More annual reports from Aurelia Metals Limited:
2023 ReportANNUAL
REPORT
2023
—
FY23 HIGHLIGHTS
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A 41% decrease in Total Recordable Injury Frequency
Rate (TRIFR) to 5.13 (FY22: 8.7) that continues
year-on-year improvements.
Improvement in Recordable Environmental Incident
Frequency Rate (REIFR) to 2.91 (FY22: 3.8) highlights
Group environmental excellence.
Record volumes mined and milled at Dargues.
Development Consent received for the
Federation Project.
Debt free at 30 June 2023 with term loan repaid
from operating cash flow.
Balance sheet transformed with a new
~A$100 million financing facility to fund development
of the Federation Project – one of the highest grade
base metal development projects in Australia.
ABOUT THIS REPORT
This Annual Report is a summary of Aurelia and our subsidiaries’ operations,
activities, and financial position as at 30 June 2023 – financial year 2023 (FY23).
We are committed to reducing the environmental impact associated with the
production of this Annual Report. Annual Reports are only printed and posted
to shareholders who have elected to receive a printed copy.
This and previous Annual Reports are available on the Company’s website,
https://aureliametals.com/investors/company-reporting/
The Peak Mine processing plant at dusk
2
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ANNUAL REPORT 2023 CONTENTS
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FY23 Highlights
Chair's Letter
Managing Director and Chief Executive Officer’s Report
We are Aurelia
Our Profile
Our Portfolio
Our Vision, Values and Strategy
Our Financial and Operating Performance
Our Production Performance
Our Mines
Our Projects
Sustainability Report
Financial Report
Mineral Resource and Ore Reserve Statement
Unaudited Periodic Report Verification
Procedure
Shareholder Information
Schedule of Tenement Interests
Company Information
2
4
8
10
10
11
12
14
14
15
18
22
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64
191
192
194
199
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AURELIA METALS CHAIR’S LETTER
—
Dear Shareholders
The last twelve months have been keenly challenging
for all at Aurelia Metals. For our Board, our employees
and our shareholders. Following a year of unacceptable
and deteriorating performance, the Company embarked
on a series of changes that I believe has provided a
strong platform to deliver future enhanced value to our
shareholders, while providing a safe, supportive and
rewarding environment for our employees and contractors.
There is still an enormous amount of work to do to restore
our true value and deliver future growth but I believe the
ship has turned with refreshed leadership. We now have
a foundation to deliver on our commitments of improving
operational performance, develop our premier Federation
Project, optimise the value of our infrastructure and mining
assets in the Cobar Basin, and leverage our talented and
dedicated people for years to come.
At last year’s Annual General Meeting, I announced three
priorities for the Company that would be our focus for the
year ahead:
1) Recover strong and consistent operational performance
to ensure high margin, low-cost production and deliver
predictable cash flows to fund future growth.
2) Ensure highly experienced and skilled executives are in
place to drive our performance and deliver superior value.
3) Secure a competitive funding solution to underwrite
the development of our quality Federation and
Great Cobar Projects.
These priorities were translated into a comprehensive and
far-reaching Organisational Renewal Program comprising
five strategic themes. I’m pleased to report we have seen
significant progress against each of these strategies through
the year.
Safety
Given the size and scope of the Organisational Renewal
Program, maintaining safety performance through a sustained
period of change was front and centre for Aurelia in FY23.
We challenged our leaders to ensure the health, safety and
wellbeing of our people were not compromised during this
dynamic period of change and they certainly delivered.
On 30 June 2023, Aurelia was pleased to report strong safety
performance with a Group Total Recordable Injury Frequency
Rate (TRIFR) of 5.13 (FY22: 8.7). This included operating
during the entire second half of the year with no recordable
incidents across the Aurelia portfolio.
Safety performance at Dargues hit a particular high note with
the mine recording 12 months injury free on 30 June 2023
bringing their FY23 TRIFR to zero.
4
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Operational performance and cash management
Despite a difficult first half, site-by-site improvement
initiatives drove achievement of FY23 Guidance including
outperformance of gold production at 86,000 ounces at an
All-In-Sustaining-Cost of A$2,315 per ounce.
At Hera, a change in the mine plan in December returned the
asset to positive cash generation, marked by a very strong
finish to operations in late March 2023. The mine was closed
and the surface facilities were successfully transitioned
to care and maintenance in April, with much of the asset’s
significant infrastructure earmarked for use at the Federation
Mine as it comes online.
At the Peak Mine, Aurelia’s cornerstone asset, our focus was
managing costs. The transition to owner-mining concluded at
the end of April 2023, resulting in a sharp reduction in mining
costs that improved cash flows. Work has also commenced
to improve development and further drive down costs, as we
pursue better production outcomes.
The Dargues Mine continued to be a reliable, stable operation
throughout the year, with efforts targeted towards increasing
cash flows. In December, the New South Wales (NSW)
Department of Planning and Environment approved our
application to lift processing rates 15% from 355 thousand
tonnes per annum (ktpa) to 415ktpa. This allowed increased
throughput rates and improved cash flows in the second half
of the year.
Perhaps the most inspiring effort to improve organisational
efficiency came with the introduction of the Working
Smarter Program. More than 220 ideas flowed across the
organisation, resulting in A$25.6 million in cost savings
and efficiency equivalent value, A$15.8 million of which is
ongoing savings due to sustainable changes in operating
methods, processes or equipment. This beat the A$24 million
target, demonstrating our employees are some of the most
passionate in the industry when it comes to rebuilding
organisational success.
At year end, together these initiatives resulted in:
significant cash generation with earnings before interest,
taxes, depreciation and amortisation (EBITDA) of A$55.8
million (FY22: A$166.51 million), up from A$12 million in the
first half of the year
~A$40 million directed towards repayment of the
pre-existing term loan, and a full cash-backed
performance bond facility for rehabilitation
cash at 30 June 2023 of A$38.9 million
(FY22: A$76.7 million) excluding the performance bond
cash backing.
ANNUAL REPORT 2023 Optimisation of the high grade Federation Project
A Federation-led future is well on its way, as the Company
made important steps towards bringing one of the highest
grade base metal development projects in Australia
into production.
On 10 October 2022, the Federation Mine (Federation)
Feasibility Study was released, confirming a capital efficient
project that will benefit strongly from our established mine
and milling infrastructure and generate impressive rates of
return for our shareholders.
The Project received development consent from the NSW
government in March 2023 and is currently finalising
secondary approvals to start mining development of ore by
the first half of FY25. With the timeframe from discovery to
first production of just six years, Federation will be one of the
fastest development projects in recent NSW history, backed
by the strong belief the Board has in the potential of the
Project to materially grow Aurelia’s shareholder value.
In April, the Company provided an update, which further
refined the Feasibility Study and delivered an improved
path to production, lower capital expenditure, along with
an updated mine design to increase operational efficiency.
It also confirmed a mine production target of 4.0 million
tonnes (Mt) for an initial 8-year life with an expected average
annual steady state recovered metal production of 45kt zinc,
46kt lead, 1kt copper, 15 thousand ounces (koz) gold and
39koz silver.
Federation funding
A key activity through the year was delivery of a flexible and
competitive funding package to transform the Company’s
balance sheet. The effort to secure the best solution for our
business and to protect shareholder value was significant
and far-reaching. A range of options were reviewed through
a comprehensive analysis. Despite the tough economic
environment, characterised by climbing interest rates,
the Aurelia team was successful in delivering a cost effective
and comprehensive solution while managing the repayment
of our existing debt facility.
On 31 May 2023, we were pleased to announce the execution
of a new ~A$100 million financing facility with Trafigura
Pte Ltd (Trafigura) comprising a US$24 million Loan Note
Advance and up to a A$65 million Performance Bond Facility.
To accompany the Trafigura facilities, Aurelia completed a
A$40 million equity raising with receipt of proceeds from
the institutional placement and entitlement offer received in
June 2023. Proceeds from the retail entitlement offer were
received in July 2023.
Subsequent to the announcement of the Trafigura financing
facility, the Company remobilised its mining contractor to the
Peter Botten, AC, CBE
Non-Executive Chair
Federation site, and development recommenced on
1 August 2023.
Leadership renewal
While initiatives to lead the business turnaround were
designed and implemented, it was critical the Board’s focus
turned to securing highly capable executives to ensure the
change could be sustained.
These efforts began with the appointment of Martin
Cummings as the Company’s new Chief Financial Officer.
Martin is a highly-experienced mining executive with over
25 years’ financial, commercial, treasury and investor
relations experience. This experience served us well
in the pursuit of the Trafigura financing facility, which
Martin secured to fully fund the business and protect the
outstanding rates of return on offer from the Company’s
growth projects.
Following the departure of our Managing Director and
Chief Executive Officer, Dan Clifford in November 2022,
Andrew Graham was appointed Interim Chief Executive and
effectively led the turn round in Company performance in a
highly skilled and committed way. Andrew did an outstanding
job in this position and the Board extends its thanks for his
dedication and professionalism during his time in this role
In June 2023, the Board was pleased to announce the
appointment of a new Managing Director and Chief Executive
Officer, Bryan Quinn. Bryan’s extensive experience at BHP
and OZ Minerals in business improvement, operational
excellence and project delivery, comprised the ideal
background to help Aurelia deliver its exciting development
projects, while optimising value and performance of its
existing assets. Bryan has already had a significant impact
in defining our ongoing strategy and further addressing
improvement in our operational performance. With Bryan’s
appointment, Andrew has taken up an expanded role in
driving growth for the organisation as our Chief Development
and Technical Officer.
Health and safety
Underpinning the significant efforts to transform business
performance in FY23 was a series of initiatives directed
towards looking after our workforce and endeavouring to
make Aurelia an employer of choice to address industry wide
high levels of employee turnover. At Aurelia, we recognise
we’re only as strong as our people who call our workplace
their own. To support a holistic approach to our people’s
safety and provide a safe and supportive workplace for all
employees and contractors, during FY23 we focused on
mental health and wellbeing with a series of workshops
across all our sites.
5
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AURELIA METALS As part of our ongoing optimisation of governance at Aurelia,
we will be reducing the size of the Board, while ensuring
that the Board has relevant skills and experience to further
drive the turnaround of business performance and build
shareholder confidence in our delivery of value creation.
Finally, I would like to convey my sincere appreciation to you,
Aurelia shareholders, for your support. I believe, like me,
you recognise the significant value of the Aurelia portfolio.
Following our efforts over the past year, I am convinced we
have the right leaders, capability and strategies in place to
achieve shareholder prosperity.
Your Board looks forward to continuing to do what we say
in FY24.
Peter Botten, AC, CBE
Non-Executive Chair
The four-staged program included three workshops covering
mental health awareness (including a mental health
workplace audit), education on mental health resilience
and training on mental health responses for leaders and
workplace champions. The program is supported by
wellness resources.
Our efforts to ensure the health and safety of our workforce
have been equally matched with our drive to ensure the same
outcome in our environmental performance. In recognition
of this effort, we were pleased to receive the Environmental
Excellence Award at the NSW Minerals Council’s Health,
Safety, Environment and Community Awards in August.
The Award recognises the Recordable Environmental
Incidents Frequency Rate (REIFR) reporting framework
that has been implemented across the Company.
Exploration
A key challenge this year has been keeping up work to realise
the value of our extensive exploration tenement package in
an environment of careful cost control. I’m pleased to report
drilling in the Peak Mine province – with a view to growing the
already substantial Mineral Resource tonnage that exists –
yielded positive results.
In October 2022, Aurelia announced a material increase
to the Mineral Resource reported during the half year.
Tonnage increased 37% to 8Mt containing more than 178kt
of copper and 179koz of gold.
Further geophysical surveys conducted during the year also
returned interesting results, with targets further progressing
up Aurelia’s exploration pipeline to be the focus of additional
exploration work.
Looking ahead
Great teams are made during tough times, and all that was
achieved in FY23 could not have been done without the
dedication of the Aurelia workforce. I’m very proud to say
employee commitment was the hallmark of a significant
business turnaround and a sign of great things to come.
As I close, I would like to thank my fellow Board Directors and
Company executives for leading the change that was required
in FY23 to set Aurelia up for a strong future. In particular,
I would like to recognise our new Non-Executive Director,
Lyn Brazil, who recently joined the Board to help us chart the
course towards restoring shareholder value. Lyn is already
providing a valuable perspective on how we run the business
and grow the Company.
6
6
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ANNUAL REPORT 2023
AURELIA METALS
7
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ANNUAL REPORT 2023
The shaft headframe at the Peak Mine
6
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ANNUAL REPORT 2023
AURELIA METALS
7
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MANAGING DIRECTOR AND CHIEF EXECUTIVE
OFFICER’S REPORT
—
Dear Shareholders
New Vision and Strategy to grow value for the future
When I joined Aurelia in early June 2023, I approached the
role with the intention to listen with a view to understanding
the history of the business, its growth potential, and most
importantly the Company’s capability and culture.
FY23 was a year that impacted the Company greatly.
After emerging from a period of underperformance, there
was a clear business case for transformational change. In
response to the challenge, the effort evoked from Aurelia
people under a set of extremely tough circumstances
was very inspiring. The multi-faceted Organisational
Renewal Program requested by the Aurelia Board,
outlined the change required and demanded the focus
of every employee. The team worked together to return
operational stability, maximise cashflows, optimise and
fund the premier Federation Project, as well as recruit and
onboard new leaders with the requisite experience to take
the business forward. At the end of the financial year, Aurelia
emerged as both a stronger team, delivering a record safety
performance, and a more resilient business. We now look
at the foundation built together as the starting point for
a resources success story based on a new Vision, Values
and Strategy.
And it’s not too hard to see how that could quickly become
our reality. We have some of the largest base metal resources
in the Cobar Basin, as well as two established mills with a
throughput capacity of between 1.25 – 1.4Mt. We are also
extremely fortunate with strong infrastructure and supply
services within the town of Cobar. But perhaps our greatest
competitive advantage is a workforce who through their own
sweat has set the Company up for success, is dedicated to
deliver results, and looks forward to a strong future in the
region of NSW.
How we combine these ingredients for success into a clear,
pragmatic plan owned by every Aurelia employee has been
my focus during my early days as the MD and CEO.
On my first day, I joined fellow executives and senior leaders
in a strategy planning workshop. Our goal: to determine
our Vision for the future and establish how the Aurelia team
would work together to deliver a Strategy to help us emerge
from FY23 and achieve value in our portfolio, as well as
returns for our shareholders. I am now excited to lead and
share this new strategic direction for Aurelia.
Developing and operating a critical base
metals company
It’s a great time to be in base metals, which will dominate
approximately three quarters of the Aurelia portfolio by
2026. The transition to base metals is occurring at the
perfect time for our Company, as society ramps up efforts to
decarbonise, rising living standards, and countries continue
to emerge from the COVID-19 pandemic fuelling increased
global construction activity.
At a time when the world needs more copper and zinc to
reach net zero, we are poised to bring on two new critical
metals mines in the Cobar Basin, in addition to running our
cornerstone operations at Peak.
The Federation Project, rich in zinc, is the first project in our
development pipeline, and the first new critical minerals mine
in NSW in seven years. Zinc is the fourth most consumed
metal in the world and its outlook is exciting, with demand
set to increase given its use in the manufacturing of
green technologies.
Our Great Cobar Project (at Peak North) will follow, bringing
a significant copper endowment to the portfolio. Copper
– the metal of electrification – is essential in the adoption
of renewable technologies.
These projects, together with future prospects in our
exploration pipeline, will pivot our Company to a base metals
producer in the near term and fill our mill capacity.
Becoming a developer and operator of choice
During my first visits to our mine sites and surrounding
exploration assets, one thing became abundantly clear to me:
our significant infrastructure in the Cobar Basin can unlock
value across the region.
Moving forward, we will leverage this infrastructure to deliver
our Vision to ‘become a developer and operator of choice for
critical base metals to power a low carbon society and deliver
superior shareholder value’. To do this, we are embarking on a
new business model – the ‘Cobar Province Model’.
This ‘hub and spoke’ approach will enable us to use our
infrastructure to provide low-cost, capital efficient growth.
Using our 1.25 – 1.4Mtpa processing capacity, we will ramp up
our operations, increase cash flow and reduce costs by filling
our mills with economic ore as quickly as possible.
8
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ANNUAL REPORT 2023
Bryan Quinn
Managing Director and Chief Executive Officer
While ore is currently sourced from our existing sites, looking
to the future, we will also explore options to work as a catalyst
in the region to accelerate organic and inorganic growth.
We will do this by pursuing strategic partnerships with those
looking to break into the critical minerals space at a minority
level interest. We will also use our assets and Resources
where it makes commercial sense to attract investment
and growth in the region. In this way, we can maximise
shareholder value sooner than on our own.
A roadmap to success
My focus has now turned to the roadmap for delivering our
new Strategy. Developed in conjunction with our Executive
Team and Board, the first phase of the roadmap was called
the CEO’s 100-day plan. It builds on the momentum achieved
by stabilising the business in FY23 through the following
priorities:
Continue to safely deliver our operational targets to
enrich our balance sheet, including maximising cash from
Dargues over its remaining life.
Setting up the Federation Project for success will be
immensely important. Safely delivering early works on
time and on budget will help ensure we can maximise the
value of this incredible resource.
Commence improvement programs at our Peak Mine to
right size our cost base and allow us to be competitive in
all price cycles, in addition to identifying opportunities to
fill the Peak mill as soon as possible.
Identify organic and inorganic commercial opportunities
to maximise our value in the Cobar Basin using the ‘Cobar
Province Model’ to grow and fill our mill capacities as
a start.
Successful achievement of these priorities relies on ensuring
we have a robust operating model, excellent leadership
and a positive culture in place to attract and retain a
high-performing workforce. Creating this environment is my
focus and my expectation of all leaders in our business.
Finally, our commitment to sustainability will remain paramount.
The continual improvement in safety, the wellbeing of
our people, community engagement, and the responsible
stewardship of the environment in which we operate, will be
essential ingredients to our success, and to maintaining our
social licence to operate. We have and will continue to place
sustainability at the core of everything we do. Its importance
is exemplified in this, our fourth Annual Report which includes
our sustainability performance outcomes.
Thank you
In closing I want to thank you, our valued shareholders –
existing and new – for your continued faith in our Company.
I also greatly appreciate your support during my transition
into Aurelia.
I recognise that to grow Aurelia and unlock its potential, we
first need to regain your trust and confidence. Together with
the Aurelia team, this is a challenge I will tackle with the same
energy demonstrated in the second half of FY23.
With your support, and the support from our Board,
I’m confident we have a clear path forward that will return
value to you and all Aurelia stakeholders.
I want to acknowledge the significant efforts of the whole
workforce, under the leadership of Interim Chief Executive
Officer, Andrew Graham and the newly-appointed Chief
Financial Officer, Martin Cummings, to deliver the priorities
set forth by our Chair at the 2022 Annual General Meeting.
Lastly, I would like to thank the entire Aurelia team for their
dedication to remaining safe and focused on turning our
business around in the last half of FY23. I am honoured to
lead you into this new chapter in Aurelia’s history.
Bryan Quinn
Managing Director and Chief Executive Officer
9
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AURELIA METALS
WE ARE
AURELIA
—
The conveyor and coarse ore stockpile
at the Peak Mine
OUR PROFILE
—
Aurelia Metals (‘Aurelia’, ‘the Company’) is an Australian
mining and exploration company with a highly strategic
landholding, two operating mines, and two development
projects in NSW.
We own and operate two underground mines and processing
facilities in NSW and have an enviable portfolio of organic
growth prospects in the region.
Our Peak Mine comprises two separate underground
polymetallic mines and an 800ktpa base metals and gold
processing plant. Peak is in the northern Cobar Basin,
south of Cobar, a town in central-west NSW.
Our Dargues Mine is a gold-mining and milling operation
located in the Southern Tablelands region in NSW,
approximately 60 kilometres (km) southeast of Canberra.
The facility includes an underground mine, processing plant
and associated surface facilities.
The Hera mining operation, also located in the Cobar Basin,
has ceased and the surface facilities have been placed into
care and maintenance. Hera’s 455ktpa processing plant is
equipped with a three-stage crushing, gravity gold and base
metals flotation and concentrate leach circuit.
10
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In the Cobar Basin, we hold one of the most geologically
prospective ground positions in Australia and have the
expertise and capability to discover and convert this
endowment to unlock exceptional value for our shareholders.
Our premier Federation Project is one of the highest-grade
base metal development projects in Australia. Receiving
Development Consent from the NSW Department of Planning
and Environment in March 2023, the Federation deposit
hosts high-grade zinc, lead, and gold mineralisation and
remains open at depth.
Our Great Cobar Project involves the development of satellite
base metals and a gold deposit, north of, and accessible from,
the New Cobar mining complex at the Peak Mine.
From exploration through to operations and into closure, we
are committed to minimising the environmental impacts of
our operations.
Aurelia Metals is listed on the Australian Securities Exchange
(ASX) (ASX code: AMI) and is headquartered in Brisbane
(Queensland, Australia).
ANNUAL REPORT 2023 OUR PORTFOLIO
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Cobar
Great Cobar
BARRIER HIGHWAY
Peak
Mine
Canbelego
C
A
N
B
E
L
E
G
O
R
O
A
D
Y
A
W
N
A
M
D
K
I
LEGEND
Processing Facility
Operating Mine
Development Project
Tenement Holding
Road
Locality
PRIORY TANK ROAD
Nymagee
D
A
O
D R
O
O
W
GLEN
B
Hera
A
L
O
W
R
A
R
O
A
D
Federation
Peak Mine
NSW
Cobar
Nymagee
Hera
and
Federation
Sydney
Canberra
Dargues Mine
D
A ROA
RIG
NER
E R I V E R R O A D
Braidwood
L I T
T
L
A
R
A
L
U
E
N
R
O
A
D
KINGS HIGHWAY
LEGEND
Processing Facility
Operating Mine
Tenement Holding
Road
Locality
K
I
N
G
S
H
I
G
H
W
A
Y
BOMBAY ROAD
D
A
O
A R
M
O
O
C
D
A
O
R
K
E
E
R
C
S
R
O
J
A
M
Dargues Mine
Majors Creek
Araluen
11
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AURELIA METALS
OUR
VISION
Developer and operator of choice for critical
base metals to power a low carbon future
and deliver superior shareholder value
OUR VALUES
CARE
CURIOSITY
NIMBLE
ONE TEAM
We respect our people,
We are interested in
communities and
the environment.
the ideas of others and
value diverse opinions.
We act with integrity
and want to make
a difference.
We do what’s right
and own the outcome
of our efforts.
We are committed
to safety first.
We ask questions,
seek information
and challenge the
status quo.
We make informed
decisions and learn
from success as well
as failures.
We actively participate
and work together
towards shared goals.
We acknowledge
and celebrate the
achievements of teams
and individuals.
We trust each other
– we are open,
supportive and strive
for collective success.
We are proactive
in identifying
and addressing
emerging challenges
and opportunities.
We are open and
receptive to change,
quickly responding
to evolving
circumstances.
We make timely
decisions based
on available
information to avoid
unnecessary delays.
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ANNUAL REPORT 2023
AURELIA METALS
13
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METALS THAT MATTER
OUR STRATEGY
DELIVER WITH
CONFIDENCE
IMPROVE
OUR OPERATING
MARGIN
RIGHT PEOPLE,
RIGHT MINDSET
FOCUSED
GROWTH
Develop integrated
and robust plans
with contingency.
Clear accountability
of targets across the
organisation for all
leaders and teams.
Implement our
management
operating system
and embed
consistent processes.
Make decisions based
on data, then learn
from the outcomes.
Deploy plans that
deliver our operational
targets in a safe and
sustainable manner.
Drive investor
engagement.
Drive down costs and
improve margins at
all operations.
Maximise utilisation
of established
infrastructure.
Scale our organisation
to endure through
the cycle.
Optimise metal
recovery and extract
full value from our
products.
Establish strategic
partnerships and
deliver value from
our contract spend.
Maximise
shareholder value.
Attract talent by
demonstrating
a superior value
proposition for
our people.
Cultivate leadership
excellence through
development, support
and feedback.
Anticipate workforce
needs and grow
a pipeline of
talent through the
development of
our people.
Create a one team
culture by engaging
people in the way
we work.
Increase mineral
endowment by
expanding near
mine and historic
mineral resources
in combination with
regional discoveries.
Optimise the Cobar
Basin, including
the effective use
of assets and
mineral inventories.
Assess and act on third
party opportunities.
Accelerate growth
through strategic
partnerships.
12
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ANNUAL REPORT 2023
AURELIA METALS
13
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OUR FY23 FINANCIAL AND OPERATING
PERFORMANCE
—
GROUP FINANCIAL MEASURE
Revenue
EBITDA – statutory
EBITDA – underlying
EBITDA margin
Net profit/(loss) after tax – statutory
Net profit/(loss) after tax – underlying
Basic earnings per share
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financial activities and foreign exchange (FX)
Group cash flow
UNIT
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
A$M
FY23
369.2
55.8
55.7
15
(52.2)
(37.7)
(4.16)
45.9
(77.4)
(6.8)
(38.3)
FY22
% CHANGE
438.8
166.5
142.9
38
(81.7)
(1.4)
(6.61)
154.1
(131.5)
(20.2)
(16)
(66)
(61)
(60)
36
2,659
37
(70)
41
66
2.5
(1,654)
OUR FY23 PRODUCTION PERFORMANCE
—
KEY METRIC
Production Volume
Gold
Silver
Copper
Lead
Zinc
Average Prices Achieved
Gold
Silver
Copper
Lead
Zinc
UNIT
FY23
FY22
% CHANGE
oz
oz
t
t
t
A$/oz
A$/oz
A$/t
A$/t
A$/t
86,254
98,461
352,343
788,840
2,188
18,998
20,548
2,697
34
12,092
3,351
4,493
2,315
3,726
24,266
30,067
2,500
32
13,124
3,032
4,692
1,707
(12)
(55)
(41)
(22)
(32)
8
6
(8)
11
(4)
36
All in Sustaining Cost (AISC)
A$/oz
Excerpt from pages 5 and 6 of the 'FY23 Financial Results' presentation (30 August 2023) available on the ASX.
14
—
ANNUAL REPORT 2023 OUR MINES:
PEAK MINE
—
The New Cobar open-pit, part of the
Peak Mine complex
METAL
Gold
Silver
Copper
Lead
Zinc
UNIT
FY23 PRODUCTION
oz
oz
t
t
t
36,279
203,981
2,188
14,416
13,302
Peak Mine is located in the northern Cobar Basin,
south of Cobar in central-west NSW. The current
operation started production in 1992.
Aurelia completed the purchase of Peak from New Gold
in April 2018. Through accelerated mining of the
high-grade Chronos gold deposit, investment payback
on the A$59 million purchase price was achieved
within four months.
The operation comprises two separate polymetallic
underground mines and an 800ktpa base metals and gold-
processing plant. The plant is supplied with lead-zinc-gold
and copper-gold ores from several active underground
mining areas that use open stope mining with backfill.
Thickened tailings are pumped for deposition to an
engineered tailings storage facility.
The processing facility enables the treatment of different
polymetallic ore types to produce separate copper, lead and
zinc concentrates. Ore is processed in campaigns based on
the nature of the polymetallic mineralisation mined from the
different orebodies.
Drilling at Peak Mine and its deposits is currently focused on
further extensions of the existing orebodies across the north
and south mines, including Kairos, Peak North, Perseverance
and Chesney. Additional near-mine drilling is focused on
evaluating the potential of high-value line-of-lode targets
between the main deposits.
For further information about the Peak Mine and its FY23
performance, see pages 88 to 89 and visit our website:
https://aureliametals.com/peak-mine/
15
—
AURELIA METALS OUR MINES:
DARGUES MINE
—
An aerial view of the Dargues Mine
process plant
METAL
Gold
UNIT
oz
FY23 PRODUCTION
36,358
Dargues Mine is a gold-mining and milling operation
in the Southern Tablelands region of NSW,
approximately 60km southeast of Canberra, which
Aurelia purchased in late 2020 and successfully
integrated into our production portfolio during 2021.
Ore is mined using conventional bottom-up longhole
stoping and trucked from the underground mine to a
surface stockpile adjacent to the process plant. Stope voids
are backfilled with cemented hydraulic fill or waste rock.
Mine access is via a boxcut and decline from the surface.
Ore is treated through three-stage crushing, ball milling,
flotation and dewatering circuits to produce a gold-rich pyrite
concentrate that is exported for smelting.
Dargues life-of-mine planning in FY23 indicates the
completion of onsite mining and processing in 2024.
Dargues Management has taken steps to ensure the
strong planned cash contribution from the asset until
the end of its mine life is realised.
For further information about the Dargues Mine and its FY23
performance, see page 90 and visit our website:
https://aureliametals.com/dargues-mine/
16
—
ANNUAL REPORT 2023 OUR MINES:
HERA SITE
—
An aerial view of the Hera site process
plant at night
METAL
Gold
Silver
Lead
Zinc
UNIT
FY23 PRODUCTION
oz
oz
t
t
13,616
148,362
4,582
7,247
Hera site is located approximately 100km southeast
of Cobar in central-west NSW. In March 2023, the
last ore from the underground mine was hauled to
the surface and processed through the plant, and
Hera’s surface facilities were transitioned to care and
maintenance in April 2023.
The 455ktpa process plant is equipped with a three-stage
crushing, gravity gold, base metal flotation and concentrate
leach circuits. We intend to leverage the established
infrastructure at our Hera site to process ore from our nearby
Federation Project.
Since commissioning in 2014, Hera has produced 3.2 million
tonnes of ore, supported 180 full time jobs, and contributed
A$216 million to the local economy.
For further information about Hera and its FY23
performance, see page 91 and visit our website:
https://aureliametals.com/hera-mine/
17
—
AURELIA METALS OUR PROJECTS:
FEDERATION
PROJECT
—
An aerial view of the decline
at the Federation Project site
The Federation Project deposit hosts high-grade
zinc, lead, and gold mineralisation and is located
approximately 10km south of our Hera site.
Project development will involve the underground mining
of the deposit for treatment through established processing
circuits at our Peak and Hera sites.
The Federation deposit was discovered in April 2019.
We moved swiftly to progress exploration and infill drilling,
in conjunction with project evaluation and permitting
applications, to enable production from this exceptional
mineral deposit.
In October 2022, we completed the Federation Feasibility
Study (FS). In conjunction with the FS we announced a
maiden Ore Reserve of 2.2Mt at 8.9% zinc (Zn), 5.3% lead
(Pb), 1.4g/t gold (Au), 6g/t silver (Ag), and 0.3% copper (Cu).
On 2 March 2023, Aurelia received Development Consent
from the NSW Department of Planning and Environment for
the Federation Project.
On 13 April 2023, we released an update to the market on the
Federation Project scope, timeline and capital cost estimate
to capture opportunities associated with mining operations
at the nearby Hera site closing and surface facilities
transitioning to care and maintenance. Compared to the
October 2022 release of the Federation FS, several valuable
project enhancements were identified, including:
Improved path to first production
Updated mine design delivers earlier stope ore production.
Initial ore trucked to the Company’s Peak processing plant
which improves concentrate payabilities by producing
separate zinc and lead concentrate products.
Restart of the Hera process plant able to be delayed until
capacity at Peak is fully utilised.
Lower capital expenditure compared to the FS
Capital expenditure to first production stope ore lower at
A$76 million (FS: A$88 million) and total growth capital
lower at A$143 million (FS: A$145 million).
Leveraging existing Hera mining assets and camp
infrastructure lowers capital spend and de-risks execution.
Improvements have more than offset the impact of
industry-wide capital cost inflation since the FS.
Deferral of project spend associated with tailings filtration
and waste backfill plant.
Updated mine design improves efficiency and
operability
Optimised mine design reduces total development metres.
Shallower decline gradient improves trucking efficiency.
Figure-8 decline design provides better orebody strike
coverage and improved infill drilling platforms.
A compelling base metals development project and
significant Aurelia value
Net Present Value (NPV) of A$354 million at spot prices
(as at 14 March 2023).
Total mill feed of 4.0Mt for 8-year initial production life;
expected average annual steady state-recovered metal
production of 45kt zinc, 46kt lead, 1kt copper, 15koz gold
and 39koz silver.
Long-term fundamentals for zinc remain strong.
The Federation Deposit remains open along strike and at
depth with substantial potential for resource extension and
conversion from planned underground and surface drilling.
In May 2023, we secured a funding solution for the Federation
Project comprising new senior secured financing facilities
and a A$40 million fully underwritten equity raise.
For further information about our Federation Project, visit our
website: https://aureliametals.com/federation/
18
—
ANNUAL REPORT 2023 OUR PROJECTS:
GREAT COBAR
—
Exploration Geologist, Karl de Groot using a
handheld X-ray fluorescence analytical tool
at one of our exploration prospects
The Great Cobar Project involves the development
of a satellite base metals and gold deposit, north
of, and accessible from, the New Cobar mining
complex at our Peak Mine’s processing facility and is
approximately 1.5km north of the New Cobar Mine.
Copper mineralisation was discovered at the Great Cobar
deposit in 1870 and mined from then until 1919. Modern
exploration drilling intercepted significant copper-gold and
zinc-lead-silver mineralisation outside the historic mine
workings with copper mineralisation identified at depths
of 1,000 metres (m) below surface.
The Great Cobar deposit remains open both up-plunge
and down-plunge. Further testing of the extent of
its mineralisation will be facilitated by underground
drill platforms that will be accessed from the planned
mine workings.
A Pre-Feasibility Study (PFS) and maiden Ore Reserve was
released in January 2022. The mine development uses
a layout that incorporates responses from community
consultation and information from assessments prepared
for the Environmental Impact Study (EIS) for the New Cobar
Complex. Further study works are planned to be completed
during FY24.
Aurelia has prioritised development of the Federation Project
and intends to commence mining activities at Great Cobar
after Federation starts production.
For further information about our Great Cobar Project, visit
our website: https://aureliametals.com/great-cobar/
19
—
AURELIA METALS OUR EXPLORATION
PROSPECTS
—
Exploration activities at the historic
Queen Bee mine
We hold one of the most geologically prospective
ground positions in Australia and have the expertise
and capability to discover and convert this
endowment to unlock exceptional value.
We have a strong record of discovery and are engaged
in exploration activities that span the breadth of the
exploration pipeline from early stage reconnaissance to
advanced targeting. The Exploration Team is well established
and uses leading edge technology through established
pathways to research ore bodies and provide the latest advice
on exploration methodologies and advanced targeting in the
mineral exploration industry.
Our exploration pipeline in the Cobar Basin encompasses
the Cobar and Nymagee Districts. Together these include
in excess of 125 exploration prospects, 21 of which are at
the advanced drilling stage. In our Braidwood District in the
Southern Tablelands region of NSW, the exploration pipeline
consists of more than 20 exploration prospects and six
prospects at the advanced drilling stage.
Cobar District drilling
In March 2023, we confirmed the outcomes of an exploration
drilling program at the Chesney East, Burrabungie and Queen
Bee prospects that returned high-grade copper and gold
results with the potential to extend Peak’s life of mine.
The prospects evaluated are all located close to Peak
infrastructure, with the Chesney East Gold Lens just 10m
and the Burrabungie Lens within 100m of the existing
underground development. Queen Bee – a historic mine
which has now been successfully assessed and drilled as a
maiden drill program – is within 10km of Peak’s infrastructure.
Induced Polarisation (IP) surveys – Nymagee District
In January 2023, we were pleased to share promising results
from four recent IP surveys conducted at four prospects in
the Nymagee District.
All four prospects evaluated – Lancelot, Vaucluse, Piney and
Lyell-Burge Trig – contain high chargeability levels, including
90 millivolts per volt (mV/V) at Lancelot, where levels of
10–15 mV/V typically warrant drill testing.
The results at Lancelot were especially intriguing and have
significantly upgraded its mineral prospectivity, advancing
the prospect through our exploration pipeline. Significantly,
surveys fast-tracked the target definition process, and
fine-spaced soil sampling will be conducted over the
prospects in the June FY24 quarter, followed by drill testing
if results are favourable.
20
—
ANNUAL REPORT 2023 THE COBAR DISTRICT
—
THE NYMAGEE DISTRICT
—
THE BRAIDWOOD DISTRICT
—
Resource Legend
Gold
Copper
Silver
Zinc
Lead
21
—
AURELIA METALS SUSTAINABILITY
REPORT
—
Environmental and Social Responsibility Advisor,
Abigail Saunders performing environmental
monitoring activities near the Dargues Mine
22
—
ANNUAL REPORT 2023 23
—
AURELIA METALS OUR APPROACH TO SUSTAINABILITY
—
Building and maintaining a trusted, sustainable, and beneficial
presence in the areas where we operate is essential
to Aurelia’s success.
Our approach to sustainability is aligned with our Vision and
Values and aims to deliver business and stakeholder value
across all aspects of our operations and functions from
exploration to closure.
Sustainability is embedded within our business through our
commitment to:
protecting the health and safety of our employees,
contractors, and host communities
minimising our environmental impact, conserving and
enhancing biodiversity, using resources such as water and
energy efficiently, and progressively rehabilitating land in
preparation for eventual closure
building resilience to climate change risks and minimising
and managing greenhouse gas emissions and other
climate change impacts
The United Nations Sustainable Development Goals (SDGs)
were endorsed in 2015 and are aimed at eliminating poverty,
protecting the environment, and providing a shared blueprint
for peace and prosperity for people and the planet by 2030.
We have mapped our sustainability programs and
performance to the SDGs within the GRI Content Index.
The Financial Stability Board created the Taskforce on
Climate-Related Financial Disclosures (TCFD) in 2015.
The TCFD includes recommendations on voluntary climate-
related financial risk disclosures that provide investors,
lenders, insurers, regulators, policy makers and other
stakeholders in the financial markets climate-related
information useful to decision-making.
We have begun the process of aligning our climate strategy
and disclosures to International Sustainability Standards
Board's (ISSB) disclosure standards, which are aligned to the
recommendations of the TCFD.
recognising and respecting the deep connection First
Nations Peoples have with the land and operating in a way
that protects their cultural heritage
MATERIAL TOPICS
—
building trusting, transparent and long-term relationships
with our communities
contributing positively to our communities through
programs that respect their aspirations
respecting and promoting human rights and actively
managing modern slavery risks
applying ethical and transparent business practices
We regularly engage with our key internal and external
stakeholders to identify the issues most important to them.
An overview of our approach to stakeholder engagement can
be found on page 32.
In developing this Sustainability section of our 2023 Annual
Report, we focused our disclosures on the potential risks
and opportunities that could most impact the business and
influence the assessments and decisions of our stakeholders.
complying with applicable laws, regulations, licences
We did this by:
and commitments.
To achieve our sustainability objectives, we recognise the
need to continually improve, understand, benchmark,
and address emerging issues that are important for ourselves
and our stakeholders.
Our approach to managing performance in these areas
includes risk assessment, development and implementation
of plans, objectives, targets, policies, standards and
procedures that are supported by management systems,
leadership development, training and guidance.
undertaking a materiality survey which was sent to
our employees, Community Consultative Committees,
key suppliers and Board of Directors
reviewing our material company risks
reviewing stakeholder expectations and emerging risks
engaging with industry bodies and other experts
benchmarking peer reports
reviewing internationally recognised reporting frameworks.
This Sustainability section of our 2023 Annual Report has
been prepared with reference to internationally recognised
reporting frameworks.
This Sustainability section of our 2023 Annual Report
describes our management approach, programs and
performance for our material topics.
GRI is an independent international organisation that has
established the leading global framework and standards for
sustainability reporting.
A GRI Content Index begins on page 59 of this Annual Report.
The Aurelia Board, via our Sustainability and Risk Committee,
has reviewed the outcomes of our materiality assessment
and approved the sustainability content of this 2023
Annual Report.
24
—
ANNUAL REPORT 2023 FY23 MATERIAL ISSUES
—
E
C
N
A
M
R
O
F
R
E
P
Y
T
N
U
M
M
O
C
I
N
E
M
N
O
V I R
N
E
E
C
N
A
M
R
O
F
R
E
L P
A
T
Climate Change
Land and Biodiversity
Water
Tailings and Waste Rock
Rehabilitation
and Closure
G
O
VERN
A
N
CE
Governance
Structure
Operating with Integrity
Risk Management
Management Systems
Stakeholder Engagement
Planning and
Strategy
Community
Investment
and Development
First Nations Engagement
Project Approval Engagement
Grievance
Management
MATERIAL
ISSUES
Economic value generated
Economic value distributed
Safety Culture
Fatal Hazard and
Critical Controls
Contractor Management
Health and Wellbeing
Retaining talent
Diversity, equity
and Inclusion
Training and Development
Remuneration linked
to performance
HEALTH A
N
D SAFETY PERFOR
M
A
N
CE
E
C
N
A
M
R
O
F
R
E
E P
L
P
O
E
P
I
I
N
O
T
U
B
R
T
N
O
C
C
M
O
N
O
C
E
I
The Peak Mine processing plant at dusk
25
—
AURELIA METALS
GOVERNANCE
—
(left to right) Emergency Services Officer, Russell
Wawatai and General Counsel and Company
Secretary, Rochelle Carey walking towards the coarse
ore stockpile at the Peak Mine
We remain committed to achieving our environmental,
social and governance (ESG) objectives and targets in
a progressive, sustainable, and respectful manner.
Our strong focus on governance and commitment to our
stakeholders comes from a clear appreciation that our
actions are on behalf of our shareholders.
Our aim is to instil an ‘act as an owner’ mindset, where
everyone is working towards a common goal in the best
interest of the business, shareholders and stakeholders.
GOVERNANCE STRUCTURE
—
The Board of Directors (the ‘Board’) is the highest
governance body within Aurelia’s governance structure.
Our Board operates under the roles and responsibilities
outlined in the Board Charter, which is regularly reviewed and
available on our website.
The role of the Board is to represent and serve the interests
of shareholders, with a commitment to delivering strong
value to all stakeholders, including the communities
where we operate. Fundamental to these activities is
our contribution as a trusted, valued and sustainable
mine operator.
The following committees support the Board:
Audit
Sustainability and Risk
Remuneration and Nomination.
The responsibility and authority of each committee is
outlined in the Committee Charters which are available on
our website: https://aureliametals.com/about/corporate-
governance/
The functions of the Board Committees do not relieve the
Board from any of its responsibilities.
The Board has delegated certain defined authorities to the
Managing Director and Chief Executive Officer to provide for
the efficient operation of the business within an appropriate
framework of control and risk management.
The Managing Director and Chief Executive Officer has the
authority to delegate certain authorities, as set out in the
Delegated Authorities Manual which has been approved by
the Board.
The Managing Director and Chief Executive Officer prepares
and recommends the Company strategy to be approved
by the Board, and is then responsible for execution of the
strategy within agreed risk tolerances, Company policies
and the governance framework.
26
—
ANNUAL REPORT 2023 SUSTAINABILITY AND RISK COMMITTEE
The Sustainability and Risk Committee assists the Board in
matters pertaining to sustainability in the Company including
safety, health, climate and environment, community relations,
and enterprise risk management.
In particular, the Committee is responsible for satisfying itself
that measures, systems and controls are in place to manage
sustainability issues and incidents that may have material
strategic, business and reputational implications for Aurelia
and our stakeholders.
Relevant General Managers and Executives are invited to
attend meetings of the Committee and risk owners are
required to present their sustainability risk matters and
mitigation plans.
As part of its work program, the Sustainability and
Risk Committee invites representatives from external
stakeholder groups to present to them in relation to
current environmental, social and governance (ESG) issues
and/or trends.
In FY23, the Board and Committee arranged for EY to deliver
presentations on the changing ESG landscape and the new
ISSB requirements, and Deloitte on its Tracking the Trends
2023 Report.
THE AURELIA WAY
The Aurelia Way is our Code of Conduct, which encompasses
our vision and values and guides all aspects of the business,
from the policies and standards we apply to how we conduct
ourselves and approach day-to-day decisions.
It sets boundaries to help guide employees and contractors
to exercise good judgment and describes how we should
interact internally with our colleagues, as well as externally
with our stakeholders and is structured around the
following themes:
The purpose of The Aurelia Way and how it applies to
employees and contractors and how Aurelia will respond
to breaches.
Workplace behaviours articulating expectations which
include health and safety, respect for people, employee
performance and unacceptable behaviour.
Sustainability covering environment, community and
human rights matters.
Operating with integrity addressing conflicts of interest,
bribery and corruption and working in accordance with
the law.
Communicating externally encompassing disclosures to
the market (ASX), shareholders, media and working with
government agencies.
The Aurelia Way is incorporated into inductions for all new
employees and contractors and within the terms for any new
and existing suppliers.
We expect employees to carry out due diligence on potential
and existing business partners and suppliers to confirm they
conduct their business lawfully, that they are aware of their
obligations under The Aurelia Way and that they operate in a
consistent manner.
We encourage employees, contractors, and stakeholders to
feel safe to come forward without fear of retaliation to report
conduct they reasonably believe may be illegal, unethical
or inconsistent with our values and standards. There are
a number of options for reporting unacceptable conduct,
including:
raising it with a direct manager or supervisor
elevating it to the next level of management
contacting the Human Resources Team, Legal Team or
Whistleblower Protection Officers
reporting it through our confidential independent external
Whistleblower service, Stopline.
The Board approved The Aurelia Way in September 2021, and
it is available on our website.
WHISTLEBLOWERS
Stopline, our appointed external confidential Whistleblower
service provider can be contacted 24/7 as well as trained
Whistleblower contact officers within our business.
We encourage employees and stakeholders to speak up
at the earliest opportunity where a person has reasonable
grounds to suspect misconduct. Our Whistleblowers Standard
outlines the protections available to whistleblowers and
the process that will be followed when a disclosure is made,
to encourage people to come forward with their concerns.
All disclosures made under this Standard are treated
seriously and are carefully considered.
The underground conveyor
at the Peak Mine
27
—
wAURELIA METALS OPERATING WITH INTEGRITY
—
We work with business partners and suppliers who share our
commitment to safety, human rights, working ethically and
lawfully and who behave in accordance with The Aurelia Way.
We also prioritise responsible local procurement of goods
and services that contribute to the economic and social
development of communities where we operate.
Our business partners and suppliers play an important
role in our success. We therefore choose whom we work
with carefully.
HUMAN RIGHTS AND MODERN SLAVERY
Aurelia supports and respects human rights and works to
ensure we operate honestly and ethically to identify, assess
and reduce the risk of modern slavery in our operations and
supply chains, as outlined in The Aurelia Way.
In doing this, we recognise that human rights apply to every
person across the globe regardless of their background.
We see this as a fundamental element to our social
responsibility and the sustainability of our operations.
We have identified the following aspects of our supply chain
may expose us to higher modern slavery risks. These include:
overseas manufacturing and fabrication (uniforms and
personal protective equipment)
ANTI-BRIBERY AND CORRUPTION
electronics (computers and mobile phones)
Aurelia is committed to conducting its business ethically and
in accordance with our vision and values and The Aurelia Way.
facilities management (cleaning, accommodation camp
management and food services)
We take a zero-tolerance approach to bribery and corruption,
as set out in the Anti-Bribery and Corruption Standard,
which was reviewed and updated in FY23 and is available on
our website. The Standard is communicated to all employees
and contractors as part of The Aurelia Way training.
Information on limits for gifts, hospitality and entertainment,
and detailed guidance on deciding if and when this may
be appropriate, are outlined in the Standard and within
The Aurelia Way.
In FY23, there were:
no confirmed incidents of corruption
no employees dismissed for corruption
transport and logistics (including shipping)
construction.
Some of the key actions Aurelia has taken to assess and
address modern slavery risks in our operations and supply
chains include:
Developing and rolling out The Aurelia Way and specific
modern slavery training, which includes expectations
to uphold human rights and identify and report modern
slavery exposure.
Encouraging employees, contractors, suppliers and
stakeholders to report any human rights or modern
slavery incidents pursuant to our Whistleblower Standard.
no incidents where contracts were terminated or not
Undertaking a Group-level modern slavery
renewed due to corruption
risk assessment.
no cases regarding corruption being brought against the
Establishing a Modern Slavery Working Group, which
Company or its employees.
CONFLICTS OF INTEREST
Aurelia requires that all actual, perceived or potential
conflicts of interest be disclosed in writing. Other expected
actions include withdrawing from decision-making that
creates, or could be perceived to create, a conflict of interest.
ANTI-COMPETITIVE BEHAVIOUR
No matter which country we operate in, or the customers and
suppliers we transact with, we will support competition and
not engage in anti-competitive behaviour.
In FY23, there were no legal actions pending or completed
against Aurelia in relation to anti-competitive behaviour,
or violations of anti-trust or monopoly legislation.
meets quarterly to identify, monitor and address modern
slavery risks in our business. The Working Group includes
representatives from head office and site, Legal, Finance,
Procurement, Sustainability and Human Resources Teams.
Undertaking supply chain due diligence based on
expenditure, product/service type, sector/industry and
geographical location.
Strengthening modern slavery compliance and reporting
obligations in all tenders, contracts and new supplier
onboarding processes.
We aim for continual improvement in our actions to assess
and address modern slavery risks in our operations and
supply chains.
Aurelia’s published Modern Slavery Statements are available
on our website: https://aureliametals.com/investors/
company-reporting/
28
—
ANNUAL REPORT 2023 SECURITY MANAGEMENT
TAX GOVERNANCE AND COMPLIANCE
Aurelia operates within Australian jurisdictions and engages
with the relevant state and federal tax authorities for all tax
compliance matters.
We maintain thorough and transparent engagement with
tax authorities.
Aurelia’s Board Tax Policy ensures our approach to taxation is
principled, transparent and sustainable in the long term.
The Board endorses the following principles governing
its approach:
Commitment to ensure full compliance with all statutory
obligations, and full disclosure to revenue authorities.
Management of tax affairs in a proactive manner that
seeks to maximise shareholder value, while operating in
accordance with the law.
Maintenance of documented policies and procedures in
relation to tax risk management.
Sustaining engagement with revenue authorities and
actively considering the implications of tax planning for
Aurelia’s wider reputation.
Aurelia tolerates a low level of tax risk (which is inherent in
taxation matters). Tax will be managed with the objective
that all tax liabilities properly due under the law are
correctly recorded, accounted for and paid.
TRADING IN AURELIA’S SHARES
Aurelia has a Securities Trading Policy which applies to all
our employees, contractors and consultants and is available
on our website. The Policy exists to minimise the risk of
actual insider trading and avoid the risk of perception of
insider trading.
Anyone with knowledge of price sensitive information
that is not generally available is prohibited from dealing in
Aurelia shares.
Directors, senior executives and certain employees who
are in a position that provides them with ready access to
confidential and price sensitive information about Aurelia
are termed ‘designated employees’. These employees have
additional protocols governing their dealing in Aurelia shares,
including needing prior approval to trade and only being able
to trade during designated trading windows as defined in
Aurelia’s Securities Trading Policy.
Aurelia requires contractors engaged to provide security
services to appropriately address the human rights aspects of
security services. Our contracted secure transport provider is
a founding member of the UN Global Compact in support of
the UN Sustainable Development Goals.
PROCESS TO REMEDIATE
NEGATIVE IMPACTS
Any reported breaches of The Aurelia Way are taken
seriously and dealt with on a case-by-case basis and in a
timely manner.
The course of action will depend on the nature and severity
of the breach and may include disciplinary action, including
dismissal in some cases and for matters of a breach of law
(criminal or civil), referral to relevant authorities.
COMPLIANCE WITH LAWS
AND REGULATIONS
Aurelia’s Directors, employees and business partners are
required to comply with the laws in the state and country
in which they are working and acknowledge that a breach
can result in serious consequences for the Company
and our employees. This could include fines, criminal
and civil penalties, sanctions, imprisonment and/or
reputational damage.
Aurelia experienced no material environmental, community
or heritage incidents and received no fines or penalty
infringement notices in FY23. However, an environmental
incident occurred at the Dargues Mine in July 2023 regarding
a mine water tank overflowing into a nearby creek. A Clean
Up Notice was issued to Big Island Mining Pty Ltd in July
2023 with respect to the incident.
There were several minor non-compliances to development
consent conditions during the year, all of which were reported
to the relevant authorities as required.
WORKING WITH GOVERNMENT AGENCIES
Aurelia works closely with government officials in the
jurisdictions where we operate, and regularly engages with
them on matters that affect our business. We maintain sound
professional relationships with governments, their agencies
and employees, and always act in a respectful, honest,
transparent and ethical manner. We always cooperate with
government enquiries and investigations.
In accordance with Company guidelines, under our
Delegation of Authority Manual and Anti Bribery and
Corruption Standard, no political donations in cash or in-kind
are to be made. Employees may participate as individuals in
political processes provided it is made clear that in doing so,
they are not representing the Company.
No financial assistance has been received or requested from
federal or state governments.
29
—
AURELIA METALS The following factors are taken into consideration when
identifying material risks:
Has the risk been evaluated with a risk rating of ‘extreme’
in the Aurelia Risk Management Framework?
Would the risk require public disclosure?
Could the risk substantially influence the assessment and
decisions of stakeholders?
Could the risk materially change the underlying value
of the business?
Would the risk impact the Company meeting its business
strategy and objectives?
Material risks in the Group Risk Register are also
allocated to the Board or one of the Board Committees
for annual oversight. This includes the review of the risk
management framework and monitoring of Group material
risks to confirm appropriate processes have been applied
to identify, evaluate and control risks as far as reasonably
practical, and consideration is given for further mitigation
from the Board’s experience.
Material business risks are further discussed in the
‘Operations and Financial Review’ section of this Annual
Report on page 99.
In FY23, we updated our Enterprise Risk Management
Framework, which is aligned to ISO 31000 and includes
our Risk Management Policy, Standard and Procedure.
The Risk Management Standard outlines Aurelia’s minimum
requirements for the systematic identification, assessment
and management of risks and opportunities.
RISK MANAGEMENT
—
Risk Management at Aurelia refers to the management
of potentially adverse effects, as well as the realisation
of potential opportunities.
Risk management is embedded throughout the business
from assessing growth opportunities through exploration,
mergers and acquisitions, to development, operation, and
mine closure.
Our approach to hazard identification, risk assessment and
incident investigation is governed by our Board and the
Sustainability and Risk, and Audit Committees. This high
level of monitoring provides confidence to our internal and
external stakeholders that Aurelia’s material and significant
risks are identified and effectively managed.
Aurelia’s Group Risk Register categorises risks and
opportunities in the following four broad topics:
Operational, including Compliance and Approvals, Health
and Safety, Environment, Projects, and Community.
Strategic, including Capital Allocation, Industry, and
Strategy and Delivery.
Financial, including Commodity Prices, Credit Risks,
Financial Operations and Liquidity.
Corporate, including Supply Chain, Fraud and Corruption,
Information Technology, Human Resources and Legal.
For each risk, control strategies and improvement
opportunities are identified and accountability for their
management is assigned to a risk owner.
Recent improvements to our risk management framework
include formalising monthly risk and improvement action
reviews with risk owners and the Senior Leadership Team.
Material risks are those that threaten the success of Aurelia’s
business and/or could substantially impact the Company’s
ability to create or preserve value over the short, medium
or long term.
30
—
An aerial view of the Peak
Mine tailings storage facility
during the construction of
the stage 5 lift
ANNUAL REPORT 2023 The Risk Management Standard is supplemented by Aurelia’s
Risk Management Procedure which provides guidance on the
four levels of risk assessments undertaken at Aurelia:
Level 1: Take 5s
A pre-task assessment to be undertaken by individuals
in the field to consider hazards associated with the task
at hand. A Take 5 is required at shift commencement,
before each task, and when the work environment or other
conditions change.
Level 2: Job Hazard Analysis
A pre-task assessment identifying job steps, relevant hazards,
and controls. A Job Hazard Analysis (JHA) is undertaken
when a Take 5 cannot address the risk adequately, for team
activities, and/or where a standard operating procedure
is not available. A JHA is reviewed by everyone involved,
or likely to be involved, in a task.
Level 3: Formal risk assessments
Formal, team-based, qualitative risk assessments are completed
for: the Aurelia Group, operations, departments, major projects,
life-of-mine planning and budgeting, major modifications of
plant and equipment (including capital projects), mine closure,
entry into new materials and/or different jurisdictions and
mergers and acquisitions. Level 3 moves beyond the task in
relation to health, safety, environmental and community risk,
to consider financial, human resources, business continuity
and other strategic business risks.
Level 4: Quantitative and other detailed
Risk Assessments
Quantitative risk assessments may be required for scenarios
that have significant consequences where a more detailed
understanding of the controls and effectiveness are required.
MANAGEMENT SYSTEMS
—
Our Health, Safety and Environment Management Systems
are informed by our Risk Management Framework. They build
upon our Vision, Values, Strategy and policies and are
supported by The Aurelia Way, our Rules to Live By, and
Green Rules which set clear and unambiguous minimum
expectations around high potential risk incidents and guide
individual behaviours. See our website for a list of our Rules
to Live By: https://aureliametals.com/sustainability/safety.
The Green Rules are also available on our website:
https://aureliametals.com/sustainability/environment/
We have established standards, management plans
and procedures – supported by work instructions and
task-specific risk assessments – to guide how work
should be undertaken in a safe and environmentally
responsible manner.
Prior to visiting or beginning work at one of our sites,
employees and contractors undergo an induction program
targeted to the level of risk associated with their activities.
General site inductions inform the workforce about the
risks and controls associated with activities on site, and the
behaviours we expect of them. Additional inductions and
training are provided to those who access higher risk areas,
including our processing mills and underground environment,
or who will be undertaking higher risk work.
We continued to improve our Health, Safety and Environment
Management Systems this year, with the further development
and enhancement of Fatal and Catastrophic Hazard
Standards and Critical Control Verification programs.
INCIDENT INVESTIGATIONS
—
Incidents are fully investigated in line with our Incident and
Hazard Management Procedure. Under this Procedure,
incidents are broadly classified into the following categories:
safety (eg. injuries, occupational illness, near misses,
policy/procedure breaches)
equipment/damage
environmental
non-compliance
production loss
community/reputation
inappropriate workplace behaviour (eg. sexual harassment
and assault)
security.
The depth of incident investigation is dependent on the
severity of the incident, with increasing depth correlating to
increased actual or potential consequence.
Incidents or near misses with an actual consequence of
level 3 (moderate) and above, or a potential consequence of
level 4 (major) and above – also known as ‘High Potential Risk
Incidents’ (HPRIs) – are investigated using the Incident Cause
Analysis Method (ICAM).
Employees trained in the ICAM methodology are called on to
lead or assist in incident investigations as required.
For highly sensitive and/or serious investigations the
Company has used external (independent) investigators.
Outcomes of HPRI investigations are overseen by Aurelia’s
Senior Management Taskforce for Significant Incidents,
including verification that HPRI actions have been
appropriately closed out. Events that go to the Taskforce are
also presented to the Sustainability and Risk Committee, with
some more severe or complex incidents also being presented
to the Board.
In FY23, six HPRIs required investigation (FY22: 11).
31
—
AURELIA METALS
STAKEHOLDER ENGAGEMENT
—
Fundamental to our Vision and Values is being accepted
as a transparent and trusted partner, and successfully
establishing long-term relationships with all our stakeholders.
We do this by respectfully and openly engaging with our
stakeholders through various forums and the media.
We actively attempt to understand the needs and concerns
of our stakeholders to better inform our decision-making.
We share information about our operations and performance
to ensure our stakeholders are kept up to date.
STAKEHOLDER GROUPS
HOW WE ENGAGE
KEY TOPICS OF ENGAGEMENT
Employees and contractors
Emails, site and Group-wide newsletters,
noticeboards, meetings, General Manager
State of the Nation meetings, Managing
Director and Chief Executive Officer
communications, social media
Business performance
Development of Business Plans and performance
against the plan
Sustainability management and performance
Employee recognition and reward
Key operational and project milestones
Inductions, Vision and Values, expectations,
The Aurelia Way, Rules to Live By, Green Rules,
core Company policies and standards
Community engagement and sponsorships
Government
Meetings, site visits, emails, briefings,
industry associations (NSW Minerals Council)
Regulatory and legal compliance
Project approvals and modifications
Communities
Community Consultation Committees,
complaints and grievance mechanisms,
website, employee visits, community
noticeboards, social media
Shareholders and investors
Annual Reports, quarterly reports, website,
investor briefings, conference calls, ASX
announcements, Annual General Meetings,
social media
Sustainability management and performance
Voluntary Planning Agreements
Community investment
Operational and project milestones
New projects
Sustainability management and performance
Investment in communities
Cultural heritage consultation and surveys
Direct engagement through Town Hall meetings
on new projects
Life-of-mine planning
Mine and project milestones
Operating performance
Financial performance and balance sheet
Updates to the Mineral Resource and Ore Reserve
Sustainability management and performance
Corporate governance
Community sponsorships and donations
Life-of-mine planning
Mine and project milestones
Suppliers
Meetings, contractual agreements
Sustainability requirements
Customers
Meetings, engagement, site visits,
market tenders
Modern Slavery requirements
Contract conditions
Updates to the Mineral Resource and Ore Reserve
Regulatory compliance
Sustainability management and performance
32
—
ANNUAL REPORT 2023 With FY23 being a year of transition for the Group, the
strategic plan developed for the year was deprioritised in
favour of improved cost control through the Working Smarter
Program and organisational transformation.
For FY24, our approach to strategic planning has changed,
with internal facilitation of business planning sessions
commencing with the creation of the revised Strategy on a
Page by the Executive and Senior Leadership. This strategy
in turn provided guidance to the creation of FY24 business
plans for our operations which detail the critical tasks and
tactical projects to be completed to ensure delivery against
the FY24 budget.
ANNUAL BUSINESS
PLANNING CYCLE
—
Aurelia has a defined annual business planning cycle that
culminates in the development of objectives and targets at
the beginning of each financial year. These are aligned to the
Company’s annual plan and long-term strategy.
The annual business planning cycle includes:
Material Risk and Opportunity Review
Strategy (developed by executive management
and approved by the Board)
Life-of-mine planning
Budget, review of performance, and annual Business
Plan development.
The annual planning cycle ensures the Group strategy and
critical tasks for the annual plan and budget are cascaded
down throughout the business. In this way everyone, from the
Managing Director and Chief Executive Officer down to each
employee in the organisation, knows what is expected and
how they contribute to the plan.
Sunrise at the Peak process plant
33
—
AURELIA METALS CASE STUDY:
WORKING SMARTER
PROGRAM
—
(left to right) Underground Truck
Operator, Peter Summerfield, Loadscan
Consultant, Brandon Moynihan and
Bogger Operator, Steven Blom following
calibration of the Loadscan scanner at
New Cobar: a Working Smarter Program
initiative that increases productivity and
supports safe production
In FY23, a key focus for Aurelia was returning
our business to operational certainty following
underwhelming performance at the onset of the year.
Recognising our employees know the business the
best, we called on them to help identify cost reduction
opportunities as well as process and business
efficiency improvements that would help us find value
in the margin through the Working Smarter Program.
Launched in November 2022, the Program empowered
and incentivised employees to log initiatives via QR codes,
suggestions boxes and/or paper forms at our worksites.
Once submitted, initiatives were moved along a five-stage
evaluation process, with stage one being the ‘pipeline’ or
identification stage. All initiatives were then moved to stage
two, or ‘investigating’ and were reviewed using a value versus
ease of implementation assessment.
From there, the ‘prioritisation’ process identified highest
value initiatives, noting value wasn’t solely determined by
cost savings, and those which increased efficiency and/or
maximised returns were also given priority.
Finally, actions were planned for initiatives that were
approved to move to the ‘executing’ phase and were then
‘banked’ when completed. Sitting across the process was
‘stage zero’, or initiatives the Working Smarter Committee
identified as needing no further analysis and were moved
immediately to execution.
When the Program wrapped in July 2023, more than
$A25.6 million in cost savings and efficiency equivalent
value had been banked. This included approximately $15.8
million in ongoing savings due to sustainable changes in
operating methods, processes, or equipment. The outcome
far and above exceeded our Executive Leadership Team’s
(ELT) expectations, having set what was thought to be a very
optimistic initial target of A$24 million.
Principal – Production Systems, Simon Young – who also
doubled as the Working Smarter Committee Lead – spoke
about the response to the Program.
“In the eight months Working Smarter ran across our
business, 601 initiatives were logged, 220 of which were
completed and banked. The Working Smarter Committee and
the ELT were overjoyed at this response,” Simon said.
“One of the keys to the success of the Program was its
overarching ethos: ‘that’s how it’s always been done’ doesn’t
necessarily mean it’s the best way to do things anymore.
It encouraged all ideas, some simple and small, others large
and complex, from employees across the Group.
“The Working Smarter Program is testament to what Aurelia
can achieve when we invest in the knowledge of our people
and empower them to ‘own’ their processes and shape the
future of our Company. If the Working Smarter Program is a
snapshot of what we can achieve when they come together,
I am confident the future remains bright for Aurelia,”
Simon concluded.
34
—
ANNUAL REPORT 2023 SUSTAINABILITY PLAN
—
Aurelia has developed a rolling three-year plan to guide our efforts to improve our approach and performance across three
pillars of Sustainability. The plan has been approved by our Board and informs annual business planning, particularly for Health
Safety Environment and Community (HSEC) and People and Organisation projects that require a coordinated effort across
the business.
1. SUSTAINABILITY
GOVERNANCE
2. ENVIRONMENTAL
PERFORMANCE
3. SOCIAL
PERFORMANCE
Incorporating Board oversight via the
Sustainability and Risk Committee,
establishment of Aurelia’s risk
management framework, development
and implementation of standards and
systems to ensure we have a culture
that recognises the importance of
sustainability to business success.
Addressing key environmental risks,
including legal compliance, climate
change, land and biodiversity,
water, tailings and waste rock, and
rehabilitation and closure.
Managing key social risks across
the people (diversity and inclusion,
training and development), health and
safety (fatal hazards, legal compliance,
and health and wellbeing) and
community (stakeholder engagement,
social investment and cultural
heritage) disciplines.
A Peron's Tree frog, photo taken at the Peak Mine site
35
—
AURELIA METALS FY23 OBJECTIVES, TARGETS AND PERFORMANCE
—
At the Annual General Meeting in November 2022, our
Board set an agenda which included targets to turn around
operational performance and cash management.
As a result, a number of the FY23 targets were deprioritised
and not completed. Performance against our FY23
sustainability targets is summarised in the table below.
Our key focus to return to operational certainty meant that
FY23 was a year of rebalance to restore shareholder value.
FY23 OBJECTIVES, TARGETS AND PERFORMANCE
Not achieved
In progress
Complete
OBJECTIVES
RISK
TARGETS
PERFORMANCE / ACHIEVEMENTS
Maintaining an effective risk management
framework is essential for the protection
and creation of business value.
Three Fatal or Catastrophic
Hazard Standards audited
External audits conducted against 3 (three)
Fatal Hazard Standards at operating sites in
FY23 (1 at Hera, 2 at Dargues, 3 at Peak)
SAFETY
Safety underpins everything we do. We are
committed to the health and wellbeing of
our workforce.
Zero fatalities
≤ 6.6 TRIFR
Zero fatalities
5.13 TRIFR*
>90% of actions to address
100% of actions from identified serious
serious weaknesses identified
during Critical Control
Verifications completed by
due date
weaknesses were completed by the due date
PEOPLE
We value our people. A diverse,
high-performing, engaged and empowered
workforce is key to our success.
COMMUNITY
As a part of our local communities,
we actively engage to foster trusted,
transparent and respectful long-term
relationships to create enduring value and
protect cultural heritage.
CLIMATE CHANGE
We are committed to a future where
average temperatures do not rise by
more than two degrees through building
resilience to climate change and
minimising greenhouse gas emissions.
ENVIRONMENT
Our commitment to environmental
stewardship focuses on biodiversity
conservation, efficient use of water and
resources, and minimising unintended
pollution to land, water and air.
7% improvement in the
No engagement survey completed in FY23; full
Sustainable Engagement Score
survey planned for FY24
≤20% voluntary turnover
Due to the closure of Hera mine and company
20% improvement in female
uncertainty turnover rose to 35.9%
representation in the workforce
5.6% year-on-year improvement to 22.7%
female participation
70% of approved social
investment actions completed
Finalise Climate Change Position
including science-based targets
Social investment program not developed due
to focus on operational performance; however,
we have an active community grants program,
which contributed A$0.2M to our local
communities in FY23
Climate Change Position not finalised. Aurelia
recognises climate change is an issue and
we are committed to reducing emissions
through projects such as the solar farm at the
Federation Project.
≤3 Recordable Environmental
2.91 REIFR
Incident Frequency Rate (REIFR)
Progressive rehabilitation projects are ongoing
100% of available land
rehabilitated in accordance with
site rehabilitation plans
* Total Recordable Injury Frequency Rate (TRIFR) measured by per million hours worked.
36
—
ANNUAL REPORT 2023 FY24 OBJECTIVES AND TARGETS
OBJECTIVES
RISK
TARGETS
Maintaining an effective risk management
framework is essential for the protection
and creation of business value.
SAFETY
Safety underpins everything we do. We are
committed to the health and wellbeing of
our workforce.
PEOPLE
We value our people. A diverse,
high- performing, engaged and
empowered workforce is key to
our success.
COMMUNITY
As a part of our local communities,
we actively engage to foster trusted,
transparent and respectful long-term
relationships to create enduring value and
protect cultural heritage.
CLIMATE CHANGE
We are committed to a future where
average temperatures do not rise by
more than two degrees through building
resilience to climate change and
minimising greenhouse gas emissions.
ENVIRONMENT
Our commitment to environmental
stewardship focuses on biodiversity
conservation, efficient use of water and
resources, and minimising unintended
pollution to land, water and air.
Active risk management and review embedded across sites, with monthly risk reviews
Zero fatalities
≤ 4.6 TRIFR
All Fatal Hazard Standards and their CCVs reviewed and simplified
Employee engagement survey completed by end FY24
10% improvement in the Training and Development category under the Employee
Engagement Survey
Close out 80% of priority actions under the Diversity, Equity and Inclusion Strategy
25% female participation across the workforce
Develop priority People Standards for the Group
Develop and implement Community and Engagement Standards for the Group
Continue to actively participate in our communities through donations and community
support, targeting A$0.15M in FY24
Development of a Reflect Reconciliation Action Plan
Complete a gap analysis of Aurelia’s climate change commitments and reporting capability
against International Financial Reporting Standards (IFRS) which fully incorporate the
recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD)
Roll out Environment Performance Standards across the Group
Verify performance against four Environmental Performance Standards
37
—
AURELIA METALS ECONOMIC CONTRIBUTION
—
Aurelia acknowledges how important it is to share the value
of the resources we extract with our stakeholders. We’re open
and transparent about our economic contribution and,
despite cost pressures throughout FY23, have continued to
give back to the local, state and national economies in which
we operate.
Tender and vendor selection processes for material supply
and service contracts include consideration of ESG exposures
and mitigation measures implemented by the supplier.
Direct economic value generated ................... A$369.2M
Economic value retained ............................................ (A$26.6M)
Economic value distributed ............................ A$395.8M
Operational costs and other ....................................... A$297.3M
Community investments and expenditure ............... A$0.2M
Employee benefits .......................................................... A$62.4M
Payments to governments (net) ................................ A$30.2M
Payments to providers of capital ................................... A$5.7M
An aerial view of the Peak Mine process plant
In FY23, there were no instances of negative ESG impacts
being identified in the supply chain which resulted in the
termination of business relationships.
In FY23, we generated more than A$369 million in royalties,
taxes, employee wages and dividends.
($26.6M)
$395.8M
$297.3M
$62.4M
$30.2M
$5.7M
$0.2M
38
—
ANNUAL REPORT 2023 PEOPLE PERFORMANCE
—
Aurelia recognises superior organisational performance
can only be achieved through the people who call our
workplace theirs.
including career breaks, compact work weeks, and hybrid
rosters that enabled employees to work remotely.
We introduced a tailored Retention Scheme for employees
In a tight labour market, the challenge to attract, recruit
and retain high-calibre employees to meet our current and
future business needs is significant. This means our efforts to
engage, energise and include our people at every stage of the
employment lifecycle have never been more important.
Our materiality process identified the following people
and performance focus areas for FY23:
Retaining talent.
Diversity, equity and inclusion.
Training and development.
Remuneration linked to performance.
RETAINING TALENT
—
Our workforce rose to the challenge of the substantial
operational change agenda set out by the Board at the
2022 Annual General Meeting which included targets to turn
around operational performance and cash management.
Our aim to return to operational certainty and restore
shareholder value meant that FY23 was a year of rebalancing.
We focused on guiding our workforce through substantial
changes within our Executive Leadership Team (ELT),
while continuing to prioritise the safety of our people and
remaining conscious of cash flow and cost management.
We set in motion a range of programs designed to support
and retain our people at a time when uncertainty and fatigue
were prevalent.
There were a number of Group-wide initiatives introduced
with the aim of recognising and rewarding our existing
employees for remaining with the Company during these
uncertain times:
We invited Senior Professionals and Superintendents to
participate in the Long-Term Incentive (LTI) Scheme for
the first time. The LTI Scheme encourages ownership of
the Company’s performance. Employees at Manager level
and above continue to be eligible to participate in the
LTI Scheme.
We promoted and embedded our Flexible Working
Arrangements Standard including broadening Drive-In-
Drive Out (DIDO) and Fly-In Fly-Out (FIFO) roles to enable
our employees to live where they want and continue to
work for Aurelia. We added alternatives for accommodation
including share-housing and camp options at our Peak
Mine. We also promoted other options under the Flexible
Working Standard that were embraced by our employees
working at our Hera Mine which incentivised our
employees’ commitment to remain with the Company
until their roles were not required (redundancy) or remain
with the Company and be transferred to another Aurelia
worksite. The Scheme was designed to reduce employee
resignations arising from concerns over job security and
future employment and was successful with over 92%
of employees participating in the Scheme remaining
with the Company. A Retention Scheme at our Dargues
Mine – which also incentivises employees to remain with
the Company until their roles are no longer required was
introduced at the beginning of FY24.
An Employee Share Scheme, whereby eligible permanent
full-time and part-time employees can receive A$1,000
in Aurelia shares, was issued again in FY23. For further
information, see the Remuneration Report which begins
on page 107.
DIVERSITY, EQUITY AND
INCLUSION
—
Aurelia recognises that a diverse and inclusive workforce
brings a wide range of perspectives and experiences and
enables employees to fully contribute their talent to business
improvements and success.
In FY23, we are proud to report an increased female
representation across the workforce to 22.65% (FY22:
21.5%). This represents the fourth year running that female
representation has increased.
Our Board remains committed to ensuring a minimum of
25% of its members are women. As at 30 June 2023 female
representation on the Board was 29%.
We continue to take a proactive, ‘ground-up’ approach to
understanding employee experiences across our business.
This has included a psychosocial risk survey in FY23.
Our Diversity, Equity, and Inclusion (DE&I) Working Group
continued to meet throughout FY23, and progress was
made against our measurable objectives and actions.
These included:
The development of a Parental Leave Standard and
continuing to embed and promote our Workplace
Flexibility Standard. These standards emphasise flexibility
and are aimed at supporting parents to return to our
workforce while balancing additional responsibilities
at home.
39
—
AURELIA METALS Delivering an extensive face-to-face Workplace
Behaviour Training package that educates employees
on the Company’s expected behaviours when it comes
to bullying, harassment (including sexual harassment),
discrimination and victimisation. This training emphasised
our robust support mechanisms available for employees
to raise a concern, lodge a complaint or request a review
of their grievance on a case-by-case basis. Within Aurelia,
incidents of sexual harassment and inappropriate
workplace behaviour are referred to the Senior Taskforce
for Significant Incidents as High Potential Risk Incidents
and require full investigation. The ELT is also fully
briefed on any incidents of this nature, including actions
management takes to prevent such incidents.
The development of a Professional Development
Procedure. This procedure was prioritised after a review
of voluntary turnover data indicated that the key reason
for leaving provided in exit interviews by our professional
females was ‘pursuing career opportunities’.
Conducting an extensive gender pay gap analysis, before
and after any award of salary increases. This was provided
to both the Remuneration and Nomination Committee and
the Board.
Continuing to collect information from our workforce
relating to gender equity through targeted questions
in exit interviews, a psychological risks survey and a
sustainability survey to ascertain our employees’ beliefs
regarding material topics for this Sustainability Report.
LISTENING TO OUR EMPLOYEES
At Aurelia it is important our employees feel they are safe
to speak up about issues in the workplace. In FY23, we
continued to promote platforms and mechanisms whereby
employees could voice concerns, seek help or raise
a complaint. These methods include through:
our 24/7 confidential Whistleblower service provider,
Stopline
our external Employee Assistance Provider,
Drake Wellbeing
their line management or human resources
representative/s.
Our Fair Treatment Standard provides another avenue for our
employees to raise and resolve disputes.
We place great importance on our employees’ right to
exercise freedom of association and work closely with
relevant union representatives. In FY23, we had no strikes or
lockouts at any of our sites.
TRAINING AND DEVELOPMENT
—
Aurelia is committed to fostering an environment wherein
our people can reach their full potential. By investing in
their capability and skills, we are investing in Aurelia’s
future growth.
We are committed to providing access to adequate support
and resources for our employees to support our people to
continue to feel confident in managing their mental health.
As part of this support, members of our Human Resources
and Health, Safety and Environment Teams completed Mental
Health First Aid Training in FY23 through the Cobar TAFE.
This training provides the skills required to offer initial
support to adults who are developing a mental health
concern, are experiencing a worsening of an existing
mental health concern or are in a mental health crisis, until
appropriate professional help is received, or the crisis is
resolved. The course is informed by the Mental Health First
Aid (MHFA) Guidelines. Our aim is to ensure our key HR and
HSE personnel have improved knowledge of mental illnesses
and their treatments, knowledge of appropriate first aid
strategies, and confidence in providing first aid to individuals
with mental illness.
In FY23, we implemented Pegasus, a Learning and Contractor
Management System to deliver a comprehensive solution
to streamline our processes in contractor onboarding,
contractor management, online learning, data integrity for
training records and individual training needs analysis. This
system replaced three Learning Management Systems across
our sites. We are excited to be able to utilise this system to
continue to build a capable and competent workforce.
An aerial view of the Peak Mine process plant
40
—
ANNUAL REPORT 2023 CASE STUDY:
MENTAL HEALTH
TRAINING
—
(left to right) Electrical Planner,
Stephen Mann and General
Counsel and Company Secretary,
Rochelle Carey at the Peak Mine
Keeping our people safe is – and will remain –
a top priority for us.
The period of sustained transition endured throughout FY23
meant our workforce was challenged to ensure the health,
safety and wellbeing of our people were not compromised.
In recognition of this, we continued to partner with Mental
Health Movement to provide mental health training for
the Group.
Beginning in FY22 with a trial at our Dargues Mine, the
Mental Health Movement’s Mental Health Workplace
Blueprint is a four-stage program which includes awareness,
education, training and resources. Stage one and two
were rolled out to the Peak, Hera and corporate-based
employees in FY23, with a select number of representatives
from all sites participating in training offered in stage
three. Additionally, we invited our people to participate
in a psychosocial hazards survey and risk assessment
(see page 45).
Mental Health Movement Founder, Dan Hunt spoke about the
Mental Health Workplace Blueprint and how its methodology
has helped the Company and our people.
“At Mental Health Movement, we believe organisations
need to be supported to help understand the importance
of providing a mentally healthy and supportive workplace
and effectively implement the right mental health supports.
The Blueprint allows for this, aiming to improve literacy and
resilience and reduce stigma surrounding reporting and
managing mental health issues.
“In stage one, through the power of story, participants
unpack six keys to improved mental health to begin to
understand the supports available to them and how they can
be activated. Workshops that dive deeper into mental health
literacy, management, and personal reliance are offered in
stage two, followed by accredited Mental Health First Aid
and Mental Health Response training in stage three. These
stages are supported by resources – stage four – which
provide support and can facilitate conversations without the
presence of Mental Health Movement.
“By engaging us to roll out our Mental Health Workplace
Blueprint, Aurelia Metals is helping provide a mentally healthy
and supportive environment for its people,” Dan said.
Our Group Manager – People, Susan Scheepers said the
program has been well received, with positive results from
a survey following stage one driving its continued roll out in
FY24 and beyond.
“The survey indicated 89% of respondents changed their
perception of mental health, with a further 96% saying their
knowledge of mental health had increased.
“Importantly, the survey also indicated our employees would
be more likely to seek support if they were struggling with
mental health after the workshop, with 96% saying they
felt more confident in managing their own mental health
and 89% noted they felt they would be able to support a
co-worker with a mental health struggle.
“This program exemplifies how we are continuing to prioritise
the health and safety of our workforce. We look forward to
continuing to work with Mental Health Movement as we
progress our workforce through the stages of their Workplace
Blueprint,” Susan concluded.
41
—
AURELIA METALS REMUNERATION LINKED
TO PERFORMANCE
—
Fairness and equity are our key drivers to remunerate
talent, as well as a focus on rewarding and recognising
high performance. We recognise that fairness and equality
in remuneration is necessary to attract, develop and retain
high-calibre employees.
REMUNERATION FRAMEWORK
Our remuneration framework promotes a performance-
based culture whereby competitive remuneration and
rewards are aligned to Company business plans and
shareholder objectives.
All employees’ employment conditions are underpinned
by common law contracts. We don’t have any enterprise
agreements at our sites. As a result, Aurelia undertakes
annual market remuneration benchmarking (against similar
industries and market capitalisation) for all levels within the
business to maintain market competitiveness for attraction
and retention.
Our gender pay gap analysis forms part of Aurelia’s Diversity
and Inclusion Policy. This Policy is overseen by our Board and
forms part of the Remuneration and Nomination Committee
Charter and annual work plans to review and address any
gaps. Performance and salary reviews are moderated by the
Senior Leadership Team to ensure both internal consistency
and that there are no gender or other attribute biases prior to
the Board’s review.
In FY23, we undertook a gender pay gap analysis of
like-for-like roles. No gaps were identified.
PERFORMANCE MANAGEMENT CYCLE
In FY23, our Short-Term Incentive (STI) Plan was simplified,
moving to Company and site performance measured
against three pillars: safety, production, and cost outcomes.
We believe realigning employee individual performance
goals under these pillars will help the Company unlock future
business success. It also allows employees to make a clear
link between individual and Company performance and the
payment of their variable remuneration.
Every employee continues to have an individual Achievement
Development Plan (ADPs) (including Trades and Operators-
level employees). ADPs outline individual performance
targets, identify development needs and opportunities, and
assess an employee’s alignment to key behavioural indicators
outlined in The Aurelia Way.
In FY23, we introduced Personal Key Performance Indicator
(KPI) Plans for Supervisor-level and above employees.
The KPI Plans outline two to three individual performance
targets that extend beyond normal position description
duties. These targets align with our Group-wide strategy and
plans and are designed to reward employees who outperform
in their role and contribute to the success of the Company.
ADPs and KPI Plans are developed and agreed at the
beginning of the financial year and every employee
participates in an informal mid-year and a formal year-end
review to discuss progress against targets. Outcomes from
these reviews against ADPs determine remuneration
increases in an objective, consistent way for all employees.
For roles below supervisory level, performance against
ADPs also determines the outcome of the individual
component of an employee’s STI. For Supervisor levels and
above, performance against the KPI Plans determines the
outcome of the individual component of their employee’s STI.
All full-time, part-time and eligible fixed-term employees
participate in this process.
In FY24, there will be a targeted focus on informal and formal
training and professional development opportunities that
are tailored and planned for all employees as outlined in
their ADPs.
42
—
(left to right) Chief Financial Officer, Martin
Cummings, Managing Director and Chief
Executive Officer, Bryan Quinn with Hera Care
and Maintenance Supervisor, Luke O’Reilly tour
the plant facilities at the Hera site
ANNUAL REPORT 2023 Workforce Size
Corporate/
Exploration
Peak Mine
Hera Mine
Dargues Mine
Total
FY21
EMPLOYEES CONTRACTORS
FY22
EMPLOYEES CONTRACTORS
FY23
EMPLOYEES CONTRACTORS
25
133
63
37
258
1
279
109
83
472
49
153
54
51
307
6
315
120
81
522
45
199
6
48
298
8
75
3
74
160
Employee Gender Diversity (%)
Male
Female
FY21
FY22
FY23
81
19
78
22
77
23
Employee-Initiated Turnover (%)
FY21
FY22
FY23
-*
28
34
31
32
22
19
28
44
26
40
27
47
41
36
Corporate
Peak Mine
Hera Mine
Dargues Mine
Total
*Data not available prior to FY22
Local Employment (%)
FY22
FY23
RESIDENTIAL
OTHER
RESIDENTIAL
OTHER
Peak Mine
Hera Mine
Dargues Mine
81
39
86
19
61
14
66
0
61
34
100
39
Employee Gender Diversity by Employment Level (%)
EMPLOYMENT
LEVEL
Board
Executive/General
Manager
Principal/Manager
Senior Professional/
Superintendent
Professional/
Supervisor
Paraprofessionals/
Operators
FY21
FY22
FY23
MALE
FEMALE
MALE
FEMALE
MALE
FEMALE
67
100
81
79
82
80
33
0
19
21
18
20
71
100
78
76
85
75
29
0
22
24
15
25
71
87.5
80
72
91
75
29
12.5
20
28
9
25
43
—
AURELIA METALS HEALTH AND SAFETY
PERFORMANCE
—
Aurelia is committed to the health and safety of our
employees, contractors and communities. We achieve
this through our Safe Metals program and zero harm
philosophy whereby all workplace incidents and
injuries are considered preventable.
We strive to continually improve our health and safety
performance through our annual planning cycle process.
Our materiality process identified the following health and
safety performance focus areas for FY23:
Safety culture.
Fatal hazards and critical controls.
Contractor management.
Health and wellbeing.
SAFETY CULTURE
—
Aurelia’s safety culture is incorporated within The Aurelia Way
and supports our Rules to Live By.
The Rules to Live By were developed in response to High
Potential Risk Incidents (HPRI) which have previously caused
harm and/or fatalities in the mining industry. The Rules set
expectations and guide individual behaviours.
Our safety culture is supported by requiring people in
supervisor and above roles to participate in our Safety
Leadership Program.
Under the Safety Leadership Program, leaders demonstrate
visible safety leadership by engaging in proactive
conversations, observations and inspections (including Safe
Act Observations, Planned Task Observations, Workplace
Inspections, Critical Control and HPRI Verifications), in line
with a lead indicator matrix and schedule. This helps us to
determine the effectiveness of our safety understanding and
controls throughout the business.
In FY23, we achieved >85% compliance with our Safety
Leadership Program targets.
TOTAL RECORDABLE INJURY
FREQUENCY RATE
Aurelia’s safety performance continued to improve this year
with a significant reduction in the Total Recordable Injury
Frequency Rate (TRIFR) from 8.7 to 5.1 per million hours
worked – this was enabled by the Group experiencing no
recordable injuries during the second half of the reporting
year, and our Dargues site remaining recordable injury-free
for the entire 12-month period. No work-related illnesses
were reported in FY23. We are targeting to further reduce
TRIFR in FY24 to ≤ 4.6.
e
t
a
r
y
c
n
e
u
q
e
r
F
y
r
u
n
I
e
b
a
d
r
o
c
e
R
l
j
12
10
8
6
)
d
e
k
r
o
w
s
r
u
o
h
n
o
i
l
l
i
m
r
e
p
(
l
a
t
o
T
4
2021
44
—
2022
2023
ANNUAL REPORT 2023
Recordable Injuries – FY23
EMPLOYEES
CONTRACTORS
MEDICAL
TREATMENT
RESTRICTED
WORK
LOST TIME
MEDICAL
TREATMENT
RESTRICTED
WORK
LOST TIME
Peak Mine
Hera Mine
Dargues Mine
Exploration
Total
-
-
-
-
-
1
-
-
-
1
-
-
-
-
-
2
1
-
-
3
3
-
-
-
3
-
1
-
-
1
We have also developed CCVs, based on a bowtie risk
analysis, for the following Fatal or Catastrophic Hazards:
Airborne Contaminants
Explosives and Blasting
Ground Failure
Emergency Response
Inundation and Inrush
Open Holes and Voids
Working at Heights
Tailings Storage Facilities
Cranes and Lifting
Confined Space
Fire/Explosion
CCVs are used to verify that the critical controls identified for
our Fatal Hazards are in place and effective. Progress against
the CCV program is tracked at a site level and reported
monthly to senior management.
In FY23, we engaged an external auditor to undertake deep
dive audits of compliance with the following Fatal Hazard
Standards at all three operating sites:
Hera – Hazardous Materials
Dargues – Hazardous Energy, and Mobile Plant and Traffic
Peak – Hazardous Materials, Hazardous Energy, and Mobile
Plant and Traffic.
The audits provided valuable insights into each site’s systems
and processes for ensuring compliance with the Standards,
along with feedback on the effectiveness of the Fatal Hazard
Standards themselves. The results from the audits were
generally positive, with each site implementing corrective
actions throughout the year to close out identified gaps.
PARTICIPATION AND CONSULTATION
In line with our focus on the safety of our people in FY23,
we conducted a psychosocial hazards survey. Conducted with
employees, this was part of our overall program of work
identifying and assessing psychosocial risks in the workplace,
and was preceded by a training package made available to
all employees. We received responses from 110 employees,
allowing us to identify the most prevalent psychosocial
hazards and prioritise these in our risk assessment process.
A risk assessment followed the survey and was undertaken
as a workshop over two days in Cobar, with employee
representatives from across the business. The assessment
uncovered valuable insights into the assessment of
psychosocial risks in the workplace and the identification
of control strategies.
FATAL HAZARDS AND
CRITICAL CONTROLS
—
In FY23, we continued to focus on preventing fatalities and
serious incidents by continuing to develop Fatal Hazard
Standards and Critical Control Verifications (CCVs) which
set the minimum requirements for our most significant
safety risks.
To date, we have implemented Fatal and Catastrophic Hazard
Standards and CCVs for:
Mobile Plant and Traffic
Tyres and Rims
Hazardous Energy Isolation
Hazardous Materials
Open Holes and Voids
Airborne Contaminants
Ground Failure
Explosives and Blasting
Emergency Response
Cranes and Lifting
Tailings Storage Facilities
45
—
AURELIA METALS CASE STUDY:
ROLL OUT OF THE
CONTRACTOR HSE
MANAGEMENT
PROCEDURE
—
Electrical
Contractor for
JTMEC at the 630L
safety sign at the
Peak Mine
In response to identifying all recordable injuries
experienced at Aurelia sites in recent years sustained
by contractor workers, in FY23 we identified
contractor management as a material issue for
the business and rolled out a Contractor HSE
Management Procedure.
The Procedure defines the process to award work, assign
a contract owner, contract coordinator and contractor’s
representative, and manage the HSE risks posed by
contractors performing work for Aurelia.
Under the Procedure, Aurelia personnel designated as the
‘Contract Owner’ or ‘Contract Coordinator’ are required
to complete specific monitoring and compliance work
throughout the procurement, engagement, onboarding,
execution and demobilisation phases of their contracts.
This work ensures contractors have in place appropriate
safety management systems and their workers are trained
and competent to carry out their duties on site.
Contractors are assigned a risk rating dependent on
the type and complexity of their work, and this rating
dictates the frequency and type of supervision that each
contractor requires.
Level 1 contractors perform short duration, low-risk work
and are required to receive day-to-day supervision or
escort from an Aurelia employee.
Level 2 contractors undertake work in which Aurelia has
greater experience or Aurelia performs a greater directive
role, and Aurelia has management systems specific to the
task(s). These contractors are supervised on a day-to-
day basis, and subject to more stringent monitoring and
management than Level 1.
Level 3 contractors are the highest risk contractors, and
are managed much more closely under the Procedure.
This category includes contractors undertaking work
that requires specialist expertise, and where Aurelia may
not have management systems specific to the task(s)
to be undertaken.
Speaking about the Procedure, Heath Carney, Principal – Risk
and Sustainability, spoke about the success of the standard in
bringing down contractor-related safety incidents.
“The implementation of the Contractor HSE Management
Procedure has been an integral part of Aurelia’s safety
improvement program in 2023. It contributed to the
reduction in recordable injuries sustained by contractors from
15 in FY22 to 7 in FY23,” Heath explained.
The Contractor HSE Management Procedure is another way
we are ensuring everyone who undertakes work at any of our
sites goes home safe, every day.
46
—
ANNUAL REPORT 2023 HEALTH AND WELLBEING
—
suitably rested prior to commencing their shift. We undertake
routine drug and alcohol testing at our sites and have
implemented a fatigue management program.
Ongoing health and hygiene monitoring is undertaken at our
sites, dependent on the level of risk exposure, and includes:
surveillance for noise and airborne contaminant exposure
including silica, dust, and diesel particulates
testing of blood lead levels
periodic medicals for operational personnel.
With FY23 being a year of disruption and transformation at
Aurelia, our promotion of employee health was focused on
psychosocial safety and the mental health of our workforce.
Along with this initiative, we also implemented a program
of Mental Health Awareness and Mental Health Resilience
training, facilitated across our sites, including the
corporate office. Further detail on these initiatives is provided
in the Mental Health Training case study in the People
Performance section on page 41.
All employees and contractors undertaking work at our
sites are required to complete a pre-employment medical,
including assessment of medical and functional fitness
for work, and are required to present to work fit for duty.
This includes being free of alcohol and other drugs and being
Underground Truck Operator, Pamela Lowe at
the 630L of the Peak Mine
47
—
AURELIA METALS COMMUNITY
PERFORMANCE
—
'Little Miners' –
children of our Peak
Mine employees enjoy
the festivities at the
2022 Cobar Christmas
Parade which was
sponsored by the Peak
Donations Committee
Aurelia is committed to ensuring our presence has a
positive impact in the communities where we operate,
and our long-term relationships create shared
enduring value.
COMMUNITY INVESTMENT
AND DEVELOPMENT
—
Through understanding and a collaborative approach,
we ensure mutually beneficial opportunities and outcomes
to improve the overall quality of life within our communities.
By taking community members’ views into account, informed
decisions are made for support programs and prioritising
local employment and procurement of goods and services
through local businesses.
Our materiality process identified the following community
performance focus areas for FY23:
Community investment and development
First Nations engagement
Project approval engagement
Grievance management.
Our focus is to support local community groups and
businesses wherever possible with our main priority being
projects supporting health, education and cultural initiatives.
We also have ongoing relationships with local sporting groups
and community events, which we believe are the beating
heart of local communities in regional and remote NSW.
Over the last three years, approximately 51% of our
procurement has been sourced from local communities,
which has injected approximately A$449M into regional NSW.
In addition to the approximately A$1.3M we paid in Voluntary
Planning Agreement (VPA) contributions (which includes
maintenance of local roads, community programs and
administration), we have also made discretionary donations of
approximately A$0.4M to local community groups and events
over the last three years. These programs are supported by
the Dargues and Peak Community Grants Programs which
are typically held on a quarterly basis.
48
—
ANNUAL REPORT 2023 These VPA contributions and donations have supported
projects such as:
Improved access to medical services in rural NSW
through subsidised housing for health professionals
visiting Braidwood.
Donations of valuable medical supplies to the Cobar
Athletics Club so they can continue to deliver inclusive
and community-based activities to the people of
Cobar and encourage them to lead an active and
healthy lifestyle.
Supply communications equipment to the Rural Fire
Service in Cobar. The equipment will increase network
coverage and ensure the fire service can continue to
respond to people in need.
Aurelia was proud to sponsor the world premiere of
‘Cancel Culture’ in Cobar. The opera showcase was
written and performed by students from the Cobar High
School. The experimental education program is the first
of its kind and aims to empower, inspire and encourage
young people to engage in the arts.
Supply of solar panels to the Cobar Amateur Pistol Club
who are set to reduce their overhead costs (after being
severely impacted by COVID–19) and their greenhouse
gas emissions.
We were delighted to donate an awning to the St John’s
Parents & Friends Association in Cobar for the schools
pickup zone. The awning will help to protect kids from
the elements while waiting for the school bus.
We were honoured to contribute to the Braidwood
& District Education Foundation who gave us the
opportunity to provide financial support to a young
person from the Braidwood High School who is
heading to University of Wollongong to further their
tertiary education.
Earth Sciences Rock and Aurelia was excited to speak
at the Cobar High School as part of the ‘Teacher Earth
Science Education Programme’.
Community Investments (A$)
FY21
FY22
FY23
Local procurement
184M
174M
127M
Voluntary Planning Agreement
contributions
0.8M
0.3M
0.2M
Discretionary donations
0.1M
0.1M
0.2M
In FY23, work continued on the development of a
Community Strategy that includes a social investment
framework. The Strategy aims to redefine our approach
to social investment in a way that increases the positive
impact we can have on our local communities.
Music students at Cobar High School during a
taiko drumming workshop made possible through
support from the Peak Donations Committee
49
—
AURELIA METALS 50
—
General Manager – Dargues, Angus Wyllie (right)
with representatives from the Majors Creek
Bushfire Brigade (left and centre) - a recipient of
the Dargues Community Grants Program
ANNUAL REPORT 2023 FIRST NATIONS ENGAGEMENT
—
Significant stakeholder consultation was undertaken
throughout the exploration and approvals processes for
this Project.
We value the relationship we have with First Nations Peoples
on whose land we operate, and we acknowledge their rights
and interests to protect and manage their cultural heritage.
Their engagement through exploration and discovery, to mine
development, operations and into closure is invaluable, and
we respect the responsibilities and obligations First Nations
Peoples have for Country.
We strive to meet our legal and statutory obligations and
undertake fair and respectful consultation with our host
First Nations Peoples. Across our exploration and mining
tenure, we operate on the traditional lands of the Wongaibon,
Ngiyampaa, Wiradjuri and Ngarigo.
For projects being developed, there has been extensive
consultation with Registered Aboriginal Parties (RAPs)
involving all aspects of the project, cultural heritage, heritage
surveys and clearances. Through this consultation, it was
identified the RAPs felt the name of the Federation Project
was inappropriate. Aurelia is currently engaging with RAPs
to determine a more culturally appropriate name. This may
take some time to complete as there is an active Native Title
Claim over the land encompassing Federation that is yet to
be determined.
In FY23, Aurelia had no incidents involving First Nations
Peoples. We do not operate in any areas with Native Title
Agreements in place, however we acknowledge there
is an active Native Title claimant over areas containing
our Peak and Hera Mines which is yet to be determined.
This relates to an application made by the Ngemba,
Ngiyampaa, Wangaaypuwan and Wayilan People. While the
application is determined by the NSW government, we will
continue to foster fair and respectful relationships with First
Nations Peoples.
PROJECT APPROVAL
ENGAGEMENT
—
In FY23, we received development consent approval for the
Federation Project from the NSW government. Development
of the Project has commenced, with works associated with
surface facilities and the underground decline ongoing.
The consultation included numerous site visits, heritage
clearance surveys, community information sessions and
ongoing consultation with the project-specific Community
Consultative Committees (CCC). RAPs also participated in
Cultural Heritage and First Nations training for our employees
and contractors.
Aurelia has established CCCs across the Group. The CCCs
are independently chaired and include a number of key
representatives from the local community. They provide
the community with an opportunity to engage directly with
the Company, ask questions, flag issues or air grievances.
Aurelia values the input of our CCCs which provide a direct
link between the Company, the management team and
the community.
GRIEVANCE MANAGEMENT
—
Aurelia investigates all complaints and grievances and
responds fairly and promptly. We take an active approach to
understanding our stakeholder issues and their concerns
through face-to-face forums.
The success of our approach to proactively engaging with
the community has been demonstrated since our acquisition
of the Dargues Mine with community complaints decreasing
from 115 in FY22 to 43 complaints in FY23 (most relating
to noise).
This has been achieved through genuine, respectful
engagement with the local community. In response to
community feedback, we have implemented a number of
initiatives including on-site inspections with members of
nearby communities to determine the cause of the issue
and exploring and implementing a number of suggested
abatement opportunities.
In FY23, Aurelia did not displace or resettle any
community members or First Nations Peoples as a result
of our operations. Artisanal and small-scale mining does
not take place on or adjacent to our operations.
Complaints
The proposed development demonstrated significant benefit
to the local community and State of NSW through providing:
Peak Mine
critical minerals (copper and zinc) which will be required to
Hera Mine
decarbonise the economy
employment opportunities
taxes and royalties
certainty that mining will continue within the region to
ensure the Cobar township continues to thrive.
Dargues Mine
Corporate
Total
FY21
FY22
FY23
18
1
397
-
416
17
2
115
-
134
2
3
43
-
48
51
—
AURELIA METALS CASE STUDY:
INSTALLATION OF
THE NOISE ATTENUATOR
AT THE DARGUES MINE
—
In December 2022, Aurelia installed a noise
attenuator on the mine ventilation fan at our
Dargues Mine to address noise concerns from the
neighbouring Majors Creek community.
Following an increase in noise complaints (which coincided
with an increase in the depth of mine activity and speed of
the ventilation circuit), we engaged a third-party consultant
to conduct a noise audit across site.
While the audit confirmed the ventilation fan was the source
of the intrusive night-time noise, it also concluded Dargues
was operating within noise limits. Despite this, we pursued a
custom-built silencer for the ventilation fan.
General Manager – Dargues, Angus Wyllie spoke about
the project and how it demonstrates our commitment to
going above and beyond to address the concerns of the
communities in which we operate.
“Following several months of consultation, a noise audit, and
confirmation from its CCC and community members, the
mine ventilation fan was unequivocally determined as the
source of noise concerns from the residents of Majors Creek.
“The fan speed had increased from 70 to 82% to maintain
the required airflow within the underground operating areas.
Further increases in the fan speed are planned as the mine
progresses deeper and the resistance of the ventilation
circuit increases.
“Utilising this data, we engaged Quality Acoustics to design
an attenuation measure. The unique specification of the
silencer and reduced consumable availability (associated with
COVID–19) pushed production time, with the fan arriving on
site on 30 November. Installation was completed on
1 December.
The Dargues Mine ventilation fan attenuator
being brought to site, November 2022
“Three months after the installation, an additional external
audit of the attenuator was conducted. It concluded the
noise from the mine ventilation fan while operating at 80%
fan speed measured 15–25 decibels (dBZ). This was down
from the 2022 reading of 20–30dBZ (at the same speed and
measured from the same position). Furthermore, at maximum
speed (100%), noise from the fan measured 15–25dBZ, down
from the 2022 reading of 25–35dBZ.
“Mining companies have a duty of care to their communities,
no matter which state and/or country they are operating in.
It’s incumbent upon them to operate within the constraints
of their Mining Lease and development consent conditions
as well as other contractual, policy and legal obligations.
It’s not necessary to go above and beyond these contractual
commitments. In this situation, we did.
"The decision to act strengthened our social licence to
operate and demonstrates our commitment to being a
good corporate citizen, and our willingness to go above and
beyond to address concerns raised by its communities,”
Angus concluded.
52
—
Final installation of the attenuator on the Dargues Mine ventilation fan
ANNUAL REPORT 2023 ENVIRONMENTAL PERFORMANCE
—
Our unwavering commitment to environmental stewardship
includes the preservation of biodiversity, the judicious
utilisation of resources (including water), the management of
tailings and waste rock, and rehabilitation and closure.
Our materiality process identified the following
environmental performance focus areas for FY23:
Climate change
Land and biodiversity
Water management
Tailings and waste rock
Rehabilitation and closure.
Aurelia acknowledges the risks to the environment inherent
in our operations. From exploration and development, through
to operations and into closure, Aurelia steadfastly endeavours
to mitigate its ecological footprint and preserve the natural
world we share.
As at 30 June 2023, we achieved a Recordable
Environmental Incident Frequency Rate (REIFR) per million
hours worked of 2.91 (target of ≤ 3). In recognition of our
REIFR reporting framework and the positive impact it has
on our environmental performance, we were honoured to
receive the ‘Environmental Excellence’ Award at the 2023
NSW Mining HSEC Awards dinner on 7 August 2023.
Recognising the magnitude of the challenge climate change
poses to our natural world, we are resolute in our dedication
to enhancing our resilience to climate-related risks.
This encompasses the reduction, management and
meticulous oversight of greenhouse gas emissions and other
far-reaching consequences of climate change.
Environment and Community Advisor,
Laura Newton conducting water monitoring
activities at the Peak Mine
53
—
AURELIA METALS CASE STUDY:
INDUSTRY
RECOGNITION
FOR ENVIRONMENTAL
EXCELLENCE
—
(left to right) Aurelia Group Manager – Environment
and Community, Jonathon Thompson with Evolution
Group Manager Environment, Alisa Wilkinson
following the announcement Aurelia won the Award
for Environmental Excellence at the 2023 NSW
Minerals Council's HSEC Awards
On 7 August 2023, we were honoured to receive the
‘Environmental Excellence’ Award at the 2023 NSW
Minerals Council’s HSEC Awards dinner. The Award
recognises our Recordable Environmental Incident
Frequency Rate (REIFR) reporting framework.
As entrusted custodians of the local environments where
we operate, we take the protection and management of the
environment very seriously. Group Manager – Environment
and Community, Jonathon Thompson spoke about our REIFR
framework and how it addresses a lack of standardisation in
NSW regarding environmental reporting.
"Given we view safety and environmental performance
as intrinsically linked, it comes as no surprise we’ve
seen year-on-year improvements in our environmental
and safety performance.
“Our REIFR reporting framework is a unique solution to an
absence in standardisation for mining companies to report
their environmental performance. In our Award submission,
we highlighted the advantages of the framework for other
mining companies. These advantages transcend transparency
obligations and point to improved safety and environmental
performance and strengthening employee accountability.
“Our REIFR is calculated by tracking environmental incidents
that could cause material harm to the environment per
million hours worked. This mirrors our TRIFR reporting.
“REIFR reporting has and will continue to strengthen our
social licence to operate through improved relationships
with our shareholders and stakeholders,” Jonathon said.
“Incorporating REIFR into our reporting framework
coincided with the overarching cultural shift that came
with the inception and roll out of our Aurelia Metals –
Safe Metals Strategy.
For more on our Aurelia Metals – Safe Metals Strategy, see
page 22 of our 2020 Annual Report, available on our website
at: https://aureliametals.com/investors/company-reporting/
54
—
ANNUAL REPORT 2023 CLIMATE CHANGE
—
LAND AND BIODIVERSITY
—
Climate change remains a dynamic subject, presenting both
formidable challenges and promising prospects for Aurelia.
In FY23, our approximate Scope 1 and 2 carbon emissions
totalled 104,596t CO2-e. This was a reduction on previous
years, driven by the Hera site entering care and maintenance.
We expect carbon emissions to increase in FY24 with the
ramp up of the Federation Project. Federation includes a solar
farm which will offset some of the carbon emissions.
Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions are
calculated based on the Australian Government methodology
required by the National Greenhouse and Energy Reporting
(NGER) scheme.
Our Scope 1 emissions are predominantly associated with
gas-fired electricity generation at the Hera Mine with a
smaller proportion from our operational vehicle fleet. Scope 2
emissions relate to purchased electricity at the Peak and
Dargues Mines.
Scope 3 emissions are those associated with activities that
are not under our operational control, such as emissions
resulting from product transportation, and we have not yet
calculated these emissions.
Greenhouse gas emissions (kt CO2-e)
FY21
FY22
FY23
Scope 1 emissions
34.5
32.9
Scope 2 emissions
76.1
81.0
24.2
80.4
Greenhouse gas intensity (t CO2-e per oz Au eq)
Scope 1 and 2 emissions
intensity
FY21
FY22
FY23
0.54
0.58
0.72
Energy use and production (GJ per oz Au eq)
Energy produced
Energy consumed
FY21
FY22
FY23
0.47
4.47
0.44
0.42
4.68
5.94
This is preliminary data and is subject to change pending external review
and verification.
Aurelia values the diverse environments in which it operates
and is committed to managing its impacts on these important
ecosystems. For Aurelia, biodiversity includes the responsible
consumption of water sources, resource management, and
protecting the natural environment.
Environmental compliance is consistently front of mind, as is
improving systems and processes. Our Environment Team is
streamlining our Environmental Management System (EMS)
to support our growing business profile.
In FY23, we advanced the environmental approvals
for the Federation Project. Federation will increase our
environmental footprint and resources use, such as water and
energy. We have ensured our EMS, policies and procedures,
consider the impacts of this increase are mitigated to
minimise impacts on the environment.
Aurelia is committed to protecting or offsetting our impacts
to biodiversity through the implementation of our Group-
wide Green Rules. The Green Rules are similar to our safety,
Rules to Live By and guide individual behaviours. The four
rules manage disturbance, hazardous material, water
management and wildlife. The Green Rules are included in all
employee inductions with clear signage at our mine sites and
exploration areas.
Offsetting – in accordance with the Biodiversity
Assessment Methodology (BAM) – is another way we work
to protect biodiversity. Our impacts to biodiversity at the
Federation Project are offset through the retirement of
biodiversity credits at our offset property, Chelsea. If Aurelia
does not have the required biodiversity credits, they are
sourced from a third party or the NSW government.
The Chelsea offset property has an established Biodiversity
Stewardship Agreement (BSA) with the NSW government.
The property is approximately 2,500 hectares and we have
committed to protecting its biodiversity values and improving
them over time.
At Dargues, we are working with relevant stakeholders to
establish an offsite and onsite biodiversity offset property.
In FY23, we progressed negotiations with a third-party
landholder to establish a biodiversity offset area on
their property. It is proposed that the area – an established
Tablelands basalt forest community – will be secured and
protected for biodiversity value in perpetuity by establishing
conditions on the Land Title.
55
—
AURELIA METALS WATER
—
Aurelia understands that mining operations have the
potential to impact water supply and quality and that these
impacts need to be managed appropriately, especially in the
dry, water-stressed environment of western NSW.
Fish biologist from the
University of Canberra during
an aquatic monitoring survey of
the Spring and Majors Creeks
near the Dargues Mine
Water is a resource we share with the environment and
our communities, and we recognise we need to use water
efficiently and protect the surrounding environment.
Aurelia does not discharge to the surrounding environment.
All water is reused on our operating sites and excess water
is evaporated or irrigated to mine-owned pasture.
In FY23, our sites continued to manage excess water
from heavy rainfall in the region. At the Peak Mine, we
continue to evaporate excess water within purpose-built
evaporation dams.
With the Group processing fewer tonnes and the Hera
Mine entering care and maintenance, water use efficiency
decreased in FY23.
Water use and efficiency
TAILINGS MANAGEMENT
—
The responsible management of tailings facilities is a high
priority for Aurelia.
Mining and processing metalliferous ore extracts a
small portion of the volume of material introduced to
the processing plant. The remaining depleted ore is
transferred as a slurry to dedicated tailings storage
facilities (TSFs). The facilities are engineered, designed
and constructed to provide secure storage of fine tailings
as a permanent landform.
The operations and management of our TSFs occur within
the guidelines and boundaries of regulations and codes
of practice, such as NSW Dam Safety Guidelines, and the
Australian National Committee on Large Dams Guidelines on
Tailings Dams (2012) (ANCOLD).
Aurelia operates central-thickened TSFs at our Peak Mine
and Hera sites and a perimeter discharge TSF at the
Dargues Mine.
TSFs are designed by industry experts and risk-assessed
to determine appropriate designs while considering local
meteorological (low rainfall and high evaporation rates),
topographical (utilising local topography to reduce site
footprints) and other site-specific conditions.
Our TSFs are operated in accordance with site-specific operation
and maintenance manuals. This includes regular inspections
and an annual inspection by an independent TSF Engineer.
Each of our sites have completed a dam break analysis, and have
Pollution Incident Response Management Plans in place.
WSP Golder and BK Civil were engaged in 2021 to complete
the Stage 5 embankment raise of the TSF at our Peak Mine.
The work increased capacity within the existing TSF and was
completed in early 2023. Aurelia was nominated as a finalist
in the 2022 Prospect Awards in the ‘Mine Project Success of
the Year Award’ category for the project which showcased the
exemplary work by the Peak Mine operational team and our
supporting civil contractors and design engineers.
FY21
FY22
FY23
Tailings production (kt)
Water withdrawal (ML)
581
709
614
Water consumption (ML)
1,266
1,170
1,103
Water use efficiency
(KL/oz Au eq)
6.79
5.94
7.61
Tailings production
1,119
1,165
1,033
FY21
FY22
FY23
56
—
ANNUAL REPORT 2023
WASTE ROCK MANAGEMENT
—
REHABILITATION AND CLOSURE
—
Waste rock is stored in purpose-built waste rock
emplacements. Where waste rock is non-acid forming, it is
stored for use in future rehabilitation projects or used in civil
construction activities including TSF embankment raises
and road bases.
An aerial photo of construction activities
during the stage 5 lift of the Peak Mine TSF
Waste rock brought to the surface (kt)
Waste rock production
153
204
156
FY21
FY22
FY23
Planning for closure commences at the feasibility stage and
continues throughout the mine’s operational life to identify
and reduce risks and unknowns over time. Aurelia recognises
that strong engagement and ongoing consideration of closure
from the development phase will help mitigate risks and
identify opportunities to leave a positive legacy. We recognise
that we have a responsibility to close mines in a way that
leaves a safe, stable and self-supporting environment.
Our mines and projects are governed by Rehabilitation
Management Plans which are overseen by the NSW
Resources Regulator. In FY23, we lodged our Rehabilitation
Management Plans and Form and Way documents with the
regulator for all sites. This was in response to a change in the
Mining Act which standardised rehabilitation requirements
across NSW. The management plans included identification
of the mine activities, associated risks, costs, and local
community engagement.
Our closure plans are supported by a Rehabilitation Cost
Estimate (RCE), which informs our closure provision
which is backed by Aurelia and secured via a government
guarantee. To ensure our closure provisions remain current,
we engage independent third-party consultants to undertake
annual reviews. This is also reviewed by the Audit Committee
to ensure its veracity.
In FY23, Hera's mining operations ceased and its surface
facilities transitioned into care and maintenance.
Aurelia continues to manage and mitigate risks on
site. The surface facilities are planned to recommence
operations as the Federation Project ramps up.
Following life-of-mine planning in FY23, we anticipate
our Dargues Mine will progress to mine closure in FY25.
Therefore, we are in the process of determining the final
details of closure which will be captured in a detailed Mine
Closure Plan. This plan will be informed by the Rehabilitation
Management Plan and Form and Way documents.
We are actively refining and investigating ways to better
close our mines through various studies, consultation and
progressive rehabilitation of areas no longer required
for operations.
57
—
AURELIA METALS CASE STUDY:
FEDERATION PROJECT
ENVIRONMENTAL
APPROVALS
—
At Aurelia, we’re committed to rapidly developing
our Federation Project, one of the highest grade
base metal development projects in Australia. Our
timely completion of the Project permitting process
– including obtaining all required environmental
approvals – exemplifies this commitment.
Following the discovery drill hole at the Federation
Project in 2019, we moved quickly to prepare the
permitting documentation required to obtain development
consent. The first step was to apply for the Secretary’s
Environmental Assessment Requirements (SEARs) from
the NSW government.
Received in August 2021, the SEARs were addressed
in Federation’s Environmental Impact Statement (EIS)
and supporting documentation which we completed and
submitted in March 2022. The EIS was then placed on public
exhibition for community and government consultation.
Between April and October 2022, we received several
comments and submissions from government agencies
regarding the EIS, all of which were addressed in our
‘Response to Submissions’. We were also pleased to
receive no objections to the Project and one Letter of
Support from a Project landholder during this time,
confirming that Federation has significant support from
our local communities.
58
—
An aerial view of the Federation Project site
The Federation Project permitting was completed on 2 March
2023 when we were pleased to receive full development
consent from the NSW government, three months earlier
than anticipated. Federation is now one of the fastest moving
mining projects in recent NSW history, and the first greenfield
critical metals project to be approved in the last seven years.
Managing Director and Chief Executive Officer, Bryan
Quinn thanked the NSW government for working with
us to complete permitting for the Federation Project.
“On behalf of everyone at Aurelia, I want to thank the NSW
government for working with us to approve Federation in
such a short timeframe. The Project will contribute to the
regional economy, and supply the metals essential for the
manufacture of renewable technologies.
“We look forward to continuing to work with the government
and regulatory agencies in NSW on the development of the
Federation Project which will be an important source of
value to our shareholders and the community where we are
privileged to operate,” Bryan said.
ANNUAL REPORT 2023 GRI CONTENT INDEX
—
Aurelia Metals has reported the information cited in this GRI content index for the period 1 July 2022 to 30 June 2023 with reference to the GRI Standards
as listed in the table below, the 2010 G4 Sector Disclosures for Mining and Metals and the United Nations Sustainable Development Goals.
GRI DISCLOSURE
GRI 2: General Disclosures 2021
2-1 Organizational details
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
2-2 Entities included in the organization’s sustainability reporting
Our Profile/Our Portfolio
2-3 Reporting period, frequency and contact point
2-4 Restatements of information
2-5 External assurance
2-6 Activities, value chain and other business relationships
2-7 Employees
2-8 Workers who are not employees
2-9 Governance structure and composition
2-10 Nomination and selection of the highest governance body
2-11 Chair of the highest governance body
2-12 Role of the highest governance body in overseeing the management
of impacts
2-13 Delegation of responsibility for managing impacts
About This Report
Audit Report
Our Portfolio
People Performance
Governance Structure /
Directors Report
2-14 Role of the highest governance body in sustainability reporting
Material Topics
2-15 Conflicts of interest
Operating with Integrity
2-16 Communication of critical concerns
2-17 Collective knowledge of the highest governance body
Governance Structure /
Stakeholder Engagement
Governance Structure /
Directors Report
2-18 Evaluation of the performance of the highest governance body
Governance Structure
2-19 Remuneration policies
2-20 Process to determine remuneration
2-22 Statement on sustainable development strategy
2-23 Policy commitments
2-24 Embedding policy commitments
2-25 Processes to remediate negative impacts
2-26 Mechanisms for seeking advice and raising concerns
2-27 Compliance with laws and regulations
Remuneration Report
Our Approach to
Sustainability
Governance Structure
Operating with Integrity /
Grievance Management
Governance Structure /
Stakeholder Engagement
Operating with Integrity
59
—
AURELIA METALS
GRI DISCLOSURE
2-28 Membership associations
2-29 Approach to stakeholder engagement
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
Stakeholder Engagement
2-30 Collective bargaining agreements
Remuneration Framework
GRI 3: Material Topics 2021
3-1 Process to determine material topics
3-2 List of material topics
Material Topics
3-3 Management of material topics
GRI 201: Economic Performance 2016
201-1 Direct economic value generated and distributed
Economic Contribution
201-2 Financial implications and other risks and opportunities due to
climate change
Climate Change
201-4 Financial assistance received from government
Operating with Integrity
GRI 203: Indirect Economic Impacts 2016
203-1 Infrastructure investments and services supported
GRI 204: Procurement Practices 2016
204-1 Proportion of spending on local suppliers
GRI 205: Anti-corruption 2016
205-2 Communication and training about anti-corruption policies
and procedures
205-3 Confirmed incidents of corruption and actions taken
GRI 206: Anti-competitive Behaviour 2016
Community Investment
and Development
Community Investment
and Development
Operating with Integrity
206-1 Legal actions for anti-competitive behaviour, anti-trust,
and monopoly practices
Operating with Integrity
GRI 207: Tax 2019
207-1 Approach to tax
207-2 Tax governance, control, and risk management
207-3 Stakeholder engagement and management of concerns related to tax
Operating with Integrity
207-4 Country-by-country reporting
60
—
ANNUAL REPORT 2023
GRI DISCLOSURE
GRI 302: Energy 2016
302-1 Energy consumption within the organization
302-3 Energy intensity
GRI 303: Water and Effluents 2018
303-1 Interactions with water as a shared resource
303-2 Management of water discharge-related impacts
303-3 Water withdrawal
303-4 Water discharge
303-5 Water consumption
GRI 304: Biodiversity 2016
304-1 Operational sites owned, leased, managed in, or adjacent to, protected
areas and areas of high biodiversity value outside protected areas
304-2 Significant impacts of activities, products and services on biodiversity
304-3 Habitats protected or restored
304-4 IUCN Red List species and national conservation list species with
habitats in areas affected by operations
MM2 Number and percentage of total sites identified as requiring biodiversity
management plans according to stated criteria, and the number (percentage)
of those sites with plans in place
GRI 305: Emissions 2016
305-1 Direct (Scope 1) GHG emissions
305-2 Energy indirect (Scope 2) GHG emissions
305-4 GHG emissions intensity
305-5 Reduction of GHG emissions
GRI 306: Waste 2020
306-1 Waste generation and significant waste-related impacts
306-2 Management of significant waste-related impacts
306-3 Waste generated
306-4 Waste diverted from disposal
306-5 Waste directed to disposal
MM3 Total amounts of overburden, rock, tailings and sludges and their
associated risks
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
Climate Change
Water
Land and Biodiversity
Climate Change
Tailings Management /
Waste Rock Management
61
—
AURELIA METALS
GRI DISCLOSURE
GRI 308: Supplier Environmental Assessment 2016
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
308-1 New suppliers that were screened using environmental criteria
308-2 Negative environmental impacts in the supply chain and actions taken
Economic Contribution
GRI 401: Employment 2016
401-1 New employee hires and employee turnover
People Performance
GRI 402: Labour/Management Relations 2016
MM4 Number of strikes and lock-outs exceeding one week’s duration,
by country
Listening to our employees
GRI 403: Occupational Health and Safety 2018
403-1 Occupational health and safety management system
Management Systems
403-2 Hazard identification, risk assessment, and incident investigation
Risk Management /
Management Systems
403-4 Worker participation, consultation, and communication on occupational
health and safety
Safety Culture
403-5 Worker training on occupational health and safety
403-6 Promotion of worker health
Growing our People
to Grow with Us
Health and Wellbeing
403-7 Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships
Contractor Management
403-8 Workers covered by an occupational health and safety management
system
Management Systems
403-9 Work-related injuries
403-10 Work-related ill health
GRI 404: Training and Education 2016
Safety Culture
404-2 Programs for upgrading employee skills and transition
assistance programs
Training and development
404-3 Percentage of employees receiving regular performance and career
development reviews
Remuneration linked to
performance
GRI 405: Diversity and Equal Opportunity 2016
405-1 Diversity of governance bodies and employees
People Performance
405-2 Ratio of basic salary and remuneration of women to men
Remuneration linked to
performance
GRI 406: Non-Discrimination 2016
406-1 Incidents of discrimination and corrective actions taken
Diversity, Equity and Inclusion
GRI 407: Freedom of Association and Collective Bargaining
407-1 Operations and suppliers in which the right to freedom of association
and collective bargaining may be at risk
Listening to our employees
GRI 408: Child Labour 2016
408-1 Operations and suppliers at significant risk for incidents of child labour
Operating with Integrity
62
—
ANNUAL REPORT 2023
GRI DISCLOSURE
GRI 409: Forced or Compulsory Labour 2016
WHERE TO FIND
RELATED INFORMATION
SUSTAINABLE
DEVELOPMENT GOAL
409-1 Operations and suppliers at significant risk for incidents of forced or
compulsory labour
Operating with Integrity
GRI 410: Security Practices 2016
410-1 Security personnel trained in human rights policies or procedures
Operating with Integrity
GRI 411: Rights of Indigenous Peoples 2016
411-1 Incidents of violations involving rights of indigenous peoples
MM5 Total number of operations taking place in or adjacent to Indigenous
peoples’ territories, and number and percentage of operations or sites where
there are formal agreements with Indigenous peoples’ communities
First Nations Engagement
GRI 413: Local Communities 2016
413-1 Operations with local community engagement, impact assessments,
and development programs
MM6 Number and description of significant disputes relating to land use,
customary rights of local communities and Indigenous peoples
MM7 The extent to which grievance mechanisms were used to resolve disputes
relating to land use, customary rights of local communities and Indigenous
peoples’, and the outcomes
MM8 Number (and percentage) of company operating sites where artisanal
and small-scale mining takes place on, or adjacent to, the site; the associated
risks and the actions taken to manage and mitigate these risks
MM9 Sites where resettlements took place, the number of households
resettled in each, and how their livelihoods were affected in the process
GRI 414: Supplier Social Assessment 2016
414-1 New suppliers that were screened using social criteria
414-2 Negative social impacts in the supply chain and actions taken
GRI 415: Public Policy 2016
Stakeholder Engagement /
Community Investment and
Development
First Nations Engagement /
Grievance Management
Grievance Management
Economic Contribution
415-1 Political contributions
Operating with Integrity
Closure Planning
MM10 Number and percentage of operations with closure plans
Rehabilitation and Closure
63
—
AURELIA METALS
MINERAL RESOURCE
AND ORE RESERVE
—
64
—
ANNUAL REPORT 2023 An aerial view of the environment
surrounding the Peak Mine
65
—
AURELIA METALS COMPETENT PERSONS STATEMENTS
—
PEAK MINERAL
RESOURCE ESTIMATE
—
Compilation of the drilling database, assay validation and
geological interpretations for the Peak Mineral Resource
Estimate were completed by Chris Powell, BSc, MAusIMM,
who is a full-time employee of Peak Gold Mines Pty Ltd.
The Mineral Resource Estimate has been prepared by
Mr Powell who has sufficient experience which is relevant
to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking to
qualify as Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Powell consents
to the inclusion in this report of the matters based on their
information in the form and context in which it appears.
DARGUES MINERAL
RESOURCE ESTIMATE
—
Compilation of the drilling database, assay validation and
geological interpretations for the Dargues Mineral Resource
Estimate was completed under the supervision of Timothy
O’Sullivan, BSc (Hons), MAusIMM CP (Geo), who was a
full-time employee of Aurelia Metals Limited during the
relevant period. The Mineral Resource Estimate for Dargues
was prepared by Mr O’Sullivan. Mr O’Sullivan has sufficient
experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which
he is undertaking to qualify as Competent Persons as defined
in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’.
Mr O’Sullivan consents to the inclusion in this report of the
matters based on their information in the form and context
in which it appears.
FEDERATION MINERAL
RESOURCE ESTIMATES
—
Compilation of the drilling database, assay validation
and geological interpretations for the Federation
Mineral Resource Estimates as well as the Federation
Mineral Resource Estimates were prepared by Timothy
O’Sullivan, BSc (Hons), MAusIMM CP (Geo), who was a
full-time employee of Aurelia Metals Limited during the
relevant period. Mr O’Sullivan has sufficient experience
which is relevant to the style of mineralisation and type of
deposit under consideration and to the activity which they
are undertaking to qualify as Competent Persons as defined
in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’.
Mr O’Sullivan consent to the inclusion in this report of the
matters based on their information in the form and context
in which it appears.
NYMAGEE MINERAL
RESOURCE ESTIMATE
—
Compilation of the drilling database, assay validation and
geological interpretations for the Nymagee Mineral Resource
Estimate was completed under the supervision of Timothy
O’Sullivan, BSc (Hons), MAusIMM CP (Geo), who was a
full-time employee of Aurelia Metals Limited during the
relevant period. The Mineral Resource Estimate for Nymagee
was prepared by Mr O’Sullivan. Mr O’Sullivan has sufficient
experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which
he is undertaking to qualify as Competent Persons as defined
in the 2012 Edition of the ‘Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves’.
Mr O’Sullivan consents to the inclusion in this report of the
matters based on their information in the form and context
in which it appears.
ORE RESERVE ESTIMATE –
PEAK, DARGUES, FEDERATION
—
The Ore Reserve Estimate was compiled by Justin Woodward,
BEng (Mining), MAusIMM, who is a full-time employee
of Aurelia Metals Limited. Mr Woodward has sufficient
experience which is relevant to the style of mineralisation
and type of deposit under consideration and to the activity
for which he is undertaking to qualify as Competent Person
as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. Mr Woodward consents to the inclusion in this
report of the matters based on their information in the form
and context in which it appears.
66
—
ANNUAL REPORT 2023 MINERAL RESOURCE AND ORE RESERVE
—
The following is an excerpt from the Group's annual Mineral Resource and Ore Reserve Statement (ASX Announcement:
Group Mineral Resource and Ore Reserve Statement) released to the market on 30 August 2023. All supporting information
for the tables included in this Mineral Resource and Ore Reserve section of the 2023 Annual Report is included in that
ASX Announcement.
The Statement includes the 100%-owned Peak, Federation and Dargues Mines, along with Mineral Resource Estimates (MREs)
for its 95%-owned Nymagee Project in New South Wales (NSW).
The MREs and Ore Reserve estimates are reported in accordance with the guidelines of the 2012 Edition of the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code 2012). Estimates are reported
as at 30 June 2023.
Group MREs and Ore Reserve estimates are presented in Table 1 and Table 2. Estimates for each mine and deposit
are summarised in Table 3 to Table 11.
Table 1. Group Mineral Resource Estimate as at 30 June 2023.
CLASS
Measured
Indicated
Inferred
Total
Tonnes
(kt)
3,000
15,000
8,200
27,000
Cu
(%)
0.9
1.4
1.7
1.4
Au
(g/t)
2.6
1.1
0.5
1.0
Zn
(%)
1.1
2.8
1.8
2.2
Pb
(%)
0.9
1.8
1.0
1.4
Ag
(g/t)
12
8
8
8
Note: The MRE is reported inclusive of Ore Reserves. There is no certainty that Mineral Resources not included in Ore Reserves will be converted to Ore
Reserves. The Group MRE utilises A$120/t net smelter return (NSR) cut-off for mineable shapes that include internal dilution for Nymagee, Dargues,
Federation and the majority of the Peak deposits with A$135/t NSR for Perseverance, Peak and Kairos. NSR is an estimate of the net recoverable value
per tonne including offsite costs, payables, royalties and metal recoveries. Values are reported to two significant figures which may result in rounding
discrepancies in the totals.
Table 2. Group Ore Reserve Estimate as at 30 June 2023.
CLASS
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
940
4,500
5,500
270
290
290
Cu
(%)
0.6
0.9
0.9
Au
(g/t)
3.5
1.5
1.8
Zn
(%)
1.6
5.4
4.7
Pb
(%)
1.4
3.3
3.0
Ag
(g/t)
9
7
7
Note: Values are reported to two significant figures which may result in rounding discrepancies in the totals.
67
—
AURELIA METALS MINERAL RESOURCE ESTIMATES
—
Table 3. Peak Mine copper MRE as at 30 June 2023.
CLASS
Measured
Indicated
Inferred
Total
Tonnes
(kt)
1,600
8,300
6,100
16,000
Cu
(%)
1.3
1.8
2.1
1.8
Au
(g/t)
2.0
1.0
0.5
0.9
Zn
(%)
0.1
0.0
0.1
0.0
Pb
(%)
0.1
0.0
0.0
0.0
Ag
(g/t)
7
5
7
6
Note: The Peak Mine MRE is reported inclusive of Ore Reserves. The MRE utilises A$135/t NSR cut-off for Perseverance, Peak & Kairos and A$120/t NSR
cut-off for all other deposits within mineable shapes that include internal dilution. Values are reported to two significant figures which may result in rounding
discrepancies in the totals.
Table 4. Peak Mine zinc-lead MRE as at 30 June 2023.
CLASS
Measured
Indicated
Inferred
Total
Tonnes
(kt)
1,000
1,200
840
3,000
Zn
(%)
3.3
5.3
5.0
4.6
Pb
(%)
2.6
4.4
2.5
3.3
Cu
(%)
0.7
0.5
1.0
0.7
Au
(g/t)
2.8
1.7
0.5
1.8
Ag
(g/t)
24
22
23
23
Note: The Peak Mine MRE is reported inclusive of Ore Reserves. The MRE utilises A$135/t NSR cut-off for Perseverance, Peak & Kairos and A$120/t NSR
cut-off for all other deposits within mineable shapes that include internal dilution. Values are reported to two significant figures which may result in rounding
discrepancies in the totals.
Table 5. Dargues Mine MRE as at 30 June 2023.
CLASS
Measured
Indicated
Inferred
Total
Tonnes
(kt)
350
360
140
850
Au
(g/t)
5.0
3.0
3.4
3.9
Note: The MRE is reported inclusive of Ore Reserves. The MRE utilises A$120/t
NSR cut-off mineable shapes that include internal dilution. Values are reported
to two significant figures which may result in rounding discrepancies in the totals.
Table 6. Federation Mine MRE as at 30 June 2023.
CLASS
Indicated
Inferred
Total
Tonnes
(kt)
3,700
1,100
4,800
Zn
(%)
9.0
8.9
9.0
Pb
(%)
5.4
5.3
5.4
Cu
(%)
0.3
0.2
0.3
Au
(g/t)
1.1
0.2
0.9
Ag
(g/t)
6
6
6
Note: The Federation MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution. Values are reported to two significant figures which
may result in rounding discrepancies in the totals.
68
—
ANNUAL REPORT 2023 Table 7. Nymagee Project MRE as at 30 June 2023.
CLASS
Indicated
Inferred
Total
Tonnes
(kt)
1,900
50
1,900
Cu
(%)
2.2
2.2
2.2
Au
(g/t)
0.1
0.1
0.1
Zn
(%)
1.1
0.5
1.1
Pb
(%)
0.6
0.2
0.6
Ag
(g/t)
16
11
16
Note: The Nymagee Project MRE utilises A$120/t NSR cut-off mineable shapes that include internal dilution. Values are reported to two significant figures
which may result in rounding discrepancies in the totals.
Figure 1. Change in Group Mineral Resource tonnage relative to 30 June 2022.
30,000
25,000
20,000
)
t
k
(
s
e
n
n
o
T
15,000
29,000
10,000
5,000
0
2 -
2
0
2
e
u r c
o
s
e
R
-1,700
-860
-1,400
1,900
60
27,000
e r a
H
e
D
s
n
p l e ti o
g & M
rilli n
D
e l U
d
o
s
n
a t e
d
p
o
c
E
m i c P
o
a r a m e t e r s
n t
s t m e
d j u
A
e
u r c
o
s
e
R
3 -
2
0
2
69
—
AURELIA METALS
ORE RESERVE ESTIMATES
—
Table 8. Peak Mine copper Ore Reserve Estimate as at 30 June 2023.
CLASS
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
350
1,600
2,000
270
230
230
Cu
(%)
1.3
1.9
1.8
Au
(g/t)
3.0
1.5
1.7
Zn
(%)
0.1
0.0
0.0
Pb
(%)
0.1
0.0
0.0
Ag
(g/t)
6
5
5
Note: The Peak copper Ore Reserve Estimate utilises A$80/t NSR cut-off for development and A$175-220/t NSR for stoping depending on mine area.
Values are reported to two significant figures which may result in rounding discrepancies in the totals.
Table 9. Peak Mine zinc-lead Ore Reserve Estimate as at 30 June 2023.
CLASS
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
290
420
710
340
280
300
Zn
(%)
5.1
6.8
6.1
Pb
(%)
4.3
5.7
5.1
Cu
(%)
0.5
0.4
0.4
Au
(g/t)
3.6
1.8
2.6
Ag
(g/t)
21
23
22
Note: The Peak zinc-lead Ore Reserve Estimate utilises A$80/t NSR cut-off for development and A$185-190/t NSR for stoping depending on mine area.
Values are reported to two significant figures which may result in rounding discrepancies in the totals.
Table 10. Dargues Mine Ore Reserve Estimate as at 30 June 2023.
CLASS
Measured
Inferred
Total
Tonnes
(kt)
NSR
(A$/t)
290
66
360
210
130
190
Au
(g/t)
3.8
2.3
3.5
Note: The Dargues Ore Reserve Estimate utilises A$80/t NSR cut-off for development and A$120/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
Table 11. Federation Mine Ore Reserve Estimate as at 30 June 2023.
CLASS
Proved
Probable
Total
Tonnes
(kt)
NSR
(A$/t)
0
2,400
2,400
0
350
350
Zn
(%)
0
9.0
9.0
Pb
(%)
0
5.3
5.3
Cu
(%)
0
0.3
0.3
Au
(g/t)
0
1.4
1.4
Ag
(g/t)
0
6
6
Note: The Federation Ore Reserve Estimate utilises A$80/t NSR cut-off for development and A$175/t NSR cut-off for stoping. Values are reported to two
significant figures which may result in rounding discrepancies in the totals.
70
—
ANNUAL REPORT 2023 The change in the Group’s Ore Reserve Estimate relative to the prior (30 June 2022) published statement is presented in
Figure 2. Positive drilling results at Chesney supported Mineral Resource conversion to Ore Reserve which, along with updated
economic parameters, have mostly offset mining depletion at a Group level.
Figure 2. Change in Group Ore Reserve tonnage relative to 30 June 2022.
6,000
5,000
4,000
)
t
k
(
s
e
n
n
o
T
3,000
5,700
2,000
1,000
0
2 -
2
0
2
e
e r v
s
e
R
550
50
-590
650
-860
5,500
e r a
H
e
D
s
n
p l e ti o
rilli n
D
g & M
e l …
d
o
o
n
o
c
E
a r a m e t e r s
m i c P
n t
s t m e
d j u
A
e
e r v
s
e
R
3 -
2
0
2
71
—
AURELIA METALS
72
—
ANNUAL REPORT 2023 FINANCIAL REPORT
CONTENTS
—
Company Information
Directors’ Report
Operations and Financial Review
Letter from the Chair of the Remuneration
and Nomination Committee
Remuneration Report (Audited)
Auditor's Independence Declaration
Consolidated Financial Statements
Statement of Profit or Loss and
Other Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes to Financial Statements
Directors' Declaration
Independent Auditor’s Report to the
Members of Aurelia Metals Limited
74
75
83
104
107
131
132
132
133
135
136
137
184
185
73
—
AURELIA METALS COMPANY
INFORMATION
—
AURELIA METALS LIMITED ABN 37 108 476 384
DIRECTORS
—
The Company’s Directors in office during the year ended and until the date of this report are set out below.
The Directors were in office for the entire period unless otherwise stated and other than the Managing Director & Chief Executive
Officer (CEO) and Mr Franklyn (“Lyn”) Brazil (nominee Director), all Directors are deemed to be independent.
NON-EXECUTIVE DIRECTORS
POSITION
TERM
Peter Botten
Susie Corlett
Independent Non-Executive Chair
Full Year
Independent Non-Executive Director
Full Year
Lawrence Conway
Independent Non-Executive Director
Resigned 31 August 2022
Bruce Cox
Paul Harris
Helen Gillies
Bob Vassie
Lyn Brazil
Independent Non-Executive Director
Appointed 1 September 2022
Independent Non-Executive Director
Full Year
Independent Non-Executive Director
Full Year
Independent Non-Executive Director
Full Year
Non-Executive Director
Appointed 17 July 2023
Bradley Newcombe
Alternate Director for Lyn Brazil
From 17 July 2023
Managing Director and CEO
Resigned 18 November 2022
Managing Director and CEO
Appointed 6 June 2023
EXECUTIVE DIRECTORS
Daniel Clifford
Bryan Quinn
COMPANY SECRETARY
Rochelle Carey
Ian Poole
Appointed 28 December 2022
Retired 31 December 2022
The following report is submitted in
respect of the results of Aurelia Metals
Limited (‘Aurelia’ or ‘the Company’)
and its subsidiaries, together the
consolidated group (‘Group’), for the
financial year ended 30 June 2023,
together with the state of affairs of the
Group as at that date.
The Board of Directors
submit their report for the
year ended 30 June 2023.
Registered office and principal
place of business
Aurelia Metals Limited
Level 17, 144 Edward Street,
Brisbane QLD 4000
GPO Box 7, Brisbane QLD 4001
Telephone: (07) 3180 5000
Email: office@aureliametals.com.au
www.aureliametals.com
Share register
Automic Group
Level 5, 126 Phillip Street,
Sydney NSW 2000
Investor services: 1300 288 664
General enquiries: (02) 8072 1400
Email: hello@automic.com.au
www.automicgroup.com.au
Stock exchange listing
Aurelia Metals Limited shares are listed
on the Australian Securities Exchange
(ASX Code: AMI)
Auditors
Ernst & Young
111 Eagle Street
Brisbane QLD 4000
74
—
ANNUAL REPORT 2023 DIRECTORS
REPORT
—
1. DIRECTORS
AND OFFICERS
—
The names and details of the Company's Directors in office
during the financial year and until the date of this report are
set out below. Directors were in office for this entire period
unless otherwise stated.
PETER BOTTEN AC CBE
Independent Non-Executive Chair
Appointed as a Director of the Company
on 13 September 2021 and as Independent
Non-Executive Chair on 4 November 2021
Mr Botten is a geologist by training, having over 45 years
experience working in the resources sector. He was the
Managing Director of Oil Search Limited from 28 October
1994 until 25 February 2020, overseeing its development
into a major Australian Securities Exchange-listed company.
Peter has extensive worldwide experience in the oil and
gas industry, holding various senior technical, managerial
and board positions in a number of listed and government-
owned bodies. He has extensive experience in developing
and financing major resource projects. He has a Bachelor
of Science in Geology from the Royal School of Mines at
Imperial College London.
During the past three years, Mr Botten has served
as a Director of:
AGL Energy Limited (ASX: AGL), appointed October 2016,
resigned September 2022
Karoon Energy Limited (ASX: KAR), appointed October
2020, and
Conrad Asia Energy Ltd (ASX: CRD), appointed
1 November 2021.
SUSIE CORLETT
Independent Non-Executive Director
Appointed as a Director of the Company
on 3 October 2018
Ms Corlett is a geologist with over 25 years’ experience
in exploration, mining operations, mining finance and
investment. Ms Corlett serves as a non-executive director
of ASX listed Mineral Resources Ltd (ASX: MRL) and Iluka
Resources Ltd (ASX: ILU) and also is a Trustee of the AusIMM
Education Endowment Fund.
During her executive career, Ms Corlett was an Investment
Director for global mining private equity fund, Pacific Road
Capital Ltd and worked in mining credit risk management and
project finance for Standard Bank Limited, Deutsche Bank
and Macquarie Bank.
Ms Corlett has a Bachelor of Science (Hons. Geology) from
the University of Melbourne, is a graduate of the Australian
Institute of Company Directors, a Fellow of the AusIMM and
a member of Chief Executive Women.
During the past three years, Ms Corlett has served
as a Director of:
Iluka Resources (ASX: ILU), appointed June 2020, and
Mineral Resources (ASX: MRL), appointed January 2021.
HELEN GILLIES
Independent Non-Executive Director
Appointed as a Director of the Company
on 21 January 2021
Ms. Gillies is a corporate lawyer with over 30 years of
experience in external and in-house legal counsel roles.
This includes almost 20 years in various senior legal and risk
management roles at major engineering company, Sinclair
Knight Merz, including the role of General Counsel and
General Manager Risk.
Ms. Gillies is currently a non-executive director of
Monadelphous Group Limited (ASX: MND), BAC HoldCo
Pty Ltd (the holding company for Bankstown and Camden
Airports), Lexon Insurance Pty Ltd and Yancoal Australia
Limited (ASX: YAL). Ms. Gillies has undergraduate degrees
in Commerce and Law, and Masters degrees in Business
Administration and Law, and is a Fellow of the Australian
Institute of Company Directors.
During the past three years, Ms Gillies has served
as a Director of:
Monadelphous Group Limited (ASX: MND), appointed
September 2016, and
Yancoal Australia Limited (ASX: YAL), appointed
January 2018.
75
—
AURELIA METALS DIRECTORS’ REPORT (CONTINUED)
1. DIRECTORS AND OFFICERS (CONTINUED)
—
PAUL HARRIS
BRUCE COX
Independent Non-Executive Director
Independent Non-Executive Director
Appointed as a Director of the Company
on 17 December 2018
Appointed as a Director of the Company
on 1 September 2022
Mr Harris has more than 27 years’ experience in financial
markets and investment banking, including advising mining
corporates on strategy, mergers and acquisitions, and capital
markets, including as Managing Director - Head of Metals and
Mining at Citi.
Mr Harris has a Masters of Engineering (Mining) and a
Bachelor of Commerce (Finance) and is a graduate of the
Australian Institute of Company Directors.
During the past three years, Mr Harris has served
as a Director of:
Aeon Metals Limited (ASX: AML), appointed
December 2014,
Highfield Resources Limited (ASX: HFR), appointed
March 2022, and
Koonenberry Gold Limited (ASX: KNB), appointed
August 2022.
BOB VASSIE
Mr Cox has more than 40 years of global experience in
the resources industry across the commodities of steel,
platinum, iron ore, copper, aluminium and diamonds. He has
held senior financial and executive leadership position,
including Managing Director of Rio Tinto Diamonds where
he had operational responsibility for the Argyle, Diavik, and
Murowa mines, as well as the Bunder Development project
in India. As CEO of Pacific Aluminium and later Managing
Director, Rio Tinto Aluminium Pacific Operations, Mr Cox was
responsible for various smelter, alumina refinery and bauxite
operations across Australia and New Zealand, He also worked
for BHP in both the Minerals and Iron Ore divisions, including
as Chief Financial Officer (CFO) Escondida in Chile and CFO
Hartley Platinum based out of Zimbabwe. Mr Cox is currently
a director of Aluminium Bahrain (listed on the London and
Bahrain stock exchanges) and on the Mining Advisory Board
of Ajlan & Bros Holding group Abilitii.
Mr Cox is a Graduate of the Australian Institute of Company
Directors and also holds a Bachelor of Commerce and Master
of Business Administration from the University of Wollongong.
Independent Non-Executive Director
Appointed as a Director of the Company
on 21 January 2021
Mr Vassie is a mining engineer with over 35 years’ experience
in management and operational roles within the global
resources industry. Most recently, he was Managing Director
and CEO of St Barbara Limited (ASX: SBM) from 2014 to
2020. Prior to that, Mr Vassie was Managing Director and
CEO of Inova Resources Limited (ASX: IVA). He has also held
various senior management and operational roles, with
almost 20 years at Rio Tinto Limited (ASX: RIO). Mr Vassie
is currently the non-executive chair of Ramelius Resources
Limited (ASX: RMS) and a non-executive director of
Federation Mining Pty Ltd.
During the past three years, Mr Vassie has served
as a Director of:
Ramelius Resources Limited (ASX: RMS), appointed
January 2021.
LYN BRAZIL AM
Non-Executive Director
Appointed as a Director of the Company
on 17 July 2023
Mr Brazil is a southern Queensland mixed farmer, investor
and philanthropist, who was awarded a Member of the Order
of Australia (AM) in the Queen’s Birthday 2022 Honours list.
Mr Brazil received the title for his service to medical research
and agriculture.
Mr Brazil progressed from a small poultry farm on the
Queensland – New South Wales border to owning four
cropping properties at Brookstead and two cattle operations
at Goondiwindi. Mr Brazil also boasts multiple successful
investments in listed companies and created the Brazil Family
Foundation which contributes to many medical and scientific
research organisations.
Mr Brazil is a nominee Director of Brazil Farming Pty Ltd.
76
—
ANNUAL REPORT 2023 DIRECTORS’ REPORT (CONTINUED)
1. DIRECTORS AND OFFICERS (CONTINUED)
—
BRADLEY NEWCOMBE
ROCHELLE CAREY
Alternate Director for Mr Brazil
Company Secretary
Appointed as Alternate Director of the Company
on 17 July 2023
Appointed as Company Secretary
on 28 December 2022
Ms Carey is a corporate lawyer with over 20 years’ experience
in the legal sector, with a focus on energy and resources.
Prior to joining Aurelia, Ms Carey was in-house counsel at
Stanmore Resources Limited, Energex Limited and Glencore.
Prior to moving in-house, she was a Senior Associate at
Allens Linklaters (formerly Allens Arthur Robinson).
Ms Carey holds a Bachelor of Business (International
Business) / Bachelor of Laws (QUT) and a Master
of Laws (LSE).
Mr Newcombe is a key investment advisor for Mr Brazil.
Mr Newcombe has over 25 years’ experience as an
accounting and financial markets professional across
treasury, fixed income and equities. Mr Newcombe has
acted as an advisor to Brazil Farming since 2015.
BRYAN QUINN
Managing Director and Chief Executive Officer
Appointed as a Director of the Company
on 6 June 2023
Mr Quinn joined Aurelia as Managing Director and Chief
Executive Officer in June 2023.
In the 12 months prior to his appointment at Aurelia, Mr Quinn
led the Growth, Strategy, Exploration, Sales and Marketing
businesses at Oz Minerals.
Prior to this, Mr Quinn spent more than 27 years with BHP,
where he held a series of senior executive, operational
and business improvement roles. This included President
Joint Ventures Americas and Africa, Global Chief Technical
Functions, and various Asset President and general
management roles, across a range of commodities
and businesses.
Mr Quinn has a Bachelor of Engineering (Mining Hons) and
a Masters in Applied Finance and Investment with more than
30 years’ experience across a broad range of commodities,
geographies and operations, both mining and downstream.
DIRECTORS AND OFFICERS WHO NO LONGER HOLD OFFICE
AT THE DATE OF THIS REPORT ARE AS FOLLOWS:
DANIEL CLIFFORD
IAN POOLE
Managing Director and CEO resigned
18 November 2022.
Chief Financial Officer & Company Secretary retired
31 December 2022.
LAWRENCE CONWAY
Non-Executive Director resigned 31 August 2022.
77
—
AURELIA METALS
DIRECTORS’ REPORT (CONTINUED)
2. DIRECTORS’ INTERESTS
—
The interests of the Directors in the shares and other equity securities of the Company as at 30 June 2023 and as at 30 August
2023 were:
DIRECTOR
Peter Botten
Susie Corlett
Paul Harris
Bob Vassie
Helen Gillies
Bruce Cox
Bryan Quinn
Lyn Brazil
Bradley Newcombe
Total
ORDINARY SHARES AS AT
30 JUNE 2023
ORDINARY SHARES AS AT
30 AUGUST 2023
-
33,731
-
250,000
250,000
-
50,000
290,104,300
8,025,000
298,713,031
-
33,731
-
317,205
317,205
-
513,441
319,357,179
8,035,000
328,573,761
On 5 July 2023, after the reporting period, the shares under the Retail Entitlement Offer were issued. As relevant interest
holders, Mr Vassie, Ms Gillies, Mr Quinn, Mr Brazil and Mr Newcombe participated in the Retail Entitlement Offer. In addition,
Mr Quinn acquired further shares on market during the period.
78
—
ANNUAL REPORT 2023 DIRECTORS’ REPORT (CONTINUED)
3. MEETINGS OF DIRECTORS
—
The number of Board of Director meetings and Board Committee meetings held during the year and each Director’s attendance
at those meetings is set out below:
DIRECTORS’
MEETINGS
COMMITTEE MEETINGS OF THE BOARD:
Audit
Remuneration & Nomination
Sustainability & Risk
DIRECTOR
Peter Botten
Susie Corlett
Paul Harris
Bob Vassie
Helen Gillies
Bruce Cox
Bryan Quinn
FORMER DIRECTOR
Daniel Clifford
Lawrence Conway
(i)
18
18
18
18
18
15
1
7
3
(ii)
(i)
(ii)
(i)
(ii)
(i)
(ii)
18
18
18
18
18
14
1
7
3
-
4
4
-
-
3
-
-
1
-
4
4
-
-
3
-
-
1
-
-
6
6
6
-
-
-
-
-
-
6
6
6
-
-
-
-
-
5
-
5
5
-
-
-
-
-
5
-
5
5
-
-
-
-
(i) Held – Indicates the number of Board meetings held during the period of a Director’s tenure or the in the case of Committee meetings, whilst
the Director was a member of Committee.
(ii) Attended – Indicates the number of meetings attended by a Director. While non-member Directors are entitled to attend Committee meetings
(subject to any conflicts), these attendances are not reflected in the above table.
The members of the Board’s Committees at 30 June 2023 are:
Audit Committee: Bruce Cox (Chair), Susie Corlett and Paul Harris
Remuneration and Nomination Committee: Paul Harris (Chair), Helen Gillies and Bob Vassie
Sustainability and Risk Committee: Susie Corlett (Chair), Helen Gillies and Bob Vassie
79
—
AURELIA METALS DIRECTORS’ REPORT (CONTINUED)
4. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
—
During the financial year, the Company paid a premium in respect to a contract insuring the Directors of the Company,
the Company Secretary(s), all executive officers of the Company, and of any related body corporate against a liability incurred
to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability
and the amount of the premium.
The Company provides a Deed of Indemnity, Insurance and Access with Directors and Officers. In summary, the Deed provides
for access to corporate records for each Director for a period after ceasing to hold office in the Company; the provision of
Directors and Officers Liability Insurance; and an indemnity for legal costs incurred by Directors in carrying out the business
affairs of the Company.
Except for the above the Company has not otherwise, except to the amount permitted by law, indemnified or agreed to
indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred, during or since
the financial year.
5. INDEMNIFICATION OF AUDITORS
—
To the extent permitted by law, the Company has agreed to indemnify its auditor as part of the terms of its audit engagement
agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made
to indemnify the auditor during or since the financial year.
6. DIVIDENDS
—
The Board of Directors did not declare a dividend for the year ended 30 June 2023 (30 June 2022: Nil).
7. CORPORATE STRUCTURE
—
Aurelia Metals Limited is a company limited by shares that is incorporated and domiciled in Australia. The Aurelia Group
(the ‘Group’) comprises of the following wholly owned subsidiaries:
ENTITY NAME
INCORPORATION DATE
Defiance Resources Pty Ltd
15 May 2006
Hera Resources Pty Ltd
20 August 2009
Nymagee Resources Pty Ltd
7 November 2011
Peak Gold Asia Pacific Ltd
26 February 2003
Peak Gold Mines Pty Ltd
31 October 1977
Dargues Gold Mines Pty Ltd
12 January 2006
Big Island Mining Pty Ltd
3 February 2005
80
—
ANNUAL REPORT 2023 DIRECTORS’ REPORT (CONTINUED)
8. PERFORMANCE RIGHTS
—
As at 30 August 2023, there are 11,657,080 Performance Rights on issue. The Performance Rights are unlisted and have terms
as set out below:
GRANT
GRANT
DATE
EXPIRY OR
TEST DATE
EXERCISE
PRICE
BALANCE
AT START
OF YEAR
GRANTED
DURING
THE YEAR
VESTED
DURING
THE YEAR
EXPIRED
DURING
THE YEAR
BALANCE
AT 30
AUGUST
Class 19A
29-11-19
30-06-22
Class FY21
19-11-20
30-06-23
Class FY21
26-12-20
30-06-23
Class FY22
04-11-21
30-06-24
Class FY22
09-11-21
30-06-24
Class FY23
08-12-22
30-06-25
Nil
Nil
Nil
Nil
Nil
Nil
2,284,641
1,696,714
3,755,760
1,866,231
-
-
-
-
6,401,029
31,198
-
11,544,184
(380,759)
(1,903,882)
(197,045)
(1,499,669)
(260,830)
(3,494,930)
-
-
-
-
-
-
(1,004,632)
861,599
(3,905,046)
2,527,181
(3,275,884)
8,268,300
Total
16,004,375
11,575,382
(952,027)
(15,084,043)
11,657,080
The performance rights have various share price and operational performance measures. Refer to the Remuneration Report for
further details. No performance right holder has any right under the performance right to participate in any other share issue of
the Company or any other entity.
9. FUTURE DEVELOPMENTS
—
Refer to the Operations and Financial Review for information on future prospects of the Company.
10. ENVIRONMENTAL REGULATION AND PERFORMANCE
—
An environmental incident occurred at the Dargues Mine in July 2023 regarding a mine water tank overflowing into a nearby
creek. A Clean Up Notice was issued to Big Island Mining Pty Ltd in July 2023 with respect to the incident. At the time of this
report, the Environmental Protection Agency is still investigating the incident, which has the potential for further regulatory
action or fines.
The Directors are otherwise not aware of any environmental incidents during the year that would have a materially adverse
impact on the Company. There were several minor non-compliances to development consent conditions during the year, all of
which were reported to the relevant authorities as required. Immediate actions were taken to return the operation to compliance.
No regulatory action or fines have been received by the Company in response to these minor incidents and due to the minor
nature of the incidents, no such action is anticipated.
81
—
AURELIA METALS DIRECTORS’ REPORT (CONTINUED)
11. CURRENCY AND ROUNDING OF AMOUNTS
—
All references to dollars are a reference to Australian dollars ($A) unless otherwise stated. ($A) may be used for clarity.
Aurelia Metals Limited is a company of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191 and in accordance with that instrument, amounts in the Financial/Directors’ Reports are rounded to the
nearest thousand dollars, except when indicated otherwise. Due to rounding, numbers presented throughout this document may
not add up precisely to the totals provided.
12. AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
—
During the year the Company’s auditor, Ernst & Young Australia provided non-audit services. The directors are satisfied that
the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was
not compromised.
The amounts received by Ernst & Young Australia for non-audit services are contained in Note 24 of the financial statements.
The Company has obtained an independence declaration from its auditor, Ernst & Young, which forms part of this report.
A copy of that declaration is included on page 131.
Signed in accordance with a resolution of the Directors.
Peter Botten AC CBE
Non-Executive Chairman
Bryan Quinn
Managing Director & Chief Executive Officer
Brisbane
30 August 2023
82
—
ANNUAL REPORT 2023
OPERATIONS AND FINANCIAL REVIEW
—
1. ABOUT AURELIA METALS LIMITED
—
Aurelia Metals Limited (Aurelia) is an Australian mining and exploration company with a highly strategic
landholding, two operating mines, and two development projects in New South Wales (NSW).
The Peak Mine is in the northern Cobar Basin in central-west NSW, and the Dargues Mine is in the Southern Tablelands region.
During the year the Company operated the Hera site, also located in the northern Cobar Basin. The mine closed in March 2023
and the processing facility transitioned to care and maintenance in April 2023.
Our growth ambition is to generate value and long-term returns for our stakeholders and shareholders. We hold one of the
most geologically prospective ground positions in Australia and have the expertise and capability to discover and convert this
endowment to unlock exceptional value.
Our exciting near term growth opportunities are the Federation zinc, lead, copper, gold and silver development project located
near the Hera site, one of Australia’s highest grade base metal developments, and the Great Cobar copper-gold deposit located
near the Peak Mine.
2. GROUP STRATEGY
—
Our vision is to be a developer and operator of choice for critical base metals to power a low carbon future and deliver superior
shareholder value.
DELIVER WITH
CONFIDENCE
IMPROVE
OUR OPERATING
MARGIN
RIGHT PEOPLE,
RIGHT MINDSET
FOCUSED
GROWTH
Develop integrated
and robust plans
with contingency.
Clear accountability
of targets across the
organisation for all leaders
and teams.
Implement our
management operating
system and embed
consistent processes.
Make decisions based
on data, then learn
from the outcomes.
Deploy plans that
deliver our operational
targets in a safe and
sustainable manner.
Drive investor
engagement.
Drive down costs and
improve margins at
all operations.
Maximise utilisation of
established infrastructure.
Scale our organisation to
endure through the cycle.
Optimise metal recovery
and extract full value from
our products.
Establish strategic
partnerships and
deliver value from
our contract spend.
Maximise
shareholder value.
Attract talent by
Increase mineral
demonstrating a superior
value proposition for
our people.
Cultivate leadership
excellence through
development, support
and feedback.
Anticipate workforce
needs and grow a
pipeline of talent through
the development of
our people.
Create a one team culture
by engaging people in the
way we work.
endowment by expanding
near mine and historic
mineral resources
in combination with
regional discoveries.
Optimise the Cobar
Basin, including the
effective use of assets
and mineral inventories.
Assess and act on third
party opportunities.
Accelerate growth through
strategic partnerships.
83
—
AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE
—
FY23 represented a year of significant change for Aurelia.
The Company acknowledged during the year that operational
performance was unsatisfactory and took steps to address it.
This included renewal of the Leadership team, closing the
Hera Mine and placing the processing facility on care and
maintenance, transitioning the Peak mine to owner mining,
and implementing a Working Smarter program.
All of these initiatives have contributed to an improved
operating performance in the second half of FY23, and along
with the appointment of a new CEO and Managing Director
and a new financing facility, enables the Company to pursue
its growth ambitions in the Cobar Basin.
Health, Safety and Sustainability
Continued drive for improved safety culture. Group Total
Recordable Injury Frequency Rate (TRIFR) of 5.13 at
30 June 2023 (30 June 2022: 8.75), with 12 months’
recordable injury free at the Dargues Mine resulting in a
site TRIFR of zero
The 12 month moving average Reportable Environmental
Incidents Frequency Rate (REIFR) reduced by 24% to
30 June 2023 of 2.91 (30 June 2022: 3.81)
In August 2023, the Company was awarded the
Environmental Excellence award at NSW Minerals Council
HSEC Awards. The award relates to the standardised
reporting metric, Reportable Environmental Incidents
Frequency Rate (REIFR) implemented across the Company
Production and Cost Performance
Growth
Federation
The Federation Mine Feasibility Study was released on
10 October 2022 and refined further in a project update
on 13 April 2023, and confirms Federation as a high grade,
capital efficient investment project that leverages existing
infrastructure in the Cobar basin to generate significant
shareholder value
The project received State Significant Development
consent from the NSW government in March 2023,
with the remaining approvals now being finalised
Subsequent to the announcement of the new Trafigura
financing facility and accompanying equity raise on 31 May
2023, the Company remobilised the mining contractor
to the Federation site and development advance which
recommenced on 1 August 2023
Dargues Mine
Regulatory approval of a modification to the development
consent was received on 20 December 2022 which
increases the processing throughput limit from 355kt to
415kt per calendar year
Great Cobar
A material increase to the Great Cobar Mineral Resource
was reported during H1 FY23. Tonnage increased 45%
to 7.7Mt
Group gold equivalent production of 145koz (FY22: 198koz)
Financial outcomes
Group gold production of 86.3koz at an AISC of $2,315/oz
Cash at 30 June 2023 of $38.9 million
(FY22: 98.5koz at $1,707/oz)
(FY22: $76.7 million)
– Peak gold production of 36.3koz of gold at an AISC
of $1,789/oz (FY22: 40.3koz at AISC of $1,520/oz)
– Dargues gold production of 36.4koz of gold at an AISC
of $2,280/oz (FY22: 41.7koz at ASIC of $2,039/oz)
– Final ore from Hera was mined and processed in
late March 2023, with the site transitioned to care
and maintenance
Group base metals production comprised Lead 19kt,
Zinc 21kt, and Copper 2kt (FY22: Lead 24kt, Zinc 30kt
and Copper 4kt)
– By-product revenue decreased 31% to $145.4 million
mainly driven by the completion of mining at Hera in
March 2023, and lower base metals revenue generated
by the Peak mine
Balance sheet transformed with the execution of a new
~$100 million financing facility with Trafigura Pte Ltd
(“Trafigura”),
– US$24 million Loan Note Advance (undrawn as at
30 June 2023)
– $65 million Environmental Performance Bond Facility
$40 million equity raise competed with receipt of proceeds
from the Institutional placement and entitlement offer in
June 2023. Proceeds from the Retail entitlement offer
received in July 2023
Existing term loan fully repaid and performance bond
facility fully cash backed. New performance bonds under
the Trafigura facilities have now been issued and the cash
backing of $56.8 million is in the process of being returned
EBITDA* of $55.8 million (FY22: $166.47 million)
* EBITDA is a non-IFRS measure and is unaudited.
84
—
ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.1 PROFIT AND FINANCIAL PERFORMANCE
The Group reports a statutory net loss after tax of $52.2 million for the year ended 30 June 2023. Included in the statutory
net loss are some significant transactions which are not in the ordinary course of ongoing business activities. Such items are
separately disclosed in the reconciliation between statutory profit and underlying profit. The underlying net profit or loss is
presented to improve the comparability of the financial results between periods.
The result for the year ended 30 June 2023 in comparison to the prior year is summarised below:
NET PROFIT/(LOSS)
Sales revenue
Cost of sales
Gross profit
Impairment Expense
Other income and expenses, net (i)
Net (loss)/profit before income tax and net finance expenses
Net finance expenses
Net (loss)/profit before income tax expense (ii)
Income tax expense/(benefit)
Net (loss)/profit after income tax (ii)
UNDERLYING NET PROFIT:
Net profit/(loss) before income tax expense
Add back:
Impairment Expense
Rehabilitation expense – (reversal)
Remeasurement of financial liabilities
Underlying net (loss) / profit before income tax expense (ii)
Tax effect on underlying (loss)/profits for the year
Underlying net profit after tax expense (ii)
(i) Other income and expenses, net, include admin and other expenses.
2023
$’000
369,202
(403,000)
(33,798)
(20,846)
(14,529)
(69,173)
(4,700)
(73,873)
21,652
(52,221)
2023
$’000
(73,873)
20,846
(3,274)
3,195
(53,106)
15,422
(37,684)
2022
$’000
438,815
(416,366)
22,449
(135,687)
6,207
(107,031)
(7,007)
(114,038)
32,350
(81,688)
2022
$’000
(114,038)
135,687
3,531
(27,131)
(1,951)
585
(1,366)
CHANGE
%
(16)%
3%
(251)%
85%
(334)%
35%
33%
35%
(33)%
36%
CHANGE
%
35%
85%
(193)%
112%
(2,622)%
2,536%
(2,659)%
(ii) Underlying net (loss)/profit reflects the statutory net (loss)/profit adjusted to present the Directors’ assessment of the result for the ongoing business
activities of the Consolidated Entity. The presentation of non-IFRS financial information provides stakeholders with the ability to compare against prior
periods in a consistent manner.
These measures have been presented to assist in the assessment of the relative performance of the Group from period to period. The calculations are based
on non-IFRS information and are unaudited.
85
—
AURELIA METALS
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.1 PROFIT AND FINANCIAL PERFORMANCE (CONTINUED)
Total sales revenue for the year was $69.6 million lower than the prior year. Lower gold sales revenue was driven by the closure
of the Hera Mine in March 2023, lower gold grade at Dargues and lower processing throughput at Peak. The average realised
gold price of A$2,697/oz (FY22: A$2,500/oz) was achieved. By-product revenue decreased by 31% to $145.4 million, driven
mainly by the completion of mining at Hera in March 2023 and lower base metals revenue generated by the Peak Mine.
Total costs of sales were $13.4 million lower at $403.0 million (FY22: $416.4 million). This is a result of:
Total ore mined decreased by 12% to 1.14 million tonnes (FY22 1.29MT) however there was a $26.8 million increase in cost
of sales, largely attributed to the utilisation of opening ROM and concentrate stockpiles. General inflation costs have also
impacted the business resulting in higher unit mining costs.
The mining operations at the Hera Mine ceased and the process plant and surface infrastructure transitioned into care and
maintenance during the period resulting in a reduction of cost of sales at Hera of $14.5 million compared to the previous year.
Depreciation and amortisation expense (excluding Corporate) decreased by $33.8 million to $103.4 million
(FY22: $137.2 million), the majority of the reduction was due to higher depreciation for Dargues in FY22.
The tax benefit of $21.7 million equates to an effective tax rate of 29%.
3.2 GROUP EARNINGS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (EBITDA)
The Group’s earnings before interest, tax, depreciation and amortisation (EBITDA), in comparison to the prior year,
is summarised below:
UNDERLYING GROUP EBITDA
Net (loss) /profit before income tax
and net finance expenses
Depreciation and amortisation
Impairment expense
EBITDA (i)
Remeasurement of financial liabilities
Rehabilitation expense / (reversal)
Underlying EBITDA (ii)
2023
$’000
(69,173)
104,130
20,846
55,803
3,195
(3,274)
55,724
2022
$’000
(107,031)
137,816
135,687
166,472
(27,131)
3,531
142,872
CHANGE
%
35%
(24)%
85%
(66)%
112%
(193)%
(61)%
(i)
EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) is a non-IFRS measure and not audited.
(ii) Underlying EBITDA (non-IFRS measure) reflects statutory EBITDA as adjusted to present the Directors’ assessment of the result for the ongoing
business activities of the Consolidated Entity. The presentation of non-IFRS financial information provides stakeholders the ability to compare against
prior periods in a consistent manner.
These measures have been presented to assist in the assessment of the relative performance of the Group from period to period. The calculations are
based on non-IFRS information and are unaudited.
86
—
ANNUAL REPORT 2023
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.3 CASH FLOW PERFORMANCE
A summary of the Company’s cash flow for the year ended 30 June 2023, in comparison to the prior year, is summarised below:
GROUP CASH FLOWS
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net movement in cash
Net foreign exchange difference
Cash at the beginning of the year
Cash at the end of the year
2023
$’000
45,864
(77,373)
(6,766)
(38,275)
527
76,694
38,946
2022
$’000
154,093
(131,463)
(20,167)
2,463
(301)
74,532
76,694
CHANGE
%
(70)%
41%
66%
(1,654)%
275%
3%
(49)%
The net cash inflows from operating activities for FY23 amounted to $45.9 million (FY22: $154.1 million), which represented
a 70% decrease in comparison to the prior year.
The net cash outflow from investing activities for the year ended was $77.4 million (FY22: $131.5 million). The key investing
activities include:
Sustaining property, plant and equipment and mine capital expenditure, excluding lease payments, of $11 million
(FY22: $56.5 million)
Growth capital of $28.3 million (FY22: $19.1 million)
Exploration and evaluation of $11 million (FY22: $32.5 million), and
Guarantee Facility cash cover deposits paid of $26.0 million (FY22: $22.1 million), with the total balance of $56.8 million in the
process of being returned.
The net cash outflow from financing activities for the year ended of $6.8 million (FY22: outflows of $20.2 million) includes the
following key activities:
Inflow of $22.3 million net of share issue costs relating to the Institutional placement and entitlement offer component of the
$40 million equity raise announced on 31 May 2023 (the balance from the Retail entitlement offer was received in July 2023)
Term loan repayments totaling $20.7 million (FY22: $16.2 million) which resulted in the facility being totally repaid
on 30 June 2023
Financing arrangements for new mobile plant and equipment of $3.0 million, (FY22: $7.3 million), and early repayment
of $3.0 million, and
Lease principal repayments of $9.4 million (FY22: $ 10.7 million).
87
—
AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.4 GROUP OPERATIONAL SUMMARY
The key operating results for the Group are summarised below:
Production volume
Gold
Silver
Copper - contained metal
Lead - contained metal
Zinc - contained metal
Sales volume
Gold doré and gold in concentrate
Silver doré and silver in concentrate
Payable copper in concentrate
Payable lead in concentrate
Payable zinc in concentrate
Average prices achieved (i)
Gold
Silver
Copper
Lead
Zinc
All in sustaining cost (ii)
(i) After realised hedge gains/losses
oz
oz
t
t
t
oz
oz
t
t
t
A$/oz
A$/oz
A$/t
A$/t
A$/t
A$/oz
2023
$’000
86,254
352,343
2,188
18,998
20,548
84,240
271,479
2,898
17,100
15,753
2,697
34
12,092
3,351
4,493
2,315
2022
$’000
CHANGE
%
98,461
788,840
3,726
24,266
30,067
92,448
593,271
2,632
23,549
25,305
2,500
32
13,124
3,032
4,692
1,707
(12)%
(55)%
(41)%
(22)%
(32)%
(9)%
(54)%
10%
(27)%
(38)%
8%
6%
(8)%
11%
(4)%
(36)%
(ii) All-in Sustaining Costs (AISC) is a non-IFRS measure and is not audited. Group AISC includes Site Costs (mining processing, administration, changes in
inventory), royalty, transport and smelter expenses, by-product credits (silver, copper, lead & zinc sales), sustaining capital, corporate costs, divided by
gold sold during the year.
3.5 PEAK MINE OPERATIONAL SUMMARY
Our Peak Mine is located in the northern Cobar Basin, south of Cobar in central-west NSW. The current operation commenced
production in 1992.
Mining performance at Peak was below expectation during FY23 and was the result of a year of significant change. A transition
to majority owner-mining commenced in the September 2022 quarter and was completed in the March 2023 quarter following
full demobilisation of the mining contractor. Cost performance at Peak improved in the March and June quarters and with the
addition of a second jumbo which was transferred from Dargues, and the purchase of a new underground haul truck in June
2023 quarter, which sets up the operation to increase mining rates and drive down mining unit costs in FY24.
Milling operations at Peak were also scaled back to approximately 550kpta in the September quarter by moving to a weekday
roster to match mining rates and reduce plant operating costs. The plant also received upgrades to the lead/zinc circuit to
increase base metal recoveries.
88
—
ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.5 PEAK MINE OPERATIONAL SUMMARY (CONTINUED)
Drilling at Peak Mine is currently focused on further extensions of the existing orebodies, including the Kairos and Peak North
deposits, and testing the potential high-value line-of-lode targets.
Construction of the Stage 5 Tailings Storage Facility (TSF) embankment raise was completed in February 2023 and provided
capacity for approximately five years of ore processing.
The key performance metrics for the Peak Mine are tabulated below.
PEAK MINE
Ore processed
Gold grade
Silver grade
Copper grade
Lead grade
Zinc grade
Gold recovery
Production Volume
Gold production
Silver production
Copper production
Lead production
Zinc production
t
g/t
g/t
%
%
%
%
oz
oz
t
t
t
AISC (All in sustaining cost) *
A$/oz
*AISC is a non-IFRS measure and is unaudited.
2023
494,125
2.46
15.0
0.74
3.48
4.02
92.8
36,279
203,981
2,188
14,416
13,302
1,789
2022
608,647
2.27
16.9
0.88
2.86
3.18
90.6
40,322
263,546
3,726
13,441
12,273
1,520
CHANGE
%
(19)%
8%
(11)%
(16)%
22%
26%
3%
(10)%
(23)%
(41)%
7%
8%
(18)%
The Peak Mine’s total gold sold during the year was 34,137 oz at an AISC of $1,789/oz (FY22: 39,201 oz at an AISC of $1,520/oz).
The reduction in the quantity of gold sold during the year is reflective of the lower mined tonnes and grade. Lower sales of
copper, lead and zinc were also driven by lower tonnes mined, offset somewhat by higher lead and zinc grades.
Sustaining capital for the year was $7.5 million (FY22: $42.6 million) which includes the purchase of a jumbo and haul truck.
Total Growth capital expenditure for the year ended was $10.6 million (FY22: $11.5 million) which included construction work
to raise the Stage 5 TSF embankment.
89
—
AURELIA METALS
OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.6 DARGUES MINE OPERATIONAL SUMMARY
Our Dargues Mine is a gold mining and milling operation located in the Southern Tablelands region of NSW, approximately 60km
south-east of Canberra and a short drive from the town of Braidwood.
Total gold produced during the year was 36,358 ounces. Ore processed was higher than the prior year at 370kt (FY22: 365kt)
as a result of receiving approval in December 2022 to increase the annual processing cap on the mill from 355kt to 415kt.
More than offsetting that benefit was a 14% reduction in gold grade to 3.21g/t. A total of 36,616 oz of gold sold, with an AISC
of $2,280/oz (FY22: 37,098 oz of gold sold, with an AISC of $2,039/oz).
Construction of the Stage 3 TSF embankment lift was completed in August 2022, providing an immediate increase in tailings
and water storage capacity. Additionally, the NSW regulator approved a modified water management plan which allowed for the
use of TSF supernatant water for pasture irrigation and dust suppression until October 2023.
The Dargues Life of Mine planning which began in the December quarter was completed by the end of the financial year and
it is now anticipated that mining will be completed at Dargues in H1 FY25. Dargues management has taken steps to ensure the
strong planned cash contribution from the asset until the end of its mine life is realised. A retention program for both employees
and contractors is now in place to provide the workforce with greater incentive to remain at Dargues through to the end of
mine operations.
Sustaining capital invested during the year was $9.4 million (FY22: $18.9 million) excluding sustaining leases, which was largely
related to mine development.
DARGUES MINE
Ore processed
Gold grade
Gold recovery
Production Volume
Gold production
t
g/t
%
oz
AISC (All in sustaining cost) *
A$/oz
* AISC is a non-IFRS measure and is unaudited.
12 MONTHS TO
30 JUNE 2023
PERIOD FROM 17
DECEMBER 2022 TO
30 JUNE 2022
CHANGE
%
370,324
365,243
3.21
95.1
36,358
2,280
3.72
95.4
41,661
2,039
1%
(14)%
(1)%
(13)%
(12)%
90
—
ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.7 HERA MINE OPERATIONAL SUMMARY
Our Hera site is located approximately 100km south-east of Cobar in central-west New South Wales. Due to several quarters of
negative cash flow, a new life of mine plan was finalised in the December quarter, focusing on cash generation. This plan resulted
in mining operations ceasing in March 2023, with the mine shut and the process plant and surface infrastructure transitioned
into care and maintenance in April 2023.
Hera delivered exceptional performance in its final quarter of operation with higher ore processed, gold grade and gold recovery
resulting in a particularly strong 43% increase in gold production, exceeding expectations from the revised Life of Mine plan.
Since its commissioning in 2014, Hera produced 3.2 million tonnes of ore, supported 180 full time jobs, and contributed
A$216 million to the local economy.
The key performance metrics for the Hera Mine are tabulated below:
HERA MINE
Ore processed
Gold grade
Silver grade
Lead grade
Zinc grade
Gold recovery
Production Volume
Gold production
Silver production
Lead production
Zinc production
t
g/t
g/t
%
%
%
oz
oz
t
t
AISC (All in sustaining cost) *
A$/oz
* AISC is a non-IFRS measure and is unaudited.
3.8 FEDERATION PROJECT
2023
282,014
1.63
17.51
1.79
2.80
91.98
13,616
148,362
4,582
7,247
2,923
2022
335,102
1.79
54.7
3.45
5.59
85.5
16,478
525,294
10,824
17,794
625
CHANGE
(16)%
(9)%
(68)%
(48)%
(50)%
8%
(17)%
(72)%
(58)%
(59)%
(368)%
The Federation deposit hosts high-grade zinc, lead, and gold mineralisation and is located approximately 10km south of our
Hera site. Project development will involve the underground mining of the Federation deposit for treatment through established
processing circuits at our Peak and Hera sites.
During the year, Aurelia completed the Federation Feasibility Study (FS) and announced the outcomes of the FS in October.
In conjunction with the FS, Aurelia declared a maiden Ore Reserve of 2.2Mt at 8.9% Zn, 5.3% Pb, 1.4g/t Au, 6g/t Ag, and 0.3% Cu.
The FS demonstrated a strong technical and economic case for development based on a low risk milling strategy that utilises
existing processing asset, which substantially reduces capital and execution risk and accelerates production ramp-up. The
project had a robust economic case with a projected NPV of A$415M and IRR of 71% at the prevailing spot metal prices utilised
in the FS (as at 5 August 2022, being US$1,800/oz gold, US$20/oz silver, US$1,984/t lead, US$3,527/t zinc, US$7,716/t copper
and 0.70 A$/US$).
91
—
AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
—
3.8 FEDERATION PROJECT (CONTINUED)
On 13 April 2023, the Company released an update to the Federation Project scope, timeline and capital cost estimate to capture
opportunities associated with the transition of the nearby Hera surface facilities to care and maintenance. Compared to the
October 2022 release of the Federation FS, several valuable project enhancements were identified, including:
Improved path to first production
Updated mine design delivers earlier stope ore production.
Initial ore trucked to the Company’s Peak processing plant which improves concentrate payabilities by producing separate
zinc and lead concentrate products.
Restart of the Hera process plant able to be delayed until capacity at Peak is fully utilised.
Lower capital expenditure compared to the FS
Capital expenditure to first production stope ore lower at A$76 million (FS: A$88 million) and total growth capital lower
at A$143 million (FS: A$145 million).
Leveraging existing Hera mining assets and camp infrastructure lowers capital spend and de-risks execution.
Improvements have more than offset the impact of industry capital cost inflation since the FS.
Deferral of project spend associated with tailings filtration and waste backfill plant.
Updated mine design improves efficiency and operability
Optimised mine design reduces total development metres.
Shallower decline gradient improves trucking efficiency.
Figure-8 decline design provides better orebody strike coverage and improved infill drilling platforms.
A compelling base metals development project and significant Aurelia value
Net Present Value (using a 7% discount rate) of A$354 million at spot prices.
Total mill feed of 4.0Mt for 8-year initial production life; expected average annual steady state recovered metal production
of 45kt zinc, 46kt lead, 1kt copper, 15koz gold and 39koz silver.
Long-term fundamentals for zinc remaining strong.
Deposit remains open in multiple directions with substantial potential for Resource extension and conversion from planned
underground and surface drilling.
On 3 March 2023, Aurelia received Development Consent from the New South Wales Department of Planning and Environment
for the Federation Project.
Project Development
The first exploration decline development blast occurred on 12 September 2022 after finalisation of the boxcut excavation and
wall support. Approximately 90m of exploration decline development was achieved prior to activities pausing in October to allow
for an appropriate financing structure to be put in place.
Preparation of the Environmental Impact Statement (EIS) Amendment, along with the Company’s formal Response to
Submissions, was completed in September 2022 with a draft submitted to the NSW Department of Planning and Environment
(DPE) for adequacy review. Lodgement of the EIS Amendment occurred in October 2022.
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ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
3. OPERATING AND FINANCIAL PERFORMANCE (CONTINUED)
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3.8 FEDERATION PROJECT (CONTINUED)
On 31 May 2023, Aurelia announced it had secured a funding solution to enable the restart of development at Federation,
with preparations to resume site activities initiated in early June. This work included:
the preparation of the Safety Management System and Remobilisation Plan,
mobilisation of Redpath’s workforce and equipment (from mid-July) which enabled decline development mining to resume on
1 August 2023,
preparing tenders for several critical path work packages including surface shaft raiseboring and public road upgrade construction,
optimising the flotation and tailings filtration testwork to inform detailed engineering and design work.
Submissions for secondary approvals required under the project’s Development Consent were well advanced by the end
of the financial year.
Exploration and Mineral Resource
Following on from the infill drill program that was completed in late FY22, a substantial program of core processing, assaying
and interpretation was conducted during early FY23, which included some exceptional drilling results that were reported
after the cut-off date for the resource model used for the FS (see ASX release titled: Spectacular intercepts at Federation dated
15 August 2022). The updated Mineral Resource Estimate at 30 June 2023 incorporates these results with conversion of Inferred
to Indicated Mineral Resource due to improved estimation confidence.
The Company will conduct further infill drilling and extensional drilling from underground platforms targeting depth extensions
of known mineralisation once the Federation exploration decline is sufficiently advanced in FY24. Surface exploration is planned
for reinstatement in FY24 targeting along strike positions to known mineralisation. The Federation deposit remains open and/or
very sparsely drilled along strike and at depth, which will be the focus of future exploration drilling.
3.9 GREAT COBAR
The Great Cobar copper deposit is located in close proximity to the Peak Mine complex, approximately seven kilometres north
of the Peak Mine’s processing facility and is approximately one and a half kilometres north of the New Cobar Mine.
The Great Cobar Pre-Feasibility Study (PFS) and maiden Ore Reserve was released in January 2022. The mine development
uses a layout that incorporates responses from community consultation and information from assessments prepared for the
Environmental Impact Statement (EIS) for the New Cobar Complex. A Feasibility Study is planned to be completed during FY24.
The Great Cobar Project comprises:
Establishment of a new satellite underground mine which would deliver ore to the Peak Mine process plant
Excavation of twin underground access declines and a return air raise to access the deposit from the existing New Cobar
Mine workings
Longhole stoping mining methods with waste rock backfill in the copper dominant portion of the deposit
Initial mining and processing expected to take place over an approximate six-year life (400-500ktpa) to deliver a total of
66kt copper and 92koz gold
A Mineral Resource of 8,400kt of Indicated and Inferred Mineral Resource at average grades of 2.1% copper and 0.6g/t gold
for the copper dominant portion of the deposit, and
A Probable Ore Reserve estimate of 1,100kt at 2.1% copper, 1.2g/t gold and 4g/t silver as part of the Peak Mine Ore Reserve.
The Great Cobar deposit remains open both up-plunge and down-plunge. Further testing of the mineralised extents of the
deposit will be facilitated by underground drill platforms that will be accessed from the planned mine workings.
The Company has prioritised development of the Federation Project and intends to commence mining activities at Great Cobar
after Federation commences production.
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
4. EXPLORATION AND EVALUATION
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Aurelia’s exploration and evaluation activities continue to unlock exceptional value. Targeted exploration and resource definition
drilling has delivered strong results within Aurelia’s highly prospective tenement holding. While the Company is committed to
investing in future growth, exploration activities were minimised in FY23 whilst the refinance process was completed. Now that
financing is in place, exploration will ramp up with a focus on near-mine and regional exploration targets in the Cobar Basin.
4.1 COBAR DISTRICT (PEAK MINE)
Kairos
The high grade gold Kairos discovery was announced in early 2019 and was brought into production in June 2021. The Kairos
deposit is situated below the Peak Mine workings, around 700 metres to the north and slightly deeper than the Chronos lode,
with a similar steeply plunging geometry.
At Kairos further drilling was completed in FY23 to test the northern strike extent of the deposit. The drilling took place in a
new area in upper north Kairos where an overlap occurs between the Kairos lens and the Peak North orebody. Whilst minor
extensions to known mineralisation were identified, drilling has now discontinued in this area.
In FY24 drilling is now planned along the southern strike extent and down dip at Kairos where strong mineralisation
has been encountered at depth ~200m down-dip of current mine workings. Exploration drilling will aim to extend this
mineralisation further.
Perseverance
Three exploration drill programs were undertaken at the Perseverance orebody to test extensions of Upper Chronos, Zone A
(North Perseverance), and Perseverance Deeps. Each drill program was undertaken or initiated during late FY23 and assay
results are expected in the 1st quarter of FY24.
Burrabungie
The Burrabungie area is located 100m south of the Chesney orebody within the Proteus complex of the Cobar District. Historic
drilling indicated a high potential for extension of known copper mineralisation in the area within close proximity to mine
workings at the Chesney Mine.
Two drill programs were undertaken during FY23 with a surface program at Burrabungie (see ASX announcement titled:
“Exploration Update – Cobar District” released 20 March 2023) and the Chesney South underground drill program.
The Burrabungie program intersected significant intervals of copper mineralisation and has been included as a maiden Resource
Estimate in the Mineral Resource and Ore Reserve report at 30 June 2023.
The Chesney South program was completed during the last quarter of FY23 which was designed to drill an untested corridor
between the Chesney orebody and the Burrabungie orebody. Assay results for this program are pending.
Queen Bee
The Queen Bee area is located 10km south of the Peak Mine Complex and is a historic deposit composed of a copper lens and a
lead-zinc lens which discontinued operations in 1910.
The Company gained land access to this area in FY23 and initiated a first pass maiden exploration drilling campaign in the March
quarter. The drill program was designed to test the location of historic workings, support existing drilling intervals conducted
in 1966, and assess for extensions to existing mineralisation in the upper area of the copper lens (see ASX announcement titled
“Exploration Update – Cobar District 20 March 2023” released on 20 March 2023). Further exploration drilling is planned for
FY24 that will test deeper positions in the deposit and target extensions of the copper and lead-zinc lenses.
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ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
4. EXPLORATION AND EVALUATION (CONTINUED)
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4.2 NYMAGEE DISTRICT (HERA – FEDERATION)
The region encompassing the Hera-Federation Complex is the vicinity of the historic mining town of Nymagee.
The Federation deposit was discovered in this area and its prospectivity is described in Section 3.1. During FY24, Aurelia plans to
deploy a surface drill rig to test step-out targets along the Federation line of lode to the east and west to test repeat positions of
the North North-East plunging lenses at Federation.
As part of the Company’s FY23 regional exploration program, Aurelia conducted induced polarisation (IP) surveys at the Piney,
Vaucluse, Lyell and Ironbark prospects in the Nymagee district (see ASX announcement titled “Survey Results” released on
18 January 2023). Encouraging chargeability anomalies were defined at each project area. In addition to these prospects, which
will be considered for further testing with drilling, the Sir Lancelot prospect was identified as a priority for drilling due to the
magnitude of the chargeability response. High density soil sampling will be undertaken over the prospects in preparation for
further drill testing in the future.
The historic Nymagee Mine will be reviewed and drill tested in the future as part of the reinstatement to exploration activities
and review of the historic deposit. Nymagee Mine is located within 5km north of the Hera Deposit and represents an opportunity
for additional mine feed in the Cobar Basin. The Nymagee Mine area is highly prospective and has the potential for resource
extension and discovery of new lenses.
4.3 BRAIDWOOD DISTRICT (DARGUES)
The Dargues region and Braidwood District remains highly prospective. Further extensional drilling and infill drilling has been
completed on the Dargues ore body along strike to the east and west of the main Bonanza lode, and Ruby Lode, along with down
dip extensional drilling under Zone 15, Zone 8b and Plums Lode. Results have provided some upside to the existing resource
however have been insufficient to establish further resources in near-mine positions. Drilling conducted on targeted gold in
soil geochemical anomalies coincident with chargeability anomalies at Copper Ridge and Thompsons Lode areas were positive,
however, failed to return economically mineable significant intersections and the areas have been downgraded in prospectivity
(located to the northwest and south of Dargues respectively).
Future exploration work will be focused on near mine regional drilling to contribute to mine life but will also incorporate
geological system analysis to understand the deposit in greater detail and improve the prospectivity in a regional geological
setting. Regional exploration activities will be initiated to assess satellite mineralisation, including Snobs Mine and Doubloon
(all located within 1km of the Dargues Mine).
4.4 OTHER NEAR-MINE AND REGIONAL EXPLORATION
The Company’s exploration tenements remain highly prospective and are held over multiple jurisdictions.
Aurelia has conducted a comprehensive campaign of geophysical, geochemical and geological data compilation, review
and target generation activities to position the department for a sustained greenfield campaign to be conducted in FY24.
A significant increase in the implementation of land access agreements in FY23 has resulted in large tracts of highly prospective
ground becoming accessible for FY24 in support of target generation activities.
For further detail, including drill results, refer to the Aurelia website (www.aureliametals.com.au).
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
5. CORPORATE
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5.1 BALANCE SHEET
Total assets for the Group at 30 June 2023 have decreased by $117.9 million to $444.4 million (30 June 2022: $562.3 million),
driven by depreciation and amortisation charges that were in excess of capital expenditure. In FY23 the Company also
recognised impairment of exploration assets and the carrying value of Hera. The Group net assets decreased by $27.1 million to
$309.8 million at 30 June 2023 (30 June 2022: $336.9 million).
THE MAIN EVENTS AND MOVEMENTS DURING THE YEAR INCLUDE:
Assets
Closing cash of $38.9 million reflected part of the refinance announced on 31 May 2023.
The remainder of proceeds relating to the refinance were received in early FY24.
The restricted cash balance increased to $56.8 million at 30 June 2023 (FY22: $30.7 million) and
represents full cash backing of the issued performance bonds under the existing debt facility.
In August 2023 the performance bonds were replaced with new bonds under the Trafigura facility
and the cash backing is in the process of being returned.
Investment in Exploration and Evaluation continued in FY23 but at a lower rate with $11.0 million
invested for the year (FY22: $32.6 million), comprising spend at Federation, Great Cobar, Dargues
and other regional targets (refer to note 11 of the Financial Statements).
Mine properties assets totalling $143.1 million (FY22: $123.5 million)
Investment in Property, plant and equipment of $10.9 million (FY22: $31.1 million) (refer to note 9
of the Financial Statements).
Liabilities
During FY23 the interest bearing term loan under the existing secured Syndicated Facilities
Agreement (as detailed in Section 5.2) was repaid in full (FY22: $19.3 million outstanding),
as well as $3.1 million relating to chattel mortgages initiated during the year for new mobile plant
(FY22: $6.7 million).
Other financial liabilities totalling $7.5 million pertains to future third party royalties payable
(FY22: $11.1 million) (refer to note 16 of the Financial Statements).
Decrease in total rehabilitation provisions of $10.7 million is mostly attributable to a decrease in the
associated fair value calculation at 30 June 2023.
Equity
No dividends were paid or declared.
An equity raise of $40 million was announced on 31 May 2023 as part of the Company’s refinance.
At 30 June 2023 $22.3 million (net of fees) had been received relating to the institutional placement
and entitlement offer, with the remaining proceeds of $15.6 million (net of fees) from the retail
entitlement offer received in early July 2023.
5.2 FINANCING
On 31 May 2023 a new financing facility was announced with Trafigura Pte Ltd along with a $40 million equity raise. The new
Trafigura facilities (the “Facilities”) comprise:
US$24 million Loan Note Advance (“Loan Note”) facility to contribute funding to construction of Federation, and
A$65 million Environmental Bond Facility (“Bond Facility”) to provide rehabilitation bonding.
The Facilities have a term of 4 years from the date of financial close. The Loan Note has an interest rate of SOFR (Secured
Overnight Financing Rate) + 6.0% and the Bond Facility has an interest rate of 6.0%. The Facilities have no financial covenants,
no hedging requirements and have early repayment flexibility. Trafigura has been granted 120 million warrants over Aurelia
shares with an exercise price of A$0.25/share and a four year term.
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ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
5. CORPORATE (CONTINUED)
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5.2 FINANCING (CONTINUED)
Accompanying the Facilities is a concentrate offtake agreement with Trafigura that commences 1 January 2024 for a total of
700,000 dry metric tonnes of any combination of zinc, lead and copper concentrate produced from the Peak Processing Plant.
As part of the Facilities there is an undertaking to maintain a ratio of future concentrate deliveries under the offtake agreement
to the balance of amounts outstanding on the Facilities.
The Facilities were supported by a fully underwritten A$40 million equity raising via an institutional placement and 1 for
3.72 pro rata accelerated non-renounceable entitlement offer (“Entitlement Offer”). The proceeds from the institutional
placement and entitlement offer were received in June 2023. The balance of the raising relating to the retail entitlement offer
was received in early July 2023.
In June 2023 the existing secured Syndicated Facilities Agreement was repaid in full, and the existing performance bond
facility was fully cash backed. Total cash backing at 30 June 2023 was $56.8 million, with the full amount in the process of
being returned.
5.3 HEDGING
The Company acknowledges that a prudent hedging strategy is an important element of financial risk management and
overarching enterprise risk management. Whilst at 30 June 2023, the Company had no existing commodity price hedge
contracts on foot, the Company actively managed commodity price risk throughout FY23 through forward contracts and
quotation period hedging. It is intended that hedging will continue to be used to manage price risk in future.
On 1 June 2023, a 2-month foreign currency option was purchased relating to the foreign exchange exposure from the
US$24 million Loan Note. Upon expiry in July 2023 a further option was purchased to hedge the facility amount past financial
close of the Trafigura facilities.
5.4 CORPORATE COSTS
The corporate costs for the year were $14.8 million (FY22: $14.6 million). Corporate costs include head office employee related
costs, Group professional services costs and other operating costs.
5.5 DIVIDENDS
The Board of Directors did not declare a final dividend for the year ended 30 June 2023 (30 June 2022: Nil).
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AURELIA METALS OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
6. SAFETY, RISK AND SUSTAINABILITY
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Building and maintaining a trusted, sustainable, and beneficial presence in the areas in which we operate is essential.
Our approach to sustainability is aligned with our vision and our values of care, curiosity, nimble and one team.
We are embedding sustainability within our business and building resilience founded upon ethical and transparent business
and governance practices. We recognise the need to continuously improve, understand, benchmark and address emerging
issues which are of importance to ourselves and our stakeholders.
Our core activities continue to be directed towards providing certainty of no fatalities and no major environmental or community
incidents (incidents having a detrimental impact on the environment that would impact Aurelia’s reputation and license
to operate).
The foundational governance structures and programs which support Aurelia’s safety, risk and sustainability approach and
strategy include:
Rules to Live By – A defined set of rules by which all people working at Aurelia sites are required to comply. The rules are
based on industry research where breaches of such rules may result in fatalities. Mandatory training on the Rules to Live By
is completed for all personnel.
Green Rules – A defined set of rules that apply to work and activities that have a greater risk of causing environmental
harm or impacting Aurelia’s reputation.
Fatal and Catastrophic Hazard Standards – A set of Group standards that have been developed which define
the requirements for appropriately engineered work environments, fit for purpose equipment, and a trained workforce.
These standards also address catastrophic environmental hazards.
Critical Control Verification – A periodic and planned program of critical control verifications including improvement
action identification, tracking and closeout.
Group Risk Register – A register of group risks which are assessed for likelihood and consequence in line with Aurelia’s
Enterprise Risk Management Framework which is aligned with the International Standard for managing risk ISO31000:2018.
High Potential Risk Incidents (HPRI’s) – A Senior Management Taskforce for Significant Incidents assesses HPRI
investigations and verifies action close-out to prevent recurrence.
Safety Leadership Programs – A multifaceted preemptive program focusing on visible leadership and the proactive
verification of safety and environmental compliance to defined standards. The program includes a defined activity matrix
which includes Safe Act Observations (SAO), Workplace Inspections, and Planned Task Observations (PTO).
Competency Framework – A competency matrix developed to map employee training and development plans and
to identify and address any gaps in expected competencies.
Close out of Actions – A groupwide approach for the tracking and reporting of actions, and the close out of actions
to an appropriate standard.
The above control frameworks are also supported by external audits and verification processes to ensure that Aurelia are attuned
to evolving risks and opportunities.
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ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
6. SAFETY, RISK AND SUSTAINABILITY (CONTINUED)
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Our safety and environmental incident reduction journey over the last two years is evidence that good governance, systems
and a sustained focus on safety and environment outcomes combine to support reduced incident frequency rates.
Group 12-month average Total Recordable Injury Frequency Rate (TRIFR) per million hours worked:
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Since the implementation of the Green Rules, the frequency of reportable environmental incidents has improved. Aurelia’s
environmental compliance performance is measured by the Recordable Environmental Incident Frequency Rate (REIFR) per
million hours worked. For the first half of the financial year the Company experienced reportable injuries, however, the frequency
rate has progressively improved through the second half of the financial year through reinforced governance.
In August 2023 the Company was recognised for its REIFR reporting by being awarded the Environmental Excellence award
at the NSW Minerals Council HSEC Awards.
7. MATERIAL BUSINESS RISKS
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Aurelia prepares its business plan using estimates of production and financial performance based on a range of assumptions
and forecasts. There is uncertainty in these assumptions and forecasts, and risk that variation from them could result in actual
performance being different to expected outcomes. The uncertainties arise from a range of factors, including the nature of the
mining industry, and general economic factors. The material business risks faced by the Group that may have an impact on the
operating and financial prospects of the Group at the period end are outlined below.
7.1 FLUCTUATIONS IN THE COMMODITY PRICE AND FOREIGN EXCHANGE RATES
The Group’s revenues are exposed to fluctuations in the US$ price of gold, silver, lead, zinc and copper. Volatility in metal prices
creates revenue uncertainty and requires careful management of business performance to ensure that operating cash margins
are maintained despite metal price volatility. Gold doré sales are denominated in Australian dollars, whilst concentrate sales are
denominated in US dollars. The Company has a foreign exchange price risk when the US dollar price of a commodity is translated
back to Australian dollars.
During the financial year, gold and gold in concentrate unhedged sales were 29,812 ounces (FY22: 9,249 ounces). The effect
on the income statement with an A$50/oz increase/decrease in gold price would have resulted in an increase/decrease in
profit/loss and equity of $2.2 million (FY22: $0.5 million).
During the financial year the Company made unhedged sales of concentrate containing payable lead of 6,276 tonnes
(FY22: 4,831 tonnes), payable zinc 3,618 tonnes (FY22: 12,394 tonnes) and payable copper of 285 tonnes (FY22: 1,176 tonnes).
An increase/decrease of US$50/t in the price of lead, zinc and copper would have resulted in an increase/decrease profit/loss
and equity by $0.8 million (FY22: $1.3 million).
A movement in the US/AUD foreign exchange rate by 1% would result in an increase/decrease in revenue of $0.5 million.
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OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
7. MATERIAL BUSINESS RISKS (CONTINUED)
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7.1 FLUCTUATIONS IN THE COMMODITY PRICE AND FOREIGN EXCHANGE RATES (CONTINUED)
Declining metal prices can also impact operations by requiring a reassessment of the feasibility of an exploration target and/or
evaluation project. Even if a project is ultimately determined to be economically viable, the need to conduct such a reassessment
could cause substantial delays and/or may interrupt operations, which may have a material adverse effect on our results of
operations and financial position.
7.2 MINERAL RESOURCES AND ORE RESERVES
Group Mineral Resources and Ore Reserves are estimates, and no assurance can be given that the estimated reserves and
resources are accurate or that the indicated level of metal or other mineral will be produced. Such estimates are based on
interpretations of geological data obtained from drill holes and other sampling techniques. Actual mineralisation or geological
conditions may be different from those predicted. No assurance can be given that any part of the Company’s mineral resources
constitutes or will be converted into reserves.
Market price fluctuations, as well as increased production and capital costs, may render some of the Company’s ore reserves
unprofitable to develop for periods of time or may render some low margin ore reserves uneconomic. Mineral Resources and Ore
Reserves may have to be re-estimated based on new data, production performance, cost experience and metal price outlook.
Any of these factors may require the Company to modify its ore reserves, which could have either a positive or negative impact
on the Company’s financial results.
7.3 REPLACEMENT OF DEPLETED RESERVES
The Company must continually replace reserves depleted by production to maintain production levels over the long-term.
Reserves can be replaced by expanding known ore bodies, locating new deposits, acquiring new assets or achieving higher
levels of conversion from resource to reserve with improvements in production costs and/or operational performance and metal
price outlook.
Exploration is highly speculative in nature and as such, the Company’s exploration projects involve many risks and can often be
unsuccessful. Once a prospect with mineralisation is discovered, it may take several years from the initial discovery phase until
production is possible.
As a result, there is no assurance that current or future exploration programs will be successful. There is a risk that depletion
of reserves will not be offset by discoveries or acquisitions, or that divestment of assets will lead to a lower reserve base.
The Company’s mineral base may decline if reserves are mined without adequate replacement and the Company may not be
able to sustain production beyond the current mine life, based on current production rates.
7.4 PRODUCTION AND COST ESTIMATES
The Company routinely prepares internal estimates of future production, operating costs and capital costs for its operating
assets and development projects. The Company has developed business plans which forecast metal recoveries, ore volumes
and operating costs for each business unit. While these assumptions are considered reasonable, there can be no guarantee that
forecast rates will be achieved. Failure to achieve production or cost estimates could have an adverse impact on the Company’s
operating margins, future cash flow, profitability and financial solvency.
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7. MATERIAL BUSINESS RISKS (CONTINUED)
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7.4 PRODUCTION AND COST ESTIMATES (CONTINUED)
The Company’s actual production and costs may vary from estimates for a variety of reasons, including:
actual ore mined varying from estimates of grade, tonnage, dilution and metallurgical and other characteristics
short-term operating factors relating to the ore reserves, such as the need for sequential development of ore bodies and the
processing of new or different ore grades
revisions to mine plans
risks and hazards associated with mining
natural phenomena, such as inclement weather conditions, water availability, floods, and
unexpected labour shortages or strikes.
Costs of production may also be affected by a variety of factors, including ore grade, geotechnical conditions, metallurgical
performance, labour costs, consumable costs, energy costs, commodity costs, general inflationary pressures and currency
exchange rates.
7.5 MINING RISKS AND INSURANCE RISKS
The mining industry is subject to significant risks and hazards, including environmental hazards, industrial accidents, unusual
or unexpected geological conditions, unavailability of materials and equipment, rock failures, cave-ins, and weather conditions
(including flooding and bushfires) – most of which are beyond the Company’s control.
These risks and hazards could result in significant costs or delays that could have a material adverse effect on the Company’s
financial performance, liquidity and operations results.
The Company maintains insurance to cover some of these risks and hazards. Insurance is maintained in amounts that are
believed to be reasonable depending on the circumstances surrounding each identified insurable risk and are benchmarked
against peer insurance programs. However, property, liability and other insurance may not provide sufficient coverage for losses
related to these or other risks or hazards.
7.6 ATTRACTION AND RETENTION OF SKILLED AND EXPERIENCED PERSONNEL
The mining industry in general may be subject to a shortage of suitably experienced and qualified personnel in key
technical roles. Attracting and retaining key persons with specific knowledge and skills are critical to the viability and growth of
the Company.
The Company maintains a suitably structured remuneration strategy to assist with the attraction and retention of key employees.
However, the risk of loss of key employees is always present. This risk is managed through having active and broad recruitment
channels and the ability to rely upon other suitable personnel and qualified external contractors and consultants when required.
7.7 ENVIRONMENT AND SUSTAINABILITY
Environmental, health and safety regulations, permits
The Company’s mining and processing operations and exploration activities are subject to extensive laws and regulations
governing the protection of the environment. This includes the regulation and management of water, waste disposal, worker
health and safety, mine development, mine rehabilitation and closure, air quality and biodiversity.
Real or perceived events associated with the Company’s activities (or those of other mining companies) that detrimentally
impact the environment, human health and safety, or the surrounding communities may result in penalties, including delays in
obtaining or failure to obtain government permits and approvals. This may adversely affect the Company’s operations, including
its ability to continue operations.
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7. MATERIAL BUSINESS RISKS (CONTINUED)
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7.7 ENVIRONMENT AND SUSTAINABILITY (CONTINUED)
The Company has implemented a range of health, safety, environment and community related initiatives at its operations
to manage and support the health and safety of its employees, contractors and members of the community affected by
its operations. Despite this, there is no guarantee that such measures will eliminate the occurrence of accidents or other
incidents which may result in personal injuries, damage to property, and in certain instances such occurrences could give
rise to regulatory fines and/or civil liability.
Water
Water can be a scarce commodity in regional NSW, Australia. Water is a significant input into processing activities and access to
sufficient water to support current and future activities is critical. The impact of drought conditions serves to increase this risk.
The Company has established reliable sources of water which are an alternative to high security water sources. In addition,
in some other parts of NSW high rainfall related risks (including flooding), could lead to water storages on site overflowing
and discharging into the environment. High rainfall events may also disrupt access to site and operations on site.
Each of Aurelia’s mining operations prioritise the use of recycled water for its processing activities to preserve water reserves
and to limit the use of external water sources.
The Peak Mine obtains high security water from the Burrendong Dam to supplement other water sources, including water from
the historic Great Cobar underground workings.
The Dargues Mine has experienced significant rainfall over the last few years. As a result, water is stored within the tailings
storage facility which is utilised for activities onsite. If supplementary water is required, Dargues has regulatory approval to truck
water to site.
Community relations
The Company has operations near established communities. Active community engagement and a proactive outlook and
approach to local community stakeholder concerns and expectations is a key priority.
The mining industry in general is subject to potential community relations related risks which may result in a disruption to
production and exploration activities and delay the approval timelines for key development activities. The Company recognises
that by building respectful relationships with the communities in where it operates, it creates a shared value that is mutually
beneficial. Community relations initiatives such as community forums, community development programs, donations, and
sponsorships are coordinated to ensure active community engagement.
The Company’s operating philosophy is to ensure that the Company’s activities are carried out legally, ethically, and with
integrity and respect. Being a significant employer and consumer within the communities in which we operate, the Company
acknowledges the immeasurable responsibility bestowed on it. The Company’s active community engagement program provides
a platform for the Company to understand stakeholder needs and to work towards proactively addressing concerns and
mitigating any risk.
102
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ANNUAL REPORT 2023 OPERATIONS AND FINANCIAL REVIEW (CONTINUED)
7. MATERIAL BUSINESS RISKS (CONTINUED)
—
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Apart from the items as noted elsewhere in this report, there were no significant changes in the state of affairs of the Company
during the financial year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
The matters or events that have occurred after 30 June 2023 that have significantly affected or may significantly either the
Group’s operations or results of those operations of the Group’s state of affairs are listed below:
A new Director appointed – Mr Lyn Brazil (and his alternate, Mr Bradley Newcombe) was appointed on 17 July 2023.
The retail entitlement offer component of the equity raise completed in July 2023 with ~168 million new shares issued.
The Trafigura debt facilities financial close occurred in August 2023 and the 120 million warrants were issued to Trafigura
(with an exercise price of A$0.25/share and a four year term).
103
—
AURELIA METALS LETTER FROM THE CHAIR
OF THE REMUNERATION
AND NOMINATION COMMITTEE
—
Dear Shareholder,
On behalf of the Board of Directors of Aurelia Metals Limited,
I am pleased to present our FY23 Remuneration Report.
The size and scope of the organisational change agenda set
out by the Board at the Annual General Meeting could have
intimidated the most well-seasoned leaders and employees
alike, but I look back with pride at all that has been achieved.
The turnaround in operational performance and cash
management has involved every Aurelia employee who
embraced the challenge to return operational certainty
and begin the journey to restore shareholder value.
Organisation-wide initiatives, such as Working Smarter
captured $25 million in savings across the business, while
teams on site adjusted to new mine plans and operational
targets to increase cash flows.
FY23 was a year of rebalance. Despite strong commodity
prices, a combination of complex external factors provided a
challenging landscape for companies like ours. Against this
backdrop, we adapted our plans through a significant
Company refinancing whilst attracting a new Executive team
being the Managing Director, CFO and recently a Federation
Project Director. These changes aim to ensure operational
excellence whilst accelerating towards our premiere
Federation Project – which we see as a significant value
catalyst for our Company.
Along the way, we have been cognisant of the impacts of
fatigue, uncertainty and distraction that a sustained period
of transition can have on employees. For this reason, in FY23
we set in motion a range of programs to ensure positive
workforce outcomes designed to support and care for
our people. At the heart of this effort, was our remuneration
framework – a critical tool required to attract, retain and
reward employees who go above and beyond.
Remuneration governance
At Aurelia, we have developed a robust remuneration
framework that links outcomes with business performance.
It is built on strong governance and transparent reporting.
To ensure our approach is in line with current trends, market
expectations and peer insights, each year we engage with our
stakeholders (including proxy advisors) to hear their views
on our strategic approach to sustainability and employee-
related matters, including our remuneration framework.
The low vesting outcomes for the Company’s FY21 long-term
incentives reflected the Company’s poor shareholder return
over the three year period (to 30 June 2023). The absolute
and relative total shareholder return measures, and growth
measures all vested at 0%, reflecting the alignment
of ‘at risk’ remuneration for relevant employees with
shareholder expectations.
As Aurelia continues to grow, the Board recognises
that the overarching remuneration framework and
related governance controls need to be reviewed on an
ongoing basis. This includes the Company’s incentive plans
for ‘at-risk’ remuneration, which are reviewed to ensure the
plans remain relevant and meet the underlying objective
of creating alignment with Aurelia’s short- and long-term
business objectives.
Remuneration changes in FY23
Aurelia takes a whole of business approach to developing
strategy and plans, reviewing performance and linking
outcomes to variable remuneration.
In FY23, our Short-Term Incentive (STI) Plan was
simplified, moving to three pillars: safety, production, and
cost outcomes. These three measures were chosen as we
believe that by achieving our goals under these pillars,
it unlocks the key to our business success. Simplifying the
measures allows the Company to clearly align executive
and employee variable remuneration (short-term
and long-term incentives) to Company performance
and key stakeholder expectations. The simplification
allowed employees and stakeholders to make a clear
link between Company performance and the payment of
variable remuneration.
As shareholders would be aware, substantial pressure
on wages is being experienced across all sectors of the
economy, flowing from high levels of inflations and record
low unemployment. The Board is acutely aware of the need to
balance cost control against the disruption to operations that
are caused by a reduction in the workforce. The Remuneration
and Nomination Committee are aware that the Company is
experiencing high turnover due to competitive salaries within
the industry. The Committee recognises the needs to remain
competitive to continue to attract high calibre talent.
The Company’s remuneration framework is founded
on governance aligned with stakeholder expectations.
While there have been no material changes to remuneration
104
—
ANNUAL REPORT 2023 LETTER FROM THE CHAIR OF THE REMUNERATION AND NOMINATION COMMITTEE (CONTINUED)
in FY23, the Company has continued to refine and embed
governance processes and strategies which support its
remuneration objectives. Some of the activities completed
to this end in FY23 include:
Increases to the KMP’s Total Fixed Remuneration (TFR) is
equal to the average increases awarded across the entire
Aurelia workforce.
Commitment to meeting the 0.5% increase in legislated
Superannuation Guarantee (SG) effective from 1 July 2023
on top of the annual salary review increases which will also
be effective from 1 July 2023.
No change to the Non-Executive Director fee structure was
implemented during FY23.
Changes to the Short-Term Incentive Plan to simplify the
Company KPIs and provide a clear link between business
performance and payment of variable remuneration.
Invitation to Senior Professionals and Superintendents
to participate in the FY23 LTI Scheme for the first time.
This encourages ownership of the long-term Company
performance at all leadership levels of the Company.
Employees at the Manager level and above continue to be
eligible to participate in the LTI Scheme.
Diversity and Inclusion
With mining operations at the Hera Mine ceasing and the
surface facilities transitioned into care and maintenance,
and recruitment ramping up for Federation development in
June, ensuring our approach to remuneration safeguards our
commitment to diversity and inclusion has been a keen focus.
In FY23, this included:
Conducting and extensive gender pay gap analysis, before
and after any award of salary increases. This is provided
to the Remuneration and Nomination Committee and the
Board for review and approval.
Continuing well established remuneration bands
and position grading to ensure there is no room for
unconscious bias when appointing candidates, that is,
the remuneration for candidates is not dependent
on their individual powers of negotiation.
Increasing female representation across the workforce
for the fourth year in a row, female participation in the
workforce at 30 June 2023 is 22.65% (FY22: 21.5%).
Board commitment to ensuring 25% of its members
are women (as a minimum). At 30 June 2023, female
representation of the Board sat at 29% and currently
female representation is at 25% (given the appointment
of an additional Non-Executive Director).
Implementing a detailed three-year Diversity & Inclusion
Strategy (FY22-FY25) and a dedicated Diversity Working
Group in charge of actioning key targets against this
strategy and promoting D&I throughout the Company.
Such as:
– Delivering an extensive face-to-face Workplace
Behaviour Training that educated employees on the
Company’s expected behaviours when it comes to
Bullying, Harassment (including Sexual Harassment),
Discrimination and Victimisation.
– Introduced a Flexible Working Standard and the Group
Parental Leave Standard. These standards provide
greater clarity around the support mechanisms for
carers. These standards emphasise flexibility and are
aimed at supporting parents to return to our workforce
whilst balancing additional responsibilities at home.
– Continuing to collect information from our workforce
relating to gender equality through targeted questions
in Exit Interviews, surveys on psychological hazards and
sustainability surveys.
Looking ahead
The next two years will be transformational for Aurelia.
Funding for Federation, new leadership and a re-energised
focus on our mines have set the foundation for our
future success.
Given the KMP have been newly appointed in FY23, we do
not anticipate there to be any substantial changes to the
Total Fixed Remuneration (TFR) or changes to variable
remuneration such as short-term and/or long-term
incentive opportunities.
The Remuneration and Nomination Committee will continue
to monitor and review remuneration for the executive team
and all employees consistent with the annual review cycle.
We are confident our remuneration strategy will enable us
to attract and retain the high calibre team we need to take
us forward while strongly aligning employee interest with
shareholder value.
Thank you for your continued interest and support of
our Company.
Paul Harris
Chair – Remuneration and Nomination Committee
105
—
AURELIA METALS
This Remuneration Report forms part of the Directors’ Report for the year ended 30 June 2023. This report outlines the
details of the remuneration arrangements for the Directors and Key Management Personnel (KMP). It also outlines the
overall remuneration strategy, framework and practices adopted by the Company in accordance with the requirements of the
Corporations Act 2001 and its Regulations.
For the purposes of this report, KMP are defined as those persons having authority and responsibility for planning, directing and
controlling the activities of the Company and the Group, directly or indirectly, including any Director of the Company (whether
executive or otherwise).
106
—
ANNUAL REPORT 2023 REMUNERATION
REPORT
CONTENTS
—
Key Management Personnel (KMP)
Remuneration Governance
Remuneration Overview
Managing Director and CEO
and other KMP Remuneration
Service Agreement Key Terms
How Performance is linked to the
Variable 'At-Risk' Remuneration for
the Managing Director and CEO and
other Executive KMP
Malus Policy
Non-Executive Director remuneration
Remuneration of Directors and other KMP
Shareholdings of Directors and other KMP
Company Performance
and Remuneration Outcomes
Other Matters
108
109
110
111
113
114
125
125
126
128
130
130
107
—
AURELIA METALS REMUNERATION REPORT (AUDITED)
—
1. KEY MANAGEMENT PERSONNEL (KMP)
—
The KMP of the Company, and the positions held are summarised below:
NON-EXECUTIVE DIRECTORS
POSITION
TERM
Peter Botten
Susie Corlett
Independent Non-Executive Chair
Full Year
Independent Non-Executive Director
Full Year
Lawrence Conway
Independent Non-Executive Director
Resigned 31 August 2022
Bruce Cox
Paul Harris
Helen Gillies
Bob Vassie
Lyn Brazil (i)
Independent Non-Executive Director
Appointed 1 September 2022
Independent Non-Executive Director
Full Year
Independent Non-Executive Director
Full Year
Independent Non-Executive Director
Full Year
Non-Executive Director
Appointed 17 July 2023
Bradley Newcombe (ii)
Alternate Director for Lyn Brazil
From 17 July 2023
EXECUTIVE DIRECTORS
Daniel Clifford
Bryan Quinn
OTHER KMP
Peter Trout (iii)
Managing Director and CEO
Resigned 18 November 2022
Managing Director and CEO
Appointed 6 June 2023
Chief Operating Officer
Full Year
Martin Cummings
Chief Financial Officer
Appointed 1 December 2022
Ian Poole
INTERIM CEO
Andrew Graham
Chief Financial Officer and Company
Secretary
Retired 31 December 2022
Interim CEO
Interim appointment 19 November 2022 -
5 June 2023
(i) Mr Franklyn Brazil was appointed as a Non-Executive Director on 17 July 2023. Mr Brazil is appointed as a nominee of Brazil Farming Pty Ltd.
(ii) Mr Bradley Newcombe is Mr Brazil’s alternate director on the Board.
(iii) Peter Trout ceased employment with the Company on 7 August 2023.
108
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ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
2. REMUNERATION GOVERNANCE
—
BOARD
As part of its Corporate Governance framework, the Board of Directors (the Board) has an established Remuneration and
Nomination Committee (referred to hereafter as the ‘Remuneration Committee’ for the purposes of this Remuneration
Report)
The Board delegates responsibilities in relation to remuneration to the Remuneration Committee which functions in
accordance with the Committee Charter and the requirements of the Corporations Act 2001 and its regulations
A copy of the Charter is published on Aurelia's website (https://aureliametals.com/about/corporate-governance/)
REMUNERATION COMMITTEE
The Remuneration Committee consists solely of independent Non-Executive Directors to assist the Board in discharging
its responsibilities in relation to the Company's remuneration policies and practices
The Remuneration Committee is chaired by an independent Non-Executive Director who is not the Chair of the Board
Membership is detailed on page 79, under Section 3 of the Director’s Report
The Remuneration Committee is responsible for reviewing and making recommendations to the Board in relation to
remuneration matters, including the:
– remuneration arrangements and contract terms for the Managing Director and CEO and other KMP
– terms and conditions of short-term and long-term incentives for all employees, particularly the Managing Director and
CEO and other KMP, including the targets, performance measures and vesting conditions
– remuneration paid to Non-Executive Directors, and
– the budget for any annual salary increases for the Group.
REMUNERATION CONSULTANTS
The Remuneration Committee considers whether to appoint a remuneration consultant and, if so, their scope of work. Such
engagements are completed in accordance with:
– the requirements of the Corporations Act 2001 for remuneration consultants and related recommendations, and
– established governance procedures including direct reporting to the Board to ensure that any remuneration
recommendation is free from undue influence.
During FY23, the Remuneration Committee engaged independent consulting firm Juno Partners for the purpose of
providing advice and analysis with respect to remuneration (FY22: Juno Partners)
No remuneration recommendations, as defined in section 9B of the Corporations Act 2001, were made by the remuneration
consultants during FY23 (FY22: Nil)
109
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AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
3. REMUNERATION OVERVIEW
—
AURELIA’S REMUNERATION PHILOSOPHY
Aurelia’s remuneration philosophy is supported by a framework for organisational structure and remuneration, to enable
Aurelia to:
– attract, engage and retain high-calibre employees to achieve the Company’s current and future business needs, and
– encourage a performance-based culture whereby competitive remuneration and rewards are aligned to business and
shareholder objectives
AURELIA’S APPROACH TO REMUNERATION
The Company’s approach to remuneration considers:
– detailed remuneration benchmarking, with reference to the Company’s peers (industry and market capitalisation)
– the Company’s performance over the relevant performance period
– internal relativity and differentiation of remuneration based on performance
– pay equity at each level to ensure no gender or diversity bias within the organisation, and any differences are
determined based on performance and skills
– market developments affecting remuneration practices
– the remuneration and expectations of a high performing executive the Company wants to employ
– addressing emerging needs or concerns with tailored remuneration solutions (eg. retention schemes)
– the link between remuneration and the successful implementation of the Company’s strategy, and achievements
of objectives and targets, and
– future outlook.
THE LINK TO STRATEGIC BUSINESS OUTCOMES
The Company's remuneration framework is founded upon aligning each individual’s remuneration outcomes with the
Company's strategic business objectives. This alignment is created through linking 'at-risk' remuneration with Aurelia’s
strategic business objectives:
– 'at-risk' STIs are linked to individual and Company annual objectives and individual performance outcomes
– 'at-risk' LTIs are linked to the achievement of long-term strategic objectives in Section 6.2, and
– the typical key performance measures applied have been detailed in Sections 6.1 and 6.2.
Aurelia’s objective is to build a performance-based culture whereby competitive remuneration and rewards are aligned
with the Company’s objectives and shareholders' expectations. A significant proportion of total remuneration is ‘at-risk'
Through this framework, Aurelia seeks to attract, engage and retain high-calibre employees to meet the Company’s
current and future business needs
110
—
ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
4. MANAGING DIRECTOR AND CEO AND OTHER KMP REMUNERATION
—
Total Remuneration (TR) for all executive KMP consists of the following key elements:
TOTAL FIXED
REMUNERATION
(TFR)
Remuneration objective is to attract, engage and retain
high-calibre personnel.
Considerations include benchmarking data, internal
relativities and executive performance.
The purpose of TFR is to provide
a base level of remuneration
which is market competitive
and appropriate.
SHORT-TERM
INCENTIVE (STI)
The STI is an ‘at-risk’ component of TR with a
one-year horizon.
The performance measures consider the individual’s
performance based on the individual performance KPI’s
as well as Group performance under the pillars of Safety,
Production and Financial Outcomes.
The key focus of the performance measures is to build and
deliver superior shareholder returns.
LONG-TERM
INCENTIVE (LTI)
The LTI is an ‘at-risk’ component of TR with a
three-year horizon.
The performance measures are designed to support
superior shareholder return.
The objective of the LTI is to:
1.
provide an incentive to the executive KMP which
focuses on the long-term performance and growth
of the Company
2.
align the reward of the executive KMP with returns
to shareholders; and
3. promote the retention of the Company's executive
KMP and eligible employees.
The key performance measures
are set at the beginning of
each year with a one-year
performance period.
A number of critical tasks and
measures linked to each of
the Company's key pillars are
identified (refer to section 6.1
of this report).
The relative weighting is
determined based on the role
being performed and level
within the Company and is
applied as a percentage of the
employee’s TFR.
The performance measures
are set at the beginning of
each year, with a three-year
performance period as is
applied as a percentage of the
employee’s TFR.
The key focus of the performance
measures is to build and deliver
superior shareholder return
through total shareholder return
(TSR) measures and targeted
long-term growth criteria (refer
to section 6.2 of this report).
In addition to the above, eligible employees of the Company (including certain executive KMP) are entitled to participate in the
Company’s Employee Share Plan. This plan was implemented in April 2021. Eligible employees are invited to participate in the
plan to receive fully paid ordinary shares in the Company (subject to a 36-month holding lock) with a nominal value of $1,000
which, depending on the individual’s taxable income in the relevant year, may be tax exempt. The Managing Director and CEO
did not participate in this plan in FY23 due to commencing employment after the grant date.
111
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
4. MANAGING DIRECTOR AND CEO AND OTHER KMP REMUNERATION
(CONTINUED)
—
The amount and relative proportion of TFR, STI and LTI is established for each executive following consideration by the
Remuneration Committee. This includes consideration of external market references, including benchmarking of remuneration
for comparable roles and the internal relativities between executive roles. The Company also regularly participates in and
subscribes to the AON Hewitt Gold & General Mining Industry Remuneration Survey.
The principles underlying the Company's executive remuneration strategy are below:
a) Total Remuneration (TR) is to be appropriate, market competitive and structured to attract and retain talented and
experienced employees.
b) TR is to comprise an appropriate mix of fixed and performance-based at-risk variable remuneration.
c) TFR (base salary + superannuation) is targeted at the median (P50) range compared to the industry benchmark and
internal relativities. Exceptions may exist depending on the supply and demand of particular roles or skills or for individuals
who are recognised as high performers within the Company and thereby will be highly sought after by competitor companies.
d) variable remuneration is to consist of STIs and LTIs to align executive performance with the interests of shareholders.
Performance targets under the variable incentive plans reflect the Company’s short-term and long-term strategy
and objectives.
e) in keeping with the Company policy of paying for performance, target TR (TFR + target STI + target LTI) is targeted at up
to the 75th percentile of the relevant peer group (exceptions may exist depending on the supply and demand of particular
roles or skills or for individuals who are recognised as high performers within the Company). As variable remuneration is
performance based it is not guaranteed, with any award dependent on the business and individual meeting pre-determined
performance targets.
f) performance-based ‘at-risk’ remuneration is to encourage, and reward high performance aligned with business objectives that
create strategic, economic and sustainable shareholder value.
g) an annual review of remuneration is conducted for all supervisory roles and above (including the KMP) based on an appraisal
against their individual achievement and development plan and is designed is to deliver fair and equitable results.
Total Remuneration at maximum (Total Fixed Remuneration, Short-Term incentives at maximum and LTI opportunity) would see
the mix of remuneration for KMP as detailed below:
FY23
Bryan Quinn, Managing Director and CEO
Peter Trout, Chief Operating Officer
TFR
$827,500
$532,911
Martin Cummings, Chief Financial Officer
$442,000
Andrew Graham, Interim CEO*
$585,000
% OF TOTAL REMUNERATION AT MAXIMUM
TFR - 31%
TFR - 39%
TFR - 39%
TFR - 36%
STI - 38%
LTI - 31%
STI - 31%
LTI - 29%
STI - 31%
LTI - 29%
STI - 36%
LTI - 27%
Daniel Clifford, Previous Managing Director
and CEO
$756,428
TFR - 36%
STI - 27%
LTI - 36%
Ian Poole, Previous Chief Financial Officer
$442,000
TFR - 44%
STI - 27%
LTI - 29%
FY22
TFR
% OF TOTAL REMUNERATION AT MAXIMUM
Daniel Clifford, Managing Director and CEO
$753,005
TFR - 38%
STI - 24%
LTI - 38%
Peter Trout, Chief Operating Officer
Ian Poole, Chief Financial Officer
$530,500
$440,000
TFR - 49%
TFR - 49%
STI - 19% LTI - 32%
STI - 19% LTI - 32%
*Total Remuneration for Andrew Graham is for the period between 19 November 2022 and 5 June 2023 as Interim CEO. Mr. Graham was also entitled to a
completion bonus of $125,000 paid on completion of his tenure as Interim CEO as reflected in Section 9 Remuneration of Directors and other KMP.
112
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ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
5. SERVICE AGREEMENT KEY TERMS
—
Executives are employed under executive employment agreements with the Company
NAME AND
POSITION
DATE OF
SERVICE
AGREEMENT
TERM OF
SERVICE
AGREEMENT
Current Executive Directors and KMP
NOTICE PERIOD
BY EXECUTIVE
NOTICE PERIOD
BY AURELIA
TERMINATION
PAYMENTS
Bryan Quinn
Managing Director & CEO
31 May 23
Open
6 months*
6 months
Martin Cummings
Chief Financial Officer
02 Nov 22
Open
3 months
On or before
30 June 2024:
7 months
After 30 June
2024: 3 months +
1 month per year
of service up to
a maximum of 6
months
Previous Executive Directors and KMP
Peter Trout
Chief Operating Officer
25 Nov 19
Open
6 months
6 months
Andrew Graham
Interim Chief Executive
Officer***
18 Nov 22
Until the
appointment of a
permanent CEO,
or as otherwise
terminated by the
Board
6 months
6 months
Daniel Clifford
Managing Director & CEO
25 Nov 19
Open
6 months
6 months
Ian Poole
Chief Financial Officer
12 May 20
Open
3 months
3 months + 1 month
per year of service
up to a maximum
of an additional
3 months
Up to a max of
6 months fixed
remuneration (TFR)
Up to a max of
7 months TFR
Up to a max of
12 months base
salary**
Up to a max of
6 months fixed
remuneration (TFR)
Up to a max of
6 months fixed
remuneration (TFR)
Up to a max of
3 months fixed
remuneration (TFR)
*If there is a Fundamental Change, the Managing Director & CEO may terminate the employment by giving one months’ notice
in which case Aurelia shall pay twelve months of total fixed remuneration. A ‘Fundamental Change’ includes ceasing to hold the
position of Managing Director and CEO or report to the Board or where the scope of the responsibilities or authority is materially
diminished (other than on a temporary basis).
**The Service Agreement related to the Chief Operating Officer was negotiated to secure his services and is limited to those
that can be lawfully paid under the Corporations Act 2001. The Company has subsequently limited termination payments for
future executive KMP service agreements to a maximum of six months.
*** Mr Graham’s appointment as Interim CEO was under the terms of his existing employment agreement (as amended).
113
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AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP
—
The objective of variable remuneration is to align KMP remuneration outcomes to the short-term and long-term incentives
strategy and objectives of the Company. This alignment is achieved through the Company’s variable ‘at-risk’ incentives, which
comprise the Short-Term Incentive Plan (STIP) and the Long-Term Incentive Plan (LTIP).
The Board measures and considers the achievement of targets together with overall business performance and individual
performance (as relevant) when deciding on the actual payment or allocation of variable remuneration. The Board retains
absolute discretion in relation to participation and award under the STIP and LTIP.
6.1 SHORT TERM INCENTIVE PLAN (STIP)
The award of an STI payment is assessed at the end of the financial year and, if applicable, is paid only after the Remuneration
Committee has reviewed and made recommendations to the Board for approval. This includes the assessment of achievement
against applicable businesses performance and individual performance targets. Key elements of the Company’s FY23 z
Incentive Plan are:
Purpose
Focus participants on delivery of business objectives over a 12-month period .
Participation
All employees including executive KMP.
STI opportunity
The STI opportunity for the Interim CEO was targeted at 50% of TFR for the period of appointment with
an award for outperformance against a “stretch target” of 200% of this amount, i.e., a potential maximum
award of 100% of TFR.
The STI opportunity for the other KMP is at 40% of the TFR at target with an award for outperformance
against “stretch target” of 200% of this amount, i.e. a potential maximum award of 80% of TFR.
Period
Performance
criteria
The Managing Director and CEO does not have an STI opportunity for FY23 as he commenced
in June 2023. His STI opportunity for FY24 will be 100% of the TFR at target with an award for
outperformance against “stretch target” of 125% of this amount.
The previous Managing Director and CEO is entitled to a pro rata STI award for FY23 (up to his
resignation date), to be assessed against the FY23 performance criteria.
Performance is measured per financial year (1 July to 30 June).
The performance criteria and weighting of individual components are reviewed and determined annually
at the discretion of the Board.
The weighting given to each metric may differ by role. For FY23, the weighting for KMP was
80% Company Performance/20% Individual Performance, with each metric then evenly weighted within
these categories with the exception of the Interim CEO and the CFO who were weighted 50% Company
Performance/50% Individual Performance in recognition of the role each played in refinancing and
resetting the Group’s operations.
114
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ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
Performance
gates
There were two performance gates for the FY23 STIP. A performance gate is an indicator of
unsatisfactory business, work or personal performance that voids the STIP award for a specific KPI and/
or Participant.
Performance Gate
Impact
Safety: Zero fatalities within the Group
Forfeit of the Safety KPI
Individual Behaviour: any formal disciplinary
action or material breach of the Company Values.
Forfeit any STI award against Individual KPIs
Exercise of
discretion
Payment
Rights on
termination
Malus Policy
The Board has discretion, considering recommendations from the Remuneration Committee, to adjust
overall STI payments or an individual’s final STI payment.
STI payments are paid in cash and are subject to a service condition.
This condition is met if the KMP’s employment is continuous during performance period and was
employed at the STI payment date.
The KMP’s entitlement will be calculated on a pro-rata basis if they joined during the performance
period, with a minimum tenure of four months prior to the end of the performance period (otherwise
there will be no entitlement).
KMP whose employment is terminated before the date of payment (for whatever reason) are not eligible
for any STI payment but may be entitled to a pro-rata award as a good leaver.
At its discretion, the Board may cancel or withhold payment of any award made under the STIP for
the period if it determines that had the STI payment been made the KMP would have received an
‘inappropriate benefit.’
6.1.1 FY23 STIP outcomes for eligible KMP
The Board determined that the following measures would be applicable to participants in the FY23 STIP with variations for the
individual KPIs as these are dependent on the individual’s role. The same Business Performance categories were applied to all
STI participants, with metrics differing between Corporate and Site employees, to ensure that all employees were aligned to the
Company’s strategy, objectives and performance targets whilst being assessed against metrics that were within their control
and influence.
The STI performance measurements include (where appropriate) the application of threshold, target and stretch elements.
This complements the Company’s philosophy of performance-based remuneration, where a sliding scale for achievement may be
awarded based on the actual outcome.
115
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
6.1.1 FY23 STIP outcomes for eligible KMP (Continued)
These elements are defined below:
THRESHOLD
TARGET
STRETCH
Nil award for outcome below 30% of Target
100%
Award for outperformance against Target
Pro-rata between Target and Threshold
Pro-rata up to maximum of 200%
'Target’ is based on challenging but achievable targets for both the Company and the individual components. The stretch target
reflects outstanding individual and business performance. The threshold target represents the minimal level of acceptable
performance, recognising that target is set at a challenging level. At threshold, a partial award is made if the Company and/or
the individual has still performed well, and the Company has successfully progressed.
The Board considered the Individual Performance for each eligible KMP based on the below KPIs.
INTERIM CEO – INDIVIDUAL PERFORMANCE KPIs
KPI 1
KPI 2
KPI 3
Development of Federation
Develop and Deliver Funding
Revise Business Strategy & Develop Growth Options
CFO – INDIVIDUAL PERFORMANCE KPIs
KPI 1
KPI 2
KPI 3
Refinance the Business
Develop a Capital Management Plan
Drive Business Improvement
The Board Considered the Business Performance for employees based on the below KPIs:
KPI 1 – SAFETY (GROUP
TRIFR 12MMA)
KPI 2 – PRODUCTION
(GOLD EQUIVALENT
OUNCES)
KPI 3 – AISC (A$/OUNCE)
Threshold (0.3)
Target (1.0)
Stretch (2.0)
≤ 8.75
≤ 6.60
≤ 4.50
146,000
175,200
192,720
2,300
1,748
1,573
The FY23 STIP outcomes as applicable eligible KMP is detailed below.
116
—
ANNUAL REPORT 2023
REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
6.1.1 FY23 STIP outcomes for eligible KMP(Continued)
KPI 1
KPI 2
KPI 3
KPI 4 –
SAFETY
KPI 5 –
PRODUCTION
KPI 6 –
FINANCIAL
WEIGHTED
SCORE
Description
Individual
KPI 1
Individual
KPI 2
Individual
KPI 3
Group
TRIFR
12MMA
Gold Equivalent
Ounces
AISC
(A$/ounce)
Not disclosed due to commercial in-confidence
≤ 6.60
175,200
≤ 8.75
146,000
Threshold
Target
Stretch
Outcomes
2,300
1,748
1,573
Below
Threshold
Below
Threshold
129%
129%
Below
Threshold
62%
≤ 4.50
192,720
Between
Target &
Stretch
Between
Target &
Stretch
Between
Target &
Stretch
Between
Threshold &
Target
Between
Threshold &
Target
Between
Threshold &
Target
Interim CEO
Between Target & Stretch
CFO
Between Target & Stretch
Previous MD
& CEO
N/A
N/A
N/A
Upon the completion of the assessment related to the above quantitative and qualitative hurdles, the Board has determined and
approved the award of a FY23 STI for the Company’s KMP, as outlined below:
FY23
Interim CEO
Andrew Graham (i)
Other KMP
Martin Cummings (ii)
Daniel Clifford (iii)
TOTAL STIP AWARDED
$
% OF MAXIMUM
(STRETCH) STIP AWARDED
% OF MAXIMUM STIP
FORFEITED
205,720
132,469
91,169
64.5%
64.5%
41.6%
35.5%
35.5%
58.4%
The above FY23 STIP awards are payable in FY24. Mr Bryan Quinn joined the Company on 6 June 2023 and did not qualify for
a FY23 STI.
(i) Mr Andrew Graham was appointed as the Interim CEO from 19 November 2022 – 5 June 2023. The table above outlines the STI received related to the
period he was the Interim CEO.
(ii) Mr Martin Cummings commenced 1 December 2022, STI prorated from 1 December 2022 – 30 June 2023.
(iii) Mr Daniel Clifford resigned 19 November 2022, prorated from 1 July 2022 – 19 November 2022.
117
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.1 SHORT TERM INCENTIVE PLAN (STIP) (CONTINUED)
6.1.2 FY22 STIP outcomes
FY22
Executive Director
Daniel Clifford
Other KMP
Peter Trout
Ian Poole
TOTAL STIP AWARDED
$
% OF MAXIMUM
(STRETCH) STIP AWARDED
% OF MAXIMUM STIP
FORFEITED
171,596
96,173
80,214
36%
36%
36%
64%
64%
64%
The FY22 STIP performance measures and the award outcomes are detailed in the FY22 Annual Report.
The FY22 STIP awards were paid in FY23.
6.2 LONG TERM INCENTIVE PLAN (LTIP)
An outline of the key elements of the Company’s LTIP as it relates to executive KMP is provided below:
Format of LTIP
Performance Rights are granted to the relevant individual, which, upon satisfaction and testing of the
vesting criteria (over a 3-year period), will allow one ordinary share in the Company to be issued for each
Performance Right vested.
The LTIP opportunity is determined by the individual’s role and level within the business.
The LTIP for the Interim CEO was 75% of TFR for the period of the Interim CEO’s appointment. For other
KMP LTIP is 75% of TFR.
LTIP opportunity
The actual number of performance rights issued to KMP was determined by dividing their respective LTIP
opportunity by the 30-day VWAP of the Company’s share price as at 30 June 2022, being a VWAP of an
Aurelia ordinary share of $0.30451 per share.
The Managing Director and CEO does not have an LTI opportunity for FY23 as he commenced in
June 2023. His LTI opportunity for FY24 is a maximum of 100% of TFR.
Performance Period
The performance period is three years from 1 July 2022 to 30 June 2025.
Service condition
Performance Measures
and Weighting
Vesting of Performance Rights is subject to a service condition. This condition is met if the KMP’s
employment is continuous during the Performance Period. If a KMP ceases employment during the
Performance Period, then the treatment of Performance Rights will depend on the circumstances of the
employment ending, as outlined below under “Rights on Termination”.
The performance measures and their respective weighting in the LTIP are established at the beginning of
the financial year and are determined at the discretion of the Board.
The LTIP performance measures are detailed below:
Criteria
Relative TSR Rank
Growth (Ore Reserves per Share)
Weighting
60%
40%
118
—
ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.2 LONG TERM INCENTIVE PLAN (LTIP) (CONTINUED)
Targets and Vesting Schedule
Further detail on the LTIP targets and vesting at various levels of performance is included in Section 6.2.
Exercise of Discretion
The Board has discretion, considering recommendations from the Remuneration Committee, to adjust the
LTI vesting awards or an individual’s final LTI vesting.
Entitlement on Vesting
To the extent the performance criteria is satisfied (subject to the Service Condition and discretion of the
Board), the Performance Rights will vest and be exercised at nil exercise price and the number of ordinary
shares equal to the number of vested Performance Rights will be issued.
Disposal Restrictions
Shares granted to participants under the LTIP as a result of the vesting of Performance Rights are not
subject to disposal restrictions outside of the Company’s Securities Trading Policy.
Dividends
No dividends are paid on unvested Performance Rights.
Subject to the discretion of the Board, if a participant:
Rights on Termination
ceases employment for any other reason, any unvested Performance Rights will lapse on cessation
is determined by the Board to be a Good Leaver, a pro-rata number of unvested Performance Rights
will remain on foot and vest subject to the satisfaction of the applicable performance conditions.
of employment.
A Good Leaver is defined as termination in the event of death, permanent disability, redundancy,
retirement or as the Board otherwise determines.
Change of Control
If the Board considers that the transaction has occurred or is likely to occur which involves a change in
control (or other circumstances such as they recommend acceptance of a takeover bid), the Board may in
its absolute discretion determine that any or all unvested Performance Rights vest.
Participation in New Issues
Any Performance Rights issued under the Company’s LTIP are not entitled to participate in any new
equity raising activity.
Malus Policy
At its discretion, the Board may cancel or require KMP to forfeit any unvested LTI award made under
the LTIP if it determines that, had the LTI vesting been made, the KMP would have received an
‘inappropriate benefit’.
6.2.1 LTIP performance rights issued FY23
Performance Rights issued to KMP
The table below sets out the Performance Rights (Class FY23) that were granted to the Interim CEO and other KMP under the
Company’s LTIP during FY23. The performance rights will be tested at the end of the three-year performance period, which ends
on 30 June 2025.
FY23 PERFORMANCE
RIGHTS GRANTED
FY23 PERFORMANCE
RIGHTS LAPSED
FY23 PERFORMANCE
RIGHTS ON FOOT
3,834,212
1,769,204
2,065,008
119
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.2 LONG TERM INCENTIVE PLAN (LTIP) (CONTINUED)
6.2.1 LTIP performance rights issued FY23 (Continued)
Performance hurdles for Class FY23
The performance hurdles related to Class FY23, including relevant threshold and target measures, are detailed below.
LTIP SCORECARD
THRESHOLD
PRO-RATA
TARGET
Vesting % guide
Nil
50% to 100%
100%
Relative TSR*
<50th percentile
50th - 75th
percentile
75th percentile
and above
PERFORMANCE HURDLES
ALIGNMENT TO LTIP
OBJECTIVES
Relative TSR measures the change in the share price and dividends
paid over the performance period in comparison to a comparator
group of companies. The comparator group of companies is comprised
of ASX listed organisations which the Board considers by the nature of
their business are influenced by commodity prices and other external
factors similar to those that impact the Company, as disclosed under
section 6.2.2.
The Relative TSR measure aligns
the reward of the executive KMP
with returns to shareholders. If total
shareholder return for the Company
over the measurement period exceeds
its comparator peer group, then
shareholders will benefit and the LTIP
measure allows executive KMP to be
rewarded.
Growth –
Ore Reserve per share
<100% of Baseline
≥ 100% to 115% of
Baseline
≥ 115% of Baseline
Measurement will be against the Company’s growth in Ore Reserves
per share over the performance period. This will be done by comparing
the baseline measure of the Ore Reserves (kilograms of ore as
specified in the Group Mineral Resource and Ore Reserve Statement)
as at 1 July 2022 on a per share basis to the Ore Reserves (kilograms
of ore as specified in the Group Mineral Resource and Ore Reserve
Statement) as at 30 June 2025 on a per share basis, based on the
number of shares on issue at each respective date.
The Growth measure aligns the reward
of the executive KMP with targeted
long-term growth for the Company.
It rewards executive KMP to replace and
grow reserves over time to ensure the
Company’s long-term success, taking
into consideration the impact of any
issue of additional equities.
The baseline Ore Reserves per share as at 1 July 2022 was 4.61kg/
share. An outcome less than the baseline provides an outcome of nil
vesting at the end of the performance period
* The measurement of the performance will be 30-day VWAP of shares up to and including 30 June 2025.
6.2.2 Relative FY23 TSR comparator group
The comparator group at the start of the performance period includes: 29Metals (ASX: 29M), Aeris Resources (ASX: AIS); Alkane
Resources Limited (ASX: ALK), Genesis Minerals Limited (ASX: GMD), Gold Road Resources Limited (ASX: GOR), Pantoro Limited
(ASX: PNR), Ramelius Resources Limited (ASX: RMS), Red 5 Limited (ASX: RED), Regis Resources (ASX: RRL), Sandfire Resources
Limited (ASX: SFR), Silver Lake Resources Limited (ASX: SLR), St Barbara Limited (ASX: SBM) and Westgold Resources Limited
(ASX: WGX).
120
—
ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.2 LONG TERM INCENTIVE PLAN (LTIP) (CONTINUED)
6.2.3 LTIP Performance Rights Issued FY22
The performance measures related to the FY22 performance rights (Class FY22) are detailed below.
LTIP SCORECARD
THRESHOLD
Vesting % guide
Nil
PRO-RATA
50% to 100%
TARGET
100%
Relative TSR*
<50 percentile
50th – 75th percentile
75th percentile and above
Relative TSR measures the change in the share price and dividends paid over the performance
period in comparison to a comparator group of companies. The comparator group of companies is
comprised of ASX listed organisations which the Board considers by the nature of their business
are influenced by commodity prices and other external factors similar to those that impact
the Company.
Growth –
<100% of Baseline
≥ 100% to 115% of Baseline
≥ 115% of Baseline
Ore Reserve per share
Measurement will be against the Company’s growth in Ore Reserves per share over the
Performance Period. This will be done by comparing the baseline measure of the Ore Reserves
as at 1 July 2021 (kilograms of ore as specified in the Group Mineral Resource and Ore Reserve
Statement) on a per share basis to the Ore Reserves (kilograms of ore as specified in the Group
Mineral Resource and Ore Reserve Statement) as at 30 June 2024 on a per share basis, based on
the number of shares on issue at each respective date.
The baseline Ore Reserves per share as at 1 July 2021 was 3.56kg/share. An outcome less than the
baseline provides an outcome of nil vesting at the end of the Performance Period.
* The measurement of the performance will be 30-day VWAP of shares up to and including 30 June 2024.
121
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.2 LONG TERM INCENTIVE PLAN (LTIP) (CONTINUED)
6.2.4 Performance Rights - Vested during FY23
The performance period for the Class FY21 Performance Rights ended on 30 June 2023. A total of 457,875 Performance Rights
were able to vest, and of these a total of 274,460 Performance Rights were granted to former KMP.
2020 (FY21) PERFORMANCE RIGHTS
NUMBER
% GRANTED
% AVAILABLE
TO VEST
Granted
Lapsed
Unvested performance rights on hand
Forfeited
Total Vested
Number Vested for KMP
6,318,537
(3,182,409)
3,136,128
2,678,253
457,875
274,460
100%
50%
50%
42%
7%
4%
100.0%
85.4%
14.6%
8.8%
The Performance Rights were tested against the four measurement criteria (each of equal weighting):
a) Absolute TSR hurdle – 25% weighting
b) Relative TSR hurdle – 25% weighting
c) Production Target hurdle – 25% weighting
d) Growth hurdle – 25% weighting
The outcome of the testing was that 0% vested against each of the Absolute TSR, Relative TSR and Growth hurdles. The
Production Target hurdle achieved between 4 and 5 years and vested pro rata at 58.5%. The overall outcome was that 14.6% of
the FY21 Performance Rights on foot vested.
6.2.5 LTIP Performance Rights which remain untested
The total number of performance rights granted to the Interim CEO and other KMP (including former KMP) that are yet to vest
are detailed below:
PERFORMANCE RIGHTS TRANCHES
TOTAL NUMBER ON ISSUE
RELEVANT DATE OR TESTING DATE
Class FY22
Class FY23
Total KMP Performance Rights
1,216,654
2,065,008
3,281,662
30-Jun-24
30-Jun-25
122
—
ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.2 LONG TERM INCENTIVE PLAN (LTIP) (CONTINUED)
6.2.6 Summary of movements in Performance Rights during the year
A summary of movements of Performance Rights within the various plans are tabulated below:
GRANT
GRANT
DATE
EXPIRY
OR TEST
DATE
EXERCISE
PRICE
BALANCE
AT START
OF YEAR
GRANTED
DURING
THE YEAR
VESTED
DURING
THE YEAR
EXPIRED
DURING
THE YEAR
BALANCE
AS AT 30
AUGUST
Class 19A
29-11-19
30-06-22
Class FY21
19-11-20
30-06-23
Class FY21
26-12-20
30-06-23
Class FY22
04-11-21
30-06-24
Class FY22
09-11-21
30-06-24
Class FY23
08-12-22
30-06-25
Nil
Nil
Nil
Nil
Nil
Nil
2,284,641
1,696,714
3,755,760
1,866,231
-
-
-
-
6,401,029
31,198
-
11,544,184
(380,759)
(1,903,882)
(197,045)
(1,499,669)
(260,830)
(3,494,930)
-
-
-
-
-
-
(1,004,632)
861,599
(3,905,046)
2,527,181
(3,275,884)
8,268,300
Total
16,004,375
11,575,382
(838,634)
(15,084,043)
11,657,080
Total KMP Performance Rights
8,508,951
3,384,212
(602,893)
(8,458,608)
3,281,662
Total Non-KMP Performance Rights
7,495,424
7,741,170
(235,741)
(6,625,435)
8,375,418
Total
16,004,375
11,575,382
(838,634)
(15,084,043)
11,657,080
123
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
6. HOW PERFORMANCE IS LINKED TO THE VARIABLE
‘AT-RISK’ REMUNERATION FOR THE MANAGING DIRECTOR
AND CEO AND OTHER KMP (CONTINUED)
—
6.3 DETAILS OF SHARE-BASED COMPENSATION TO THE MANAGING DIRECTOR AND CEO
AND OTHER KMP
Details on rights over ordinary shares in the Company that were granted as compensation KMP and details of rights that vested
during the reporting period are as follows:
TEST
DATE
NUMBER
OF RIGHTS
GRANTED
GRANT
DATE
FAIR
VALUE AT
GRANT $/
RIGHT
FAIR
VALUE AT
VESTING
$/RIGHT
NUMBER
OF RIGHTS
VESTED
NUMBER
OF RIGHTS
LAPSED
BALANCE
AS AT 30
AUGUST
CLASS*
Other KMP
Peter Trout
Class 19A
30-06-22
618,812
29-11-19
0.290
Class FY21
30-06-23
776,665
26-12-20
Class FY22
30-06-24
854,606
09-11-21
Class FY23
30-06-25
1,312,546
08-12-22
0.285
0.300
0.081
n/a
n/a
n/a
n/a
(103,131)
(515,681)
-
-
-
(776,665)
(854,606)
(1,312,546)
3,562,629
(103,131)
(3,459,498)
-
-
-
-
-
Martin Cummings
Class FY23
30-06-25
1,088,634
8-12-22
0.081
n/a
1,088,634
Interim CEO
Andrew Graham**
Class FY23
30-06-25
884,241
08-12-22
0.081
n/a
-
-
-
-
-
-
-
-
1,088,634
1,088,634
884,241
884,241
884,241
Former Director and KMP ***
Daniel Clifford
Class 19A
30-06-22
1,351,866
29-11-19
Class FY21
30-06-23
1,696,714
19-12-20
Class FY22
30-06-24
1,866,231
04-11-21
4,914,811
Ian Poole
Class FY21
30-06-23
635,241
26-12-20
Class FY22
30-06-24
708,816
09-11-21
Class FY23
30-06-25
548,791
08-12-22
0.310
0.303
0.286
0.285
0.300
0.081
n/a
n/a
n/a
n/a
n/a
n/a
(225,302)
(1,126,564)
(197,045)
(1,499,669)
-
-
-
(1,004,632)
861,599
(422,347)
(3,630,865)
861,599
(77,415)
(557,826)
-
-
-
(353,761)
355,055
(456,658)
92,133
1,892,848
(77,415)
(1,368,245)
447,188
* All classes of Performance Rights that vest into fully paid ordinary shares, vest at a nil exercise price.
** The number of rights granted to Mr Graham in the table relate to the period he was the Interim CEO.
*** Mr Clifford and Mr Poole were deemed “good leavers” and therefore, on a pro-rata basis, retained some of their unvested performance rights.
124
—
ANNUAL REPORT 2023
REMUNERATION REPORT (AUDITED) (CONTINUED)
7. MALUS POLICY
—
The underlying principle of the policy is that an Executive of the Company should not receive performance-based ‘at-risk’
remuneration (including any STI reward prior to payment, unvested LTI award and any other performance-based component of
remuneration prior to payment or vesting) if the Board determines that such remuneration would be an “inappropriate benefit”.
The Board may, in its absolute discretion, exercised in good faith, elect to apply the policy so that an Executive does not receive
an “inappropriate benefit” where:
a) the Executive has been terminated for cause (including for fraud, dishonesty or gross misconduct);
b) the Executive intentionally or recklessly caused or contributed to a material misstatement or omission in any release made by
the Company to the Australian Securities Exchange (ASX); or
c) the Executive is engaging in, or has engaged in, behaviour or conduct that may negatively impact on the Group’s standing,
long-term financial strength, reputation, or relationship with its key regulators, or otherwise brings the Company or any
member of the Group into disrepute.
d) In such instances, the Board reserves the right to adjust or cancel some or all the Executive’s performance-based
‘at-risk’ remuneration.
8. NON-EXECUTIVE DIRECTOR REMUNERATION
—
The Company’s remuneration strategy and objective for Non-Executive Directors is to remunerate at a level which attracts and
retains Non-Executive Directors of the requisite expertise and experience at a market rate which is comparable to other similar
size companies and considers the time, commitment and responsibilities involved in being a Non-Executive Director of Aurelia.
The Remuneration Committee is responsible for reviewing and advising the Board on Non-Executive Director remuneration.
Guidance is obtained as required from independent industry surveys and other sources to ensure that the Director’s fees are
appropriate and in line with the market.
Following shareholder approval on 19 November 2020, the aggregate fee pool available for Non-Executive Director remuneration
was increased from $750,000 to $1,000,000 per annum. Non-Executive Director fees have remained unchanged since 2021.
The fee structure also provides for fees relating to Board committee responsibilities.
Structure
The aggregate fee pool available for Non-Executive Director remuneration is $1,000,000 per annum. The Board fees and the fees
related to Board committee responsibilities, are summarised below:
ROLE
Chair of the Board of Directors
Non-Executive Director
Chair of a Board Committee
Member of a Board Committee
*Inclusive of superannuation
EFFECTIVE 1 APRIL 2021
FEE PER ANNUM $*
200,000
100,000
15,000
10,000
125
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
9. REMUNERATION OF DIRECTORS AND OTHER KMP
—
The following table details the remuneration received and entitlements by Directors and KMP of the Company during FY23.
/
Y
R
A
L
A
S
E
S
A
B
S
E
E
F
S
R
O
T
C
E
R
D
I
$
FY23
Non-Executive Directors
Peter Botten
180,995
Susie Corlett
113,122
Bruce Cox (i)
86,727
Paul Harris
125,000
Bob Vassie
114,299
Helen Gillies
120,000
Former Non-Executive Director
Lawrence
Conway (ii)
19,167
Sub-total
759,310
Managing Director & CEO
SHORT TERM
C
O
H
-
D
A
/
S
E
C
N
A
W
O
L
L
A
S
U
N
O
B
$
Y
R
A
T
E
N
O
M
-
N
O
N
S
T
I
F
E
N
E
B
$
I
D
N
A
N
O
T
A
N
M
R
E
T
I
E
V
A
E
L
L
A
U
N
N
A
POST-
EMPLOYMENT
SHARE-
BASED
PAYMENT
D
E
U
R
C
C
A
$
*
T
N
E
M
Y
A
P
P
T
S
I
$
I
N
O
T
A
U
N
N
A
R
E
P
U
S
$
E
U
L
A
V
D
E
S
T
R
O
M
A
I
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,005
11,878
8,314
-
5,701
-
-
44,898
2,292
-
-
-
-
-
-
-
-
-
-
TOTAL
$
‘AT-
RISK’
%
200,000
125,000
95,041
125,000
120,000
120,000
19,167
804,208
0%
0%
0%
0%
0%
0%
0%
0%
69,664
0%
-
-
-
-
-
-
-
-
-
Bryan Quinn
(iii)
Other KMP
57,574
3,754
732
5,312
Peter Trout
505,411
Martin
Cummings (vi)
223,091
-
-
8,781
19,467
27,500
190,494
751,653
25%
4,000
22,055
132,469
13,750
19,813
415,178
37%
Interim CEO
Andrew
Graham (iv)
298,991
125,000
4,391
12,846
205,720
15,748
16,093
678,789
33%
Former Director & KMP
Daniel Clifford
(v)
280,798
10,417
3,659
364,387
91,169
11,572
(11,035)
750,967
11%
Ian Poole (vii)
207,250
-
4,391
(230)
-
16,042
16,818
244,271
7%
Sub-total
1,573,115
139,171
25,954
423,837
429,358
Total
2,332,425
139,171
25,954
423,837
429,358
86,904
131,802
232,183
2,910,522
232,183
3,714,730
11%
8%
(i) Mr Bruce Cox was appointed as an Independent Non-Executive Director on 1 September 2022.
(ii) Mr Lawrence Conway resigned as an Independent Non-Executive Director on 31 August 2022.
126
—
ANNUAL REPORT 2023
REMUNERATION REPORT (AUDITED) (CONTINUED)
9. REMUNERATION OF DIRECTORS AND OTHER KMP (CONTINUED)
(iii) Mr Bryan Quinn was appointed as the Managing Director and CEO on 6 June 2023, as part of Mr Bryan Quinn’s package he is entitled to sign on
shares which will be put to shareholders for approval at the AGM in November 2023. The value of the shares for his employment during FY23 is
$8,545. As part of Mr Bryan Quinn’s package, he is entitled to a travel allowance, relocation assistance, a motor vehicle, and an allowance for Executive
Coaching. The allowance listed in the table represents the travel allowance received by Mr Quinn in FY23. No other costs were incurred in FY23.
(iv) Mr Andrew Graham was appointed as the Interim Managing Director and CEO from 19 November 2022 – 5 June 2023. The table above outlines the
remuneration received for the period he was the Interim CEO.
(v) Mr Daniel Clifford resigned as Managing Director and CEO on 18 November 2022.
(vi) Mr Martin Cummings was appointed as the Chief Financial Officer on 1 December 2022.
(vii) Mr Ian Poole retired as the Chief Financial Officer on 31 December 2022 and was paid his accrued annual leave balance.
*Payments related to the 2023 STI Plan will be paid in FY24. Payments related to the 2022 STI Plan were paid in FY23.
** The leave entitlements movement includes long service leave and annual leave movements during FY23.
The following table details the remuneration received by Directors and KMP of the Company during FY22 ($).
SHORT TERM
Y
R
A
T
E
N
O
M
-
N
O
N
S
T
I
F
E
N
E
B
T
N
E
M
E
L
T
I
T
N
E
E
V
A
E
L
*
*
S
T
N
E
M
E
V
O
M
-
-
-
-
-
-
-
-
-
-
-
-
-
-
*
T
N
E
M
Y
A
P
P
T
S
I
-
-
-
-
-
-
-
/
Y
R
A
L
A
S
E
S
A
B
S
E
E
F
S
R
O
T
C
E
R
D
I
FY22
Non-Executive Directors
Peter
Botten (i)
Lawrence
Conway
Susie
Corlett (ii)
132,230
115,000
145,317
Paul Harris
125,000
Bob Vassie
109,091
Helen Gillies
111,818
Sub-total
738,456
Managing Director & CEO
S
E
C
N
A
W
O
L
L
A
-
-
-
-
-
-
-
POST-
EMPLOYMENT
SHARE-
BASED
PAYMENT
I
N
O
T
A
U
N
N
A
R
E
P
U
S
13,223
-
14,713
-
10,909
8,182
47,027
E
U
L
A
V
D
E
S
T
R
O
M
A
I
-
-
-
-
-
-
-
TOTAL
‘AT-
RISK’
145,453
0%
115,000
0%
160,030
0%
125,000
120,000
120,000
785,483
0%
0%
0%
0%
Daniel
Clifford
Other KMP
725,505
25,000
7,200
37,944
171,596
27,500
423,598
1,418,343
42%
Peter Trout
503,000
Ian Poole
412.500
-
-
7,200
11,852
96,713
27,500
135,747
782,012
30%
7,200
8,011
80,214
27,500
123,181
658,606
31%
Sub-total
1,641,005
25,000
21,600
57,807
348,523
82,500
682,526
2,858,961
38%
Total
2,379,461
25,000
21,600
57,807
348,523
129,527
682,526
3,644,444
30%
(i) Mr Peter Botten was appointed as Independent Non-Executive Director on 13 September 2021 and was appointed as Chair on 4 November 2021.
(ii) Ms Susie Corlett served as the Interim Chair during the period 2 March 2021 to 4 November 2021.
* Payments related to the 2022 STI Plan were paid in FY23. Payments related to the 2021 STI Plan were paid in FY22.
** The leave entitlements movement includes long service leave and annual leave movements during FY22.
127
—
AURELIA METALS
REMUNERATION REPORT (AUDITED) (CONTINUED)
10. SHAREHOLDINGS OF DIRECTORS AND OTHER KMP
—
All equity transactions with KMP, other than those arising from the exercise of remuneration related to Performance Rights,
or the Employee Share Scheme have been entered into under terms and agreements no more favourable than those
the Company would have adopted if dealing at arm’s length.
The Company does not have a policy or a requirement for Non-Executive Directors to hold shares in the Company.
The shareholdings of Directors and other KMP for FY23 is presented below and includes shares held directly, indirectly,
and beneficially by the Directors and other KMP.
FY23
Directors
Peter Botten
Susie Corlett
Paul Harris
Bob Vassie
Helen Gillies
Bruce Cox (i)
Bryan Quinn (ii)
Other KMP
Peter Trout *
Martin Cummings (iii)*
Former Directors
Daniel Clifford**
Lawrence Conway**
Former KMP
Ian Poole**
Total
BALANCE START
OF YEAR
PERFORMANCE
RIGHTS VESTED
OTHER CHANGES
DURING YEAR
BALANCE END
OF YEAR
-
33,731
-
250,000
250,000
-
-
4,936
-
3,130,402
225,850
4,936
-
-
-
-
-
-
-
103,131
-
-
-
-
-
-
-
50,000
9,331
409,331
225,302
(3,355,704)
-
-
(225,850)
(4,936)
-
33,731
-
250,000
250,000
-
50,000
117,398
409,331
-
-
-
3,899,855
328,433
(3,117,828)
1,110,460
(i) Mr Bruce Cox was appointed as an Independent Non-Executive Director on 1 September 2022.
(ii) Mr Bryan Quinn was appointed as Managing Director and CEO on 6 June 2023. Mr Bryan Quinn held shares in the Company prior to his
commencement. as part of Mr Bryan Quinn’s package he is entitled to sign on shares which will be put to shareholders for approval at the AGM in
November 2023.
(iii) Mr Martin Cummings was appointed as CFO on 1 December 2022. Mr Cummings held shares in the Company prior to his commencement.
Further shares were acquired by Mr Cummings on market during the period.
*Mr Trout and Mr Cummings participated in the FY23 Employee Share Plan. Mr Trout ceased to be a KMP subsequent to the end of the reporting period.
** Mr Clifford, Mr Conway and Mr Poole ceased office with the Company prior to the end of the reporting period.
128
—
ANNUAL REPORT 2023 REMUNERATION REPORT (AUDITED) (CONTINUED)
10. SHAREHOLDINGS OF DIRECTORS AND OTHER KMP (CONTINUED)
—
Note: On 5 July 2023, the shares under the Company’s Retail Entitlement Offer were issued. As existing shareholders, Mr Vassie,
Ms Gillies, Mr Quinn, Mr Trout and Mr Cummings participated in the Retail Entitlement Offer.
Refer to Section 2 of Director’s Report for current shareholdings of directors at the date of this report.
The shareholdings of Directors and other KMP for FY22 are presented below and includes shares held directly, indirectly, and
beneficially by the Directors and other KMP.
FY22
Directors
Peter Botten (i)
Daniel Clifford
Lawrence Conway
Susie Corlett
Paul Harris
Bob Vassie (i)
Helen Gillies (ii)
Other KMP
Peter Trout
Ian Poole
Total
(i) appointed 13 September 2021
BALANCE START
OF YEAR
PERFORMANCE
RIGHTS VESTED
OTHER CHANGES
DURING YEAR
BALANCE END
OF YEAR
-
1,565,201
225,850
33,731
-
250,000
250,000
2,362
2,362
-
1,565,201
-
-
-
-
-
-
-
2,329,506
1,565,201
-
-
-
-
-
-
-
2,574
2,574
5,148
-
3,130,402
225,850
33,731
-
250,000
250,000
4,936
4,936
3,899,855
10.1 MANAGING DIRECTOR & CEO SIGN ON SHARES
The new Managing Director and CEO was appointed on 6 June 2023. As part of the employment arrangements for the new
Managing Director and CEO, he is to be issued 4,524,197 ordinary shares in the Company (equivalent to $500,000 divided by
the VWAP during the 5 Business Days prior to 31 May 2023), with the issue of the shares being subject to shareholder approval.
If shareholder approval is obtained, these shares will be subject to a holding lock, with a third of the shares released on each
of the first, second and third anniversary of approval. Any shares still the subject of a holding lock will also be released upon
the event of a change in control of the Company or if there is a Fundamental Change in the Managing Director and CEO’s
employment (as described in Section 5 Service agreement key terms).
129
—
AURELIA METALS REMUNERATION REPORT (AUDITED) (CONTINUED)
11. COMPANY PERFORMANCE AND REMUNERATION OUTCOMES
—
Aurelia remuneration framework aims to create aims to create a link between Company performance and executive reward.
The following table and graph represent a summary of business performance.
YEAR ENDED 30 JUNE
Sales Revenue
EBITDA
Profit/(loss) after income tax
Cash from operating activities
Closing Share Price (cents)
2023
$’000
369,202
55,803
(52,221)
45,864
9
2022
$’000
438,815
166,472
(81,688)
154,093
26
2021
$’000
416,477
154,069
42,917
136,643
41
2020
$’000
331,819
103,447
29,442
110,531
50
2019
$’000
295,002
103,063
36,017
106,783
49
Monthly Average Share Price and Trading Volumes
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
1
2
-
l
u
J
1
2
-
g
u
A
1
2
-
p
e
S
1
2
-
t
c
O
1
2
-
v
o
N
1
2
-
c
e
D
2
2
-
n
a
J
2
2
-
b
e
F
2
2
-
r
a
M
2
2
-
r
p
A
2
2
-
y
a
M
2
2
-
n
u
J
2
2
-
l
u
J
2
2
-
g
u
A
2
2
-
p
e
S
2
2
-
t
c
O
2
2
-
v
o
N
2
2
-
c
e
D
3
2
-
n
a
J
3
2
-
b
e
F
3
2
-
r
a
M
3
2
-
r
p
A
3
2
-
y
a
M
3
2
-
n
u
J
Monthly Trading Volume '000
Average Price
12. OTHER MATTERS
—
12.1 LOANS GIVEN TO KMP
No loans have been provided by the Company to KMP.
12.2 OTHER TRANSACTIONS BETWEEN THE COMPANY AND KMP OR THEIR
RELATED PARTIES
No other transactions have been entered into between the Company and KMP and/or their related parties.
130
—
ANNUAL REPORT 2023 AUDITOR’S INDEPENDENCE DECLARATION
—
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of
Aurelia Metals Limited
As lead auditor for the audit of the financial report of Aurelia Metals Limited for the financial year
ended 30 June 2023, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b) no contraventions of any applicable code of professional conduct in relation to the audit; and
c) no non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Aurelia Metals Limited and the entities it controlled during the financial
year.
Ernst & Young
Kellie McKenzie
Partner
30 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
131
—
AURELIA METALS
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
—
FOR THE YEAR ENDED 30 JUNE 2023
NOTE
Sales Revenue
Cost of sales
Gross (Loss)/Profit
Corporate administration expenses
Rehabilitation (expense)/reversal of expense
Share based payment expense
Impairment loss
Other expenses
Other income
(Loss) before income tax and net finance costs
Finance income
Finance costs
(Loss) before income tax expense
Income tax benefit
(Loss) after income tax expense
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges, net of tax
Total comprehensive income for the year
Earnings per share for Profit attributable to the ordinary equity holders
of the parent
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
The above Statement should be read in conjunction with the accompanying notes.
3
4
4
13
21
4
4
3
3
4
5
20
20
2023
$’000
369,202
(403,000)
(33,798)
(14,848)
3,274
(797)
(20,846)
(2,369)
211
(69,173)
2,161
(6,861)
2022
$’000
438,815
(416,366)
22,449
(14,561)
(3,531)
(1,780)
(135,687)
(1,286)
27,365
(107,031)
227
(7,234)
(73,873)
(114,038)
21,652
(52,221)
32,350
(81,688)
1,964
(50,257)
(4,456)
(86,144)
(4.16)
(4.16)
(6.61)
(6.61)
132
—
ANNUAL REPORT 2023 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
—
NOTE
2023
$’000
2022
$’000
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Derivative financial instruments
Income tax receivable
Total current assets
Non-current assets
Property, plant and equipment
Mine properties
Exploration and evaluation assets
Right of use assets
Restricted cash
Financial assets
Deferred tax assets
Total non-current assets
Total assets
Liabilities
Current Liabilities
Trade and other payables
Interest bearing loans and borrowings
Provisions
Lease liabilities
Other financial liabilities
Derivative financial instruments
Total current liabilities
6
7
8
22
9
10
11
14
6
5
12
15
13
14
16
22
38,946
7,677
29,230
5,221
69
21,177
102,320
118,287
143,074
9,667
4,943
56,833
718
8,558
342,080
444,400
28,479
3,635
7,724
3,041
6,803
-
76,694
18,100
43,908
3,103
-
9,648
151,453
156,027
123,533
71,728
19,414
30,746
1,105
8,244
410,797
562,250
65,770
17,410
11,930
11,065
6,947
3,103
49,682
116,225
133
—
AURELIA METALS STATEMENT OF FINANCIAL POSITION (CONTINUED)
—
Non-current liabilities
Provisions
Interest bearing loans and borrowings
Lease liabilities
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Share based payments reserve
Hedge reserve
Retained earnings
Total equity
The above Statement should be read in conjunction with the accompanying notes.
NOTE
13
15
14
16
17
18
18
19
2023
$’000
78,164
4,047
1,969
713
84,893
134,575
309,825
357,018
13,919
-
(61,112)
309,825
2022
$’000
87,956
8,591
8,424
4,128
109,099
225,324
336,926
334,659
13,122
(1,964)
(8,891)
336,926
134
—
ANNUAL REPORT 2023 CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
—
FOR THE YEAR ENDED 30 JUNE 2023
NOTE
Balance at 1 July 2021
Total (Loss) for the period
Other comprehensive income
18
Total Comprehensive Income
Transactions with owners in their capacity
as owners
Shares issued, net of costs
Share-based payments
Dividend payments
21
17
ISSUED
SHARE
CAPITAL
$’000
SHARE
BASED
PAYMENTS
RESERVE
$’000
RETAINED
EARNINGS/
ACCUMULATED
LOSSES
$’000
HEDGE
RESERVE
$’000
TOTAL
$’000
334,659
11,342
2,492
72,797
421,290
-
-
-
-
-
-
-
-
-
-
1,780
-
-
(81,688)
(81,688)
(4,456)
(4,456)
-
(4,456)
(81,688)
(86,144)
-
-
-
-
-
-
-
1,780
-
Balance at 30 June 2022
334,659
13,122
(1,964)
(8,891)
336,926
334,659
13,122
(1,964)
(8,891)
336,926
Balance at 1 July 2022
Total (Loss) for the period
Other comprehensive income
18
Total Comprehensive Income
-
-
-
Transactions with owners in their capacity
as owners
Shares issued, net of costs
Share-based payments
Dividend payments
22,359
-
-
21
17
-
-
-
-
797
-
Balance at 30 June 2023
357,018
13,919
The above Statement should be read in conjunction with the accompanying notes
-
1,964
1,964
(52,221)
(52,221)
-
1,964
(52,221)
(50,257)
-
-
-
-
-
-
-
22,359
797
-
(61,112)
309,825
135
—
AURELIA METALS CONSOLIDATED STATEMENT OF CASH FLOWS
—
FOR THE YEAR ENDED 30 JUNE 2023
NOTE
2023
$’000
2022
$’000
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Receipts/(payments) for hedge settlements and foreign exchange
Interest received
Interest and finance charges paid
Income tax refund
Net cash flows from operating activities
23
Cash flows from investing activities
Payments for the purchase of property, plant and equipment
Payments for mine capital expenditure
Payments for exploration and evaluation
Payments for facility cash cover and security deposits
Payments for deferred consideration and royalty costs
Net cash flows used in investing activities
Cash flows from financing activities
Principal element of lease payments
Repayment of loan and borrowings
Proceeds from the issue of shares
Payments for transaction costs related to issuance of securities
Repayments of equipment loans
Proceeds from borrowings
Dividend payment to shareholders
Net cash flows (used in) /from financing activities
Net increase / (decrease) in cash and cash equivalents
Net foreign exchange difference
Cash and cash equivalents at beginning of the year
Cash and cash equivalents at end of the year
The above Statement should be read in conjunction with the accompanying notes.
17
6
362,461
(325,502)
2,023
2,161
(5,711)
10,432
45,864
(7,123)
(28,359)
(10,972)
(26,087)
(4,832)
(77,373)
(9,376)
(20,700)
23,564
(1,205)
(3,105)
4,056
-
(6,766)
(38,275)
527
76,694
38,946
453,469
(300,379)
(7,423)
226
(4,480)
12,680
154,093
(17,359)
(57,786)
(30,107)
(22,142)
(4,069)
(131,463)
(10,732)
(16,762)
-
-
-
7,327
-
(20,167)
2,463
(301)
74,532
76,694
136
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS
—
1. CORPORATE INFORMATION
—
Aurelia Metals Limited is a company limited by shares, incorporated, and domiciled in Australia, whose shares are publicly traded
on the Australian Securities Exchange (ASX).
Aurelia has the following wholly owned subsidiaries incorporated in Australia:
ENTITY NAME
INCORPORATION DATE
Big Island Mining Pty Ltd
Dargues Gold Mines Pty Ltd
Defiance Resources Pty Ltd
Hera Resources Pty Ltd
Nymagee Resources Pty Ltd
Peak Gold Asia Pacific Ltd
Peak Gold Mines Pty Ltd
3 February 2005
12 January 2006
15 May 2006
20 August 2009
7 November 2011
26 February 2003
31 October 1977
The nature of the operations and principal activities of the consolidated group are gold, copper, lead, zinc and silver production
and mineral exploration.
The financial report of Aurelia Limited and its subsidiaries for the year ended 30 June 2023 was authorised for issue in
accordance with a resolution of the Directors on 29 August 2023.
1.1 Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of the
Corporations Act 2001, Australian Accounting Standards, and other authoritative pronouncements of the Australian Accounting
Standards Board.
The financial report also complies with the International Reporting Standards (IFRS) as issued by the International Accounting
Standards Board.
The financial report has been prepared on a historical cost basis, except for investments, derivative instruments, contingent
consideration, and deferred consideration costs which are measured at fair value. The financial report has been presented in
Australian dollars, which is the functional currency of the Company. All values are rounded to the nearest thousand ($’000),
except when otherwise indicated under the option available to the Company under ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191. The Company is an entity to which this legislative instrument applies.
1.2 Going concern
The financial report has been prepared on a going concern basis which contemplates the continuity of normal business activities
and the realisation of assets and the settlement of liabilities in the ordinary course of business. To ensure the Group can meet its
working capital and sustaining and expansionary capital expenditure requirements in the ordinary course of business, the Group
routinely monitors its available cash and liquidity. During FY23 the Company announced it had refinanced the existing debt
facilities through a new ~A$100 million financing package from Trafigura Pte Ltd. Accompanying this was a A$40 million equity
raise which was completed in early July 2023. Financial close on the Trafigura facilities was achieved in August 2023. To the
extent necessary, the Group considers financing and other capital management strategies, to ensure appropriate funding for its
current operations and future growth ambitions.
137
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AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. CORPORATE INFORMATION (CONTINUED)
—
1.3 Basis of consolidation
The consolidated financial statements comprise the financial statements of Aurelia and its subsidiaries.
The financial statements of subsidiaries are prepared for the same reporting period as the Company, using consistent
accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. In preparing the
consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses
resulting from intra-group transactions, have been eliminated in full.
1.4 Foreign currency and translation
1.4.1 Functional and Presentation Currency
Both the functional and presentation currency of Aurelia and its controlled entities is Australian Dollars ($ or A$). The Group does
not have any foreign operations.
1.4.2 Transactions and Balances
Transactions in foreign currency are initially recorded in the foreign currency at the exchange rates ruling at the date of
transaction. The subsequent payment or receipt of funds related to a transaction is translated at the rate applicable on the date
of payment or receipt. Monetary assets and liabilities denominated in foreign currencies are re-translated at the rate of exchange
ruling at the reporting date. All exchange differences in the consolidated financial statements are taken to the Statement of
profit or loss as gain or loss on exchange.
1.5 Other accounting policies
Significant and other accounting policies that summarise the measurement basis used and are relevant to an understanding of
the financial statements are provided throughout the notes to the financial statements.
138
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. OPERATING SEGMENTS AND PERFORMANCE
—
2.1 IDENTIFICATION AND DESCRIPTION OF SEGMENTS
The consolidated entity applies AASB 8 Operating Segments which requires a management approach under which segment
information is presented on the same basis as that used for internal reporting purposes.
An operating segment is a component of an entity that engages in business activities from which it may earn income and incur
expenses (including income and expenses relating to transactions with other components of the same entity), whose operating
results are regularly reviewed by the entity's Chief Operating Decision Makers (CODM), to determine how resources are to be
allocated to the segment and assess its performance. Management will also consider other factors in determining operating
segments such as the existence of a line manager and the level of segment information presented to the Board of Directors.
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the
Managing Director & CEO and the Board of Directors (the Chief Operating Decision Makers) in assessing performance and in
determining the allocation of resources.
The Consolidated Entity operates entirely in the industry of exploration, development, and mining of minerals in Australia.
The reportable segments are split between the operating mine sites (Hera, Peak and Dargues mines), and corporate and
administrative activities. Financial information about each of these segments is reported to the Managing Director and Board
of Directors monthly.
Corporate and administrative activities are not allocated to operating segments and form part of the reconciliation to net profit
after tax and includes share-based expenses and other administrative expenditures incurred to support the business during
the period.
Segment performance is evaluated based on earnings before interest, tax, depreciation and amortisation (EBITDA).
2.2 ACCOUNTING POLICIES ADOPTED
Unless otherwise stated, all amounts reported to the CODM with respect to operating segments are determined in accordance
with accounting policies that are consistent with those adopted in the annual financial statements of the consolidated entity.
2.3 SEGMENT REVENUE
The revenue from external parties reported to the CODM is measured in a manner consistent with that of the statement of profit
and loss and other comprehensive income.
Revenues from external customers are derived from the sale of metal in concentrate and gold and silver doré. The revenue from
gold and silver doré sales is attributable to various counterparties with the largest customer accounting for 10% of the total sales
revenue (FY22: 37%). The concentrate revenue arises from sales to various customers with the largest customer accounting for
40% of total sales revenue (FY22: 52%).
2.4 SEGMENT ASSETS AND LIABILITIES
Where an asset is used across multiple segments the asset is allocated to the segment that receives most of the economic value
from the asset. In most instances, segment assets are clearly identifiable based on their nature and physical location.
Liabilities are allocated to segments where there is a direct nexus between the liability and the operations of the segment.
Borrowings and tax liabilities are generally considered to relate to the whole consolidated entity and are not allocated. Segment
liabilities include trade and other payables and other certain direct borrowings.
139
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. OPERATING SEGMENTS AND PERFORMANCE (CONTINUED)
—
2.5 SEGMENT INFORMATION
Unallocated items
The following items are not allocated to operating segments, as they are not considered part of the core operations
of any segment:
interest and other income;
share based payment expense;
acquisition and integration costs and stamp duty expense;
fair value adjustments/remeasurements at balance date related to financial assets and liabilities; and
foreign exchange, commodity derivative transactions, investment revaluations, fair value adjustments, debt restructuring
and gain/loss on the sale of financial assets.
The segment information for the reportable segments is as follows:
YEAR ENDED 30 JUNE 2023
NOTE
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
Sales revenue
Site EBITDA
3
200,801
69,086
99,315
37,996
(4,029)
35,633
-
-
369,202
69,600
Reconciliation of profit before tax expense:
Impairment loss
Depreciation and amortisation expense
Corporate costs
Interest income and expense, net
Rehabilitation expenses
Share based payment expenses
Other operating income
Other expenses
Income tax expense
Profit after income tax
4
21
5
(20,846)
(103,398)
(14,848)
(4,700)
3,274
(797)
211
(2,369)
21,652
(52,221)
Segment assets and liabilities
Total assets
Total liabilities
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
188,307
80,617
46,334
129,142
444,400
(77,208)
(19,533)
(28,690)
(9,144)
(134,575)
(i) Hera Mine was transitioned into care and maintenance in April 2023, the segment reporting for Hera mine also includes any costs that have been
incurred for the Federation project. The total assets and total liabilities balances also includes Federation balances.
140
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. OPERATING SEGMENTS AND PERFORMANCE (CONTINUED)
—
2.5 SEGMENT INFORMATION (CONTINUED)
YEAR ENDED 30 JUNE 2022
NOTE
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
Sales revenue
Site EBITDA
3
219,908
126,658
92,249
74,683
40,772
44,215
-
-
Reconciliation of profit before tax expense:
Impairment loss
Depreciation and amortisation expense
Corporate costs
Interest income and expense, net
Rehabilitation expenses
Share based payment expenses
Other operating income
Other expenses
Income tax expense
Profit after income tax
4
21
5
TOTAL
$’000
438,815
159,670
(135,687)
(137,221)
(14,561)
(7,007)
(3,531)
(1,780)
27,365
(1,286)
32,350
(81,688)
Segment assets and liabilities
Total assets
Total liabilities
PEAK
MINE
$’000
HERA
MINE
$’000
DARGUES
MINE
$’000
CORPORATE &
ELIMINATION
$’000
TOTAL
$’000
232,039
115,900
88,417
125,894
562,250
(97,063)
(54,192)
(40,470)
(33,599)
(225,324)
141
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SALES REVENUE AND OTHER INCOME
—
Profit before income tax includes the following revenues and other income whose disclosure is relevant in explaining the
performance of the Group.
Sales revenue
Gold
Copper
Lead
Zinc
Silver
NOTE
2023
$’000
223,721
30,505
55,841
50,160
8,975
2022
$’000
228,378
32,547
63,140
97,308
17,442
Total sales revenue from contracts with customers
369,202
438,815
Other income
Sundry income
Fair value adjustments/remeasurement of financial assets and liabilities
Fair value adjustment of financial assets
Remeasurement of financial liabilities
16
Total other income
Total finance income
Recognition and measurement
Sales revenue
Gold and silver doré sales
211
-
-
-
234
-
-
27,131
211
27,365
2,161
227
Revenue from gold and silver doré sales is recognised when control has been transferred to the counterparty (which is at the
point where the doré leaves the gold room at the mine site, or when the gold metal credits are transferred to the customer’s
account) and once the quantity of the gold and silver and the selling prices are known or have been reasonably determined.
Gold, lead, zinc, copper and silver in concentrate sales
Recognition of revenue from metal in concentrate sales contracts with customers is dependent upon the individual contract with
each customer, for each mine site. Depending on the contract, the Incoterms may be Cost, Insurance and Freight (CIF), Carriage
and Insurance Paid (CIP), or Free On Board (FOB).
The Group generates concentrate sales revenue primarily from the obligation to transfer concentrate to the customer. As the
Group sells some of the concentrate on CIF and CIP Incoterms, the freight/shipping services provided (as principal) under these
contracts with customers to facilitate the sale of concentrate represent a secondary performance obligation.
Revenue is allocated between the performance obligations and is recognised as each performance obligation is met, which for the
primary obligation occurs when the concentrate is delivered to a vessel or location, and for the secondary obligation, if applicable,
is when the concentrate is delivered to the location specified by the customer. Revenue arising from the secondary obligation, if
assessed as immaterial to the Group, is aggregated with the primary performance obligation for disclosure purposes.
142
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. SALES REVENUE AND OTHER INCOME (CONTINUED)
—
Quotation period
As is industry practice, the terms of metal in concentrate sales contracts with third parties contain provisional pricing
arrangements whereby the selling price for metal in concentrate is determined based on the market price prevailing at a future
date (quotation period). Revenue for the primary performance obligation is measured based on the fair value of the consideration
specified in a contract with the customer at the time of settling the performance obligation and is determined by reference to
forward market prices. Provisional pricing adjustments, which occur between the fair value at the time of settling the primary
performance obligation and the final price, have been assessed and are recorded within revenue from concentrate sales.
Freight services performance obligation
The freight service on export concentrate shipments represents a separate performance obligation as defined under AASB 15
Revenue from Contracts with Customers. This means a portion of the revenue earned under these contracts proportionate
to the cost of freight services has been deferred and will be recognised at the time the obligation is fulfilled, that is, when the
concentrate reaches its final destination. For the year ended 30 June 2023, the amount of deferred revenue is $0.1 million
(FY22: $3.6 million).
Other income
Fair value adjustment/remeasurement of financial assets and liabilities
The financial assets and liabilities comprise:
a financial asset measured at fair value through profit and loss related to an investment in the ordinary capital of Sky Metals
Limited, an entity listed on the Australian Securities Exchange (ASX). The fair value adjustment was determined based on the
quoted market price of Sky Metals Limited as at 30 June 2023; and
a financial liability measured at amortised cost related to a third-party royalty payable on the gross revenue from the sale
of gold concentrate from the Dargues Gold Mine. The remeasurement of the liability is based on changes to the applied gold
price and foreign exchange rate, estimated future sales volumes and the discount rate.
143
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. COST OF SALES AND OTHER EXPENSES
—
NOTE
2023
$’000
2022
$’000
Cost of sales
Site production costs
Transport and refining
Royalty
Inventory movement
Depreciation and amortisation
Total cost of sales
Corporate administration expenses
Corporate administration expenses
Corporate depreciation
Total corporate administration expenses
Other expenses
(Gain)/Loss on disposal of fixed assets
Unrealised foreign exchange loss/(gain)
Realised foreign exchange (gain)/loss
Project development costs
Exploration and evaluation expenditure written off
Fair value adjustment of financial assets
Remeasurement of financial liabilities
Total other expenses
Finance costs
Interest expense
Interest on lease liabilities
Unwinding of discount on rehabilitation liabilities
Total finance costs
Impairment loss
Impairment loss recognised in property, plant & equipment
Impairment loss recognised in mine properties
Impairment loss recognised in exploration
Total impairment loss
144
—
248,514
26,987
9,377
14,724
299,602
103,398
403,000
14,116
732
14,848
31
(637)
600
717
-
387
1,271
2,369
3,489
556
2,816
6,861
1,637
3,796
15,413
251,961
27,207
12,056
(12,079)
279,145
137,221
416,366
13,966
595
14,561
(43)
915
(723)
-
33
-
1,104
1,286
3,803
677
2,754
7,234
10,104
125,583
-
20,846
135,687
11
14
13
9
10
11
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAX
—
The Group is a tax consolidated group at balance date. The major components of income tax expense for the years ended 30
June 2023 and 2022 are:
5.1 INCOME TAX EXPENSE
Current income tax
Current tax on profits/(losses) for the year
Adjustments in respect of current income tax of previous year
Deferred tax:
Deferred tax movements for the year
Income tax expense / (benefit) reported in the statement of profit or loss
and other comprehensive income
2023
$’000
(20,822)
333
2022
$’000
(8,960)
1,305
(1,163)
(24,695)
(21,652)
(32,350)
5.2 NUMERICAL RECONCILIATION OF INCOME TAX EXPENSE TO PRIMA FACIE TAX PAYABLE
Accounting (loss)/profit before income tax
Prima facie income tax expense/(benefit) @ 30%
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income
Non-assessable items
Prior year under provisions
Previously unrecognised temporary differences
Income tax expense / (benefit)
2023
$’000
(73,873)
(22,162)
177
(118)
451
2022
$’000
(114,038)
(34,211)
556
1,305
-
(21,652)
(32,350)
145
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAX (CONTINUED)
—
5.3 DEFERRED TAX BALANCES
The net deferred tax asset of $8.5 million (FY22: liability $8.2 million), relates to the following:
Recognised deferred tax balances
Provisions
Mine properties
Inventories
2023
$’000
19,323
6,687
(2,231)
2022
$’000
20,244
1,437
(1,852)
Exploration and evaluation expenditure
(15,092)
(20,478)
Other
Property, plant and equipment
Net deferred tax asset / (liability)
Opening deferred tax asset/ (liability)
Recognised in profit or loss
Recognised in equity
Prior year under provisions
Other
Closing deferred tax asset/ (liability)
3,922
(4,051)
8,558
8,244
1,163
(480)
(305)
(63)
8,558
8,142
751
8,244
(13,129)
24,695
1,666
(4,262)
(726)
8,244
5.4. RECOGNITION AND MEASUREMENT
Current income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be paid to or recovered
from the taxation authorities based on the current period’s taxable income. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance sheet date. Under the current tax laws, in particular the loss carry back
provisions, we can claim the current tax in full from the ATO. The loss carry back rules provide that entities can choose to carry back
tax losses incurred in the FY20 to FY23 years to offset taxable income in FY19 to FY22 income years, resulting in cash refund of taxes
paid in those earlier years upon filing the income tax return, provided certain eligibility criteria are met. We consider Aurelia meets the
eligibility criteria and is entitled to loss carry back offset of the entire income tax receivable of $21.2m.
Deferred tax
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused
tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:
when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss, and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.
146
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAX (CONTINUED)
—
5.4. RECOGNITION AND MEASUREMENT (CONTINUED)
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable
that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow
the deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement. Deferred tax
assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax
liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
6. CASH AND CASH EQUIVALENTS
—
Cash at banks
Short term deposits
Cash and cash equivalents
Recognition and measurement
2023
$’000
38,575
371
38,946
2022
$’000
76,323
371
76,694
Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and short-term deposits classified as
financial assets held at amortised cost.
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods
of generally between one day and three months depending on the immediate cash requirements of the Group and earn interest
at the respective short-term deposit rates.
Restricted cash
Restricted cash is shown as a non-current asset as it is not available for day-to-day operations and is therefore excluded from
cash and cash equivalents. The Group has $56.8 million (FY22: $30.7 million) held as restricted cash by the existing banking
syndicate providing the Guarantee Facility as part of the secured Syndicated Facilities Agreement (refer to Note 15 for further
information). This cash is in the process of being returned.
147
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. TRADE AND OTHER RECEIVABLES
—
Trade receivables*
GST receivable
Other receivables
2023
$’000
5,446
1,948
283
7,677
2022
$’000
10,220
3,143
4,737
18,100
Recognition and measurement
All of the above are non-interest bearing and generally receivable on 30-to-90-day terms. At balance date, no material amount
of trade receivables was past due or impaired.
Trade receivables
Trade receivables (subject to provisional pricing), comprising base metal and gold concentrates, are initially recorded at the
fair value of contracted sale proceeds expected to be received only when there has been a passing of control to the customer.
Approximately 90-95% of the provisional invoice for concentrate sales (based on the provisional price) is received in cash when
the goods are loaded onto the ship.
The collectability of debtors is reviewed in line with a forward-looking expected credit loss (ECL) approach. The Group has
adopted AASB 9’s simplified approach and calculates ECL’s based on lifetime expected credit losses, and takes into consideration
any historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject
to impairment. The Group’s financial assets at amortised cost include trade receivables (not subject to provisional pricing) and
other receivables.
Trade receivables (subject to provisional pricing) are exposed to future commodity price movements over the quotational period
(QP) and are measured at fair value up until the date of settlement. Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. These trade
receivables are initially measured at the amount which the Group expects to be entitled, being the estimate of the price expected
to be received at the end of the QP. The QP is typically for between one- and four-months post-shipment, and final payment is
due within 90 days from the end of the QP.
* The Group has $3.3m (FY22: $6.3m) in receivables in the Statement of Financial Position that are valued at fair value and
represent provisional and advance sales invoices. These are disclosed in note 22.5.6 under the Fair value hierarchy.
Other receivables
Other receivables have arisen due to security deposits and employee receivables, and interest accrued on term deposits.
148
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. INVENTORIES
—
Finished concentrate
Finished gold doré
Metal in circuit
Ore stockpiles
Materials and supplies
Total current inventory
Recognition and measurement
2023
$’000
14,476
-
2,201
1,950
10,603
29,230
2022
$’000
26,266
658
1,741
4,686
10,557
43,908
Materials and supplies are valued at the lower of cost and net realisable value. Net realisable value is the estimate selling price in
the ordinary course of business, less the estimated costs of completion and selling expenses. An allowance for obsolescence is
determined with reference to the stores inventory items identified. A regular review is undertaken to determine the extent of any
provision for obsolescence.
Ore stockpiles, gold in circuit, doré and concentrate are physically measured (or estimated) and valued at the lower of cost and
net realisable value. Cost represents the weighted average cost and includes direct costs and an appropriate portion of fixed
and variable production overhead expenditure, including depreciation and amortisation, incurred in converting materials into
finished goods.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and
estimated costs necessary to make the sale.
As at 30 June 2023, of the total current inventory value $29.2m this includes stock valued at NRV of $10.6m (FY22 $18.7m).
Key judgements - net realisable value
The computation of net realisable value for ore stockpiles, gold in circuit, doré and concentrate involves significant
judgements and estimates in relation to timing and cost of processing, commodity prices, foreign exchange rates,
recoveries and the timing of sale of the doré and concentrate produced. A change in any of these assumptions will alter the
estimated net realisable value and may therefore impact the carrying value of ore stockpiles. Separately identifiable costs
of conversion of each metal are specifically allocated.
Stockpiles are measured by estimating the number of tonnes added and removed from the stockpile, the number
of contained gold ounces is based on assay data, and the estimated recovery percentage is based on the expected
processing method.
149
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT
—
Plant and equipment at cost
Property and Land at cost
Accumulated depreciation
Impairment provision
Movement in property, plant and equipment
Carrying value at the beginning of the year
Acquisition of Dargues Gold Mine
Additions/expenditure during the year
Depreciation for the year
Impairment loss recognised during the year
Transfer to mine properties
Assets written off
Assets disposed or derecognised
Closing balance
Recognition and measurement
NOTE
4
10
2023
$’000
278,735
7,224
2022
$’000
281,681
5,417
(155,931)
(120,967)
(11,741)
118,287
156,027
-
10,958
(35,190)
(1,637)
(11,150)
(46)
(675)
(10,104)
156,027
170,458
(4,593)
31,149
(30,564)
(10,104)
(262)
(55)
(2)
118,287
156,027
Property, plant and equipment are carried at cost, less accumulated depreciation, amortisation and accumulated
impairment losses. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable
to bringing the asset into operation, and, for qualifying assets (where relevant), borrowing costs. The purchase price or
construction cost is the aggregate amount paid and the fair value of any other consideration given to acquire the asset.
Derecognition
Items of property, plant and equipment are derecognised upon disposal or when no further future economic benefits are
expected from their use or disposal. Any gain or loss from derecognising the asset is included in the statement of profit or loss
in the period the item is derecognised.
When an asset is surplus to requirements the carrying amount of the asset is reviewed and is written down to its recoverable
amount or derecognised.
Depreciation and amortisation
Items of plant and equipment and mine development are depreciated over their estimated useful lives.
The Group uses the units of production basis when depreciating mine specific assets which results in a depreciation charge
proportional to the depletion of the anticipated remaining life of mine production. Each item’s economic life has due regard to
both its physical life limitations and to present assessments of economically recoverable reserves of the mine property at which
it is located.
For the remainder of assets, the straight-line method is used. The rates for the straight-line method vary between 10%
and 33% per annum.
Property, plant and equipment are also subject to impairment indicators. Refer to note 10 for further information.
150
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
9. PROPERTY, PLANT AND EQUIPMENT(CONTINUED)
—
Key judgements - useful lives, residual values and depreciation methods
The process of estimating the remaining useful lives, residual values and depreciation methods involve significant judgement.
These estimates are reviewed annually for all major items of plant and equipment. Any changes are accounted for prospectively
from the date of reassessment to the end of the revised useful life. The Company uses the unit-of-production basis where
depreciating/amortising specific assets which results in a depreciation/amortisation charge proportional to the depletion of the
anticipated remaining life of mine production.
Each item’s economic life has due regard to both its physical life limitations and to present assessments of economically
recoverable reserves of the mine property at which it is located. These calculations require the use of estimates and assumptions.
10. MINE PROPERTIES
—
Mine properties at cost
Accumulated depreciation and impairment
Movement in mine properties
Carrying value at the beginning of the year
Acquisition of Dargues Gold Mine
Impairment loss recognised during the year
Development expenditure during the year
Transfer from exploration and evaluation
Depreciation for the year
Transfer from property, plant and equipment
Closing balance
Recognition and measurement
NOTE
4
11
9
2023
$’000
694,532
(551,458)
143,074
123,533
-
(3,796)
15,122
57,620
2022
$’000
610,640
(487,107)
123,533
287,035
4,680
(125,583)
53,752
139
(60,555)
(96,752)
11,150
143,074
262
123,533
The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset
into operation, the initial estimate of the rehabilitation obligation, and, for qualifying assets (where relevant), borrowing costs.
The purchase price or construction cost is the aggregate amount paid and the fair value of any other consideration given
to acquire the asset.
Mine properties also consist of the fair value attributable to mineral reserves and the portion of mineral resources considered
to be probable of economic extraction at the time of an acquisition.
When a mine construction project moves into the production phase, the capitalisation of certain mine construction costs ceases,
and costs are either regarded as part of the cost of inventory or expensed, except for costs which qualify for capitalisation
relating to mining asset additions, improvements or new developments, underground mine development or mineable
reserve development.
151
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. MINE PROPERTIES (CONTINUED)
—
Depreciation and amortisation
Accumulated mine development costs are depreciated/amortised on a unit-of-production basis over the economically
recoverable reserves and the portion of mineral resources considered to be probable of economic extraction, except in the case
of assets whose useful life is shorter than the life of the mine, in which case the straight-line method is applied.
The unit of account for run of mine (ROM) costs is Gold Metal Equivalent units mined (measured in ounces), whereas the unit of
account for post-ROM costs is Gold Metal Equivalent units processed (measured in ounces).
Rights are depleted on the unit-of-production (UOP) basis over the economically recoverable reserves of the relevant area.
The unit-of-production rate calculation for the depreciation/amortisation of mine development costs considers expenditures
incurred to date, together with planned future mine development expenditure.
The estimated fair value attributable to the mineral reserves and the portion of mineral resources considered to be probable
of economic extraction at the time of the acquisition is amortised on a UOP basis whereby the denominator is the proven
and probable reserves and the portion of resources expected to be extracted economically. The estimated fair value of the
mineral resources that are not considered to be probable of economic extraction at the time of the acquisition is not subject
to amortisation, until the resource becomes probable of economic extraction in the future and is recognised in exploration and
evaluation assets.
Assessment of impairment
At each balance date, the Group conducts an assessment for any indicators of impairment on each asset or
Cash Generating Unit (CGU). The Group considers each of its mines to be a separate CGU.
Assuming indicators of impairment are identified, the carrying value of the asset or CGU is compared with its recoverable
amount. The recoverable amount is the higher of the CGU’s Fair Value Less Cost of Disposal (FVLCD) and Value In Use (VIU).
The FVLCD for each CGU was determined based on the net present value of the future estimated cash flows (expressed in real
terms) expected to be generated from the continued use of the CGUs (based on the most recent life of mine plans), including any
expansion projects, and its eventual disposal, using assumptions a market participant may take into account. These cash flows
are discounted using a real post-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the CGU.
If the carrying amount of an asset or CGU exceeds its receivable amounts, the carrying amount is reduced to the recoverable
amount and an impairment loss is recognised in the Statement of Profit or Loss.
The determination of FVLCD for each CGU are fair value measurements, as they are derived from valuation techniques that
include inputs that are not based on observable market data. The Group considers the inputs and the valuation approach to be
consistent with the approach taken by market participants.
At 30 June 2023, an impairment assessment was conducted, and it was noted that no indicators of impairment existed for
any of the mine CGUs (30 June 22: impairment loss on Dargues CGU of $135.7 million). An Impairment expense of $5.4M was
recognised at 31 December 2022 relating to the Hera mine as a result of the optimization of the life of mine with $3.8M allocated
to mine properties and the remaining balance to property, plant and equipment. As impairment tests were performed for all mine
CGUs at 30 June 2022 and 31 December 2022, although the carrying amount of the Group’s net assets was greater than the
market capitalization at 30 June 2023, sufficient headroom was observed in these previous impairment calculations that would
not have been eroded by any subsequent changes in commodity prices, interest rates or life of mine changes.
152
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
10. MINE PROPERTIES (CONTINUED)
—
Key judgements - depreciation and impairment assessment of mine properties
Units of production method of depreciation and amortisation
The Company uses the unit-of-production basis where depreciating/amortising specific assets which results in a depreciation/
amortisation charge proportional to the depletion of the anticipated remaining life of mine production.
Each item’s economic life, which is assessed annually, has due regard to both its physical life limitations and to present
assessments of economically recoverable reserves of the mine property at which it is located. These calculations require the use
of estimates and assumptions.
Impairment
The Company assesses each CGU, at each reporting period to determine whether there is any indication of impairment
or reversal. Where an indicator of impairment or reversal exists, a formal estimate of the recoverable amount is made,
which is deemed as being the higher of the fair value costs of disposal and VIU.
These assessments require the use of estimates and assumptions which could change over time and are impacted by various
economic factors such as discount rates, exchange rates, commodity prices, gold multiple values, future operating development
and sustaining capital requirements and operating performance. A change in one or more of these assumptions used to
determine the value in use or fair value less costs of disposal could result in a material adjustment in a CGU's recoverable amount.
153
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
11. EXPLORATION AND EVALUATION ASSETS
—
NOTE
Exploration and evaluation assets
Movement in exploration and evaluation assets
Balance at the beginning of the year
Expenditure during the year
Transfer to mine properties
Impairment / Expenditure written off during the year
10
Closing balance
Recognition and measurement
2023
$’000
9,667
71,728
10,972
(57,620)
(15,413)
9,667
2022
$’000
71,728
39,318
32,582
(139)
(33)
71,728
Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward where rights to tenure of
the area of interest are current and:
it is expected that expenditure will be recouped through successful development and exploitation of the area of interest or
alternatively by its sale; and/or
exploration and evaluation activities are continuing in an area of interest but at balance date have not yet reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.
Such expenditure consists of an accumulation of acquisition costs, direct exploration and evaluation costs incurred, together with
an appropriate portion of directly related overhead expenditure.
In the current year $5.3 million of the total expenditure related to the Federation project (FY22: $23.8 million}.
Impairment
A regular review is undertaken on each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to an area of interest. The carrying value of capitalised exploration and evaluation assets are assessed for impairment
when facts and circumstances suggest that the carrying value may exceed its recoverable amount.
During the year, $15.4 million of impairment expense was recognised relating primarily to Dargues both near mine and surface
drilling exploration ($13.5m) and Hera’s Athena tenement ($1m) for which there is not further prospects of an economically
recoverable resource (FY22: $0 million).
Key judgements - impairment
The consolidated entity performs impairment testing on specific exploration assets when required in AASB 6 para 20.
Significant judgement is applied during the review and assessment of the carried forward costs and the extent to which the
costs are expected to the recouped through the successful future development of the area of interest.
154
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
12. TRADE AND OTHER PAYABLES
—
Trade payables and accruals
Other payables
Recognition and measurement
2023
$’000
21,516
6,963
28,479
2022
$’000
59,423
6,347
65,770
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the financial year
that are unpaid.
Trade payables are unsecured, non-interest bearing and generally payable on 7 to 30-day terms. The carrying amounts of trade
and other payables are considered to be the same as their fair values, due to their short-term nature.
At 30 June 2023 the asset relating to mark to market adjustments for concentrate sales invoices not yet finalised is $nil.
At 30 June 2022 the liability outstanding was $12 million.
No assets of the Group have been pledged as security for the trade and other payables.
155
—
AURELIA METALS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. PROVISIONS
—
Current
Employee
Mine rehabilitation
Deferred consideration
Other
Total current provisions
Non-Current
Employee
Mine rehabilitation
Deferred consideration
Total non-current provisions
2023
$’000
2022
$’000
6,486
501
-
737
7,566
1,813
1,532
1,019
7,724
11,930
423
77,741
-
78,164
407
87,163
386
87,956
Total provisions
85,888
99,886
EMPLOYEE
$’000
MINE
REHABILITATION
$’000
DEFERRED
CONSIDERATION
$’000
7,973
4,167
-
-
(5,231)
6,909
88,976
(9,148)
(3,274)
2,106
(418)
78,242
OTHER
$’000
TOTAL
$’000
1,019
99,886
2,242
(3,298)
-
-
(3,274)
2,139
1,918
(559)
-
33
(1,392)
(2,524)
(9,565)
-
737
85,888
EMPLOYEE
$’000
MINE
REHABILITATION
$’000
DEFERRED
CONSIDERATION
$’000
OTHER
$’000
TOTAL
$’000
7,315
3,620
-
-
(2,962)
7,973
74,412
2,018
121
83,866
8,452
3,531
2,731
(150)
88,976
715
-
23
(838)
1,918
2,536
15,323
-
-
3,531
2,754
(1,638)
(5,588)
1,019
99,886
AT 30 JUNE 2023
Opening balance
Re-measurement of provision
Rehabilitation expense/(reversal)
Unwinding of discount
Amounts paid/utilised during the year
Closing balance
AT 30 JUNE 2022
Opening balance
Re-measurement of provision
Rehabilitation expense/(reversal)
Unwinding of discount
Amounts paid/utilised during the year
Closing balance
156
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. PROVISIONS (CONTINUED)
—
Employee benefits
The provision for employee benefits represents annual leave and long service leave entitlements for current employees.
Mine rehabilitation
The nature of mine rehabilitation and site restoration costs includes the dismantling and removal of mining plant, equipment and
building structures, waste removal and restoration, reclamation, and re-vegetation of affected areas of the site in accordance
with the requirements of the mining permits.
At 30 June 2023, Letters of Credit totaling $56.8 million have been lodged (30 June 2022: $56.8 million).
The Company periodically engages environmental consultants to benchmark the rates used in estimating the mine rehabilitation
provision. The change in the mine rehabilitation provision is due to the application of updated estimates, amounts recognised for
future rehabilitation to our operating mine sites and land holdings, as well as amounts paid or utilised for rehabilitation activities
undertaken during the reporting period.
Deferred consideration
This relates to deferred consideration on the purchase of Hera Mine. The Group records deferred consideration at fair value using
the discounted cash flow methodology based on the two-year Australian government bond rate of 3.4% (FY22: 2.4%). This is
now fully settled as of the date of this report.
Recognition and measurement
General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation.
Where the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset
but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of
profit or loss net of any reimbursement.
Employee benefits
Annual leave liabilities are measured at the amounts expected to be paid when the liabilities are settled. Long service leave
liabilities are measured at the present value of the estimated future cash outflows, discounted using a current pre-tax rate that
reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the
passage of time is recognised as part of finance costs in the statement of profit or loss.
157
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
13. PROVISIONS (CONTINUED)
—
Mine rehabilitation
The rehabilitation provision represents the present value of the estimated future rehabilitation costs relating to mine sites.
The discount rate used to determine the present value is a pre-tax rate reflecting the current market assessment. The unwinding
of the discounting of the provision is included in finance costs in the statement of profit or loss.
When the liability is initially recorded, the present value of the estimated cost is capitalised as part of the carrying value of mine
properties, which is amortised on a units of production basis. Additional disturbances or changes in rehabilitation costs will be
recognised as additions or changes to the corresponding asset and rehabilitation liability when incurred. In instances where
there is no asset the changes are expensed in the profit or loss.
Deferred acquisition costs in relation to Hera
The Company measures the deferred consideration by reference to the fair value of net present value of future cash outflows.
The following assumptions have been taken into account: risk free bond rate, gold price, timing and possibility of payment.
Key judgements – mine rehabilitation
Mine rehabilitation
Significant estimates and assumptions are required in determining the provision for mine rehabilitation as there are many
transactions and other factors that will affect the ultimate liability payable to rehabilitate the mine sites. Changes in
technology, regulations, price increases, changes in timing of cash flows which are based on life of mine plan and changes
in discount rates affect recognised value of the liability. These factors will impact the mine rehabilitation provision in the
period in which they change or become known.
158
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
14. LEASES
—
The Company has lease contracts for mining, property, plant, machinery, and other equipment used in its operations. The leases
generally have lease terms between 2 and 5 years.
Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period:
2023
$’000
2022
$’000
Right of use assets
Carrying value at the beginning of the year
Additions
Re-measurement / Modifications
Terminations
Depreciation expense
Carrying value at the end of the year
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease liabilities
Current
Non-current
Closing balance
Movement in lease liabilities
Carrying value at the beginning of the year
Additions
Re-measurement
Terminations
Interest expense
Payments
Carrying value at the end of the year
19,414
3,695
(5,762)
(4,528)
(7,876)
4,943
2023
$’000
3,041
1,969
5,010
19,489
3,695
(5,762)
(3,037)
557
(9,932)
5,010
12,674
17,244
-
-
(10,504)
19,414
2022
$’000
11,065
8,424
19,489
12,967
17,248
-
-
677
(11,403)
19,489
The additions for the year include lease renewals amounting to $3.7 million made in June 2023 (FY22: $7.2million).
159
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
14. LEASES (CONTINUED)
—
The following are the amounts recognised in profit or loss
Depreciation expense for right-of-use assets
Interest expense on lease liabilities
Expense relating to short term leases and low value assets (included in cost
of sales)
Recognition and measurement
Right of use assets
2023
$’000
7,876
557
-
2022
$’000
10,504
677
-
8,433
11,181
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received.
Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.
The depreciation for the mine site is disclosed under cost of sales whereas depreciation for the Corporate site is included in
corporate administration expenses. Right-of-use assets are subject to impairment.
Lease Liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments
to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under
residual value guarantees.
The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event
or condition that triggers the payment occurs. The lease interest expense is disclosed as finance costs in the statement of profit
or loss and is included as part of interest paid under cash flows from operating activities in the Cash Flow Statement.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement
date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change
in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
160
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
14. LEASES (CONTINUED)
—
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those
leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also
applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value
(i.e., below $5,000).
Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight- line basis over the
lease term.
Key judgements – Estimating incremental borrowing rate, identification of non-lease components and in
substance fixed rates
The Group cannot readily determine the interest rate implicit in its leases. Therefore, it uses the relevant incremental
borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow
over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use
asset in a similar economic environment. The Group estimates the IBR using observable inputs (such as market interest
rates) when available and entity-specific judgements estimates (such as the lease term and certain contract provisions).
In addition to containing a lease, some of the Group’s arrangement involves the provision of additional services. These are
non-lease components, and the Group has elected to separate these from the lease components. Judgement is required
to identify each of the lease and non-lease components. The consideration in the contract is then allocated between the
lease and non-lease components on a relative stand-alone price basis. The Group also applies judgement to determine
in-substance fixed payments included in the lease payments such as unavoidable fixed minimum amounts.
15. INTEREST BEARING LOANS AND BORROWINGS
—
EFFECTIVE
INTEREST RATE %
MATURITY
2023
$’000
2022
$’000
Current
Term loan facility
Less: Borrowing costs paid
BBSY +4
30-Sept-2023
Other loans
3-7%
31-May-2026
Total current loans and borrowings
Non-current
Term loan facility
Less: Borrowing costs paid
BBSY +4
30-Sept-2023
Other loans
3-7%
31-May-2026
Total non-current loans and borrowings
Total interest-bearing liabilities
-
-
-
3,635
3,635
-
-
-
4,047
4,047
7,682
16,200
(1,142)
15,058
2,352
17,410
4,500
(288)
4,212
4,379
8,591
26,001
161
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
15. INTEREST BEARING LOANS AND BORROWINGS (CONTINUED)
—
Syndicated Facilities
At 30 June 2023 the Group had a secured Syndicated Facilities Agreement with a syndicate of banks comprising ANZ, NAB and
BNP Paribas. During the Financial Year the term loan was fully repaid and security held over the Groups assets was released.
A Guarantee Facility remains in place with $56.8 million drawn for environmental rehabilitation bonds, which is fully backed by
$56.8 million in cash held by the banks (FY22: $30.7 million). Restricted cash is shown as a non-current asset as it is not available
for day-to-day operations.
Trafigura Pte Ltd
On 31 May 2023 a new financing facility was announced with Trafigura Pte Ltd. The new Trafigura facilities (the “Facilities”)
comprise:
US$24 million (A$36.4 million) Loan Note Advance (“Loan Note”) facility to contribute funding to construction of Federation,
and
A$65 million Environmental Bond Facility (“Bond Facility”) to provide rehabilitation bonding.
The Facilities have a term of 4 years from the date of financial close. No debt has been recognised at 30 June. The Loan Note
has an interest rate of SOFR (Secured Overnight Financing Rate) + 6.0% and the Bond Facility has an interest rate of 6.0%.
The Facilities have no financial covenants, no hedging requirements and have early repayment flexibility.
In June 2023 the existing secured Syndicated Facilities Agreement was repaid in full and the existing performance bond
facility was fully cash backed. Total cash backing at 30 June 2023 was $56.8 million, with the full amount in the process of
being returned.
Other loans
The Group has entered into loan agreements to fund the acquisition of mobile plant and equipment. The loans are repayable by
May 2026 with applicable interest rates ranging from 3% to 7%. The financed equipment is security for the loans.
Recognition and measurement
At initial recognition, interest bearing loans and borrowings are classified as financial liabilities measured at fair value net of
directly attributable transaction costs. Subsequent measurement is at amortised cost. Any difference between the proceeds
(net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using
the effective interest method.
Establishment fees related to the facilities are capitalised as a prepayment and amortised over the term of the facility to which
it relates.
162
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
16. OTHER FINANCIAL LIABILITIES
—
Current
Third party royalty liability
Non-Current
Third party royalty liability
NOTE
2023
$’000
2022
$’000
6,803
6,803
713
713
6,947
6,947
4,128
4,128
Total other financial liability
7,516
11,075
Movement in carrying value of other financial liabilities
Third Party Royalty Liability
Carrying value at the beginning of the year
Payments during the year
Remeasurement
Closing balance
Contingent consideration liability
Carrying value at the beginning of the year
FV adjustment through profit & loss
Closing balance
NOTE
3, 4
3
2023
$’000
11,075
(4,830)
1,271
7,516
-
-
-
2022
$’000
39,165
(5,209)
(22,881)
11,075
4,250
(4,250)
-
16.1 THIRD PARTY ROYALTY LIABILITY
On 21 December 2018, a funding agreement with Triple Flag (TFM) was executed, where TFM agreed to fund the Dargues Gold
Project in consideration for the grant of a royalty. Following the acquisition of Dargues Gold Mine on 17th December 2020, as a
going concern, Aurelia assumed the obligations related to the royalty due to the continuing obligation provisions of the royalty
deed. The royalty is calculated on the gross revenue generated from the sale of gold concentrate from the Dargues Gold Mine
and is payable in United States Dollars (USD).
The liability is measured at amortised cost. The value is determined by discounting the future royalty payments using a discount
rate of 3.33% and the impact of the periodic remeasurement of the following assumptions:
gold price;
life of mine extension and related change in sales volumes; and
foreign exchange rate.
The estimated sales volume for the remaining life of the mine has reduced due to the reassessed shorter mine life of the mine
site during the current financial year which has resulted in a lower royalty liability as at 30 June 2023.
163
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
16. OTHER FINANCIAL LIABILITIES (CONTINUED)
—
16.1 THIRD PARTY ROYALTY LIABILITY (CONTINUED)
Recognition and measurement
At initial recognition the third-party royalty liabilities are classified as financial liabilities measured at fair value net of directly
attributable transaction costs. Subsequent measurement is at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in profit or loss over the period of the liability using the effective
interest method.
17. CONTRIBUTED EQUITY
—
17.1 MOVEMENTS IN ORDINARY SHARES ON ISSUE
30 JUNE 2023
Opening balance
Shares issued on vesting of performance rights
Institutional Component of Equity Raising
Share Issue Costs
Employee Share Scheme
Closing balance
30 JUNE 2022
Opening balance
Shares issued on vesting of performance rights
Employee Share Scheme
Shares issued on vesting of performance rights
Closing balance
(i)
(ii)
(iii)
NOTES
DATE
NUMBER
$’000
(iv)
(v)
(v)
(vi)
1,237,056,457
334,659
31-Aug-22
380,759
-
9-June-23
261,818,451
23,564
9-June-23
-
(1,205)
13-June-23
2,687,328
-
1,501,942,995
357,018
NOTES
DATE
NUMBER
$’000
1,234,739,875
334,659
7-Sept-21
4-Nov-21
76,993
674,388
30-Nov-21
1,565,201
-
-
-
1,237,056,457
334,659
(i) On 7 September 2021, the Company issued 76,993 shares on the vesting of Performance Rights.
(ii) On 4 November 2021, a total of 674,388 shares were issued under the Employee Share Scheme for no consideration, (refer to note 21.2
for further detail).
(iii) Shares issued upon the vesting of 1,565,201 Performance Rights for no consideration.
(iv) On 31 August 2022, the Company issued 380,759 shares on the vesting of Performance Rights.
(v) On 9 June 2023, the Company completed the institutional placement and entitlement offer component of the A$40 million equity raising announced
on 31 May 2023. The shares were issued at $0.09 per share.
(vi) On 13 June 2023, a total of 2,687,328 shares were issued under the Employee Share Scheme for no consideration, (refer to note 21.2 for further detail).
164
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
17. CONTRIBUTED EQUITY (CONTINUED)
—
17.1 MOVEMENTS IN ORDINARY SHARES ON ISSUE (CONTINUED)
Recognition and measurement
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown
directly in equity as a deduction, net of tax, from proceeds.
Ordinary shares which have no par value have the right to receive dividends as declared and, in the event of a winding up of
the Parent, to participate in the proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on
shares held. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.
17.2 DIVIDENDS MADE AND PROPOSED
Dividend paid
Total
2023
$’000
-
-
2022
$’000
-
-
The Directors did not recommend the payment of a dividend for the financial year ended 30 June 2022 and 30 June 2023.
The franking account balance at the end of the financial year is $32.2 million (FY22: $41.9 million).
The Company currently does not have a share buy-back plan or a dividend reinvestment plan.
18. RESERVES
—
Share based payment reserve
Movements in reserves
Movement in share base payments reserve
Opening balance
Share based payment expense
Closing balance
2023
$’000
13,919
13,919
2023
$’000
13,122
797
13,919
2022
$’000
13,122
13,122
2022
$’000
11,342
1,780
13,122
165
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
18. RESERVES (CONTINUED)
—
OCI items net of tax:
Cash flow hedge reserve
Opening balance
Commodity forwards closed through P&L
Closing balance
Recognition and measurement
Derivatives designated as hedging instruments
2023
$’000
(1,964)
1,964
-
2022
$’000
2,492
(4,456)
(1,964)
Derivatives are initially recognised at fair value on the date a derivative contract is entered, and they are subsequently
remeasured to their fair value at the end of each reporting period.
The group designates derivatives as either:
hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges); or
hedges of a particular risk associated with the cash flows of recognised assets and liabilities and highly probable forecast
transactions (cash flow hedges).
Hedge accounting
At inception of the hedge relationship, the group documents the economic relationship between hedging instruments and
hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash
flows of hedged items. The group documents its risk management objective and strategy for undertaking its hedge transactions
(refer to note 22.1 and 22.5.2 for further detail).
Hedge effectiveness
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, whilst
any ineffective portion is recognised immediately in profit and loss. The cash flow hedge reserve is adjusted to the lower of the
cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item. The accumulated
gains and losses recorded in the hedge reserve are reclassified to the profit and loss in the same period during which the hedged
expected future cash flows from the underlying revenue transaction are recognized in the profit and loss. Amounts included in
the hedge reserve are released to profit and loss when the hedge contracts are closed, and revenue has been recognised in the
profit and loss.
Movement in reserves
The Company provides benefits to employees in the form of share-based payment transactions, whereby employees render
services in exchange for shares or rights over shares (“equity-settled transactions”), as issued under the Company’s employee
Performance Rights Plan. The plan forms part of the Company’s remuneration framework, as detailed and explained in the
Remuneration Report to these Financial Statements.
The Company also has an Employee Share Scheme, where eligible employees are invited to participate in the plan to receive
fully paid ordinary shares in the Company (subject to dealing restrictions ending on the earlier of 3 years after grant or when the
employee ceases employment) with a nominal value of $1,000.
166
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
19. RETAINED EARNINGS
—
Movements in retained earnings were as follows:
Opening balance
Profit/(loss) after tax for the year
Dividend paid
Closing balance
20. EARNINGS PER SHARE (EPS)
—
(Loss)/Profit attributable to owners of Aurelia Limited used to calculate
basic and diluted earnings
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Basic earnings per share
2023
$’000
2022
$’000
(8,891)
(52,221)
-
72,797
(81,688)
-
(61,112)
(8,891)
2023
$’000
2022
$’000
(52,221)
(81,688)
1,254,006
1,236,163
1,270,513
1,250,600
(4.16)
(4.16)
(6.61)
(6.61)
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity holders of the Parent Company,
by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share
Earnings used to calculate diluted earnings per share are calculated by adjusting the amount used in determining basic earnings
per share 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 shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
The effect of dilution has not been incorporated in calculating the diluted earnings per share as the effect is non anti-dilutive.
167
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
21. SHARE BASED PAYMENT ARRANGEMENTS
—
Share based payments expense
Expense from employee performance rights plan
Expense from employee share plan
Total
2023
$’000
2022
$’000
509
288
797
1,518
262
1,780
21.1 EMPLOYEE PERFORMANCE RIGHTS PLAN
The Company has an employee Performance Rights Plan. The objective of the plan is to assist in the recruitment, reward,
retention, and motivation of employees of Aurelia. The plan is open to eligible executives and employees.
The plan is provided by way of allocation of Performance Rights which carry an entitlement to a share subject to satisfaction
of performance criteria and/or vesting conditions (as applicable). To the extent performance criteria and/or vesting conditions
are satisfied, the Performance Rights are taken to have vested and been exercised for no consideration. The number of ordinary
shares issued is equal to the number of vested Performance Rights issued.
Performance Rights are generally granted each year. The performance hurdles are agreed prior to the commencement of a new
financial year. The hurdles are determined at the discretion of the Board. The test date for each issue of Performance Rights is
typically three years from the Grant Date.
21.2 EMPLOYEE SHARE PLAN
The Company has an Employee Share Plan, which provides eligible employees with an opportunity to acquire ordinary shares
in the Company, with a grant value of $1,000. In FY23, the plan provided each eligible employee with 9,331 fully paid ordinary
shares. (FY22: 2,574 shares).
21.3 SUMMARY OF MOVEMENTS OF PERFORMANCE RIGHTS ON ISSUE
The following table illustrates the number of, and movements in Performance Rights during the year. All Performance Rights
have a zero weighted average exercise price.
Refer to the Remuneration Report (section 7.2) for the vesting conditions of the performance rights issued during the year.
Performance rights on issue
Opening balance issued
Granted during the year
Vested during the year
Lapsed during the year
Closing balance issued
2023
NUMBER
2023
WAEP
2022
NUMBER
2022
WAEP
16,004,375
11,575,382
(838,634)
(11,311,535)
15,429,588
-
-
-
-
-
10,523,362
8,607,704
(1,642,193)
(1,484,498)
16,004,375
-
-
-
-
-
168
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
21. SHARE BASED PAYMENT ARRANGEMENTS (CONTINUED)
—
21.3 SUMMARY OF MOVEMENTS OF PERFORMANCE RIGHTS ON ISSUE (CONTINUED)
Performance Rights
Class 19A
Class 19C
Class FY21
Class FY22
Class FY23
Total
2023
NUMBER
2022
NUMBER
-
-
-
2,284,641
-
Vested
Vested
5,452,474
Unvested
4,859,852
8,267,260
Unvested
10,569,736
-
Unvested
15,429,588
16,004,375
Subsequent to the balance sheet date, the LTIP outcomes for Performance Rights under Class FY21 were determined.
There were also changes to Class FY22 and FY23 Performance Rights following staff movement.
21.4 FAIR VALUE DETERMINATION
During the year, the Company issued a total of 11,575,382 performance rights (FY22: 8,607,704 rights) under its employee
Performance Rights plan.
Each grant under the employee Performance Rights plan will have a fair value calculated under the accounting standards, which
is calculated as at the date of grant. An independent expert provider is engaged to calculate the estimated fair value of each
grant using the Monte Carlo simulation method, which is applied in conjunction with assumed probabilities for the achievement
of specific performance hurdles as define for each grant.
21.5 RECOGNITION AND MEASUREMENT
The Company provides benefits to employees in the form of share-based payment transactions, whereby employees render
services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they
are granted. The fair value is determined by an external independent valuation using the Monte Carlo simulation.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award
(‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:
the extent to which the vesting period has expired; and
the number of awards that will ultimately vest.
This opinion is formed based on the best available information at balance date. No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is conditional upon a market condition.
In limited circumstances where the terms of an equity-settled award are modified (such as a change of control event, or as part of an
agreed termination benefit), a minimum expense is recognised as if the terms had not been modified. The expense recognised reflects
any increase in the value of the transaction as a result of the modification, as measured at the date of modification.
169
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
21. SHARE BASED PAYMENT ARRANGEMENTS (CONTINUED)
—
21.5 RECOGNITION AND MEASUREMENT (CONTINUED)
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and
designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of the outstanding Performance Rights is reflected as additional share dilution in the computation
of earnings per share unless when the effect is anti-dilutive.
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
—
In common with all other businesses, the Company is exposed to risks that arise during the course of business and its use of
financial instruments. This note describes the consolidated entity’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.
The Company’s financial instruments consists of: deposits with banks, trade and other receivables, listed equity investments,
derivatives, loans and borrowings, trade and other payables, royalty liabilities, lease liabilities and the deferred consideration
related to the acquisition of the Hera Mine and the Dargues Gold Mine.
The Board has overall responsibility for the determination of the Company’s risk management objectives and policies, and whilst
retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the
effective implementation of the objectives and policies to the Company’s managerial team.
The Company’s risk management policies and practices are designed to minimise and reduce risk as far as possible and to
ensure cash flows are sufficient to:
withstand significant changes in cash flow at risk scenarios and still meet all financial commitments as and when they fall due; and
maintain the capacity to fund project development, exploration, and acquisition strategies.
170
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
The Group holds the following financial instruments:
Financial assets
Cash at bank
Trade and other receivables
Restricted cash
Listed equity investments
Derivative financial instruments
Balance at year end
Financial liabilities
Interest bearing loans and borrowings
Trade and other payables
Third party royalty liability
Lease liabilities
Deferred consideration
Derivative financial instruments
Balance at year end
Financial assets and liabilities
NOTES
6
7
6
22
15
12
16
14
13
22
2023
$’000
38,946
7,677
56,833
718
69
2022
$’000
76,694
18,100
30,746
1,105
-
104,243
126,645
7,682
28,479
7,516
5,010
-
-
26,001
65,770
11,075
19,489
1,918
3,103
48,687
127,356
The Group enters derivative financial instruments (commodity contracts) with financial institutions with investment-grade
credit ratings. It measures financial instruments, such as derivatives and provisionally priced trade receivables, at fair value at
each reporting date.
The Group’s principal financial assets, other than derivatives and provisionally priced trade receivables, comprise other
receivables, cash and short-term deposits that arise directly from its operations, as well as investments. The Group’s principal
financial liabilities other than derivatives comprise interest bearing loans and borrowings, trade and other payables, lease
liabilities, third party royalty and deferred consideration royalty.
Accounting policies in respect of these financial assets and liabilities are documented within the relevant notes to the
consolidated financial statements.
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial
position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net
basis, to realise the assets and settle the liabilities simultaneously.
Derivatives designated as hedging instruments
The Group is exposed to certain risks relating to its ongoing business operations. The primary risks managed using derivative
instruments are foreign currency risk and commodity price risk.
171
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.1 CASH FLOW HEDGES – COMMODITY PRICE RISK
The Group sells gold doré and gold and base metal concentrate to customers. Due to volatility in commodity markets, hedging
has been used to manage price risks. In addition to this, the existing syndicated loan facility included mandatory gold hedging
of a minimum of 20% of the Group’s gold production in each 12-month period. At 30 June 2023, the Company had no existing
hedge commitment (FY22: 21,023 oz of gold).
There is an economic relationship between the hedged items and the hedging instruments. The Group tests hedge
effectiveness periodically.
The hedge ineffectiveness can arise from:
differences in the timing of the cash flows of the hedged items and the hedging instrument; and
Changes to the forecasted amount of cash flows of hedged items and hedging instrument.
The Group had no gold forward contract commitments at 30 June 2023:
30 JUNE 2023
Average Contract price (AUD/oz)
Ounces
TOTAL
LESS THAN
1 MONTH
1 TO 3
MONTHS
3 TO 6
MONTHS
6 TO 9
MONTHS
9 TO 12
MONTHS
-
-
-
-
-
-
-
-
-
-
-
-
30 JUNE 2022
TOTAL
LESS THAN
1 MONTH
1 TO 3
MONTHS
3 TO 6
MONTHS
6 TO 9
MONTHS
9 TO 12
MONTHS
Average Contract price (AUD/oz)
2,371
2,359
2,435
2,596
2,685
Ounces
21,023
1,600
3,850
6,148
5,366
4,059
22.2 LIQUIDITY RISK
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities.
At 30 June 2023, the Company had fully repaid the term loan under the existing Syndicated Facility (FY22: $20.7 million) and
holds $38.9 million (FY22: $76.7 million) of available cash.
172
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.3 MATURITY OF FINANCIAL LIABILITIES
The tables below analyses the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances which are due within 12 months equal
their carrying balances as the impact of discounting is not significant.
2023
<1 YR
$'000
1-2 YRS
$'000
2-3 YRS
$'000
3-4 YRS
$'000
>4 YRS
$'000
CONTRACTED CASH
FLOW OF LIABILITY $'000
CARRYING VALUE
OF LIABILITY $'000
Loans and borrowings
-
-
Equipment loans
3,635
3,173
Lease liabilities
3,040
1,883
Deferred consideration
-
Trade and other payables
28,479
-
-
Third party royalty liability
6,803
713
Derivative financial
instruments
(69)
-
-
874
86
-
-
-
-
Total
41,888
5,769
960
-
-
1
-
-
-
-
1
-
-
-
-
-
-
-
8,244
5,539
-
28,479
7,675
(69)
49,868
-
7,682
5,010
-
28,479
7,516
(69)
48,618
There are no contracted cash flow liabilities relating to leases payable in period greater 5 years.
2022
<1 YR
$'000
1-2 YRS
$'000
2-3 YRS
$'000
3-4 YRS
$'000
>4 YRS
$'000
CONTRACTED CASH FLOW
OF LIABILITY $'000
CARRYING VALUE
OF LIABILITY $'000
Loans and borrowings
16,200
4,500
-
Equipment loans
2,352
2,465
1,951
Lease liabilities
11,070
7,995
Deferred consideration
1,225
614
427
108
Trade and other payables
65,770
-
-
Third party royalty
liability
Derivative financial
instruments
1,492
5,573
4,307
3,103
-
-
Total
101,212
21,146
6,793
-
-
4
-
-
-
-
4
-
-
-
-
-
-
-
-
20,700
6,768
19,496
1,947
65,770
11,372
19,270
6,731
19,489
1,918
65,770
11,075
3,103
3,103
129,156
127,356
22.4 Credit risk exposures
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers and investment securities. Although the Group has a
concentrated customer base, they have continuously met their contractual obligations. On this basis, at balance date, there were no
significant concentrations of credit risk. The Group also limits its counterparty credit risk on investments by using banks with investment
grade credit ratings.
The total trade and other receivables outstanding as at 30 June 2023 was $7.6 million (FY22: $18.1 million).
No receivables are considered past due or impaired. Cash and cash equivalents at 30 June 2023 was $38.9 million (FY22: $76.7 million).
173
—
AURELIA METALS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5 MARKET RISK EXPOSURES
22.5.1 Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities, including revenue and expenses denominated in a foreign currency.
The group considers the effects of foreign currency risk on its financial position and financial performance and assesses its
option to hedge based on current economic conditions and available market data.
The Group manages its foreign currency risk by converting foreign currency receipts to AUD upon receipt and only maintaining a
minimal USD balance for foreign currency denominated commitments.
The table below demonstrates the sensitivity of revenue not converted at the time of sale to a change in the US$ exchange rate
with all other variables held constant:
EFFECT ON PROFIT BEFORE TAX
Increase/(decrease) in foreign exchange rate
+5%
-5%
2023
$’000
(2,449)
2,423
2022
$’000
(3,756)
3,717
The cash balance at year end includes US$1.0 million (FY22: US$3.9 million) held in US$ bank accounts.
The table below demonstrates the sensitivity of the US$ denominated bank account balances to a change in the US$ exchange
rate with all other variables held constant:
EFFECT ON THE BANK BALANCES
Increase/(decrease) in AUD: USD foreign exchange rate
+5%
-5%
22.5.2 Commodity price risk
2023
$’000
(70)
77
2022
$’000
(269)
297
The Group is affected by the price volatility of certain commodities. Price risk relates to the risk that the fair value of future
cash flows of commodity sales will fluctuate because of changes in market prices largely due to supply and demand factors
for commodities. The Group is exposed to commodity price risk related to the sale of gold, lead, zinc, and copper on physical
prices determined by the market at the time of sale.
Commodity price risk may be managed, from time to time and as required and deemed appropriate by the Board, with the use
of hedging strategies through the purchase of commodity hedge contracts. These contracts can establish a minimum commodity
price denominated in either US dollars or Australian dollars over part of the group’s future metal production. With trade
receivables measured at fair value, the risk is that the final QP price achieved would be lower than the carrying value of the
receivables which was based at the forward QP price at the reporting date.
The Group’s management has developed and enacted a hedging policy focused on the management of commodity risk.
The management of this risk includes an element of mandatory hedging previously required under the secured Syndicated
Facilities Agreement, as well as Quotation Period hedging for metal in concentrates sold.
The Group had no commodity price hedging in place at 30 June 2023 (30 June 2022: 21,023 ounces with an average price
of $2,505/oz).
174
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5 MARKET RISK EXPOSURES (CONTINUED)
22.5.2 Commodity price risk (continued)
The Quotation Period hedging in place for concentrates sold at the end of the reporting period is summarised below:
COMMODITY
UNIT
QUANTITY
CONTRACT PRICE
QUANTITY
CONTRACT PRICE
30 JUNE 2023
30 JUNE 2022
Gold
Copper
Lead
Zinc
oz
t
t
t
-
-
-
-
-
-
-
-
3,274
570
1,585
400
US$1,841
US$9,860
US$2,225
US$4,018
During the financial year, gold and gold in concentrate unhedged sales were 29,812 ounces (FY22: 9,249 ounces). The effect
on the income statement with an A$50/oz increase/decrease in gold price would have resulted in an increase/decrease in
profit/loss and equity of $1.5 million (FY22: $0.5 million).
During the financial year, the Company made unhedged sales of concentrate containing payable lead of 6,276 tonnes (FY22:
4,831 tonnes), payable zinc 3,618 tonnes (FY22: 12,394 tonnes) and payable copper of 285 tonnes (FY22: 1,176 tonnes).
An increase/decrease of US$50/t in the price of lead, zinc and copper would have resulted in an increase/decrease profit/loss
and equity by $0.8 million (FY22: $1.3 million).
22.5.3 Interest rate risk
Exposure to interest rate risk arises on financial assets and liabilities recognised at reporting date where a future change in
interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The Group’s exposure to the risk of
changes in market interest rates primarily relates to the Group’s cash and the Term Loan that have floating interest rates.
An increase/(decrease) in interest rates on the average debt borrowing balance by 50 basis points will result in a $0.1 million
(FY22: $0.1 million) (decrease)/ increase in the profit or loss and equity.
The Group continually analyses its exposure to interest rate risk. Consideration is given to alternative financing options, potential
renewal of existing positions, alternative investments, and the mix of fixed and variable interest rates.
22.5.4 Equity price risk
The Group’s listed equity investment in Sky Metals Limited is susceptible to market price risk arising from uncertainties
about future value of the investment security. An increase /(decrease) of 5% in the share price would result in a $0.04 million
(FY22: $0.1 million) change in the investment.
22.5.5 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain a strong
capital base to support the Company’s growth objectives and to maximise shareholder value. The Company aims to ensure that it
meets financial covenants attached to its interest-bearing loans and borrowings that form part of its capital structure requirements.
Breaches in the financial covenants would permit the bank to immediately call interest-bearing loans and borrowings. In December
2022 the Company received a waiver of covenant testing from the Bank Syndicate whilst the debt facility refinance was completed.
Further waivers were received in March and June 2023. The new Trafigura Facilities do not contain any financial covenants.
The Group monitors capital using a gearing ratio, which is net debt divided by the aggregate of equity and net debt. The Group’s net debt is
calculated as trade and other payables, interest-bearing loans and borrowings (excluding lease liabilities) less cash and short-term deposits.
The Company continuously monitors the capital risks of the business by assessing the financial risks and adjusting the capital structure
in response to changes in those risks. The Company is continually evaluating its sources and uses of capital.
175
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5 MARKET RISK EXPOSURES (CONTINUED)
22.5.5 Capital risk management (continued)
Interest bearing loans and borrowings
Trade and other payables
Less: cash at bank
Net debt
Equity
Capital and net debt
Gearing ratio
NOTE
15
12
6
2023
$’000
7,682
28,479
(38,946)
(2,785)
309,825
307,040
(1%)
2022
$’000
26,001
65,770
(76,694)
15,077
336,926
352,003
4%
Syndicated Facilities Agreement covenants
The existing Syndicated Facility agreement contained financial covenants including a Cash Cover Ratio, a Forward Cover Ratio,
and a minimum cash balance. In December 2022 the Company received a waiver of covenant testing from the Bank Syndicate
whilst the debt facility refinance was completed. Further waivers were received in March and June 2023. The new Trafigura
Facilities do not contain any financial covenants.
The Group continues to monitor capital by assessing the financial risks and adjusting the capital structure in response to
changes in those risks. The Group is continually evaluating its sources and uses of capital. The Group is not subject to any
externally imposed capital requirements.
The Directors consider the carrying values of financial assets and financial liabilities recorded in the consolidated financial
statements approximate their fair values.
22.5.6 Fair value hierarchy
The following table provides the fair value measurement hierarchy of the Group’s financial assets and liabilities. The following
financial instruments are carried at fair value in the statement of financial position and measured at fair value through profit or
loss or Other Comprehensive Income.
176
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
22. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(CONTINUED)
—
22.5 MARKET RISK EXPOSURES (CONTINUED)
22.5.6 Fair value hierarchy (continued)
2023
Assets
Trade receivables at fair value
Listed equity investments
Derivative financial instruments
Liabilities
Derivative financial instruments
Deferred consideration
2022
Assets
Trade receivables at fair value
Listed equity investments
Derivative financial instruments
Liabilities
Derivative financial instruments
Deferred consideration
QUOTED PRICES IN
ACTIVE MARKETS
LEVEL 1 $'000
SIGNIFICANT
OBSERVABLE INPUTS
LEVEL 2 $'000
SIGNIFICANT
UNOBSERVABLE
INPUTS LEVEL 3 $'000
3,335
718
-
-
-
-
-
69
-
-
-
-
-
-
-
QUOTED PRICES IN
ACTIVE MARKETS
LEVEL 1 $'000
SIGNIFICANT
OBSERVABLE INPUTS
LEVEL 2 $'000
SIGNIFICANT
UNOBSERVABLE
INPUTS LEVEL 3 $'000
6,259
1,105
-
-
-
-
-
-
3,103
-
-
-
-
-
1,918
The techniques and inputs used to value the financial assets and liabilities are as follows:
Listed equity investments: Fair value based on quoted market price at 30 June 2023.
Derivative financial instruments (gold and base metal forward contracts): are marked-to-market value based on spot prices at
balance date and future delivery prices and volumes, as provided by trade counterparty.
Trade receivables at fair value: refer to note 7.
177
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
23. RECONCILIATION OF PROFIT AFTER TAX TO NET CASH FLOWS
—
Reconciliation of profit after tax to net cash flows used in operating activities:
Net profit after tax
Adjustments for:
Impairment loss on mine properties / exploration
Depreciation and amortisation
Rehabilitation expense/(reversal of expense)
Fair value adjustment/remeasurement of financial assets and liabilities
Income tax expense net of tax payments
Exploration and evaluation assets written off
Share based payments
(Gain) / Loss on revaluation of commodity derivatives and foreign exchange differences
(Gain) / Loss on disposal of plant and equipment
Interest expense (unwinding of discount)
Changes in assets and liabilities
Increase / (Decrease) in trade and other payables
Increase / (Decrease) in other liabilities
Increase / (Decrease) in prepaid borrowing costs
Increase / (Decrease) in provisions
Increase / (Decrease) in trade and other receivables
Increase / (Decrease) in inventories
Increase / (Decrease) in prepayments
Net cash flows from operating activities
2023
$’000
2022
$’000
(52,221)
(81,688)
20,846
104,130
(3,274)
1,657
(11,220)
24
797
(113)
(31)
2,816
(37,291)
1,435
(1,053)
(3,620)
10,422
14,678
(2,118)
45,864
135,687
137,816
3,531
(26,028)
(19,670)
33
1,780
178
43
2,754
18,465
(1,182)
1,053
(4,752)
861
(14,476)
(312)
154,093
178
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
24. AUDITORS’ REMUNERATION
—
The auditor of Aurelia Metals Limited is Ernst & Young.
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering the Group
783
681
2023
$’000
2022
$’000
Fees for other services
Business combinations tax advisory and other tax advisory services performed for the
consolidated entity
Business combinations financial advisory services performed for the consolidated entity
Tax compliance services performed for the consolidated entity
Total fees to Ernst & Young (Australia)
There were no other services provided by Ernst & Young other than as disclosed above.
-
26
79
888
226
143
79
1,129
25. PARENT COMPANY INFORMATION
—
The financial information for the parent entity, Aurelia Metals Limited has been prepared on the same basis as the consolidated
financial statements except for investment in subsidiaries.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total shareholders' equity
Profit/(loss) for the year
Total comprehensive income/(loss) for the year
2023
$’000
61,473
302,744
364,217
134,231
478
134,709
229,508
357,017
13,919
(141,428)
229,508
5,177
1,964
2022
$’000
81,836
224,717
306,553
169,296
13,992
183,288
123,265
334,659
11,159
(210,355)
135,463
16,465
12,009
179
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
25. PARENT COMPANY INFORMATION (CONTINUED)
—
25.1 COMMITMENTS
Commitments contracted for at reporting date but not recognised as liabilities are as follows:
Payable not later than 12 months
26. COMMITMENTS AND CONTINGENCIES
—
26.1 CAPITAL COMMITMENTS
The commitments to be undertaken are as follows:
Payable not later than 12 months
27.2 EXPLORATION AND MINING
The commitments to be undertaken are as follows:
Payable not later than 12 months
The commitments relate to exploration/mining lease minimum annual expenditures.
26.3 GUARANTEES
2023
$’000
2,715
2022
$’000
4,425
2023
$’000
34,505
2022
$’000
26,131
2023
$’000
6,669
2022
$’000
6,310
The Group has a $56.8 million Guarantee Facility as part of the existing Syndicated Facilities Agreement. Under the facility,
Letters of Credit with an aggregate value of $56.8 million (30 June 2022: $56.8 million) have been drawn consisting of
environmental guarantees for the Company’s three operating mine sites and its exploration tenements as well as rental bonds.
As at 30 June 2023 $56.8 million (2022: $30.7 million) is held by the banking syndicate to cash back these guarantees.
180
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
26. COMMITMENTS AND CONTINGENCIES (CONTINUED)
—
26.4 CONTINGENT LIABILITIES
At 30 June 2022, a contingent liability amounting to $4.25 million related to the acquisition of Dargues Gold Mine was released
because the conditions for settlement were not met. There are no contingent liabilities as at 30 June 2023.
27. RELATED PARTY TRANSACTIONS
—
Transactions between related parties are on normal commercial terms and conditions no more favorable than those available to
other parties unless otherwise stated.
27.1 TRANSACTIONS WITH OTHER RELATED PARTIES
During the period, the following transactions with related parties occurred:
Hollach Services Pty Ltd (i)
Total payments to related parties
(i) Directors’ fees were paid to Hollach Services Pty Ltd; a company of which Paul Harris is a Director.
27.2 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Compensation of key management personnel:
Short – term employee benefits
Post – employment benefits
Share based payments transactions
Total compensation paid to key management personnel
2023
$’000
125
125
2023
$’000
2,591
87
256
2,934
2022
$’000
125
125
2022
$’000
2,093
82
788
3,421
The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to
key management personnel. Detailed information about the remuneration received by each KMP is disclosed in the
Remuneration Report.
181
—
AURELIA METALS NOTES TO FINANCIAL STATEMENTS (CONTINUED)
27. RELATED PARTY TRANSACTIONS (CONTINUED)
—
27.2 TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL (CONTINUED)
Key management personnel interests in the Employee Performance Rights Plan
Performance Rights held by Key Management Personnel under the Employee Performance Rights Plan have the following
expiry dates:
PERFORMANCE RIGHTS TRANCHES
EXPIRY DATE
2023 NUMBER
OUTSTANDING
2022 NUMBER
OUTSTANDING
Class 19A
Class 19C
Class FY21
Class FY22
Class FY23
Total KMP Performance Rights
30-Jun-22
30-Nov-21
30-Jun-23
30-Jun-24
30-Jun-25
-
-
-
2,071,260
3,377,554
5,448,814
1,970,678
-
3,108,620
3,429,653
-
8,508,951
27.3 OTHER RELATED PARTY TRANSACTIONS
There were no other related party transactions during the year (FY22: nil).
28. NEW ACCOUNTING POLICIES AND INTERPRETATIONS
—
Accounting standards and interpretations issued but not yet effective
Certain new Australian Accounting Standards and Interpretations have been published that are not mandatory for reporting
periods commencing 1 July 2022 and have not been early adopted by the Company for the reporting period ending
30 June 2023.
The potential effect of the revised Standards/Interpretations on the Group’s consolidated financial statements has not yet
been determined.
182
—
ANNUAL REPORT 2023 NOTES TO FINANCIAL STATEMENTS (CONTINUED)
29. DEED OF CROSS GUARANTEE
—
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785, Aurelia and its wholly owned subsidiaries
entered into a deed of cross guarantee in 2018 and are relieved from the requirement to prepare and lodge an audited
financial report.
The effect of the Guarantee is that Aurelia has guaranteed to pay any deficiency in the event of winding up of any controlled
entity which is a party to the Guarantee or if they do not meet their obligations under the terms of any debt subject to
the Guarantee. The controlled entities which are parties to the Guarantee have given a similar guarantee in the event that
Aurelia is wound up or if it does not meet its obligations under the terms of any debt subject to the Guarantee.
The Consolidated Statement of Financial Position and Consolidated Statement of Profit or Loss & Other Comprehensive Income
for the closed group is not different to the Group’s Statement of Financial Position and Statement of Profit or Loss & Other
Comprehensive Income.
30. EVENTS AFTER THE REPORTING PERIOD
—
Since 30 June 2023 and until the date of signing of this report (all mentioned previously in the above report), the following has
occurred:
A new Director appointed - Mr Lyn Brazil (and his alternate, Mr Bradley Newcombe) was appointed 17 July 2023
The retail equity raise completed in July 2023 with ~168 million new shares issued
The Trafigura debt facilities financial close occurred in August 2023 and the 120 million warrants were issued to Trafigura
(with an exercise price of A$0.25/share and a four year term).
183
—
AURELIA METALS DIRECTORS’ DECLARATION
—
In accordance with a resolution of the Directors of Aurelia Metals Limited, I state that:
1. In the opinion of the Directors:
a) The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
i)
giving 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; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in the notes;
and
c) there are reasonable grounds to believe that the Company will be able to pay its debts as when they become
due and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ending 30 June 2023.
On behalf of the Board,
Peter Botten
Chair
Bryan Quinn
Managing Director and Chief Executive Officer
30 August 2023
184
—
ANNUAL REPORT 2023
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent Auditor's Report to the Members of Aurelia Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Aurelia Metals Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at
30 June 2023, the consolidated statement of profit and loss and other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year
then ended, notes to the financial statements, including a summary of significant accounting policies,
and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June
2023 and of its consolidated financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
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185
—
AURELIA METALS
Carrying value of Mine Properties and Property, Plant and Equipment
Why significant
How our audit addressed the key audit matter
At 30 June 2023, the Group’s consolidated
statement of financial position included
$261.4m of Mine Properties and Property, Plant
and Equipment.
At the end of each reporting period, the Group
exercises judgement in determining whether
there is any indication of impairment of its cash-
generating units (CGUs) as disclosed in Note 10
to the financial statements. If any such
indicators exist, the Group estimates the
recoverable amount of the non-current assets in
the relevant CGU.
At 31 December 2022, the Group determined its
decision to optimize the life-of-mine for the Hera
CGU represented an impairment indicator and
perform impairment testing of the CGU. This
resulted in an impairment charge of $5.4m
being recorded at that time.
At 30 June 2023, the Group assessed other
than the Group’s net assets exceeding its market
capitalisation, there were no indicators of
impairment for its CGUs. The Group’s market
capitalisation deficiency existed at 30 June
2022, being the time of the last detailed
impairment test for Peak and Dargues CGUs.
At 30 June 2023, the Group evaluated whether
there was evidence to suggest a decline in
recoverable amount of the most recent
impairment test. This analysis concluded the
most recent impairment tests provided
sufficient evidence of no additional impairment
being required as at 30 June 2023.
Our audit procedures included the following:
► Assessed whether the Group’s determination of
CGUs was in accordance with Australian
Accounting Standards.
► Assessed the Group’s process for identifying and
considering external and internal information
which may be an indicator of impairment and
evaluated the completeness of the factors
identified.
► Compared the Group’s market capitalisation
relative to its net assets.
►
For the Hera CGU:
► Assessed whether the valuation
methodology applied by the Group to
measure the recoverable amount of the
CGU met the requirements of Australian
Accounting Standards.
► Tested the mathematical accuracy of
managements impairment model.
►
Involved our valuation specialists to assess
the key cashflow forecast assumptions such
as commodity price, discount rates and
foreign exchange rates with reference to
external observable market data.
► Compared future production forecasts in
the impairment model to updated reserves
and resources estimates, and understood
the Group’s reserve estimation processes,
including assessing the qualifications,
competence and objectivity of the Group’s
internal experts and the scope and
appropriateness of their work.
► Assessed the operating and capital
expenditure included in the impairment
models with reference to updated plans for
the mine.
► Performed sensitivity analysis to evaluate
the effect on the CGUs recoverable amount
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—
ANNUAL REPORT 2023
Why significant
How our audit addressed the key audit matter
Key cashflow forecast assumptions used in the
Group’s measurement of recoverable amount of
its CGUs, such as forecast commodity prices,
foreign exchange rates and discount rates
require significant estimation and judgement.
Identifying and evaluating changes in these key
assumptions effects the completeness of the
Group’s impairment indicator assessment and its
recoverable amount calculations, should
impairment testing be required.
We considered the Group’s impairment indicator
assessment, impairment testing and the related
disclosures in the financial report to be a key
audit matter.
of reasonably possible changes in key
forecast assumptions.
► Recalculated the carrying amount of the
Hera CGU and compared the carrying
amount to the recoverable amount to
determine the estimated impairment
charge.
► Assessed the adequacy of the disclosures in
Notes 9 and 10 of the financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
187
—
AURELIA METALS
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 Annual Report other than the financial report and our
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual
Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the
Annual Report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
A member firm of Ernst & Young Global Limited
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188
—
ANNUAL REPORT 2023
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
A member firm of Ernst & Young Global Limited
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189
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AURELIA METALS
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended
30 June 2023.
In our opinion, the Remuneration Report of Aurelia Metals Limited for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Kellie McKenzie
Partner
Brisbane
30 August 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
190
—
ANNUAL REPORT 2023
UNAUDITED PERIODIC CORPORATE REPORT
VERIFICATION PROCEDURE
—
1. PURPOSE
—
We are committed to providing clear, concise, timely and
effective disclosures in our corporate reports. This Procedure
sets out the process undertaken by Aurelia Metals Limited
to verify the integrity of any Periodic Corporate Report we
release to the market that is not audited or reviewed by an
external auditor.
2. SCOPE
—
This Procedure applies to Aurelia Metals Limited and all its
subsidiaries (Aurelia Metals).
This Procedure applies to any Aurelia Metals periodic
corporate report, including:
annual directors' report;
annual half yearly financial statements;
quarterly activity report;
quarterly cash flow report;
integrated report;
sustainability report; and
any similar periodic report prepared for the benefit of
investors, provided that the respective report has not been
subject to audit or review by an external auditor (each a
Periodic Corporate Report).
This Procedure should be read in conjunction with Aurelia
Metals' Continuous Disclosure Policy and Shareholder
Communication Standard.
3. RESPONSIBILITIES
—
Aurelia Metals' management has developed practices and
guidance material so that the Company can satisfy itself
that our Periodic Corporate Reports are accurate, balanced
and provide investors with appropriate information to make
informed investment decisions.
This Procedure is intended to ensure that all applicable laws,
regulations and company policies have been complied with,
and that appropriate approvals are obtained before a Periodic
Corporate Report is released to the market.
4. REQUIREMENTS
—
Aurelia Metals’ process for verifying unaudited Periodic
Corporate Reports is as follows:
each Periodic Corporate Report is prepared by, or under
the supervision of, subject-matter experts;
material statements in each Periodic Corporate Report
are reviewed by the relevant functional heads so that
the functional head is satisfied that they are accurate,
not misleading, and meet regulatory requirements,
and that the Periodic Corporate Report contains no
material omissions;
information about Aurelia Metals' mineral resources and
ore reserves are only included in a report if the information
complies with the ASX Listing Rules;
information in a Periodic Corporate Report that relates
to financial projections, statements as to future financial
performance or changes to the strategy of Aurelia Metals
(taken as a whole) must be approved by the Board; and
each draft Periodic Corporate Report is reviewed by the
Corporate Affairs Manager, the Chief Financial Officer,
the General Counsel and Company Secretary and the
Managing Director and Chief Executive Officer before
its release.
5. PROCEDURE STATUS
AND REVIEW
—
This procedure was approved by the Aurelia Metal's Audit
Committee on 21 June 2021.
The Audit Committee will review this Procedure as
required having regard to the changing circumstances
of the Company.
REVISION
1
DATE
CHANGE DESCRIPTION
21 June 2021
New procedure - endorsed by the Audit Committee
191
—
AURELIA METALS
SHAREHOLDER INFORMATION
—
Capital (as at 27 September 2023)
SHARE CAPITAL
ORDINARY SHAREHOLDERS
SHAREHOLDINGS WITH LESS THAN A MARKETABLE PARCEL OF $500 WORTH OF ORDINARY SHARES
MARKET PRICE (CLOSING PRICE ON THE ASX AS AT 27 SEPTEMBER 2023)
Distribution of fully paid shares (as at 27 September 2023)
RANGE
100,001 and over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
SECURITIES
1,528,438,499
140,606,135
11,010,905
5,033,226
154,442
1,685,243,207
Unmarketable parcels
6,350,315
Substantial shareholders (as at 27 September 2023)
%
NO. OF HOLDERS
90.70
8.34
0.65
0.30
0.01
100.00
0.38
1,264
3,590
1,331
1,714
488
8,387
2,529
HOLDER NAME
BRAZIL FARMING PTY LTD
RENAISSANCE SMALLER COMPANIES PTY LTD
Total
Unquoted Equity Securities
Fully paid ordinary shares
NUMBER
319,357,179
65,358,189
384,715,368
1,685,243,207
8,387
2,529
$0.087
%
15.07
42.80
15.87
20.44
5.82
100.00
30.15
%
18.96
5.28
24.24
Unquoted equity securities the Company has on issue are Performance Rights and unlisted warrants issued to Trafigura Pte Ltd.
Performance rights
Performance Rights on issue have been issued under the Company's Long-Term Incentive Plan.
NUMBER OF HOLDERS
NUMBER OF
PERFORMANCE RIGHTS
15
55
70
3,388,780
8,268,300
11,657,080
TESTING DATES
30 JUNE 2024
30 JUNE 2025
CLASS
FY22
FY23
Total
Trafigura warrants
Trafigura Pte Ltd has been issued 120,000,000 warrants as part of the financing facility announced by the Company on
31 May 2023.
192
—
ANNUAL REPORT 2023 Twenty largest shareholders (as at 27 September 2023)
HOLDER NAME
BRAZIL FARMING PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LID
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