reserve Update and Project Financial Update” – 27 June 2023
• MIN5532 Ore Reserve Update – “Donald Project MIN5532 Ore Reserves Update” – 31 March 2023
•
MIN5532 Mineral Resource Update – “Donald Project Mining Licence Mineral Resource Update” – 1 December 2022
• RL2002 Mineral Resources – “Donald Mineral Sands Project Mineral Resource Update” – 7 April 2016
These announcements are available to view on Astron’s website at www.astronlimited.com.
The Company confirms that it is not aware of any new information or data that materially affects the information
included in the relevant market announcements and, in the case of estimates of Mineral Resources, Ore Reserves and
the Donald Rare Earth and Mineral Sands Project Definitive Feasibility Study and Phase 2 Pre-Feasibility Study, that all
material assumptions and technical parameters underpinning the estimates in the relevant market announcement
continue to apply and have not materially changed. The Company confirms that the form and context in which
the Competent Persons’ findings are presented have not been materially modified from the relevant original market
announcements.
41
Astron Corporation Limited
ARBN 154 924 553, Incorporated in Hong Kong, Company Number: 1687414
Annual Financial Statements
For the year ended 30 June 2023
42
Astron 2023 Annual Report
Astron Corporation Limited
Hong Kong Company Number: 1687414, ARBN 154 924 553
Annual Financial Statements
For the year ended 30 June 2023
Contents
DIRECTORS’ REPORT ......................................................................................................................................................... 44
REMUNERATION REPORT .................................................................................................................................................. 52
AUDITOR’S INDEPENDENCE DECLARATION ................................................................................................................... 58
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ................................ 59
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ............................................................................................... 60
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................................................................................ 61
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................................................................................ 62
NOTES TO THE FINANCIAL STATEMENTS ....................................................................................................................... 63
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
General Information .................................................................................................................................................... 63
Basis of preparation and significant accounting policies ............................................................................................. 63
Critical accounting estimates and judgments ............................................................................................................. 72
Segment information .................................................................................................................................................. 73
Revenue and other income ........................................................................................................................................ 75
Loss before income tax expense ................................................................................................................................ 76
Income tax expense ................................................................................................................................................... 77
Loss per share ............................................................................................................................................................ 78
Auditor’s remuneration ............................................................................................................................................... 78
Cash and cash equivalents ........................................................................................................................................ 78
Trade and other receivables and prepayments .......................................................................................................... 80
Inventories .................................................................................................................................................................. 81
Investments in Gambia ............................................................................................................................................... 81
Financial assets at fair value through profit or loss ..................................................................................................... 82
Subsidiaries ................................................................................................................................................................ 82
Property, plant and equipment .................................................................................................................................... 83
Exploration and evaluation assets .............................................................................................................................. 85
Development costs ..................................................................................................................................................... 86
Right-of-use assets ..................................................................................................................................................... 87
Trade and other payables ........................................................................................................................................... 87
Contract liabilities ....................................................................................................................................................... 87
Borrowings.................................................................................................................................................................. 88
Convertible notes ........................................................................................................................................................ 88
Provisions ................................................................................................................................................................... 89
Deferred tax ................................................................................................................................................................ 89
Issued capital .............................................................................................................................................................. 90
Share based payments ............................................................................................................................................... 91
Reserves .................................................................................................................................................................... 94
Holding company statement of financial position ........................................................................................................ 95
Dividends .................................................................................................................................................................... 96
Related party transactions .......................................................................................................................................... 96
Commitments ............................................................................................................................................................. 97
Cash flow information ................................................................................................................................................. 98
Employee benefit obligations ...................................................................................................................................... 99
Financial Risk Management ....................................................................................................................................... 99
DIRECTORS’ DECLARATION .......................................................................................................................................... 105
INDEPENDENT AUDITOR’S REPORT ............................................................................................................................... 106
ADDITIONAL INFORMATION REQUIRED BY LISTED COMPANIES .............................................................................. 110
1.
2.
3.
SHAREHOLDING INFORMATION .......................................................................................................................... 110
TENEMENT SCHEDULE ......................................................................................................................................... 111
INFORMATION POLICY .......................................................................................................................................... 112
GLOSSARY OF ABBREVIATIONS AND DEFINED TERMS ............................................................................................. 113
CORPORATE DIRECTORY ................................................................................................................................................ 114
Astron Corporation Limited Annual Financial Statements | 43
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
The Directors of Astron Corporation Limited (Astron or the Company) present their report, together with the consolidated financial
statements of the Company and its controlled entities (the Group), for the year ended 30 June 2023 and the audit report thereon.
FINANCIAL SNAPSHOT
Net tangible asset value per share
Revenue, Interest Income and Other Income
Net cash flow from operating activities
Loss before tax
Loss after tax attributable to members
Total comprehensive loss
PRINCIPAL ACTIVITIES / BUSINESS ENTITIES
Down
Down
Down
Down
Down
Up
294.9%
14.8%
$2,041,913
$979,221
$1,307,459
$22,456
To
To
To
To
To
To
(0.68) cps
16,395,690
(1,647,745)
$6,039,121
$7,730,992
$8,115,006
Astron is a Hong Kong incorporated company listed on the Australian Securities Exchange (ASX). The principal activities
undertaken by wholly-owned subsidiary companies include:
•
•
•
exploration, evaluation and project work through Astron Pty Limited and Donald Mineral Sands Pty Limited to advance the
Group’s holding of the Donald Rare Earth and Mineral Sands Project in regional Victoria to a Final Investment Decision (FID).
The project will consist of an initial 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 project and the Niafarang mineral sands project are at a pre-execution and pre-production stage respectively.
There were no significant changes to the Group structure in the financial year ended 30 June 2023.
DIRECTORS
The names of directors in office during the year and up to the date of this report are:
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong
Mr Gerard King
Dr Mark Elliott
DIRECTORS OF THE COMPANY’S SUBSIDIARIES
During the year and up to the date of this report, all of the directors of Astron 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 are:
Mdm Jian Ping
Astron Corporation Limited Annual Financial Statements | 44
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
INFORMATION ON DIRECTORS
Mr George Lloyd
Qualifications
Chairman (non-executive director)
Bachelor of Engineering Science in Industrial Engineering
Master of Business Administration, University of New South Wales
Stanford University Executive Management Programme
Experience
• 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 Aurion Gold Limited
Interest in Shares1
675,926 CDIs
1,200,000 unlisted share options
Special Responsibilities
Audit, Nomination & Remuneration Committees
Directorships held in other listed entities
Not currently a director of any other listed company
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 Shares1
96,017,824 CDIs
Special Responsibilities
Managing Director and Nomination & Remuneration Committee
Directorships held in other listed entities
Not currently a director of any other listed company
1.
Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.
Astron Corporation Limited Annual Financial Statements | 45
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Mdm Kang Rong
Qualifications
Executive director and chief executive of Astron Titanium (Yingkou) Ltd
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)
• Mdm Kang Rong joined Astron in 1995, originally as marketing manager of
Astron in Shenyang.
•
•
In the subsequent years, Mdm Kang Rong as held a number of leadership
roles, including acting as the group’s Chief Operating Officer for a number
of years before Mr Tiger Brown became Managing Director.
In addition to her board position, Mdm Kang Rong is actively involved in
managing the company’s Chinese operations.
• Prior to her time at Astron, Mdm Kang Rong 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
4,000,100 CDIs
Chief Executive of Astron’s China-based processing and trading operations,
Astron Titanium (Yingkou) Ltd
Interest in Shares1
Special Responsibilities
Directorships held in other listed entities
Not currently a director of any other listed company
Mr Gerard King
Qualifications
Non-executive director
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 Shares1
1,900,890 CDIs and 100 Ordinary shares
400,000 unlisted share options
Special Responsibilities
Audit Committee
Directorships held in other listed entities
Not currently a director of any other listed company
1.
Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.
Astron Corporation Limited Annual Financial Statements | 46
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Dr Mark Elliott
Qualifications
Non-executive director
Diploma in Applied Geology, Ballarat School of Mines; Ph.D, University of New
South Wales, FAICD, FAusIMM (CP Geo), FAIG
Experience
• Board member since 25 January 2021
• Chartered professional accreditation as a geologist
• Commenced his career as a senior geologist with Anaconda Australia Inc
• Subsequently held roles as Chairman and Managing Director of ASX-listed
and private companies including Mako Gold Ltd, Hot Rock Ltd, Chinalco
Yunnan Copper Resources Limited and Zirtanium Limited
Interest in Shares1
438,993 CDIs
800,000 unlisted share options
Special Responsibilities
Chair of the Audit, Nomination & Remuneration Committees
Directorships held in other listed entities
Chairman of AuKing Mining Limited (retired October 2022), Non-executive
director of Nexus Minerals Limited (retired November 2022) and Aruma
Resources Limited (retired August 2022)
1.
Interest in Shares includes directly, indirectly, beneficially or potentially beneficially held shares.
DIRECTORS’ MEETINGS
Throughout the year ended 30 June 2023, there were 6 directors’ meetings. Eligibility and attendances were as follows:
Director
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong
Mr Gerard King
Dr Mark Elliott
Eligible
Attended
6
6
6
6
6
6
6
5
6
6
During the year ended 30 June 2023, there were two Audit and remuneration committee meetings and one Nomination and
Remuneration Committee meeting. Eligibility and attendances were as follows:
Audit & Risk
Nomination &
Remuneration
Eligible
Attended
Eligible
Attended
2
NA
2
2
2
NA
2
2
1
1
NA
1
1
1
NA
1
Director
Mr George Lloyd
Mr Tiger Brown
Mr Gerard King
Dr Mark Elliott
SHARE OPTIONS
During the year, 2,000,000 options over issued shares or interests in the Group were granted and remain outstanding at 30 June
2023.
Astron Corporation Limited Annual Financial Statements | 47
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
OPERATIONAL AND FINANCIAL REVIEW
Business Highlights
• Significant progress was made at the Donald Rare Earth and Mineral Sands Project with the completion of the Definitive
Feasibility Study (DFS) for MIN5532 (the site of Phase 1 operations) in April 2023 and the Pre-Feasibility Study (PFS) for
RL2022 (the site of Phase 2 operations) in June 2023. In conjunction with the completion of the DFS and PFS, updated
Mineral Resource and Ore Reserve estimates were completed for MIN5532 along with an updated Ore Reserve estimate for
RL2002. The Project also made substantial progress towards finalisation of the Victorian Work Plan (which is expected to be
submitted to the regulatory authorities in October 2023) and critical off-site infrastructure including overhead powerline, road
and water upgrades and accommodation village.
• China Government-based COVID-19 restrictions, along with the variability and scarcity of stable sources of raw materials,
significantly hampered the utilisation of the Yingkou Mineral Separation Plant. The plant was shutdown in Mid-March whilst
negotiations for raw materials supply continued. Following some upgrades to the plant completed during the shutdown, it is
anticipated that the plant will be restarted in October 2023 following finalisation of raw material supply contracts.
•
The Company’s Mining Licence for the Niafarang project was renewed in February 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.
Financial results – key features
The main features of the 2023 financial results are provided below. Segmental results are provided in Note 4 to these financial
statements, which provide information on the financial performance for the main business entities and activities of the Group.
Revenue
Sales revenue decreased by 23.9% to $14,458,725 (2022: $18,999,516) primarily as a result of shut down of the plant in Mid-
March 2023 due to the variability and scarcity of stable sources of raw materials. Further, Chinese Government COVID-19 related
lockdowns adversely impacted the operations during the third and fourth quarters of 2022.
Expenses
The Company’s general and administrative expenses decreased from 2022 to 2023 from $7,642,970 to $6,076,128 reflecting
decreased product research and development expenses in China, decreases in legal fees relating to the proposed demerger of
the China operations and an increase in capitalisation of employee wages relating to the Donald Project.
Net loss
The Company recorded a consolidated net loss before tax of $6,039,121 (2022: $7,018,342), a reduction of the net loss of
$979,221 or 14.0%. The decrease in gross margin experienced at the Yingkou operations during the year (as outlined above) was
offset by an increase in research and development tax incentive income of $1,543,575, a decrease in general and administrative
costs of $1,566,842 and reduction in non-cash share-based payments of $334,166.
Operating cash flow
Cash outflows from operations were $1,647,745 (2022: Operating cash inflows of $394,168) reflecting an increase in the loss
before tax and lower non-cash impairment of capital works in progress offset by changes to working capital balances during the
year, with trade and other receivables decreasing by $7,249,373 offset by a decrease in trade and other payables of $5,213,606.
Net assets
The Group’s net assets as at 30 June 2023 increased to $90,496,303 (2022: $85,503,285) as a result of capital raising activities
during the year of $12,683,340 (net of costs) offset by the Company’s total comprehensive loss for the year of $8,115,006.
OPERATIONS REVIEW
Donald
The Donald Project is a long-life mining asset, comprising a world class reserve of rare earths, zircon and titanium minerals with
the potential to generate significant value through low-risk conventional mining and heavy mineral processing operations.
The Phase 1 Donald Project Definitive Feasibility Study (DFS), which was released in April 2023, confirmed Donald as a Tier 1,
globally significant critical minerals project. The DFS is the culmination of many years of metallurgical testing, detailed design and
engineering, community engagement and regulatory approvals.
Astron Corporation Limited Annual Financial Statements | 48
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Economically, the Phase 1 project is expected to deliver an NPV8 of $852 million on an initial capital investment of $364 million.
Average annual free cash flow is estimated at $110 million per annum for the first five years, and $103 million per annum over the
remainder of the 41.5-year mine life. For a project that generates impressive long-term value it has a relatively short payback
period of under four years to be followed by many decades of mining operations to drive sustainable, long-term investment returns.
The Project’s return profile is attractive and, based on conservative estimates, delivers a post-tax and inflation-adjusted real
internal rate of return of 25.8%.
Importantly, the Phase 1 project demonstrates a small portion of the full potential of the Donald Project. Once operational, Phase
1 cash-flows are anticipated to be applied to the equity requirements of the Phase 2 project – for which the indicative project
economics (at PFS level) show an incremental NPV of $1.4B, and an extension of the Phase 1 plus Phase 2 mine life from 41.5
years to 58 years at twice the Phase 1 rate of production. The Donald Project will allow Astron to be a part of the global critical
minerals landscape for many decades.
Excitement continues to build around applications of rare earths as they are recognised as the building blocks for the evolution in
electric vehicles and renewable energy. A 3MW wind turbine uses close to 40 kilograms of rare earths and, if the world is to
achieve its emissions targets, rare earth demand must increase significantly.
The zircon component of Donald’s reserves, a high proportion of which has premium quality characteristics, will make a significant
contribution to the ceramics markets where demand continues to grow due to the continuing global urbanisation trend.
Rare earths and zircon supplies are both expected to be constrained by 2026, when Donald Phase 1 is expected to be in
production. Donald’s planned scale and development timing are both crucial not only for supporting energy transition, but also for
meeting the supply requirements for the zircon industry, for which a large proportion of current supply is expected to deplete within
the next 3 to 5 years.
While Astron commenced the process of engagement with potential product off-take partners in the early stages of project
evaluation, the completion of the DFS has facilitated the start of detailed discussions with several parties to secure firm off-take
agreements prior to the start of construction.
Prior to the start of construction, Astron must also agree the terms of a work plan with the Victorian Government. The work plan
describes the nature and scale of the proposed mining activities, identifies and assesses all risks the works may pose to the
environment, details the nature of community engagement, and includes a risk management plan to eliminate or minimise
identified risks and monitor performance. The Company is very advanced towards finalisation of the work plan.
Astron raised close to $13 million in equity during the year. $5.9 million was raised from share offers with significant support from
Astron directors and executives. The high related party ownership of those closest to the project indicates our conviction in the
underlying value of the Project. We are also pleased to announce support from Mr Tan Ruiqing, Former Vice Chairman and one
of the founders of Lomon Billions Group, who invested $7 million in a placement for Astron shares. We welcome the support from
a sophisticated investor with deep experience in the titanium dioxide and zirconium chemical markets.
Astron aims to fund the Phase 1 execution investment with a split of 60% debt and 40% equity. ICA Partners have been appointed
as our debt advisor to secure appropriate debt financing to support construction. ICA Partners are a globally recognised resource
specialist firm, experienced in critical mineral projects’ financing, notably Iluka’s $1.25 billion Eneabba Rare Earths refinery. Market
soundings of potential financiers has been completed with strong interest from domestic and foreign institutions. It is expected
that financiers will confirm their interest in the debt financing process during Q4 2023 and further assessment and negotiation to
be completed during Q1 2024.
The Pre-Feasibility Study (PFS) for Phase 2 of the Donald Project, also completed during the year, confirmed the project’s place
as a Tier-1 rare earth and mineral sands project of long-term global significance. Construction for Phase 2 of the project is
planned to commence in 2029 with first production towards the end of 2030. Furthermore, the utilisation of just over 40% of the
Donald Project Mineral Resource over the combined Phase 1 and Phase 2 projects’ 58-year life is a clear indication of the potential
for further value creation by way of scale expansion as well as the production of a wide range of materials that are essential to life
in the 21st century.
During the year, the Company announced updates to the Mineral Resource and Ore Reserve for MIN5532 (the site of Phase 1
operations) and the Ore Reserve for RL2002. Completed detailed analysis of the 2022 drilling program has increased both
Reserves and Resources on MIN5532. Much of this increase is explained by widening the in-size range and drilling samples
extending the previously defined ore body. A significant increase in rare earth content was recorded as the xenotime content was
added to Valuable Heavy Mineral (VHM) analysis. Expanding our reserves is a significant development, as it strengthens the
underlying value of the overall project. Following the updated Ore Reserve estimates announced for both MIN5532 and RL2002,
total Donald Project Ore Reserves have increased by 37% to 825Mt since 30 June 2022.
Astron Corporation Limited Annual Financial Statements | 49
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
China operations
FY2023 was a challenging year for Astron’s Chinese operations. Continuing COVID-19 restrictions, including serious lockdowns
experienced across major cities in the first half of the financial year, and the on-going industry re-opening difficulties in the latter
half of the financial year contributed partly to the lower year on year revenue, which dropped from $19.0m in FY2022 to $14.5m
in 2023. In addition, supply chain difficulties, and difficulties in sourcing concentrate product meant that a larger proportion of the
revenue this year was derived from relatively low margin trading activities, rather than from processing plant operations.
A business review of the Chinese operations, which considered among other things the difficulties in securing long-term feedstock,
led to a change in operating strategy to open up the plant to a wider range of concentrate feedstocks (including in preparation for
Donald HMC). This resulted in the installation of new separation spirals in the mineral separation plant and has made a positive
contribution towards securing a number of long-term feedstock supply arrangements. The new process flowsheet is being
commissioned and the plant is expected to reach stable production in the first half of 2024.
Senegal
The Company continued to progress the Niafarang Project through the year, most notably with the renewal of the Company’s
mining licence to March 2027. The renewal of the mining licence has resulted in increased local community support for the project,
including from the local governor and local media representatives. Astron will continue to explore relevant opportunities to advance
the project, including through possible farm-out arrangements, Public Private Partnerships or other mutually beneficial structures.
BUSINESS RISKS
Supply risk
The Company is dependent on renewing its existing 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 sales to the Company’s subsidiary operations in China.
Commercial and contract risk
Potential future earnings, profitability and growth are likely to the Company’s ability to successfully implement its business plans.
The Company’s ability to do so depends on 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, rare earth concentrate sales and
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 and 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.
Astron Corporation Limited Annual Financial Statements | 50
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
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.
The Environmental Effects Statement for the Donald Project has been approved in Australia. 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 working closely with the local authorities to maintain high standards. 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 3 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.
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.
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 and restart operations at the China mineral separation plant;
finalise the submission and approval of the Victorian Mining Work Plan for the Donald Project;
negotiate and confirm offtake agreements for REEC and HMC produced by the Donald Project;
secure appropriate financing for the Donald Project through the most efficient mix of debt and equity funding;
undertake a Final Investment Decision (FID) for the Donald Project; and
continue engagement with the local community and regulators in relation to both the Donald Project and the Senegal Project.
For the Donald Project, the following represent the key work streams:
•
•
•
•
•
•
finalisation of risk management and operating plans for inclusion in the Victorian Mining Work Plan submission;
tender and award Engineering, Procurement and Construction (EPC) contract;
engage EPC in early contractor involvement to confirm engineering and design ready for construction commencement;
complete final design and tender packages for key off-site infrastructure including overhead powerline, water and road
upgrades and accommodation village;
collaborate with advisors and potential financiers to secure appropriate construction funding and undertake FID; and
complete tender packages for key operating contracts including mining services and transport and logistics.
Astron Corporation Limited Annual Financial Statements | 51
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
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 executive directors and other KMP was developed by the Nomination & 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 Nomination & 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 calibre 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 (ESOP) and, subsequent to shareholder approval, options 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 was 10.5% during the year ended 30 June 2023 increasing to 11.0% in the year ending 30 June 2024, and do not receive
any other retirement benefits.
Some individuals, however, have chosen to sacrifice part of their salary to increase payments towards superannuation.
If shares are given to directors and/or executives, these shares are issued at the market price of those shares.
The board policy is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Board
determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties
and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be
paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting. Fees for non-executive
directors are not linked to the performance of the Group. However, to align director's interests with shareholder interests, the
directors are encouraged to hold shares in the Group.
Performance based remuneration
As part of each executive director and executive’s remuneration package there is a discretionary short term incentive element.
This program intends to align the interests of directors and executives with those of the business and shareholders.
In determining whether or not each executive director and executive's bonus is due, the Nomination & Remuneration committee
bases the assessment on audited figures and independent reports where appropriate.
The Nomination & 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 (2022: Nil) were paid during the year.
The Company is formalising a short-term incentive program that will be based on key performance indicators (KPIs) set at the
beginning of the performance period and assessed at the end of the performance period. KPIs for each employee will be set with
overall Group business, operating and financial objectives in mind and will be a combination of Group and individual performance
measures. The terms of the short-term inventive program are currently being defined for review and approval by the Nomination
& Remuneration committee.
Astron Corporation Limited Annual Financial Statements | 52
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Company performance, shareholder wealth and directors’ and executives’ remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, 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.
A$’000
Sales revenue
Net Loss
Share Price at Year-end
Dividends Paid
KMP
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
-
2023
14,459
(7,731)
0.49
-
The following persons were KMP of the Group during the financial year:
Name
Directors
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong
Mr Gerard King
Dr Mark Elliott
Key executives
Mr Tim Chase
Mr Sean Chelius
Mr Greg Bell
Position Held
Chairman – non-executive
Managing director
Executive director, chief marketing officer and head of China operations
Non-executive director
Non-executive director
General Manager of global operations (resigned 17 July 2023)
Donald project director
Chief Financial Officer (appointed 3 October 2022)
Mr Joshua Theunissen
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
Directors
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong
Mr Gerard King
Dr Mark Elliott
Key executives
Mr Tim Chase
Mr Sean Chelius
Mr Greg Bell
Mr Joshua Theunissen
Balance
1 Jul 2022
Shares
purchased
Options
exercised
Balance
30 Jun 2023
-
94,165,972
4,000,100
49,138
346,400
-
-
-
100
675,926
1,851,852
-
1,851,852
92,593
-
-
93,188
37,038
98,561,710
4,602,249
-
-
-
-
-
-
-
-
-
-
675,926
96,017,824
4,000,100
1,900,990
438,993
-
-
93,188
37,138
103,164,159
Astron Corporation Limited Annual Financial Statements | 53
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Options held
Details of options held directly, indirectly, beneficially or potentially beneficially by KMP and their related parties are as follows:
30 June 2022
Directors
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong
Mr Gerard King
Dr Mark Elliott
Key executives
Mr Tim Chase
Mr Sean Chelius
Mr Greg Bell
Mr Joshua Theunissen
Details of Remuneration
Balance
1 Jul 2022
Options
issued
Options
exercised
Balance
30 Jun 2023
800,000
400,000
-
-
-
800,000
500,000
600,000
-
200,000
2,900,000
-
-
400,000
-
-
600,000
1,400,000
-
-
-
-
-
-
-
-
-
-
-
1,200,000
-
-
400,000
800,000
500,000
600,000
600,000
200,000
4,300,000
Details of compensation by key management personnel of Astron Corporation Limited Group are set out below:
Short term benefits
Post-employment
benefits
Cash, fees
salary &
commissions
A$
Non-cash
benefits/
other
A$
Share-
based
payment
expenses1
Termination
payments
A$
Superannuation
A$
Total
A$
% of
remuneration
that is
performance
based
Year ended 30 June 2023
Directors
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong2
Mr Gerard King
Dr Mark Elliott
Other KMP
Mr Tim Chase3
Mr Sean Chelius
Mr Greg Bell4
Mr Joshua Theunissen1
140,600
100,000
250,000
60,000
60,000
326,154
319,000
240,912
94,575
-
-
-
-
-
10,876
14,151
102,453
-
-
102,453
-
-
-
-
-
125,845
-
1,591,241
25,027
330,751
-
-
-
-
-
-
-
-
-
-
-
10,500
-
-
6,300
33,921
27,500
18,969
-
243,053
110,500
250,000
162,453
66,300
370,951
360,651
385,726
94,575
97,190
2,044,209
42.2
-
-
63.1
-
-
-
32.6
-
16.2
Astron Corporation Limited Annual Financial Statements | 54
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Details of Remuneration (cont’d)
Short term benefits
Post-employment
benefits
Cash, fees
salary &
commissions
A$
Non-cash
benefits/
other
A$
Share-
based
payment
expenses1
Termination
payments
A$
Superannuation
A$
Total
A$
% of
remuneration
that is
performance
based
Year ended 30 June 2022
Directors
Mr George Lloyd
Mr Tiger Brown
Mdm Kang Rong1
Mr Gerard King
Dr Mark Elliott5
Other KMP
Mr Tim Chase
93,129
99,999
250,000
85,000
60,000
-
-
-
-
-
170,189
-
-
-
(70,635)
248,333
10,658
113,073
Mr Sean Chelius
151,782
3,157
135,687
Mr Joshua Theunissen1
94,371
-
45,229
1,082,614
13,815
393,543
Notes:
-
-
-
-
-
-
-
-
-
-
9,999
-
-
6,000
24,391
13,011
-
263,318
109,998
250,000
85,000
(4,635)
396,455
303,637
139,600
64.6
-
-
-
-
28.5
44.7
32.4
53,401
1,543,373
25.5%
1.
2.
3.
The figures provided in ‘Share-based payment expenses’ were not provided in cash to the KMP during the financial period. These amounts
are calculated in accordance with accounting standards and represent the amortisation of accounting fair values of performance rights that
have been granted to KMP in this or prior financial years. The fair value of share options has been valued as at their date of grant and in
accordance with the requirements of HKFRS 2 Share-Based Payments. The fair value of options is measured using a generally accepted
valuation model. The fair values are then amortised over the entire vesting period of the equity instruments. Total remuneration shown in
‘Total’ therefore includes a portion of the fair value of unvested equity compensation during the year. The amount included as remuneration
is not related to or indicative of the benefit (if any) that individuals may ultimately realise should these equity instruments vest and be
exercised.
Paid or payable to management company.
During the year ended 30 June 2023, Mr Tim Chase entered into an agreement with the Company to pay out a portion of the annual leave
liability owing to him from past service. A total amount of $61,154 (before taxes and superannuation) was paid under the agreement which
was included in the Group’s provision for annual leave at 30 June 2022.
4. Mr Greg Bell was appointed as the Chief Financial Officer of the Group on 3 October 2022 and, as such, become a member of KMP from
this date. Mr Bell received 600,000 share options as part of his agreement to hold the position, with various vesting conditions as outlined
in Note 27 of the financial statements. These share options have been valued in accordance with HKFRS 2 and will be amortised in
accordance with the vesting conditions.
5.
During year ended 30 June 2021, non-executive director Dr. Mark Elliott was granted 800,000 options subject to shareholder approval. 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)
to be $299,943 for the purpose of recognising the services received from Dr. Mark Elliott. Upon receiving shareholder approval on 30
November 2021, the options were approved by the Board and the fair value of options granted to Dr. Mark Elliott was revalued to $229,308.
As such, an adjustment to share-based payment expense of $70,635 was recognised in the profit or loss for the year ended 30 June 2022.
Use of remuneration consultants
The Board has previously employed external consultants to review and provide recommendations regarding 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.
Astron Corporation Limited Annual Financial Statements | 55
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
Share-based payments
During the 2023 year, the Group granted 1,400,000 (2022: 2,900,000) options to directors and KMP with shareholder approval
which were valued at $346,349 (2022: $645,094). The value of share options issued to KMP will be amortised in accordance with
their vesting conditions to comply with HKFRS 2 Share based payments.
Voting and comments at the Company’s 2022 Annual General Meeting
The Company received 96.9% of “yes” votes on its remuneration report for the 2022 financial year.
The Company did not receive any specific feedback at the AGM on its remuneration report.
Service contracts
Service contracts (or letters of engagement) have been entered into, or are in the process of being entered into, by the Group
with all KMP 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 Nomination & 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 Nomination & 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 2023.
END OF REMUNERATION REPORT
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 its related
practices:
Other Services
Taxation services
Other assurance services
2023
$
-
-
2022
$
-
-
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.
Astron Corporation Limited Annual Financial Statements | 56
Astron Corporation Limited
Company Number: 1687414
Directors' Report
30 June 2023
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2023 has been received and can be found on page 58
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 2023 (2022: Nil).
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied to the Court for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings
to which the Company is a party, for the purpose of taking responsibility on behalf of the Company for all or part of those
proceedings.
Signed in accordance with a resolution of the board of directors and is signed for and on behalf of the directors by:
Chairman:
Mr George Lloyd
Date: 29 September 2023
Astron Corporation Limited Annual Financial Statements | 57
Astron Corporation Limited Annual Financial Statements | 58
Astron Corporation Limited
Company Number: 1687414
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2023
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 gain/(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:
Owners of Astron Corporation Limited
Consolidated
Year ended
Note
30 Jun 2023
A$
30 Jun 2022
A$
5
14,458,725
18,999,516
(14,244,971)
(15,326,183)
213,754
3,673,333
5
5
6
6
6
6
6
6
7
474
1,970,774
(152,140)
(179,332)
(21,195)
3,346
241,398
(276,174)
(24,425)
(7,146)
(6,076,128)
(7,642,970)
(118,716)
744
-
(47,655)
(285,522)
(1,185,794)
(158,385)
(6,755)
(7,457)
(1,755,249)
-
(619,688)
(506,759)
(89,796)
(6,039,121)
(7,018,342)
(1,691,871)
(2,020,109)
(7,730,992)
(9,038,451)
(384,014)
(384,014)
900,989
900,989
(8,115,006)
(8,137,462)
(7,730,992)
(9,038,451)
(8,115,006)
(8,137,462)
Loss per share
Basic and diluted loss per share (cents)
8
(5.98)
(7.38)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes included on pages 63 to 104.
Astron Corporation Limited Annual Financial Statements | 59
Astron Corporation Limited
Company Number: 1687414
Consolidated Statement of Financial Position
As at 30 June 2023
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
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 – current
Convertible notes
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Borrowings – non-current
Long-term provisions
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
10
10
11
12
14
16
17
18
19
20
21
22
23
24
25
22
24
26
28
7,204,674
46,112
6,261,343
2,217,845
8,319
15,738,293
2,447,986
46,112
13,510,716
2,746,131
7,575
18,758,520
22,831,507
82,590,196
8,901,965
2,773,422
117,097,090
132,835,383
23,605,398
76,701,459
8,374,798
2,974,558
111,656,213
130,414,733
6,578,001
656,001
14,627,740
5,365,323
126,666
27,353,731
12,620,821
1,569,078
795,450
14,985,349
42,339,080
90,496,303
11,791,607
2,962,559
13,668,492
4,622,272
201,624
33,246,554
10,928,950
-
735,944
11,664,894
44,911,448
85,503,285
89,233,205
18,082,648
(16,819,550)
90,496,303
76,549,865
18,041,978
(9,088,558)
85,503,285
Mr Tiger Brown
Mr George Lloyd
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes included on
pages 63 to 104.
Astron Corporation Limited Annual Financial Statements | 60
Astron Corporation Limited
Company Number: 1687414
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Note
Issued
capital
A$
Accumulated
losses
A$
Share
based
payment
reserve
A$
Foreign
currency
translation
reserve
A$
Convertible
notes equity
reserve
A$
Balance at 1 July 2021
76,549,865
(50,107)
1,213,047
13,311,431
Loss for the year
-
(9,038,451)
Other comprehensive income
- Exchange differences on
translation of foreign
operations
Total comprehensive income
for the year
Issuance of convertible notes
Recognition of equity settled
share-based payments expense
Total transactions with owners
recognised directly in equity
26
-
-
-
-
-
-
(9,038,451)
-
-
-
-
-
-
-
619,688
619,688
-
900,989
900,989
-
-
-
546,818
-
546,818
-
-
-
-
Capital
reserve
A$
Total equity
A$
1,450,005
92,474,241
-
-
-
-
-
-
(9,038,451)
900,989
(8,137,462)
546,818
619,688
1,166,506
Equity as at 30 June 2022
76,549,865
(9,088,558)
1,832,735
14,212,420
546,818
1,450,005
85,503,285
Balance at 1 July 2022
76,549,865
(9,088,558)
1,832,735
14,212,420
546,818
1,450,005
85,503,285
Loss for the year
-
(7,730,992)
Other comprehensive income
- Exchange differences on
translation of foreign
operations
Total comprehensive income
for the year
Issue of ordinary shares
Share issue costs
Recognition of equity settled
share-based payments expense
Total transactions with owners
recognised directly in equity
-
-
-
(7,730,992)
12,995,003
(172,501)
26
(139,162)
12,683,340
-
-
-
-
-
-
-
-
-
424,684
424,684
-
(384,014)
(384,014)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(7,730,992)
(384,014)
(8,115,006)
12,995,003
(172,501)
285,522
13,108,024
Equity as at 30 June 2023
89,233,205
(16,819,550)
2,257,419
13,828,406
546,818
1,450,005
90,496,303
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes included on
pages 63 to 104.
Astron Corporation Limited Annual Financial Statements | 61
Astron Corporation Limited
Company Number: 1687414
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
Cash flows from operating activities:
Receipts from customers
Payments to suppliers and employees
Net cash (outflows)/inflows from operations
Refundable Australian R&D tax offsets received
Consolidated
Year ended
Note
30 Jun 2023
A$
30 Jun 2022
A$
22,376,537
18,536,069
(25,567,857)
(18,141,901)
(3,191,320)
394,168
1,543,575
-
Net cash (outflows)/inflows from operating activities
33
(1,647,745)
394,168
Cash flows from investing activities:
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
Proceeds from the issue of ordinary shares net of transaction costs
Net proceeds from/(repayment of) borrowings
Net cash inflows from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Net foreign exchange differences
Cash and cash equivalents at end of the year
(1,484,650)
(569,235)
(5,855,362)
(4,043,452)
(7,340,012)
(4,612,687)
474
(362,641)
-
-
11,822,502
2,611,311
3,346
(336,201)
(647,936)
5,000,000
-
(145,734)
14,071,646
3,873,475
5,083,889
2,447,986
(345,044)
2,570,438
(327,201)
222,592
7,204,674
2,447,986
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes included on pages
63 to 104.
Astron Corporation Limited Annual Financial Statements | 62
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
1. General Information
The consolidated financial statements of Astron Corporation Limited for the year ended 30 June 2023 were authorised for
issue in accordance with a resolution of the directors on 29 September 2023 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. Basis of preparation and significant accounting policies
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 basis
As at 30 June 2023, the Group had a deficit of current assets over current liabilities of $11,615,438 (2022: $14,488,034),
incurred a net loss after tax for the year of $7,730,992 (2022: net loss of $9,038,451) and recorded net cash outflows from
operating activities of $1,647,745 (2022: net cash inflows of $394,168). The deficit of current assets over current liabilities,
continued operating losses and net cash outflows from operating activities, are conditions, along with the matters set out
below, that may cast significant doubt on the Group’s ability to continue as a going concern. The consolidated financial
statements have been prepared on a 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 cash flow forecasts covering 18 months from the end of the reporting period and consideration of the plans and measures
stated below, the business remains a going concern.
The directors are confident it will have sufficient funds to meet its ongoing needs for at least the next 12 months from the
date of this report based on the following:
•
•
The Group has agreed contracts for stable supply of appropriate raw materials for the Group’s mineral separation plant
in China. Agreement for a stable supply of raw materials is imperative to the sustainability and profitability of the mineral
separation plant as not only will it ensure consistent production volumes (and, by extension, sales volumes), it will also
allow the Group to increase production efficiencies through reducing the volatility of plant settings and consequently
increase profit margins. The Group has finalised negotiations with shipments to commence in the final quarter of 2023.
The directors anticipate that the Group will be able to renew certain borrowings and 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 continue to meet its primary milestones in relation to the Project.
• An undertaking by the majority shareholder to provide financial support where necessary to enable the Group to meet
its obligations and commitments until the Company is adequately financed.
•
The undertaking by a director not to demand repayments due to her and her related entities of approximately $8.0 million
until such time when any repayment will not affect the Group’s ability to repay other creditors in the normal course of
business (refer note 31).
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 consider that it is appropriate to
prepare the consolidated financial statements on a going concern basis notwithstanding that there is a material uncertainty
relating to the above events or conditions that may cast significant doubt as to 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.
Astron Corporation Limited Annual Financial Statements | 63
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Significant accounting policies
The following significant accounting policies have been adopted in the preparation and presentation of the financial
statements.
Basis of consolidation
The Group financial statements consolidate those of the Company and all of its subsidiaries as at 30 June 2023. The
Company 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.
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 or loss.
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.
Astron Corporation Limited Annual Financial Statements | 64
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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.
Astron Corporation Limited Annual Financial Statements | 65
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Financial instruments
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 marketplace.
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 is 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.
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.
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.
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.
Astron Corporation Limited Annual Financial Statements | 66
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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.
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.
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.
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.
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.
Astron Corporation Limited Annual Financial Statements | 67
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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.
Leases
All leases (irrespective of whether they are operating leases or finance leases) are required to be capitalised 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 underlying right-of-use 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
Astron Corporation Limited Annual Financial Statements | 68
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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
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.
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.
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.
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.
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 or
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.
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.
Astron Corporation Limited Annual Financial Statements | 69
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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.
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 Nomination & 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.
Where equity instruments are granted to persons other than employees, the consolidated statement of comprehensive
income is charged with the fair value of goods and services received.
Dividends/Return of capital
No dividends were paid or proposed for the years ended 30 June 2023 and 30 June 2022. There is no Dividend Reinvestment
Plan in operation.
Astron Corporation Limited Annual Financial Statements | 70
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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.
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.
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.
Adoption of HKFRS
Adoption of new or revised HKFRSs - effective on 1 July 2022
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 HKAS 16
Amendments to HKAS 37
Amendments to HKFRS 3
Property, Plant and Equipment - Proceeds before Intended Use
Onerous Contracts – Cost of Fulfilling a Contract
Reference to Conceptual Framework
Annual Improvements to HKFRSs 2018-2020
Amendments to HKFRS 9 Financial Instruments and HKFRS 16
Leases
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.
Astron Corporation Limited Annual Financial Statements | 71
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
New or revised HKFRSs that have been issued but are not yet effective
The following new or revised HKFRSs, potentially relevant to the Group’s financial statements, have been issued, but are
not yet effective and have not been early adopted by the Group. The Group’s current intention is to apply these changes on
the date they become effective.
Amendments to HKAS 1
Amendments to HKAS 1 and HKFRS Practice
Statement 2
HK Interpretation 5 (2020)
Amendments to HKAS 8
Amendments to HKAS 12
Amendments to HKFRS 16
Amendments to HKFRS 10 and HKAS 28
Classification of Liabilities as Current or Non-current1
Disclosure of Accounting Policies2
Presentation of Financial Statements – Classification by the
Borrower of a Term Loan that Contains a Repayment on
Demand Clause1
Definition of Accounting Estimates2
Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction2
Lease Liability in a Sale and Leaseback1
Sale or contribution of assets between an investor and its
associate or joint venture3
1. Effective for annual periods beginning on or after 1 January 2024
2. Effective for annual periods beginning on or after 1 January 2023
3. Effective date yet to be determined
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.
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.
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.
Astron Corporation Limited Annual Financial Statements | 72
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
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. The Group is confident the balance of $0.9
million due at year end (2022: $1.1 million) will be settled within the next twelve months.
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.
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.
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.
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 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.
4. Segment information
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
Astron Corporation Limited Annual Financial Statements | 73
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Segment information provided to the managing director
30 June
DMS
2023
A$
2022
A$
China
2023
A$
2022
A$
Senegal
2023
A$
2022
A$
Other
Consolidated
2023
A$
2022
A$
2023
A$
2022
A$
Sale of mineral products:
Revenue from contracts with external
customers
Other income:
Interest income
Rent and other income
Total revenue and other income
Segment result
Segment (loss)/profit
Acquisition of PPE, Intangible assets
and other non-current segment assets
Depreciation and amortisation
Impairment of capital works in progress
Provision for impairment of trade
receivables
Assets
Segment assets
Consolidated total assets
Liabilities
Segment liabilities
Total borrowings
Convertible notes
Deferred tax liabilities
Consolidated total liabilities
-
-
14,458,725
18,999,516
33
162,787
162,820
67
174,346
174,413
-
`264,412
14,723,137
3,256
67,052
19,069,824
-
-
-
-
-
-
-
-
-
-
14,458,725
18,999,516
441
1,543,575
1,544,016
23
-
23
474
1,970,774
16,429,973
3,346
241,398
19,244,260
(171,280)
(30,876)
(2,422,631)
(3,049,295)
42,077
(813,846)
(3,487,287)
(3,124,325)
(6,039,121)
(7,018,342)
6,494,887
19,169
-
5,980,629
5,059
-
1,898,851
1,994,928
-
507,645
1,660,983
1,755,249
201,201
-
-
213,444
-
-
10,053
11,098
-
2,544
9,306
-
8,604,992
2,025,195
-
6,704,262
1,675,348
1,755,249
-
-
118,716
6,755
-
-
-
-
118,716
6,755
87,727,731
82,208,577
34,267,691
36,538,885
9,963,806
9,376,033
876,155
2,291,238
2,073,802
-
5,365,323
-
1,915,433
-
4,622,272
-
1,946,494
16,269,089
-
-
9,885,225
12,740,763
-
-
1,476,677
-
-
-
1,259,171
-
-
-
2,659,145
(72,271)
-
12,620,821
2,631,905
927,729
-
10,928,950
132,835,383
132,835,383
130,414,733
130,414,733
8,156,118
16,196,818
5,365,323
12,620,821
42,339,080
15,691,734
13,668,492
4,622,272
10,928,950
44,911,448
Astron Corporation Limited Annual Financial Statements | 74
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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 processing and product trading 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
30 Jun 2023
A$
30 Jun 2022
A$
30 Jun 2023
A$
30 Jun 2022
A$
30 Jun 2023
A$
Non-current assets
30 Jun 2022
A$
Australia
China
-
-
14,458,725
18,999,516
Other countries
-
-
14,458,725
18,999,516
33
-
441
474
67
87,501,478
81,924,954
3,256
19,857,806
20,560,191
23
9,737,806
9,171,068
3,346 117,097,090 111,656,213
During 2023, $12,308,924 or 85% (2022: $12,370,852 or 65%) of the revenue depended on six (2022: five) customers.
5. Revenue and other income
Revenue from contracts with customers within the scope of HKFRS 15
Timing of revenue recognition – at a point in time
- sale of goods
Interest income
Other income:
-
-
research and development tax incentive refund
rental income
- other income
Total other income
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
14,458,725
18,999,516
474
3,346
1,543,575
162,787
264,412
1,970,774
-
174,346
67,052
241,398
Astron Corporation Limited Annual Financial Statements | 75
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
6.
Loss before income tax expense
Loss before income tax expense is arrived at after charging/crediting:
Employee benefits1 (including directors’ remuneration):
Salaries and fees
Non-cash benefits
Employee share option expenses
Superannuation
Notes
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
1,360,704
1,334,318
27
247,706
285,522
152,365
223,928
619,688
93,179
2,046,297
2,271,113
1. Employee benefits expense excludes an amount of $858,867 (2022: $87,077) which has been capitalised to the exploration and
evaluation assets as part of the continuing development of the Donald Rare Earth and Mineral Sands Project.
Other items
Finance costs:
- on borrowings and early redemption of note receivables
- on convertible notes
- debt advisory costs
- other finance costs
Depreciation and amortisation
Less: capitalisation of water rights amortisation
Research and development costs
Costs associated with Gambia litigation
Impairment of capital works in progress
Discontinuation of capital works in progress
Provision for impairment on receivables
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
347,825
743,051
53,478
41,440
1,185,794
326,463
169,090
-
11,206
506,759
2,618,455
2,268,608
17
(593,260)
(593,260)
2,025,195
1,675,348
-
1,847,675
47,655
-
-
118,716
-
1,755,249
374,413
6,755
13
16
16
11
Astron Corporation Limited Annual Financial Statements | 76
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
7.
Income tax expense
The components of tax expense comprise:
Deferred taxation:
- Unrealised inventory
- Capitalisation of expenditure on DMS project (net)
- Other movements
Total
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
(188,749)
(876,280)
(1,475,407)
(1,212,172)
(27,715)
68,343
(1,691,871)
(2,020,109)
The Company is subject to Australian Income Tax which is calculated at 25% (2022: 25%) 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.
The prima facie tax on loss before income tax is reconciled to the income tax as follows:
Loss before income tax expense
Prima facie tax benefit on loss at 25% (2022: 25%)
-
continuing operations
Add/(Less) tax effect of:
-
-
-
change in tax rates
revenue that is exempt from taxation
research and development tax incentive refund1
- expenses that are not deductible in determining taxable profit
-
expenses that are not deductible in determining taxable profit – Gambia
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
(6,039,121)
(7,018,342)
1,509,780
1,754,586
-
24,019
385,894
342,648
45,275
-
(449,751)
(1,736,659)
(12,943)
-
- unused tax losses not recognised as deferred tax assets in the current year
(2,837,452)
(2,121,030)
-
different tax rate of subsidiaries operating in other jurisdictions
Income tax expense
(311,418)
(304,929)
(1,691,871)
(2,020,109)
Note
1.
Tax benefit relates to Australian Government Grant in relation to research & development tax incentives on eligible expenditure related
to the DMS project.
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.
Astron Corporation Limited Annual Financial Statements | 77
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
China (including Hong Kong)
The Company is subject to Hong Kong tax law.
The Group’s subsidiaries in China 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.
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
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
Weighted average number of ordinary shares:
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
(7,730,992)
(9,038,451)
(7,730,992)
(9,038,451)
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
Weighted average number of ordinary shares outstanding during the year
for the purpose of basic and diluted loss per share
129,279,930
122,479,784
Dilutive shares
For the purpose of calculating diluted loss per share for the years ended 30 June 2022 and 2023, no adjustment was made
as the exercise of the outstanding share options and convertible notes has an anti-dilutive effect on the basic loss per share.
9. Auditor’s remuneration
Audit and review of financial statements
BDO Limited
10. Cash and cash equivalents
Cash on hand
Cash at bank
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
297,429
299,503
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
825
858
7,203,849
2,447,128
7,204,674
2,447,986
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 1.2% (2022: 0.0% and 1.3%). Deposits have an average maturity of 90 days
(2022: 90 days).
Astron Corporation Limited Annual Financial Statements | 78
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Concentration of risk by geography – cash at bank
Australia
China
Senegal
Concentration of risk by bank
Australia
Commonwealth Bank - S&P rating of AA- (2022: AA-)
Other Australian banks
China
Shengjing Bank – unrated
Shanghai Pudong Development Bank - S&P rating of BBB
Bank of Communications Company Limited – S&P rating of A-
Other banks
Other countries
Other banks
Restrictions on cash
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
863,104
2,292,638
6,300,500
40,245
70,767
83,723
7,203,849
2,447,128
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
800,159
62,945
863,104
2,225,332
67,306
2,292,638
644,418
3,515,010
2,079,910
61,162
6,300,500
3,821
64,471
-
2,475
70,767
40,245
83,723
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% (2022:
13%) to be paid.
Term deposits greater than 90 days
Term deposits with maturity over 90 days
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
46,112
46,112
As at 30 June 2023, term deposits with maturity over 90 days of $46,112 (2022: $46,112) bear fixed interest rates of between
1.2% and 3.35%% (2022: 0.9%) and have a maturity of 3 to 6 months.
Restrictions on cash
As at 30 June 2023, the above term deposits with maturity over 90 days are provided as security over the Company’s
Australian mining tenements and are required to be maintained as long as the tenement remains held by the Company.
The short-term deposits include $45,000 (2022: $45,000) of cash backed by Bank Guarantees for the operations of the
Donald project.
Astron Corporation Limited Annual Financial Statements | 79
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Concentration of risk by geography – term deposits
Australia
Concentration of risk by bank – term deposits
Australia
Commonwealth Bank-S&P rating of AA- (2022: AA-)
Other
11. Trade and other receivables and prepayments
Current assets:
Trade receivables
Provision for impairment of trade receivables
Net trade receivables
Land sale receivable
Impairments
Net land sale receivable
Sundry receivables
Prepayments
Impairments
Net prepayments
Total trade and other receivables and prepayments
Land sale receivable
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
46,112
46,112
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
35,000
11,112
46,112
35,000
11,112
46,112
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
106,266
(39,058)
4,008,099
(40,693)
67,208
3,967,406
1,095,945
1,141,839
(164,392)
(50,812)
931,553
1,091,027
2,577,001
2,545,312
3,059,965
6,297,033
(374,384)
(390,062)
2,685,581
5,906,971
6,261,343
13,510,716
During the year ended 30 June 2014, the Group entered into an agreement to transfer 1,065,384m² 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.
The receivable is currently outside the terms initially agreed.
As at 30 June 2023, the total amount outstanding before ECL provision was $1,095,945 (2022: $1,141,839). There were no
amounts received during the years ended 30 June 2022 and 2023. 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 2024 or 2025. The
provision has accordingly been determined on that basis and as such a further provision for expected credit loss of $118,716
(2022: $6,755) was recognised for the year ended 30 June 2023. As at 30 June 2023, the impairment provision for land sale
receivable was $164,392 (2022: $50,812).
Astron Corporation Limited Annual Financial Statements | 80
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Ageing analysis
The ageing analysis of trade debtors, based on due dates, is as follows:
0-30 days (not past due)
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
67,208
3,967,406
At the end of the reporting period, the Group’s trade debtors were 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, sales are made in exchange for notes (guaranteed by a Chinese bank),
minimising the Group’s exposure to an impairment issue.
Impairment on trade debtors
At year end, the Group reviewed its trade debtors and brought to account impairment where required.
As at 30 June 2023, the impairment provision for trade debtors was $39,058 (2022: $40,693).
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 $374,384 (2022: $390,062)
which is the prepayment for construction. This amount has been fully impaired due to low possibility of collection.
12.
Inventories
Raw materials
Work-in-progress
Finished goods
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
317,132
284,225
1,518,937
2,119,235
381,776
342,671
2,217,845
2,746,131
The Company has raised a provision for net realisable value against certain work in progress inventory of $86,756 (2022:
$90,389).
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 A$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 three 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 2023, no assets arising from this matter were recognised.
Astron Corporation Limited Annual Financial Statements | 81
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
When the Group receives a settlement, an additional contingent legal fee of £171,000 (equivalent to approximately
A$307,000) is payable to the lawyers who assisted in this matter.
For the year ended 30 June 2023, the Group incurred $47,655 of costs in relation to entering into a litigation funding
agreement with an international law firm to attempt to expedite the recovery of this award. The litigation funder has agreed
to incur up to US$2 million in recovery against the award with the parties to agree a budget for enforcement costs in for the
year ending 30 June 2024.
14. Financial assets at fair value through profit or loss
Equity securities
-
Listed in Australia
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
8,319
7,575
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 $1,877,716. There are no fixed returns or fixed maturity date attached to these investments.
For listed equity securities and preference shares, fair value is determined by reference to closing bid prices on the ASX.
15. Subsidiaries
Parent entity
Astron Corporation Limited
Subsidiaries of parent entity
Astron Pty Limited
Astron Mineral Sands Pty Limited
Astron Titanium (Yingkou) Co Ltd
Country of
incorporation
Percentage Owned
30 Jun 2023
30 Jun 2022
Hong Kong
Australia
Australia
China
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Astron Titanium (Yingkou) Hong Kong Holdings Limited
Hong Kong
Carnegie Minerals (Gambia) Inc
Carnegie Minerals (Gambia) Limited
Camden Sands Inc
Coast Resources Limited
Dickson & Johnson Pty Limited
Donald Mineral Sands Pty Ltd
Sovereign Gold Pty Limited
WIM 150 Pty Limited
Astron Senegal Holding Pty Ltd
Senegal Mineral Resources SA
Senegal Mineral Sands Ltd
Zirtanium Pty Limited
USA
The Gambia
USA
Isle of Man
Australia
Australia
Australia
Australia
Hong Kong
Senegal
Hong Kong
Australia
The proportion of ownership interest is equal to the proportion of voting power held.
During the years ended 30 June 2022 and 2023, no subsidiaries were acquired or disposed of.
Astron Corporation Limited Annual Financial Statements | 82
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
16. Property, plant and equipment
Land
At cost
Buildings
At cost
Less accumulated depreciation
Net carrying value
Capital works in progress
At cost
Less accumulated impairment losses
Total capital works in progress
Plant and equipment
At cost
Less accumulated depreciation
Less accumulated impairment losses
Net carrying value
Total property, plant and equipment
Assets pledged as security
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
5,162,151
5,162,151
11,355,515
11,365,402
(4,752,412)
(4,215,996)
6,603,103
7,149,406
5,137,423
4,567,663
(3,700,834)
(3,855,813)
1,436,589
711,850
18,482,113
18,609,063
(7,089,951)
(6,190,765)
(1,762,498)
(1,836,307)
9,629,664
10,581,991
22,831,507
23,605,398
As at 30 June 2023, property, plant and equipment with carrying value of $6,864,250 (2022: $6,306,982) were pledged as
security for short term loans (note 22).
Capital works in progress
Capital works in progress represent plant and equipment being assembled and/or constructed. They are not ready for use
and not yet being depreciated.
Astron Corporation Limited Annual Financial Statements | 83
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Movements in net carrying values
Movement in the carrying amount for each class of property, plant and equipment between the beginning and the end of the
current financial year.
Land
A$
Buildings
A$
Capital
works in
progress
A$
Plant and
equipment
A$
Total
A$
Balance at 1 July 2021
5,162,151
6,430,555
3,283,106
10,972,918
25,848,730
Additions
Depreciation
Asset retirement
Transfers1
Impairment2
Foreign exchange movements
-
-
-
-
-
-
-
469,287
99,948
569,235
(642,701)
-
(950,095)
(1,592,796)
-
(374,413)
1,049,734
(1,049,734)
-
(1,755,249)
-
-
-
(374,413)
-
(1,755,249)
311,818
138,853
459,220
909,891
Balance at 30 June 2022
5,162,151
7,149,406
711,850
10,581,991
23,605,398
Additions
Disposals
Depreciation
Transfers3
Foreign exchange movements
-
-
-
-
-
587,773
(88,104)
(518,351)
(247,219)
(280,402)
780,128
(6,614)
541,005
1,908,906
(2,585)
(97,303)
-
-
(48,775)
(1,423,083)
(1,941,434)
247,219
(314,883)
-
(644,060)
Balance at 30 June 2023
5,162,151
6,603,103
1,436,589
9,629,664
22,831,507
1. The Group allocated the development costs in relation to the mineral separation plant (MSP) in China to capital works in progress.
The MSP was commissioned in the year ended 30 June 2022, and the development expenditure was transferred from capital works
in progress to buildings accordingly.
2. During the year ended 30 June 2022, 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.
3. During the year ended 30 June 2023, following reconciliation of the fixed asset register to underlying source documents, depreciation
previously classified as relating to buildings was discovered to be related to plant and equipment. As such, an amount of $247,219
has been transferred between the two asset classifications at 30 June 2023.
Astron Corporation Limited Annual Financial Statements | 84
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
17. Exploration and evaluation assets
Evaluation costs
Cost
Accumulated impairment loss
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
17(a)
17(a)
7,795,057
7,807,947
(7,487,231)
(7,487,231)
307,826
320,716
Exploration expenditure capitalised - DMS project
Exploration and evaluation phases
17(b)
71,931,196
65,436,309
Water rights - DMS project
At Cost
Less accumulated amortisation
17(c)
17,958,613
17,958,613
(7,607,439)
(7,014,179)
10,351,174
10,944,434
Total exploration and evaluation assets
17(e)
82,590,196
76,701,459
(a) Evaluation costs
TiO2 project
Cost
Less accumulated impairment losses
Capitalised testing and design
Cost
Total evaluation costs
(b) Exploration and evaluation expenditure
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
7,487,231
7,487,231
(7,487,231)
(7,487,231)
-
-
307,826
307,826
320,716
320,716
This expenditure relates to the Group's investment in the Donald Rare Earth and Mineral Sands Project. As at 30 June
2023, 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 Energy, Environment and Climate
Action (Earth Resources Regulator) in Victoria, who administers the Mineral Resources Development Act 1990.
During the year, DMS completed the Definitive Feasibility Study for MIN5532, the Pre-Feasibility Study for RL2002 and
associated Mineral Resource and Ore Reserve updates for the project. In conjunction with the completion of the above,
further work has been completed on mine design and planning, engineering, process flow testing, transport and logistics
planning and market engagement.
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.
(c) 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 four years subject to terms and conditions. The amortisation period of the
water rights have accordingly been extended by four years to a total period of 29 years to December 2040.
Astron Corporation Limited Annual Financial Statements | 85
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
(d) 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.
(e) Movement in net carrying values
Evaluation
costs
A$
Exploration and
evaluation
phase
A$
Water rights
A$
Total
A$
305,465
-
-
15,251
320,716
-
-
(12,890)
307,826
59,514,726
5,921,583
-
-
11,537,694
-
(593,260)
-
71,357,885
5,921,583
(593,260)
15,251
65,436,309
10,944,434
76,701,459
6,494,887
-
6,494,887
-
-
(593,260)
-
(593,260)
(12,890)
71,931,196
10,351,174
82,590,196
Balance at 1 July 2021
Additions1
Amortisation
Foreign exchange movements
Balance at 30 June 2022
Additions1
Amortisation
Foreign exchange movements
Balance at 30 June 2023
1. Additions of exploration and evaluation phase during the year included the amortisation of water rights of $593,260 (2022:
$593,260) which was capitalised during the year.
18. Development costs
Balance at 1 July
Additions
Foreign exchange movements
Balance at 30 June
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
8,374,798
8,321,690
201,201
325,966
213,444
(160,336)
8,901,965
8,374,798
The mining license of the Senegal project was granted in June 2017 (and subsequently renewed in 2023), 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.
Astron Corporation Limited Annual Financial Statements | 86
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
19. Right-of-use assets
Balance at 1 July
Amortisation
Foreign exchange movements
Balance at 30 June
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
2,974,558
2,912,843
(83,761)
(117,375)
(82,552)
144,267
2,773,422
2,974,558
During the year ended 30 June 2014, management entered into an agreement to transfer 1,065,384m² 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. 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 2023, right-of-use assets with carrying value of $1,499,620 (2022: $1,607,182) are pledged as security over
short- term loans (note 22).
20. Trade and other payables
Unsecured liabilities
Trade payables
Note payables
Deposits received in advance
Other payables1
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
3,617,909
-
14,923
5,046,228
3,088,652
25,544
2,945,169
3,631,183
6,578,001
11,791,607
1.
Included in other payables was a balance of $1,964,565 (2022: $1,860,399) in aggregate due to a related company as detailed in
note 31.
21. Contract liabilities
Contract liabilities arising from:
Advance deposit for future provision of goods1
1. Sale of goods
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
656,001
2,962,559
Contract liabilities are amounts received by the Group as advances in relation to the sale of mineral products which are expected to
be recognised as revenue in the next 12 months.
Astron Corporation Limited Annual Financial Statements | 87
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
22. Borrowings
Current
Other short-term borrowings1-
Bank borrowings2
Advances from directors3
Non-current
Other long-term borrowings1
Bank borrowings2
Notes
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
2,782,564
5,823,748
6,021,428
1,121,463
6,067,630
6,479,399
14,627,740
13,668,492
633,118
935,960
1,569,078
-
-
-
1. Other short and long-term borrowings are Chinese subsidiary loans including:
a) amounts of $673,580 and $641,392 (2022: Nil), denominated in RMB, which are interest bearing at 4.7% - 5.6%, repayable
in October 2025 and March 2026 respectively and secured against right of use assets which are in use by Astron Titanium
(Yingkou) Limited but remain the property of the lessor;
b) an amount of $1,102,353 (2022: $1,121,463) which is interest bearing at 10% p.a. (2022: 10%), repayable in March 2024
and secured by certain right-of-us assets in China amounting to $1,499,620 (2022: $1,607,182 (Note 19)); and
c)
amounts of $998,357 (2022: Nil), denominated in RMB which are interest bearing at 1.0% to 7.5%, unsecured and repayable
on or before 31 December 2023.
2. Bank borrowings
The bank loans are Chinese subsidiary loans denominated in RMB, interest bearing between 4.5% to 5.5% p.a. (2022: 3.85% to 5.50%)
and have the following maturity profile:
a) September 2023 - $2,079,910 (successfully refinanced – now payable in September 2024);
b) November 2023 - $2,079,910;
c)
January 2024 - $1,663,928; and
d) March 2026 - $935,960.
These loans are pledged with property, plant and equipment amounting to $6,864,250 (2022: $6,306,982) (note 16) of the Group, and
personal guarantees from directors of $6,759,708 (2022: $6,067,630).
The loan agreements have been entered into by Astron’s operating subsidiary and the Company does not provide any guarantees
over the borrowings.
3. Advances from directors
At 30 June 2023, executive directors Mdm Kang Rong and Mr. Tiger Brown had advanced the Group $6,021,428 (2022: $5,479,399)
and Nil (2022: $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 $1 million) with the full amount capitalised to the loan balance.
The Notes are secured by the 100% owned subsidiary, Donald Mineral Sands Pty Ltd, providing a first ranking general
security agreement, guarantee and registered mortgage over real property held.
The movements of the liability component and conversion option component of the Notes during the year ended 30 June
2023 are as follows:
Astron Corporation Limited Annual Financial Statements | 88
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Liability
component of the
Notes
A$
Conversion option
component of the
Notes
A$
-
4,453,182
169,090
4,622,272
743,051
5,365,323
4,622,272
5,365,323
At 1 July 2021
Convertible notes issued
Effective interest expenses recognised to profit or loss
At 30 June 2022
Effective interest expenses recognised to profit or loss
At 30 June 2023
Categorised as – current portion:
At 30 June 2022
At 30 June 2023
24. Provisions
Current
Employee entitlements
Non-current
Relocation provision1
-
546,818
-
546,818
-
546,818
Total
A$
-
5,000,000
169,090
5,169,090
743,051
5,912,141
-
-
4,622,272
5,365,323
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
126,666
201,624
795,450
735,944
1. The provision for relocation represents the estimated costs to relocate and compensate landowners for the Senegal mineral sands
project.
25. Deferred tax
Liabilities
Current tax liability
Deferred tax liability arises from the following:
- Capitalised expenditure
- Unrealised inventory
-
Provisions and other timing differences
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
12,689,744
11,214,337
-
(68,923)
(188,749)
(96,638)
12,620,821
10,928,950
Astron Corporation Limited Annual Financial Statements | 89
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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 occur.
Tax losses:
-
Revenue losses (China)
-
-
Revenue losses (Australia)
Capital losses
26.
Issued capital
Fully paid ordinary shares
At beginning of the year
Shares issued on:
– 21 October 2022
– 18 November 2022
– 19 December 2022
– 17 February 2023
– 13 June 2023
– 30 June 2023
Share issue costs – cash
Non-cash share issue costs (note 27)
At the end of the year
Ordinary shares
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
9,328,686
5,315,057
2,590,373
3,657,924
12,694,612
12,694,612
30 Jun 2023
A$
30 Jun 2022
A$
30 Jun 2023
No.
30 Jun 2022
No.
Consolidated
76,549,865
76,549,865
122,479,784
122,479,784
2,585,003
776,300
2,415,000
218,700
3,500,000
3,500,000
(172,501)
(139,162)
-
-
-
-
-
-
-
-
4,787,042
1,437,632
4,472,223
405,000
6,481,481
6,481,481
-
-
-
-
-
-
-
-
-
-
89,233,205
76,549,865
146,544,643
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.
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
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
21,562,141
18,290,764
90,496,303
85,503,285
Net debt to equity ratio
23.83%
21.39%
Astron Corporation Limited Annual Financial Statements | 90
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
27. Share based payments
Employee Share Option Plan
The Company operates the Employee Share Option Plan (the ESOP) for the purpose of providing incentives and rewards
to Eligible Participants for their contribution to the Group and/or to enable the Group to recruit and retain high-calibre
employees and attract valuable human resources to the Group. The ESOP is extended 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 options issued under the ESOP shall not at any time exceed 5% of the Company's
total issued shares (being up to 7,327,232 (2022: 6,123,988) options based on the number of issued shares outstanding at
30 June 2023). 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:
•
•
•
•
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;
an associated body corporate ceases because of an Uncontrollable Event, the earlier of:
a.
b.
the expiry of the Option Period; or
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;
an associated body corporate ceases because of a Controllable Event, the earlier of:
a.
b.
the expiry of the Option Period; or
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;
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.
The Company had the following share-based payment arrangements issued under the ESOP in existence during the current
and prior periods:
ATRAA1
ATRAB1
ATRAC2
ATRAD
ATRAE
Grant date Expiry date
Date
Date
30 Nov 2021 30 Nov 2024
30 Nov 2021 30 Nov 2024
13 Dec 2021 13 Dec 2024
22 Nov 2022 22 Nov 2025
1 Oct 2025
1 Oct 2022
Exercise
price
A$
Number of options
on issue
30 Jun 23
30 Jun 22
0.3375
0.7200
0.6300
0.7725
0.9000
800,000
800,000
2,100,000
800,000
600,000
800,000
800,000
2,100,000
-
-
5,100,000
3,700,000
1.
2.
Issues ATRAA and ATRAB were agreed via separate director resolutions on 23 February 2021 (based on the share price at this date
of $0.225) and 20 July 2021 (based on the share price at this date of $0.48) respectively. However, these issues were subject to
shareholder approval and thus the grant date is taken to be the date of shareholder approval being on 30 November 2021.
An offer for the issue of 200,000 options under the ESOP to a consultant was declined during the year ended 30 June 2022. As such,
the number of options on issue at 30 June 2022 has been adjusted to reflect the fact that these options were never issued and therefore
were not outstanding at 30 June 2022.
Vesting Conditions
There are no vesting conditions for issues ATRAA, ATRAB and ATRAD. All options issued under these tranches are free to
be exercised from the date of issue.
Astron Corporation Limited Annual Financial Statements | 91
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
The following vesting conditions are in place for tranche ATRAC:
•
•
300,000 options – no vesting conditions
1,800,000 options – 50% of options vest on issue, with a further 25% on the first and second anniversary of the issue
date respectively, contingent on remaining employed. Unvested options lapse on cessation of employment.
The following vesting conditions are in place for tranche ATRAE:
•
•
300,000 options – no vesting conditions
300,000 options – 50% of options vest on issue, with a further 25% on the first and second anniversary of the issue date
respectively, contingent on remaining employed. Unvested options lapse on cessation of employment.
Movement in the number of options issued under the ESOP
Balance at 1 July 2021
Options granted under the employee share option plan
Balance at 30 June 2022
Options granted under the employee share option plan
Balance at 30 June 2023
Total number of
ESOP options
outstanding
No.
Weighted
average exercise
price
A$
800,000
2,900,000
3,700,000
1,400,000
5,100,000
0.3375
0.6548
0.5862
0.8271
0.6524
No share options were exercised during the years ended 30 June 2022 and 2023.
As at 30 June 2023, there were no further key executives that had any rights to acquire shares in terms of a share-based
payment scheme for employee remuneration.
Fair value of options issued under the ESOP
The fair value of the options granted was using Black Scholes Option Pricing Model that takes into account the following
inputs on the grant date:
ATRAA1
ATRAB1
ATRAC
ATRAD
ATRAE
Grant date
Share price at grant date
Fair value
Valuation date
Expiry date
Exercise price
Volatility2
Dividend yield
Risk free interest rate
Total life of options
0.3000
0.2866
0.4200
0.2261
0.3000
0.2127
30 Nov 2021 30 Nov 2021 13 Dec 2021 22 Nov 2022
0.5950
0.2561
30 Nov 2021 30 Nov 2021 13 Dec 2021 22 Nov 2022
30 Nov 2024 30 Nov 2024 13 Dec 2024 22 Nov 2025
0.7725
77.23%
0.0%
3.04%
3 years
0.7200
90.23%
0.0%
1.67%
3 years
0.3375
90.23%
0.0%
1.67%
3 years
0.6300
90.23%
0.0%
1.67%
3 years
1 Oct 2022
0.6000
0.2357
1 Oct 2022
1 Oct 2025
0.9000
77.23%
0.0%
3.04%
3 years
1.
2.
Issues ATRAA and ATRAB were agreed via separate director resolutions on 23 February 2021 (based on the share price at this date
of $0.225) and 20 July 2021 (based on the share price at this date of $0.48) respectively. However, these issues were subject to
shareholder approval and thus the grant date is taken to be the date of shareholder approval being on 30 November 2021.
Expected volatility (determined based on a statistical analysis of historical daily share prices over the same period as the life of the
options), early exercise behaviour and expected life of share options are determined based on market research data and historical
data respectively and may not necessarily be the actual outcome.
The fair value of options issued under the ESOP at grant date is as follows:
Number of options
Fair value of options issued at grant date
ATRAA
800,000
0.2866
ATRAB
800,000
0.2127
ATRAC
2,100,000
0.2261
ATRAD
800,000
0.2561
ATRAE
600,000
0.2357
Total fair value of options at grant date
229,308
170,188
474,906
204,906
141,443
Astron Corporation Limited Annual Financial Statements | 92
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Share-based payment expense
The following table outlines the share-based payment expense recognised in the profit or loss for each tranche of options
issued under the ESOP:
Unlisted options
ATRAA1
ATRAB
ATRAC2
ATRAD
ATRAE
Consolidated
30 June 2023
A$
30 June 2022
A$
-
-
(45,229)
204,906
125,845
(70,635)
170,188
520,135
-
-
285,522
619,688
1. During year ended 30 June 2021, non-executive director Dr. Mark Elliott was granted 800,000 options subject to shareholder approval.
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) to be $299,943 for the purpose of recognising the services received from Dr. Mark Elliott. Upon receiving
shareholder approval on 30 November 2021, the options were approved by the Board and the fair value of options granted to Dr. Mark
Elliott was revalued to $229,308. As such, an adjustment to share-based payment expense of $70,635 was recognised in the profit or
loss for the year ended 30 June 2022.
1. An offer for the issue of 200,000 options under the ESOP to a consultant was declined during the year ended 30 June 2022. However,
the share-based payment expense relating to these options was recognised during the year ended 30 June 2022. As such, an
adjustment to share-based payments expense has been recognised during the year ended 30 June 2023 in order to reflect the fact
that these options were never issued and therefore the Company has not incurred any expense in relation to these options.
The fair value of the share options granted during the year ended 30 June 2023 was $285,522 (30 June 2022: $619,688)
(note 6) which had been recognised as employee share option expense with the corresponding balance credited to the
share-based payment reserve.
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.
Broker options
Pursuant to the completion of the private placement announced by the Company on 17 October 2022, 600,000 options
exercisable at $0.81 expiring on 18 October 2025 were issued to Blue Ocean Equities nominee company L39 Pty Ltd in
accordance with the lead manager agreement executed by the Company on 15 September 2022. These options vest
immediately.
The details of these options are outlined below:
Grant date Vesting date Expiry date
Date
Date
Date
Exercise
price
Number of
options on
issue
A$ 30 Jun 2023
ATRAO
18 Oct 2022
18 Oct 2022
18 Oct 2025
0.81
600,000
Movement in the number of broker options
Options granted to broker under lead manager agreement
Balance at 30 June 2023
No broker options were exercised during the year ended 30 June 2023.
Total number of
ESOP options
outstanding
No.
Weighted average
exercise price
A$
600,000
600,000
0.81
0.81
Astron Corporation Limited Annual Financial Statements | 93
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Fair value of options issued to brokers
The fair value of the options granted was estimated using Black Scholes Option Pricing Model, which approximates the fair
value of the services received, takes into account the following inputs on the grant date:
Grant date
Share price at grant date
Fair value
Valuation date
Expiry date
Exercise price
Volatility1
Dividend yield
Risk free interest rate
Total life of options
ATRAO
18 Oct 2022
0.5700
0.2319
18 Oct 2022
18 Oct 2025
0.8100
77.23%
0.0%
3.04%
3 years
1.
Expected volatility, determined based on a statistical analysis of historical daily share prices over the same period as the life of the
options, and early exercise behaviour and expected life of share options, determined based on the market research data and historical
data respectively, may not necessarily be the actual outcome.
The fair value of options issued to brokers at grant date is as follows:
Number of options
Fair value of options issued at grant date
Total fair value of options at grant date
Share-based payment expense – share issue costs
ATRAO
600,000
0.2319
139,162
The following table outlines the share-based payment expense recognised as a reduction in share capital for each tranche
of options issued to brokers:
Unlisted options
ATRAO
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
139,162
-
The fair value of the share options granted during the year ended 30 June 2023 was $139,162 (30 June 2022: Nil). Share-
based payments expenses relating to broker options are recognised directly in equity as a reduction in the value of issued
capital at the date relevant shares are issued (or over the vesting period in the event vesting conditions are applicable) (note
26).
28. Reserves
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 2023 was $13,828,406 (2022: $14,212,420).
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 2023 was $2,257,419 (2022: $1,832,735).
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 2023 was $546,818 (2022: $546,818).
Astron Corporation Limited Annual Financial Statements | 94
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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 considered
the Firback contract expired during the year ended 30 June 2021. The amount owing to Firback was accordingly transferred
to capital reserve during the year ended 30 June 2021. The reserve balance at 30 June 2023 was $1,450,005 (2022:
$1,450,005).
29. Holding company statement of financial position
ASSETS
Current assets
Amount due from a subsidiary
Total current assets
Non-current assets
Investments in subsidiaries
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Accruals and other payables
Convertible notes
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings
TOTAL EQUITY
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
26,879,295
14,068,796
26,879,295
14,068,796
76,549,866
76,549,866
76,549,866
76,549,866
103,429,161
90,618,662
175,743
149,343
23
5,365,323
4,622,272
5,541,066
5,541,066
4,771,615
4,771,615
97,888,095
85,847,047
26
89,233,205
76,549,865
2,854,567
5,800,323
2,077,123
7,220,059
97,888,095
85,847,047
Mr Tiger Brown
Mr George Lloyd
Astron Corporation Limited Annual Financial Statements | 95
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
30. 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% (2022: 25.0%)
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
-
-
The above amount represents the balance on the franking account at the end of the financial year arising from income tax
payable.
31. Related party transactions
Parent entity
Astron Corporation Limited is the parent entity of the Group.
Subsidiaries
Interests in subsidiaries are disclosed in note 15.
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
Directors’ Emoluments
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
1,570,641
1,082,614
330,751
25,027
393,543
13,815
1,926,419
1,489,972
117,790
117,790
53,401
53,401
2,044,209
1,543,373
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 fees1
- Share-based payment expenses
- Post-employment benefits
Total directors’ emoluments
Note:
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
590,000
204,906
37,400
832,306
588,128
99,554
15,999
703,681
1. The amount includes management fees of $250,000 payable per annum for the years ended 30 June 2022 and 2023 to Juhua
International Limited of which the beneficial owner is Mdm Kang Rong.
Astron Corporation Limited Annual Financial Statements | 96
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
Interest free loans
All subsidiary companies are wholly owned with any interest free loans being eliminated on consolidation.
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 the Group as
a whole, they are not reallocated/recharged to individual entities within the Group.
Related party loans
As at 30 June 2023, executive directors Mdm Kang Rong and Mr Tiger Brown had advanced the Group $6,021,428 (2022:
$5,479,399) and Nil (2022: $1,000,000) respectively for working capital. The loans are provided interest free and repayable
on demand.
As at 30 June 2023, there were unpaid director and management fees payable to a director-related entity as follows:
• Mdm Kang Rong, Juhua International Limited of $1,964,565 (2022: $1,860,399) (note 20).
The above liabilities have been subordinated and will not be called upon unless and until such time that the Company has
available funds and repayments will not affect the Group’s ability to repay other creditors in the normal course of business.
32. Commitments
Operating lease commitments
There were no non-cancellable operating leases contracted for but not capitalised at 30 June 2022 and 2023.
Water rights
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 four years subject to terms and conditions
in accordance with the Deed of Variation as set out in note 17. Usage fee of $739,490 was charged for the year ended
30 June 2023 (2022: $692,638).
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.
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 2023, the net book value of this land was $2,773,422
(2022: $2,974,558) (note 19).
Minimum expenditure on exploration and mining licences
To maintain the Exploration and Mining Licenses at Donald, the Group is required to spend $1,561,800 (2022: $1,911,800)
on exploration and development expenditure over the next year. The minimum expenditure amount per annum will normally
increase over the life of an exploration license. The amount of this expenditure could be reduced should the Group decide
to relinquish land.
Astron Corporation Limited Annual Financial Statements | 97
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
33. Cash flow information
Reconciliation of cash provided by operating activities with loss before income tax
Loss before income tax expense
Non-cash flows in loss from ordinary activities
Depreciation of property, plant and equipment
Amortisation of right-of-use assets
Provision for impairment on receivables
Fair value (gain)/loss on financial assets at fair value through profit or loss
Impairment of construction in progress
Share based payment expenses
Finance costs
Decrease in trade and other receivables
Decease in inventories
(Decrease)/Increase in trade and other payables and provisions
Writte off of capital works in progress
Effects on foreign exchange rate movement
Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement
is reconciled to items in the consolidated statement of financial position
as follows:
Cash on hand
Cash at bank
Loan facilities
Details of the loan facilities of the Group at reporting dates are as follows:
Available loan facilities
Utilised loan facilities
Unused loan facilities
Consolidated
30 Jun 2023
A$
(6,039,121)
30 Jun 2022
A$
(7,018,342)
1,941,434
83,761
118,716
(744)
-
285,522
1,105,217
7,766,647
350,965
(7,069,029)
-
(191,113)
(1,647,745)
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
Consolidated
Note
30 Jun 2023
A$
30 Jun 2022
A$
10
10
825
7,203,849
7,204,674
858
2,447,128
2,447,986
Note
Consolidated
30 Jun 2023
A$
6,759,708
30 Jun 2022
A$
6,067,630
22
(6,759,708)
(6,067,630)
-
-
As at 30 June 2022 and 2023, the Group’s loan facilities were secured by assets held by its China subsidiary.
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.
During the year ended 30 June 2023, interest charged on the convertible note related to the unwinding of the discounted
value of the liability component of the compound financial instrument. This non-cash interest charge of $743,051 (30 June
2022: $169,090) was recognised in the statement of financial performance.
Astron Corporation Limited Annual Financial Statements | 98
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
The table below details changes in the Group’s liabilities arising from financing activities. Liabilities arising from financing
activities are those for which cash flows were or future cash flows will be, classified in the Group’s consolidated statement
of cash flows from financing activities.
At 1 July 2021
Changes from cash flows:
Convertible notes issued
Partial settlement of offtake agreement
Repayment of borrowings
Proceeds from bank borrowings
Loan interest paid
Total changes from financing cash flows
Interest expense
Settlement by delivery of products
Conversion option component of convertible notes
Exchange adjustments
At 30 June 2022 and 1 July 2022
Changes from cash flows:
Repayment of borrowings
Proceeds from borrowings
Loan interest paid
Total changes from financing cash flows
Interest expense
Transfer of balances
Exchange adjustments
At 30 June 2023
Acquisition of entities
Borrowings
(note 22)
$
13,213,255
Contract
liabilities -
Wensheng
$
732,290
Convertible
Notes
(note 23)
$
-
-
-
(2,312,745)
2,167,011
(336,201)
(481,935)
336,201
-
-
600,971
13,668,492
(394,097)
3,005,408
(362,641)
2,248,670
362,641
537,248
(620,233)
16,196,818
-
(647,936)
-
-
-
(647,936)
-
(121,353)
-
36,999
-
-
-
-
-
-
-
-
-
5,000,000
-
-
-
-
5,000,000
169,090
-
(546,818)
-
4,622,272
-
-
-
-
743,051
-
-
5,365,323
During the current or previous year, the Company did not invest any funds in its Chinese subsidiaries. During the current
year, the Group did not acquire any new entities.
Disposal of entities
There were no disposals of entities in the current or prior financial years.
Restrictions on cash
There were no restricted cash amounts included in the Group’s consolidated cash and cash equivalents balance at 30 June
2023 (30 June 2022: Nil).
34. Employee benefit obligations
As at 30 June 2023 and 30 June 2022, 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.
35. Financial Risk Management
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.
Astron Corporation Limited Annual Financial Statements | 99
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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:
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 cash, cash equivalents and term deposits greater than 90 days are held with
institutions with an AA- to BBB credit rating. As set out in note 10, 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 75% (2022: 22%) of the Group’s trade debtors is from
two (2022: seven) customers. The increase in concentration risk relates predominantly to the significant decrease in trade
receivables during the year ended 30 June 2023. Group policy is that sales are only made to customers that are credit
worthy. Trade receivables are predominantly situated in China.
Other receivables include $1,095,945 (2022: $1,141,839) being the gross land sale receivable from the Yingkou Provincial
government. The directors are of the opinion that the credit risk on this receivable to be low for the reasons set out in note 11.
Credit risk is managed on a Group basis and reviewed regularly by management and the Audit & Risk Committee. It arises
from exposures to customers as well as through certain derivative financial instruments and deposits with financial
institutions.
Refer to note 10 for concentration of credit risk for cash and cash equivalents.
The maximum exposure of the Group to credit risk at the end of the reporting period is as follows:
Cash & cash equivalents
Term deposits with maturity over 90 days
Trade and other receivables
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
7,204,674
46,112
3,575,762
2,447,986
46,112
7,603,745
10,826,548
10,097,843
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 2023 and 2022:
Gross carrying amount
Lifetime expected credit loss
Net carrying amount
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
39,058
(39,058)
-
40,693
(40,693)
-
Astron Corporation Limited Annual Financial Statements | 100
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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 2023:
Expected loss rate
%
Gross carrying
amount
A$
Current (not past due)
30 June
2023
-
2022
2023
2022
-
67,208
3,967,406
Loss allowance
A$
2023
-
2022
-
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.
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
2023, the Group had cash of $7,204,674 (2022: $2,447,986).
Maturity analysis
Carrying
Amount
A$
Contractual
Cash flows
A$
Note
< 6 months
A$
> 6 months
A$
Year ended 30 June 2023
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing liabilities
Borrowings
Convertible notes
20
20
22
22
23
3,617,909
2,945,169
6,021,428
3,617,909
2,945,169
6,021,428
3,617,909
2,945,169
6,021,428
12,584,506
12,584,506
12,584,506
-
-
-
-
10,175,390
10,175,390
5,517,200
5,365,323
6,000,000
-
4,658,190
6,000,000
Total interest bearing liabilities
15,540,713
16,175,390
5,517,200
10,658,190
Total liabilities
28,125,219
28,759,896
18,101,706
10,658,190
Year ended 30 June 2022
Non-derivatives
Trade and note payables
Other payables
Borrowings
Total non-interest bearing liabilities
Borrowings
Convertible notes
20
20
22
22
23
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
5,000,000
5,455,484
-
Total interest bearing liabilities
11,811,365
12,189,093
5,455,484
Total liabilities
Fair value
30,056,827
30,434,555
23,700,946
-
-
-
-
1,733,609
5,000,000
6,733,609
6,733,609
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 2023, the aggregate fair values and carrying amounts of financial assets and financial liabilities
approximate their carrying amounts.
Astron Corporation Limited Annual Financial Statements | 101
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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.
Price risk
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
8,319
7,575
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 2023, the maximum exposure of price risk to the Group was the financial assets at fair value through profit or
loss for $8,319 (2022: $7,575). 100% of the Group’s holding is in the mining or energy sector.
The Group’s exposure to equity price risk is as follows:
Carrying amount of listed equity shares on ASX
Sensitivity Analysis
Consolidated
30 Jun 2023
A$
30 Jun 2022
A$
8,319
7,575
Increase/(decrease) in share price
30 Jun 2023
A$
30 Jun 2022
A$
+10%
-10%
+10%
-10%
Listed equity shares on ASX
Profit before tax – increase/(decrease)
832
(832)
758
(758)
The above analysis assumes all other variables remain constant.
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 an AA- to
BBB credit rating while a proportion is held with an unrated bank in PRC.
Astron Corporation Limited Annual Financial Statements | 102
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
The Group’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in the tables below:
Weighted average
effective interest rate
30 June
Financial assets:
Cash and cash equivalents
Term deposits greater than 90 days
Trade and other receivables
Financial assets at fair value through profit
or loss
Total financial assets
Financial liabilities:
Trade and other payables
Borrowings
Convertible notes
Total financial liabilities
2023
%
0.01
1.72
-
-
-
4.95
15.00
Floating interest rate
Fixed interest rate
Non-interest bearing
Total
2023
$
2022
$
7,203,849
2,447,128
2023
2022
$
-
$
-
-
-
-
-
-
-
46,112
46,112
-
-
-
-
2023
$
825
-
2022
$
2023
$
2022
$
858
7,204,674
2,447,986
-
46,112
46,112
3,575,762
7,603,745
3,575,762
7,603,745
8,319
7,575
8,319
7,575
7,203,849
2,447,128
46,112
46,112
3,584,906
7,612,178
10,834,867
10,105,418
-
-
-
-
6,563,078
11,766,063
6,563,078
11,766,063
2022
%
0.90
0.90
-
-
-
5.62
6,759,708
6,067,630
3,415,682
1,121,463
6,021,428
6,479,399
16,196,818
13,668,492
15.00
-
-
5,365,323
4,622,272
-
-
5,365,323
4,622,272
6,759,708
6,067,630
8,781,005
5,743,735
12,584,506
18,245,462
28,125,219
30,056,827
Astron Corporation Limited Annual Financial Statements | 103
Astron Corporation Limited
Company Number: 1687414
Notes to the Consolidated Financial Statements
For the year ended 30 June 2023
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
Borrowings
Tax charge of 25% (2022: 25%)
Foreign currency risk
+ 1% (100 basis points)
-1% (100 basis points)
30 Jun 2023
A$
30 Jun 2022
A$
30 Jun 2023
A$
30 Jun 2022
A$
72,038
(67,597)
4,441
(1,110)
3,331
24,471
(60,676)
(36,205)
9,051
(27,154)
(72,038)
67,597
(4,441)
1,110
(3,331)
(24,471)
60,676
36,205
(9,051)
27,154
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.
Astron Corporation Limited Annual Financial Statements | 104
Astron Corporation Limited
Company Number: 1687414
Directors’ Declaration
For the year ended 30 June 2023
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 2023 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:
Chairman
Mr George Lloyd
Dated 29 September 2023
Astron Corporation Limited Annual Financial Statements | 105
Tel : +852 2218 8288
Fax: +852 2815 2239
www.bdo.com.hk
25th Floor Wing On Centre
111 Connaught
Hong Kong
Road Central
��: +852 2218 8288
{@� : +852 2815 2239
www.bdo.com.hk
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7.l<�i:p,I)25�
Independent
Auditor's
Report
To the members of Astron Corporation
(incorporated
in Hong Kong with limited
Limited
liability)
Opinion
We have audited
and its subsidiaries
of financial
statement
other comprehensive
statement
including
the consolidated
financial
statements
set out on pages 59 to 104, which comprise
of Astron Corporation
("the Company")
the consolidated
Limited
"the Group")
(together
position
income, the consolidated
as at 30 June 2023, and the consolidated
statement
of changes in equity and the consolidated
statement
of profit or loss and
of cash flows for the year then ended, and notes to the consolidated
financial
statements,
a summary of significant
accounting
policies.
the consolidated
financial
statements
give a true and fair view of the consolidated
of the Group as at 30 June 2023, and of its consolidated
financial
and its
performance
cash flows for the year then ended in accordance
with Hong Kong Financial
Reporting
issued by the Hong Kong Institute
of Certified
Public Accountants
("HKICPA")
and have been
in compliance
with the Hong Kong Companies
Ordinance.
In our opinion,
financial
position
consolidated
Standards
properly
prepared
Basis for Opinion
our audit in accordance
We conducted
HKICPA. Our responsibilities
Responsibilities
independent
("the Code"),
believe
opinion.
of the Group in accordance
and we have fulfilled
that the audit evidence
with Hong Kong Standards
on Auditing
("HKSAs")
issued by the
under those standards
are further described
in the "Auditor's
for the Audit of the Consolidated
Financial
Statements"
with the HKICPA's
"Code of Ethics
section
of our report.
for Professional
with the Code. We
We are
Accountants"
our other ethical
responsibilities
and appropriate
in accordance
is sufficient
to provide
we have obtained
a basis for our
Material
Uncertainty
Related
to Going Concern
to note 2 in the consolidated
of current
and recorded
We draw attention
2023, the Group had a deficit
a loss of $7,730,992
incurred
during the year ended 30 June 2023. These conditions
that a material
a going concern.
uncertainty
Our opinion
that may cast significant
in respect
assets over current
net cash outflows
is not modified
financial
exists
statements, which
liabilities
from operating
indicates
of $11,615,438
that as at 30 June
and the Group
of $1,647,745
activities
set out in note 2 indicate
along with other matters
doubt on the Group's
ability
to continue
as
of this matter.
Key Audit Matters
that, in our professional
are those matters
financial
of our audit of the consolidated
Key audit matters
our audit of the consolidated
in the context
opinion
described
described
in the Material
Related
below to be the key audit matters
and we do not provide
Uncertainty
statements
a separate
thereon,
of the current
financial
opinion
judgement,
period.
statements
on these matters.
to Going Concern
to be communicated
section,
in our report.
our
as a whole, and in forming
In addition
to the matter
we have determined
the matters
were of most significance
in
These matters
were addressed
BDO Limited
�iff"il.f;1,(11).fltt�ffl$fllp/i�l��i5J
BDO Limited, a Hong Kong limited company,
and forms part of the international
BDO network
of independent
member firms.
is a member of BDO International Limited,
a UK company limited by guarantee,
Astron Corporation Limited Annual Financial Statements | 106
Key Audit Matters
(continued)
Impairment
costs
of property,
plant and equipment,
exploration
and evaluation
assets and development
Refer to note 16, 17 and 18 to the consolidated financial statements
value is in excess of the recoverable
to assess at each reporting
date if there are any triggers
the carrying
to assess whether
judgement.
The Group is required
may suggest
management
element of management
significantly
indicators
accordance
trigger
an impairment
review,
less than the consolidated
with HKAS 36 Impairment
of Assets.
there are any impairment
At 30 June 2023,
net assets, which
for impairment
triggers
value. The process
in each area of interest
the market capitalisation
is a trigger
is required
for impairment.
to perform impairment
which
by
an
of the Group was
undertaken
involves
testing
management
in
Once impairment
We have identified
development
statements
judgement
rate.
impairment
of property,
plant and equipment,
exploration
costs as a key audit matter because of their significance
involve
calculations
in particular
and because the management's
with respect
value-in-use
cash flow forecast,
underlying
to the
and
assets
and evaluation
to the consolidated
significant
management
the growth rate, and discount
financial
Our Response:
Our procedures
exploration
in relation
and evaluation
to management's
assets
and development
costs included:
impairment
review of property,
plant and equipment,
• obtaining
management's
of the recoverable
amount of the assets and comparing
them
to the methodology
as required
calculation
under HKAS 36;
• tracing
the ownership
whether a right of tenure existed;
of licences
to statutory
registers
maintained
by third parties
to determine
• challenging
and corroborating
made by management,
including
those made by the
management
experts,
relating
of the assets for their reasonableness;
key assumptions
to the recoverability
• involving
an auditor
expert to assist
in reviewing
the impairment
model of the exploration
and
evaluation
assets;
• understanding
reliability
of the data;
the sources
of data used to prepare
the value-in-use
calculation
and evaluating
the
• understanding
evaluation
assets
whether any data exists
to suggest
are unlikely
to be recovered
through
that the carrying
value of these exploration
or sale;
development
and
• understanding
and assessing
cash flow approach
expected
for valuation
costs;
of development
the reasonableness
adopted
of probabilities
by management
under the
• understanding
reasonableness
and evaluating
of assumptions
the appropriateness
used for the determination
of discount
rate; and
of the valuation
method used, the
• reviewing
the appropriateness
of the related
disclosures
within the financial
statements.
Astron Corporation Limited Annual Financial Statements | 107
Other Information
in the Annual Report
are responsible
The directors
included
the consolidated
in the directors'
financial
report,
statements
declaration
of directors
and investor
report
thereon.
and our auditor's
for the other information.
the information
The other information comprises
information,
but does not include
Our opinion
not express
on the consolidated
any form of assurance
statements
thereon.
conclusion
financial
does not cover the other information
and we do
In connection
other information
with the consolidated
to be materially
material
to report
misstatement
in this regard.
misstated.
and, in doing so, consider
statements
financial
with our audit of the consolidated
financial
statements,
whether
the other information
our responsibility
is materially
is to read the
inconsistent
or our knowledge
If, based on the work we have performed,
obtained
we conclude
that there is a
in the audit or otherwise
appears
of this other information,
we are required
to report
that fact. We have nothing
Directors'
Responsibilities
for the Consolidated
Financial
Statements
are responsible
The directors
and fair view in accordance
Hong Kong Companies
to enable the preparation
whether
misstatement,
for the preparation
with Hong Kong Financial
and for such internal
of consolidated
due to fraud or error.
Ordinance,
of consolidated
statements
that give a true
financial
issued
Reporting
control
Standards
as the directors
by the HKICPA and the
determine
is necessary
financial
statements
that are free from material
In preparing
to continue
ability
Group's
and using the going concern
or to cease operations,
the consolidated
financial statements,
disclosing,
as applicable,
the directors
as a going concern,
for assessing
to going concern
the
are responsible
related
matters
intend
to liquidate
the Group
unless
basis of accounting
the directors
do so.
but to
alternative
either
or have no realistic
Auditor's
Responsibilities
for the Audit of the Consolidated
Financial
Statements
to obtain
Our objectives are
reasonable
as a whole are free from material misstatement,
report
Section
responsibility
that includes
This report
405 of the Hong Kong Companies
liability
or accept
Ordinance,
to any other person
whether
is made solely
our opinion.
about whether
assurance
towards
and for no other purpose.
for the contents
due to fraud or error,
to you, as a body, in accordance
We do not assume
with
of this report.
and to issue an auditor's
the consolidated
financial statements
always
with HKSAs will
is a high level of assurance,
Reasonable assurance
a material
detect
accordance
arise from fraud or error and are considered
material
reasonably
consolidated
but is not a guarantee
misstatement
if, individually
the economic decisions
in
can
or in the aggregate,
Misstatements
they could
of users taken on the basis of these
be expected
financial
that an audit conducted
statements.
when it exists.
to influence
As part of an audit in accordance
throughout
skepticism
professional
the audit.
We also:
with HKSAs, we exercise
professional
judgement
and maintain
and assess
due to fraud or error,
audit evidence
a material
• identify
whether
obtain
of not detecting
error,
override
as fraud may involve
control.
of internal
the risks of material
misstatement
design
that is sufficient
and perform
and appropriate
of the consolidated
statements,
audit procedures responsive
financial
and
a basis for our opinion.
The risk
from
than for one resulting
or the
misrepresentations,
to provide
from fraud is higher
omissions,
to those risks,
intentional
misstatement
collusion,
forgery,
resulting
Astron Corporation Limited Annual Financial Statements | 108
Auditor's
Responsibilities
for the Audit of the Consolidated
Financial
Statements
(continued)
• obtain an understanding
that are appropriate
effectiv
eness of the Group's
of internal
control
internal
control.
in the circumstances,
relevant
but not for the purpose
to the audit in order to design audit procedures
of expressing
on the
an opinion
• evaluate
estimates
the appropriateness
disclosures
and related
made by the directors.
of accounting
policies
used and the reasonableness
of accounting
• conclude
whether a material
uncertainty
to events or
of the directors'
use of the going concern
basis of accounting
and,
on the appropriateness
obtained,
that may cast significant
that a material
based on the audit evidence
conditions
we conclude
report to the related
inadequate,
the date of our auditor's
cease to continue
to modify our opinion.
disclosures
uncertainty
exists,
in the consolidated
Our conclusions
However,
report.
as a going concern.
doubt on the Group's
ability
we are required
related
exists
to continue
to draw attention
as a going concern.
If
statements
financial
are based on the audit evidence
in our auditor's
or, if such disclosures
obtained
are
up to
the Group to
future events or conditions
may cause
• evaluate
the overall
presentation,
structure
and content
of the consolidated
financial
including
underlying
the disclosures,
transactions
and events in a manner that achieves
and whether the consolidated
financial
statements
fair presentation.
statements,
the
represent
• obtain sufficient
activities
business
We are responsible
solely
responsible
for our audit opinion.
appropriate
audit evidence
within the Group to express
regarding
an opinion
the financial
information
on the consolidated
financial
of the entities
or
statements.
for the direction,
supervision
and performance
of the Group audit.
We remain
We communicate
the audit and significant
during our audit.
identify
with the directors
regarding,
audit findings, including
among other matters,
any significant
the planned
deficiencies
scope and timing of
control
in internal
that we
We also provide the directors
requirements
matters
safeguards.
regarding
that may reasonably
with a statement
that we have complied
with relevant
ethical
independence,
be thought
and to communicate
to bear on our independence,
with them all relationships
and other
and where applicable,
related
communicated
in the audit of the consolidated
We describe
From the matters
significance
the key audit matters.
precludes
that a matter should not be communicated
be expected
would reasonably
public disclosure
to outweigh
these matters
with the directors,
we determine
those matters
of the current
that were of most
period and are therefore
financial
statements
in our auditor's
report unless law or regulation
about the matter or when, in extremely
rare circumstances,
we determine
in our report because
benefits
the public interest
the adverse consequences
of doing so
of such communication.
�v ),,·,n.'7�
BDO Limited
Certified Public
Accountants
Chiu Wing Cheung Ringo
Practising
Certificate
Number P04434
2023
Hong Kong, 29 September
Astron Corporation Limited Annual Financial Statements | 109
Astron Corporation Limited
Company Number: 1687414
Additional Information for Listed Public Companies
2023/24 FINANCIAL CALENDAR (ON OR BEFORE)
Release of quarterly report
2023 annual general meeting
Release of quarterly report
Release of half-year report
Release of quarterly report
31 October 2023
30 November 2023
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 28 September 2023.
1. SHAREHOLDERS’ INTERESTS
(a) Distribution of shareholders
Size of holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Non CDI holders
1 - 1,000
1,001 - 5,000
Number of
shareholders
Number of
shares held
151
178
77
179
52
637
5
1
6
74,443
491,554
614,994
6,428,401
138,932,244
146,541,636
307
2,700
3,007
%
0.05
0.34
0.42
4.39
94.81
100.00
(b) Less than marketable parcels
There were 157 holders of less than a marketable parcel of 1,064 shares ($500 worth) based on the closing market price of ATR
shares on 28 September 2023.
Astron Corporation Limited Annual Financial Statements | 110
Astron Corporation Limited
Company Number: 1687414
Additional Information for Listed Public Companies
(c) Twenty largest CDI holders
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
Ruiqing Tan
Citicorp Nominees Pty Limited
Juhua International Limited
Pandora Nominees Pty Ltd
Bealey Pty Limited
Mr Milton Yannis
Mr Donald Alexander Black
Mr Guodong Gong
Mr Darrel Vaughan Manton & Mrs Veronica Josephine Manton
BT Portfolio Services Ltd
Yanjuan Zhao
Mr Adrian Robert Nijman & Mrs Jenny Ann Nijman
Jojeto Pty Ltd
G W Eales Pty Ltd
HSBC Custody Nominees (Australia) Limited
Elliott Nominees Pty Ltd
Cognition Australia Pty Ltd
Dosmiv Pty Ltd
Tri Global Resources Limited
Totals: Top 20 holders of CDI
Total Remaining Holders Balance
Total CDIs
Total non-CDI holders
Total shares on issue
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
2. TENEMENT SCHEDULE
Number of
shares held
94,165,972
12,962,962
7,459,966
4,000,000
1,900,890
1,851,852
1,179,509
1,168,175
1,073,894
933,364
860,000
810,000
756,556
675,926
638,689
448,337
438,993
437,024
400,000
370,371
132,532,480
14,009,156
146,541,636
3,007
146,544,643
%
64.26
8.85
5.09
2.73
1.30
1.26
0.80
0.80
0.73
0.64
0.59
0.55
0.52
0.46
0.44
0.31
0.30
0.30
0.27
0.25
90.44
9.56
100.00
Location
Victoria Australia
Victoria Australia
Victoria Australia
Victoria Australia
Senegal
Tenement
RL2002
RL2003
MIN5532
EL5186
09042/MIM/TMG
Expiry Date
9 October 2029
Pending
Renewal
19 August 2030
7 April 2024
29 May 2027
Interest at year
end
%
100
100
100
100
100
Astron Corporation Limited Annual Financial Statements | 111
Astron Corporation Limited
Company Number: 1687414
Additional Information for Listed Public Companies
3.
INFORMATION POLICY
It is the policy of the Company to conform with the highest reporting and information standards to its shareholders. Company
spokespeople are available and pleased to respond to queries from financial community, investors and shareholders.
During the year, the Group held one shareholder information session meeting and at the meeting active discussions took place
and questions were answered.
All these initiatives will continue to be improved and expanded in the coming year with the objective of providing the fullest and
most detailed information to shareholders consistent with the Company’s objectives.
Information on the Group and presentations to analysts can be obtained from the Company’s website astronlimited.com.au.
To assist and improve service to shareholders related to the administration of the fully registered shares shareholders can contact
our share registry service.
Shareholders can also contact the Company directly by telephone in Australia +61 3 5385 7088.
Astron Corporation Limited Annual Financial Statements | 112
Astron Corporation Limited
Company Number: 1687414
Glossary of Abbreviations and Defined Terms
TERM
µm
$ or A$ or AUD
ARBN
Astron or the Group
Astron Titanium
ASX
Board
CDI
CeO2
Company
CUP
director
DMS
Donald Project
EES
EIA
EPBC
EPS
ESOP
FTE
FVTPL
GRP
GSP
GST
GWM Water
HKAS
HKFRS
HKICPA
HLS
HM
HMC
JORC Code
kt
Laser Ablation ICPMS
LP1
LP2
mm
MIN5532
MOU
MRE
MSP
Mt
PPE
PRC
QX 202X
QEMSCAN
RCAC
REEC
RL2002
RL2003
RMB
SMR
SPP
SPP Shortfall
TiO2
VHM
VHMC
VWAP
WCP
XRF
YSC
ZrO2
Micron
Australian dollars
Australian Registered Business Number
The Company and its controlled entities
Astron Titanium Yingkou Company Limited
Australian Securities Exchange
The board of directors of the Company
CHESS Depositary Interest
Cerium dioxide
Astron Corporation Limited ARBN 154 924 553, Hong Kong Company Number 1687414
Concentrate upgrade plant
A member of the Board
Donald Mineral Sands Pty Ltd
The Donald Rare Earth & Mineral Sands Project
Environmental Effects Statement
Economic Impact Assessment
Environmental Protection Biodiversity Conservation
Earnings per share
Employee Share Option Plan
Full-time equivalent
Fair value through profit or loss
Gross Regional Product
Gross State Product
Goods and services tax
Greater Wimmera Mallee Water Corporation
Hong Kong Accounting Standards
Hong Kong Financial Reporting Standards, HKAS and Interpretations
Hong Kong Institute of Certified Public Accountants
Heavy liquid separation
Heavy mineral
Heavy mineral concentrate
The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
One thousand tonnes
Laser ablation inductively coupled plasma mass spectrometry
Loxton-Parilla 1 sand formation
Loxton-Parilla 2 sand formation
Millimetre
Victorian mining licence 5532
Memorandum of Understanding
Mineral resource estimate
Mineral separation plant
Million tonnes
Property, plant and equipment
People’s Republic of China
X quarter of calendar year 202X
Quantitative evaluation of minerals by scanning electron microscopy
Reverse-Circulation Air Core
Rare earth element concentrate
Victorian retention licence 2002
Victorian retention licence 2003
Chinese yuan
Senegal Mineral Resources SA
Share Purchase Plan
Amount of SPP not applied for by eligible shareholders
Titanium dioxide
Valuable heavy minerals
Valuable heavy mineral concentrate
Volume weighted average price
Wet concentrator plant
X-ray fluorescence
Yarriambiack Shire Council
Zirconium dioxide
Astron Corporation Limited Annual Financial Statements | 113
Astron Corporation Limited
Company Number: 1687414
Corporate Directory
DIRECTORS
Mr George Lloyd (Chairman, Non-executive Director)
Mr Tiger Brown (Managing Director)
Mdm Kang Rong (Executive Director)
Mr Gerard King (Non-executive Director)
Dr Mark Elliott (Non-executive Director)
COMPANY SECRETARY AND REGISTERED OFFICE
Boardroom Corporate Services (HK) Limited
31/F., 148 Electric Road
North Point
Hong Kong
AUSTRALIAN CORPORATE OFFICE
73 Main Street
Minyip VIC 3392
Australia
Tel:
E:
W:
+61 3 5385 7088
investors@astronlimited.com
astronlimited.com.au.au
CHINA BUSINESS OFFICE
C/ Yingkou Astron Mineral Resources Co Ltd
Room 5612, Building No. 5, Hua Fu Tian Di
No. 128, Ha’erbin Road, Shenhe District
Shenyang 110013
China
Tel/Fax: +86 24 2259 5960
AUDITOR
BDO Limited
25th Floor, Wing On Centre
111 Connaught Road Central
Hong Kong
SHARE REGISTRY
Computershare Investor Services Limited
Level 3, 60 Carrington Street
Sydney NSW 2000
Australia
Computershare Hong Kong Investor Services Limited
Hopewell Centre, 46th Floor
183 Queen’s Road East
Wan Chai
Hong Kong
BANKERS
Commonwealth Bank of Australia
48 Martin Place
Sydney NSW 2000
Australia
ASX CODE
ATR
Astron Corporation Limited Annual Financial Statements | 114
www.astronlimited.com.au
140
Astron 2023 Annual Report