AVZ Minerals Limited
AVZ Minerals Limited
AAnnnnuuaall RReeppoorrtt
AAnnnnuuaall RReeppoorrtt
30 June 2021
30 June 2021
CCoorrppoorraattee DDiirreeccttoorryy
DDiirreeccttoorrss
John Clarke (Non-Executive Chairman)
Nigel Ferguson (Managing Director)
Graeme Johnston (Technical Director)
Rhett Brans (Non-Executive Director)
Peter Huljich (Non-Executive Director)
CChhiieeff FFiinnaanncciiaall OOffffiicceerr
Jan de Jager
JJooiinntt CCoommppaannyy SSeeccrreettaarriieess
PPrriinncciippaall PPllaaccee ooff BBuussiinneessss && RReeggiisstteerreedd OOffffiiccee
SShhaarree RReeggiissttrryy
AAuuddiittoorrss
Jan de Jager
Benjamin Cohen
Level 2, 8 Colin Street
West Perth WA 6005
Telephone: +61 8 6117 9397
Facsimile: +61 8 6118 2106
Automic Registry Services
Level 2, 267 St George’s Terrace
Perth WA 6000
T: 1300 288 664 (within Australia)
+61 8 9324 2099 (outside Australia)
E: hello@automic.com.au
Hall Chadwick WA Audit Pty Ltd1
283 Rokeby Road
Subiaco WA 6008
Telephone: +61 8 9426 0666
SSeeccuurriittiieess EExxcchhaannggee LLiissttiinngg
Australian Securities Exchange
(Home branch: Perth, Western Australia)
ASX Code: AVZ
WWeebbssiittee AAddddrreessss
www.avzminerals.com.au
1 Formerly Bentleys Audit & Corporate WA Pty Ltd
CCoonntteennttss
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
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CChhaaiirrmmaann’’ss lleetttteerr ttoo SShhaarreehhoollddeerrss
The 2021 financial year has been incredibly successful for AVZ Minerals.
We eagerly await the granting of a Mining Licence for our flagship Manono Lithium and Tin Project (“Manono
Project”) by the Government of the Democratic Republic of Congo (DRC), as well as the execution of our
Collaboration Development Agreement and Manono Special Economic Zone Agreement.
The granting of our Mining Licence for the Manono Project will be a significant catalyst to finalise further
binding finance agreements and, ultimately, a Final Investment Decision (“FID”) by your Board of Directors.
To reach this point has required a massive amount of hard work and strategic execution from your Company.
On behalf of all shareholders, I want to congratulate our senior executive team led by Managing Director
Nigel Ferguson and thank him and all our staff and consultants working in Australia, the DRC and other parts
of the globe for their outstanding efforts.
As Steve Jobs once said: “Great things in business are never done by one person; they’re done a by a team
of people.”
AVZ Minerals has a great team of people!
Dr John Clarke
Non-Executive Chairman
AVZ Minerals Limited | 1
MMaannaaggiinngg DDiirreeccttoorr’’ss lleetttteerr ttoo SShhaarreehhoollddeerrss
"An
independent greenhouse gas assessment
shows the Manono Project could have one of the
lowest carbon footprints of any global hard rock
lithium miner."
ASX Announcement, January 2021
Dear Shareholders
The level of work undertaken and the achievements delivered during the 2021 Financial Year have brought
our flagship Manono Lithium and Tin Project (“Manono Project”) substantially closer to being a leading global
producer of lithium products.
AVZ secured the rights to an additional 15% equity in the Manono Project – taking our total interest to 75% on
completion – and we also secured long-term, binding sales agreements with three major Chinese lithium
converters for 80% of its saleable 6% Li2O spodumene concentrate, as well as a significant three-year binding
offtake agreement with a major participant in the tin market.
Significant metallurgical work throughout the 2021 Financial Year also resulted in an upgrade of the JORC
Proved and Probable Ore Reserves estimate for the Manono Project to 131.7Mt – an increase of 41.6% from
the 93Mt reported in the April 2020 Definitive Feasibility Study (DFS). The average lithium grade increased
by 3.1% from 1.58% to 1.63% Li2O while the tin grade of 990ppm remained the same but reported a 41%
increase in contained tin metal to 130.3kt. The project’s Life of Mine extended to 29.5 years based on a
4.5Mtpa mining rate of the Ore Reserves – an increase of 47.5% from its April 2020 DFS.
Importantly, during the last 12 months our senior management team in the DRC has continued positive
engagement with the Government of the DRC and I look forward to updating our shareholders on the
granting of the Mining Licence for the Manono Project, as well as the execution of our Collaboration
Development Agreement, Mpiana Mwanga Hydro-Electric Power Plant (”HEPP”) Agreement and Manono
Special Economic Zone (“MSEZ”) Agreement.
During FY21, project financing discussions continued to advance positively with potential debt financiers and
equity investors. In late September 2021, the project secured a major cornerstone investor and we are now
in a strong position to finalise our total required project funding. We are very pleased to have signed a deal
with Mr. Pei Zhenhua of Suzhou CATH Energy Technologies (and related parties) who will invest US$240
million for a 24% interest in the project and contribute their pro rata portion of funding for development
capital, providing over 50% of the total project capital required for the Manono Project.
AVZ Minerals Limited | 2
On the corporate front, we completed a highly successful and significantly oversubscribed Share Placement
just after the completion of the 2021 Financial Year, which resulted in the Company raising A$40 million
(before costs) with funds (in part) used to increase our equity interest in the Manono Project to 75%. The Share
Placement was well supported by high-quality institutional investors throughout Australia, Europe, North
America, Singapore, Malaysia and the Middle East.
I would like to take this opportunity to pay special thanks to our senior executive team, staff and consultants
both in Australia and the DRC for their outstanding efforts to advance our world-class project in what has still
been difficult times in the DRC due to COVID-19-related lockdowns. AVZ is committed to developing the
Manono Project and, with the full support of the DRC Government, we look forward to making the DRC a
leading global centre for sustainable lithium supply, with the capacity to feed the lithium-ion battery chain
and empower the green energy transition for future generations.
Nigel Ferguson
Managing Director
AVZ Minerals Limited | 3
Review of Operations
RReevviieeww ooff OOppeerraattiioonnss
AVZ Minerals Limited | 4
Review of Operations
Manono Lithium and Tin Project (“Manono Project”)
Democratic Republic of Congo (DRC)
Highlights
Secured rights to an additional 10% equity in the Manono Project for US$15.5 million, giving AVZ the option
to increase to 75% ownership of the Manono Project on completion of the transaction
Long term binding SC6 Offtake Agreements signed with GFL International Co., Ltd (Ganfeng), Shenzhen
Chengxin Lithium Group Co., Ltd and Yibin Tianyi Lithium Industry Co., Ltd, representing over 80% of AVZ’s
SC6 production at a nominal 4.5mtpa ore throughput
Binding Tin Offtake Agreement signed with Kalon Resources Limited, a 100% subsidiary of Noble Group
Holdings Limited
Continued positive engagement with the DRC Government on granting of Mining Licence (ML), Mpiana
Mwanga Hydro-Electric Power Plant (HEPP) Agreement, Collaboration Agreement and Manono Special
Economic Zone (MSEZ) Agreement
Project financing discussions continued to advance positively with potential debt financiers and equity
investors
Mineral Resource estimate updated at Roche Dure with Indicated Resources increasing by 12 million tonnes
and combined Measured and Indicated Resources increasing to 274Mt
Initial Exploration Target for placer hosted tin at Manono Project identified, demonstrating significant
potential for a possible standalone alluvial tin mining operation
Front End Engineering Design (FEED), process plant design and site geotechnical investigation studies
completed confirming updated CAPEX and OPEX for the Manono Project
Using FEED Study outputs, work commenced on the optimisation and upgrading of the April 2020 Manono
Definitive Feasibility Study (DFS) to Bankable Feasibility Study (BFS) level
Secured a 1,227-hectare staging site at Kabondo Dianda that will play a major role in exporting lithium and
tin products to global markets
Primary Lithium Sulphate (PLS) metallurgical test work confirmed suitability as a battery production feedstock
Independent Greenhouse Gas (GHG) emissions assessment shows Manono Project forecast to have one of
the lowest carbon footprints globally of any hard rock lithium mining operation
Operational Events after Reporting Date
Manono JORC Proved and Probable Ore Reserves now estimated at 131.7Mt – an increase of 41.6% from the
93Mt reported in April 2020 DFS
Manono Ore Reserve Estimate contains 65.0Mt of Proved Category and 66.6Mt of Probable Category Ore
Reserves
Life of Mine (LoM) extended to 29.5 years based on a 4.5Mtpa ore operation – underpinned by the Ore
Reserves – an increase of 47.5% from the April 2020 DFS.
PLS conversion to Lithium Hydroxide Pre-Feasibility Study (PFS) commenced
AVZ Minerals Limited | 5
Review of Operations
Overview
The level of work completed and array of achievements secured during the 2021 financial year has taken the Manono
Project to the cusp of a Final Investment Decision (FID) being made.
The strong global demand for 6% Li2O spodumene concentrate was evidenced by three major Chinese lithium
converters committing to binding sales agreements with AVZ, representing approximately 80% of the Company’s SC6
production. In addition, the Company signed a three-year binding offtake agreement with a major participant in the tin
market for 600 metric tonnes of tin concentrate per annum.
The granting of a Mining Licence (PR) for the Manono Project is a significant catalyst to finalise binding finance
agreements and ultimately, a FID from the Board of AVZ which is expected in Q4 2021. To that end, the Company has
progressed all the necessary requirements for its ML, HEPP, Collaboration and MSEZ Agreements and remains confident
it will receive favourable decisions from the DRC Government based on the body of work completed by the Company
in confirming the robust economics of the Manono Project.
Two significant milestones were also reported by the Company after the end of the reporting period.
On 2 July 2021, AVZ announced the completion of a highly successful oversubscribed Share Placement comprising the
issue of 307,692,308 new shares at an issue price of $0.13 per share to raise A$40 million (before costs). The Placement
was aimed at bringing more institutional investors to the register and was well supported by high-quality institutional
investors in Australia, Europe, North America, Singapore, Malaysia and the Middle East.
On 14 July 2021, AVZ upgraded its JORC Proved and Probable Ore Reserves estimate to 131.7Mt – an increase of 41.6%
from the 93Mt reported in its April 2020 DFS. The average lithium grade increased by 3.1% from 1.58% to 1.63% Li2O
while the tin grade of 990ppm remained the same but reported a 41% increase in contained tin metal to 130.3kt. The
Manono Project LoM extended to 29.5 years, based on a 4.5Mtpa ore operation underpinned by the Ore Reserves – an
increase of 47.5% from its April 2020 DFS. The extended LoM has been used as an input in the optimised DFS/BFS.
Further information on sub-sections of the Manono Project is provided below:
Binding Offtake Agreements for 6% Li2O spodumene concentrate (“SC6”) and Tin concentrate
The Company signed strategic binding SC6 offtake agreements with the following entities during the 2021
financial year:
GFL International Co., Ltd (“GFL”), a subsidiary of China’s largest lithium compounds producer, Ganfeng
Lithium Co Ltd (“Ganfeng Lithium”);
Shenzhen Chengxin Lithium Group Co., Ltd (“Chengxin”), a leading global battery materials producer in China;
and
Yibin Tianyi Lithium Industry Co., Ltd (“Yibin”), a key participant in the supply chain of Contemporary Amperex
Technology (“CATL”), the world’s largest lithium-ion battery maker.
GFL signed an initial five-year agreement with an option to extend for a further five years, with supply ramping up to
160,000 tonnes of SC6 from year three onwards.
Chengxin signed an initial three-year agreement with extension options by mutual agreement for the annual supply of
up to 180,000 tonnes of SC6.
Yibin signed an initial three-year agreement with an option to extend for an additional two years for the annual supply
of up to 200,000 tonnes of SC6.
In March 2021, AVZ also signed a three-year binding offtake agreement with Kalon Resources Limited (“Kalon”) for 600
metric tonnes of tin concentrate per annum. Kalon is a major participant in the tin market, handling several thousand
tonnes of tin concentrate per annum.
AVZ Minerals Limited | 6
Review of Operations
Project Financing
During the 2021 financial year, AVZ’s management team was actively engaged with various commercial banks, finance
brokers, private equity investors and non-commercial lenders such as Pan-African Development Finance Institutions
(DFIs) to progress debt and equity funding agreements for the development of the Manono Project.
The granting of a Mining Licence for the Manono Project is a major requirement to finalise binding finance agreements
and ultimately, a Final Investment Decision (FID) from the Board of AVZ, which is expected in Q4 2021.
Mining Licence, Mpiana Mwanga Hydro-Electric Power Plant Agreement, Mining Collaboration
Agreement and Manono Special Economic Zone Agreement
During the 2021 financial year, AVZ continued to enjoy a supportive, collaborative and cooperative working relationship
with the newly appointed DRC Government officials and is confident of receiving its Mining Licence (or Permis
d’Exploitation (PE)), Mpiana Mwanga Hydro-Electric Power Plant (HEEP) Agreement and Collaboration Agreement
during Q4 2021, with the proposed Manono Special Economic Zone Agreement (MSEZ) expected thereafter.
The Company acknowledged that some previously published indicative timelines for the issue of its Mining Licence and
various agreements had been delayed due to changes with the newly sworn-in DRC Government, with some decision-
making processes being suspended for several months during the reporting period.
However, AVZ remains confident it will receive favourable decisions based on the body of work completed by the
Company in confirming the robust economics of the Manono Project – although the timing of those decision remains
exclusively at the discretion of the DRC Government.
AVZ’s Director of Corporate Affairs, Mr. Serge Ngandu (far right) addresses a high-level
AVZ Minerals Limited | 7
government delegation about the future Manono Special Economic Zone (MSEZ)
Review of Operations
Updated Mineral Resource and Reserves
The Company updated the Manono Project Mineral Resource, after including results from its nine-hole pit floor drilling
program that was completed in January 2021. The sample assays confirmed the presence of high-grade, fresh pegmatite
in all nine holes drilled on sections 7100mN to 7300Mn at Roche Dure from close to or at the pit floor. The additional
information and geological remodelling resulted in an upgrade of some 12 million tonnes (Mt) of Inferred Resources to
Indicated Resources.
After the end of the reporting period, the Company upgraded its JORC Proved and Probable Ore Reserves estimate to
131.7Mt – an increase of 41.6% from the 93Mt reported in its April 2020 DFS. The average lithium grade increased by
3.1% from 1.58% to 1.63% Li2O while the tin grade of 990ppm remained the same but reported a 41% increase in
contained tin metal to 130.3kt.
The Manono Project Life of Mine (“LoM”) extended to 29.5 years, based on a 4.5Mtpa operation underpinned by the
new Ore Reserves – an increase of 47.5% from its April 2020 DFS.
Extension of the LoM beyond the modelled 29.5 years is not constrained by Ore Reserves, with only one third being
included, but rather due to the lack of data and costings for replacing processing equipment and certainly forecasting
SC6 prices beyond the 29.5 year LoM.
Initial Exploration Target for Alluvial Placer Hosted Tin
In May 2021, the Company also announced an initial Exploration Target defining the potential for alluvial tin hosted
resources at its Manono Project. This statement was based on an independent review of historical exploration records
produced by Zairetain, the previous operators of the historical tin mining operations at the Manono Project. The review
was conducted by independent geological and mining consultants, Behre Dolbear International Limited.
The Exploration Target was in addition to the existing JORC 2012 compliant hard rock tin and tantalum Mineral Resource
Estimates of 125 million tonnes @ 175ppm Sn and 26ppm Ta (low-grade tin domain) and 275 million tonnes @ 962ppm
Sn and 38ppm Ta (high-grade tin domain) at a 0.5% Li20 cut off published in the 21 April 2020 DFS Study.
Refer to ASX Announcement dated 18 May 2021 – “Initial Exploration Target for Alluvial Placer Hosted Tin Defined at the
Manono Lithium and Tin Project.”
Front End Engineering Design (FEED) Study and optimised DFS/BFS
A FEED Study was completed by Melbourne-based engineering company, Mincore Pty Ltd.
The FEED Study provided block flow and process flow diagrams, mechanical equipment selection and sizing, the overall
mechanical equipment list, the electrical load list and plant general arrangement drawings, including a 3D model.
The FEED study also improved the confidence level in Capital and Operational Costs of the Manono Project to an AACEI
Class 2 (+/- 10%) from the previous Class 3 (+/- 20%) DFS level of estimation from April 2020.
Receipt of the final FEED study outputs and the updated Mine Schedule Plan, which was completed by CSA Global, has
allowed AVZ to commence optimisation and upgrading of the April 2020 Manono DFS to BFS level, which is expected
to be released in Q4 2021.
AVZ Minerals Limited | 8
Review of Operations
Primary Lithium Sulphate (PLS)
In January 2021, the Company announced it had successfully produced 1.5kg of PLS material from typical Roche Dure
SC6 concentrate. This is confirmed as suitable feedstock for the electrolytic conversion of Lithium Hydroxide
Monohydrate used in battery production and is expected to contain approximately 95% lithium in this refined product.
The metallurgical testwork was undertaken by Kingston Process Metallurgy (“KPM”) in Canada.
Primary Lithium Sulphate (PLS) conversion to Lithium Hydroxide
AVZ also engaged Noram Engineering and Constructors Ltd (“Noram”) to undertake a Pre-Feasibility Study (PFS) to
produce lithium hydroxide from Roche Dure sourced PLS feedstock.
The Company has identified a short list of engineering firms to complete the outside battery limits scope of engineering
design, in conjunction with the inside battery limit technical work to be undertaken by Noram. The information from the
PFS will assist to identify the preferred global location for a lithium hydroxide conversion facility fed with product from
Manono.
Early-stage discussions occurred with interested parties in various jurisdictions wishing to partner with AVZ in the
development of a lithium hydroxide facility, where it is intended that AVZ will maintain a controlling interest.
Primary Lithium Sulphate produced from Roche Dure SC6 under
metallurgical testing for AVZ’s planned Manono Lithium Sulphate Plant
AVZ Minerals Limited | 9
Review of Operations
Kabondo Dianda Intermodal Staging Station
In late June 2021, AVZ’s 100% owned DRC logistics and
haulage company, Nyuki Logistics (“Nyuki”), secured a
1,227-hectare site at Kabondo Dianda that will play a
major role in the Company’s plans to export products
from the Manono Lithium and Tin Operation (“MLTO”)
through the ports of Lobito in Angola and Dar es Salaam
in Tanzania.
Nyuki was formed as a dedicated logistics arm for the
MLTO, responsible for commercial and operational
management of MLTO’s
requirements,
including road haulage, rail and port services and
logistics infrastructure maintenance under a service
agreement with Dathcom Mining SA.
logistics
Independent Greenhouse Gas Emissions Assessment
Proposed Phase 1 SEZ map showing
the haulage route for SC6 from
Manono to Kabondo Dianda
In January 2021, AVZ released an
independent
Greenhouse Gas (GHG) emissions assessment for the
life of mine of the Manono Project.
The GHG assessment, which was completed by leading
global environmental and sustainability consultants,
Environmental Resource Management (ERM), evaluated
the estimated Scope 11 and Scope 22 emissions
associated with all operations over the 20-year life of the
Manono mine, processing
road
transportation of the products. The GHG’s evaluated in
the study were carbon dioxide (CO2), nitrous oxide (N2O)
and methane (CH4) using a methodology consistent with
the 2006 Intergovernmental Panel on Climate Change
(IPCC) Guidelines.
facilities and
ERM’s findings showed the Manono Project could have
one of the lowest carbon footprints of any global hard
rock lithium miner. This was primarily due to AVZ’s
strategic location adjacent to the Mpiana Mwanga Hydro
Electric Power Plant which, once refurbished,
is
anticipated to provide all the Manono Project’s electricity
requirements.
AVZ is also investigating and planning substantial GHG
mitigation measures which include:
purchase of electric mining
fleet once
commercially viable equipment is available;
generation of Hydrogen (H2) from excess
renewable electricity to enable use of Fuel Cell
Electric Vehicles (FCEVs); and
the establishment of a 5,000-ha sequestration
biomass plantation.
1 Scope 1: Direct greenhouse gas emissions; defined as those that occur
from sources that are owned or controlled by the reporting entity.
2 Scope 2: A category of indirect emissions that accounts for GHG emissions
from the generation of purchased energy products (principally electricity,
steam/heat and reduction materials used for smelting) by the entity.
AVZ Minerals Limited | 10
Review of Operations
Corporate
EEqquuiittyy iinn MMaannoonnoo PPrroojjeecctt
In September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake in Dathcom
Mining SA (which holds 100% of the Manono Project) from its joint venture partner, Dathomir Mining Resources SARLU
(“Dathomir Mining”). Under the Agreement, AVZ paid US$500,000 to Dathomir Mining as an advance payment with the
remaining US$15 million to be paid at any time within 12 months of the Agreement being executed or as soon as AVZ
secured a minimum US$50 million in project financing.
As announced in June 2019, the Company had previously secured a 5% equity interest from Dathomir Mining for a total
consideration of US$5.5 million, with an advance payment made of US$500,000. The balance of the consideration (US$5
million) was to be paid at any time within 36 months from execution of the Agreement.
AVZ now owns 75% of the joint venture company, Dathcom Mining SA, following completion of both Agreements.* The
remaining 25% of Dathcom Mining is owned by La Congolaise d’Exploitation Minière SA (Cominiere), of the DRC
Government over which AVZ has a preemptive right to purchase further project equity.
**SSeeee NNoottee 2266 ffoorr EEvveennttss OOccccuurrrriinngg AAfftteerr RReeppoorrttiinngg DDaattee
MMaannaaggeemmeenntt CChhaannggeess
Effective 15 April 2021, Mr. Jan de Jager was appointed AVZ’s Chief Financial Officer (CFO) and Joint Company
Secretary and Mr. Ben Cohen was appointed Commercial Manager and Joint Company Secretary. Mr. Leonard Math
resigned his position with the Company on 12 April 2021.
Mr. de Jager has held senior roles in the mining industry for more than 20 years, including as CFO and Chief Information
Officer of several listed and non-listed companies, while Mr. Cohen is a commercially focused CPA with more than 20
years’ experience in the bulk commodity, shipping, mining and corporate sectors.
IIssssuuee ooff FFuullllyy PPaaiidd SShhaarreess aanndd EExxeerrcciissee ooff UUnnlliisstteedd OOppttiioonnss
During the year, the Company received a total of A$3,098,500 from the exercise of the following:
1,000,000 unlisted options exercisable at $0.0475 per share;
5,000,000 unlisted options exercisable at $0.057 per share;
4,000,000 unlisted options exercisable at $0.0665 per share; and
41,666,667 unlisted options exercisable at $0.06 per share.
IIssssuuee aanndd EExxppiirraattiioonn ooff PPeerrffoorrmmaannccee RRiigghhttss
During the year, the Company issued the following Performance Rights to directors, employees and consultants:
4,000,000 Performance Rights with an expiry of 3 December 2021
24,100,000 Performance Rights with an expiry of 9 December 2023; and
5,200,000 Performance Rights with an expiry date of 29 June 2024.
A total of 6,600,000 Performance Rights expired during the year.
Refer to Note 24 for the terms of these issuance.
AVZ Minerals Limited | 11
Review of Operations
UUnnmmaarrkkeettaabbllee PPaarrcceell SShhaarree SSaallee FFaacciilliittyy
In September 2020, the Company completed an Unmarketable Parcel Share
Sale Facility, with a total of 5,985,461 shares sold at an average price of 5.94
cents per share. The total number of shareholders was reduced by
approximately 1,550 at the completion of the facility.
IInnffoorrmmaattiioonn rreeqquuiirreedd uunnddeerr AASSXX LLiissttiinngg RRuullee 55..33..33
List of current mining and exploration tenements (as of 30 June 2021):
CCoouunnttrryy // PPrroojjeecctt
TTeenneemmeenntt
IInntteerreesstt
SSttaattuuss
DDRRCC –– MMaannoonnoo PPrroojjeecctt
PR 13359
60% (*75%)
Granted
DDRRCC –– MMaannoonnoo EExxtteennssiioonn PPrroojjeecctt
PR 4029
PR 4030
100%
Granted
RReesseerrvvee CCaatteeggoorryy
PPrroovveedd
PPrroobbaabbllee
TToottaall
CCaatteeggoorryy
MMeeaassuurreedd
IInnddiiccaatteedd
IInnffeerrrreedd
TToottaall
*AVZ Minerals Limited has secured a further 15% equity in the Manono Project
from Dathomir Mining Resources SARL. AVZ Minerals now has a 75% interest
in the Manono Project following completion of the acquisition in August 2021.
RRoocchhee DDuurree MMaaiinn PPeeggmmaattiittee OOrree RReesseerrvvee EEssttiimmaattee
aass ooff 3300 JJuunnee 22002211
TToonnnneess
((MMtt))
GGrraaddee
LLii22OO
%%
CCoonnttaaiinneedd
LLii2200
((MMtt))
GGrraaddee SSnn
((gg//tt))
CCoonnttaaiinneedd SSnn
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65.0
1.64
1.07
942
61.2
66.6
1.61
1.075
1,037
69.1
113311..77
11..6633
22..1144
999900
113300..33
Note: The Ore Reserve estimate has been based on a cut-off > US$0.00 block
value comprising an economic block by block calculation. Figures may not sum
due to rounding.
RRoocchhee DDuurree MMaaiinn PPeeggmmaattiittee MMiinneerraall RReessoouurrccee aatt aa 00..55%% LLii22OO ccuutt--ooffff
aass ooff 3300 JJuunnee 22002211
TToonnnneess
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100
174
128
440011
LLii22OO
%%
1.67
SSnn
ppppmm
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ppppmm
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870
35
0.93
0.30
1.65
807
35
0.97
0.29
1.65
585
31
1.01
0.28
11..6655
775522
3344
00..9977
00..2299
AVZ Minerals Limited | 12
Review of Operations
LLooccaattiioonn ooff tthhee MMaannoonnoo LLiitthhiiuumm aanndd TTiinn PPrroojjeecctt..
CCoommppeetteenntt PPeerrssoonn SSttaatteemmeennttss
The information that relates to Ore Reserves is based on information compiled by Mr Daniel Grosso and reviewed by Mr
Karl van Olden, both employees of CSA Global Pty Ltd. Mr van Olden takes overall responsibility for the Report as
Competent Person. Mr van Olden is a Fellow of The Australasian Institute of Mining and Metallurgy and has sufficient
experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity
he is undertaking, to qualify as Competent Person in terms of the JORC (2012 Edition). The Competent Person, Karl van
Olden has reviewed the Ore Reserve statement and given permission for the publication of this information in the form
and context within which it appears. The estimated ore reserves underpinning the production target have been prepared
by Competent Person, Karl van Olden from CSA Global, in accordance with the requirements in Appendix 5A of the
(JORC Code) 2012. Mr van Olden consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
The Mineral Resource estimate has been completed by Mrs. Ipelo Gasela (BSc Hons, MSc (Eng)) who is a geologist with
14 years’ experience in mining geology, Mineral Resource evaluation and reporting. She is a Senior Mineral Resource
Consultant for The MSA Group (an independent consulting company), is registered with the South African Council for
Natural Scientific Professions (SACNASP) and is a Member of the Geological Society of South Africa (GSSA). Mrs. Gasela
has the appropriate relevant qualifications and experience to be considered a Competent Person for the activity being
undertaken as defined in the 2012 edition of the JORC Code. Mrs. Gasela consents to the inclusion in the report of the
matters based on her information in the form and context in which it appears
The information in this report that relates to geology and the exploration results is based on information compiled by
Mr. Nigel Ferguson (BSc) FAusIMM MAIG, a Competent Person who is a Fellow of the Australian Institute of Mining and
Metallurgy and a Member of the Australia Institute of Geoscientists. Mr. Ferguson is the Managing Director of AVZ
Minerals Limited and has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of
the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Ferguson
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
AVZ Minerals Limited | 13
Review of Operations
NNoo NNeeww IInnffoorrmmaattiioonn
This document may include references to information that relates to Mineral Resources and Ore Reserves prepared and
first disclosed under the JORC Code 2012. The information was extracted from the Company’s previous ASX
announcements as follows:
“JORC Ore Reserves increase by 41.6% at Roche Dure” released on 14 July 2021; and
“Updated Mineral Resource Estimate Includes Pit Floor “Wedge” Drill Results” released on 24 May 2021.
References to the DFS or any production targets is made with reference to the April 2020 DFS which was announced on
the ASX on 21 April 2020.
These ASX announcements are available to view on the Company’s website www.avzminerals.com.au.
The Company confirms it is not aware of any new information or data that materially affects the information included in
the relevant market announcements and, in the case of estimates of Mineral Resources and Ore Reserves, that all material
assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to
apply and have not materially changed.
The Company confirms that the form and context in which the Competent Persons’ findings are presented have not
been materially modified from the relevant original market announcements
AVZ Minerals Limited | 14
DDIIRREECCTTOORRSS’’
RREEPPOORRTT
Directors’ Report
Directors’ Report
Your directors submit their report on the consolidated entity consisting of AVZ Minerals Limited (‘AVZ’) and the entities
it controlled (the ‘Group’ or the ‘consolidated entity’) for the financial year ended 30 June 2021. In order to comply with
the provisions of the Corporations Act 2001, the directors report as follows:
11.. DDiirreeccttoorrss
The names of directors who held office during or since the end of the year and until the date of this report are as
follows. Directors were in office for the entire period unless otherwise stated.
John Clarke
Nigel Ferguson
Graeme Johnston
Rhett Brans
Peter Huljich
Non-Executive Chairman (appointed 2 December 2019)
Managing Director (appointed 2 February 2017)
Technical Director (appointed 30 July 2018)
Non-Executive Director (appointed 5 February 2018)
Non-Executive Director (appointed 1 May 2019)
22.. CChhiieeff FFiinnaanncciiaall OOffffiicceerr
Jan de Jager (appointed 15 April 2021)
Leonard Math (appointed 9 July 2018, resigned 12 April 2021)
33..
JJooiinntt CCoommppaannyy SSeeccrreettaarriieess
Jan de Jager (appointed 15 April 2021)
Benjamin Cohen (appointed 30 April 2021)
44..
PPrriinncciippaall AAccttiivviittiieess
The principal activity of the consolidated entity during the financial year was mineral exploration. There were no
significant changes in the nature of the consolidated entity’s principal activities during the financial year.
55.. OOppeerraattiinngg RReessuullttss
The loss of the consolidated entity after income tax amounted to $5,537,632 (2020: $5,299,858).
66.. DDiivviiddeennddss PPaaiidd oorr RReeccoommmmeennddeedd
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a
dividend to the date of this report.
77..
RReevviieeww ooff OOppeerraattiioonnss
Refer pages 4 – 14 for a detailed review of the Group’s operations during the year.
The Group’s financial position, financial performance and use of funds information for the financial year is provided in
the financial statements that follow this Directors’ Report.
As an exploration entity, the Group has no operating revenue or earnings and consequently the Group’s performance
cannot be gauged by reference to those measures. Instead, the Directors’ consider the Group’s performance based on
the success of exploration activity, acquisition of additional prospective mineral interests and, in general, the value added
to the Group’s mineral portfolio during the course of the financial year.
Whilst performance can be gauged by reference to market capitalisation, that measure is also subject to numerous
external factors. These external factors can be specific to the Group, generic to the mining industry and generic to the
stock market as a whole and the Board and management would only be able to control a small number of these factors.
AVZ Minerals Limited | 16
Directors’ Report
The Group’s activities are also subject to numerous risks, mostly outside the Board’s and management’s control. These
risks can be specific to the Group, generic to the mining industry and generic to the stock market as a whole. The key
risks, expressed in summary form, affecting the Group and its future performance include but are not limited to:
geological and technical risk posed to exploration and commercial exploitation success;
security of tenure including licence renewal (no assurance can be given that the licence renewals and licence
applications that have been submitted will be successful), and inability to obtain regulatory or landowner
consents;
change in commodity prices and market conditions;
environmental and occupational health and safety risks;
retention of key staff;
capital requirement and lack of future funding; and
Coronavirus (COVID-19) and the impact it may have on the Group’s operations and fundraising activities.
This is not an exhaustive list of risks faced by the Group or an investment in it. There are other risks generic to the stock
market and the world economy as whole and other risks generic to the mining industry, all of which can impact on the
Group.
88..
SSiiggnniiffiiccaanntt CChhaannggeess iinn tthhee SSttaattee ooff AAffffaaiirrss
There have been significant changes in the state of affairs of the Group to the date of this report and these are referred
to in the Review of Operations.
99..
EEvveennttss OOccccuurrrriinngg aafftteerr tthhee RReeppoorrttiinngg DDaattee
In July 2021, the Company issued 307,692,308 new shares at $0.13 per share via a share placement to raise $40 million
(before costs) from high-quality institutional, sophisticated and professional investors. Proceeds from the placement,
increased AVZ’s cash reserve, which allowed the Company to increase its interest in the Manono Project from 60% to
75%, negotiate project financing from an enhanced balance sheet position, assist to establish a working capital and
contingency cost buffer during project development and enhance AVZ’s limited early capital works program prior to
making a Final Investment Decision (FID) on the Manono Project.
In August 2021, the Company increased its interest in the Manono Project from 60% to 75% by exercising options to
purchase Dathomir’s minority shareholding of 15% equity in Dathcom Mining for US$20 million.
On 8 September 2021, the Company advised it had issued 16,675,000 Performance Rights to employees and
consultants under the Company’s Performance Rights Plan. In addition, the Company advised it was proposing to issue
31,750,000 Performance Rights to Directors subject to shareholder approval at the Company’s 2021 Annual General
Meeting to be held on 18 November 2021.
On 24 September 2021, a wholly owned entity of the Company, AVZ International Pty Ltd (the holder of the Company’s
equity interest in the Manono Project) executed a “Transaction Implementation Agreement” with Suzhou CATH Energy
Technologies Co. Ltd and related parties (“Suzhou Group”) in which AVZ International has agreed, on the achievement
of certain key project and corporate milestones, to divest a 24% equity interest in Dathcom Mining SA (the owner of the
Manono Project tenements) to the Suzhou Group for US$240 million.
Other than the abovementioned, no other matter or circumstance has arisen that has significantly affected, or may
significantly affect:
the Group’s operations in future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.
1100.. LLiikkeellyy DDeevveellooppmmeennttss aanndd EExxppeecctteedd RReessuullttss ooff OOppeerraattiioonnss
The Group will continue its mineral exploration and development activity at and around its principal exploration projects,
being the Manono Lithium and Tin Project and the Manono Extension Project.
AVZ Minerals Limited | 17
Directors’ Report
1111.. EEnnvviirroonnmmeennttaall RReegguullaattiioonn
The Group is aware of its environmental obligations with regards to its exploration activities and ensures that it complies
with all regulations when carrying out any exploration work including with the national Greenhouse and Energy
Reporting Act 2007.
1122..
IInnffoorrmmaattiioonn oonn DDiirreeccttoorrss aanndd CCoommppaannyy SSeeccrreettaarriieess ((iinncclluuddiinngg DDiirreeccttoorr’’ss iinntteerreessttss aatt tthhee ddaattee ooff tthhiiss rreeppoorrtt))
JJoohhnn CCllaarrkkee
Non-Executive Chairman (appointed 2 December 2019)
Qualifications
Experience
Ph.D. in Metallurgy (Cambridge University), B.Sc. in Metallurgy (Cardiff University), MBA
(Middlesex University)
Dr. Clarke started his career 49 years ago as a metallurgist at Goldfield’s Kloof Gold
Mine in 1972. Most of his career has focused on the operation, development or
management of African mining projects and activities, from junior operating roles to
the most senior Executive and Board level appointments.
In 1994, he was appointed to the Board of Ashanti Goldfields as Executive Director,
responsible for Strategic Planning and Business Development. In 1997, he was
appointed President and CEO of Nevsun Resources, a gold explorer and developer
listed on the Toronto Stock Exchange. More recently, after joining the Board of Banro
Corporation in 2004 as a Non-Executive Director, he became President and CEO in
2013 until 2018. Banro was listed on the TSX and NYSE and was focused on the
development of gold projects in eastern DRC. Banro brought the Twangiza and
Namoya gold mines into production.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
4,333,333
6,000,000
Directorships in last 3 years Great Quest Fertilizer Limited (listed on Toronto Stock Exchange) (since 17 June 2009)
NNiiggeell FFeerrgguussoonn
Managing Director (appointed 2 February 2017)
Qualifications
BSc (University of Tasmania), F AusIMM, MAIG
Experience
Mr. Ferguson is a geologist with over 30 years of experience having worked in senior
management positions for the past 20 years in a variety of locations. He has experience
in the exploration and definition of precious and base metal mineral resources
throughout the world, including DRC, Zambia, Tanzania, Saudi Arabia, South East Asia
and Central America. He has been active in the DRC since 2004 in gold and base metals
exploration and resource development.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
46,811,404
6,000,000
Directorships in last 3 years Okapi Resources Limited (29 May 2017 to 30 June 2020)
AJN Resources Inc. (listed on Canadian Securities Exchange) (since 15 October 2016)
GGrraaeemmee JJoohhnnssttoonn
Technical Director (appointed 30 July 2018)
Qualifications
Experience
BSc in Geology (Glasgow University), M.Sc. in Structural Geology (Royal School of
Mines, London)
Mr. Johnston is a geologist with over 30 years’ experience in Australia, the Middle East,
Romania, Malaysia and the DRC. Mr. Johnston worked on various gold projects before
joining Rio Tinto and then with Midwest Corporation where he was the Principal
Geologist during its sale to Sinosteel Corporation. Following this, Mr. Johnston was a
funding director of Goldstar Resources and then Ferrowest Limited where he was
Technical Director for nine years and contributed to the successful completion of the
Feasibility Study for the Yalgoo Pig Iron Project.
AVZ Minerals Limited | 18
Directors’ Report
Mr. Johnston’s technical experience is focused on the transition between orebody
delineation and mine opening and has worked on over five projects that resulted in
new mines being commissioned. Mr Johnston initially joined the AVZ team in May
2017 as Project Manager for the Manono Project before stepping into the role of
Technical Director.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
9,183,070
4,000,000
Directorships in last 3 years
Mount Ridley Mines Limited (appointed 1 December 2020)
RRhheetttt BBrraannss
Non-Executive Director (appointed 5 February 2018)
Qualifications
Dip. Engineering (Civil)
Experience
Mr. Brans is an experienced director and civil engineer with over 47 years’ experience
in project developments. Throughout his career, Mr. Brans has been involved in the
management of feasibility studies and the design and construction of mineral
treatment plants across a range of commodities and geographies including for gold
in Ghana, copper in the DRC and graphite in Mozambique. He has extensive
experience as an owner’s representative for several successful mine feasibility studies
and project developments.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
4,963,158
3,000,000
Directorships in last 3 years Australian Potash Limited (since 9 May 2017)
Carnavale Resources Limited (since 17 September 2013)
Syrah Resources Limited (12 June 2013 to 31 December 2017)
PPeetteerr HHuulljjiicchh
Non-Executive Director (appointed 1 May 2019)
Qualifications
BCom/LLB, GD-AppFin, GAICD
Experience
Mr. Huljich has over 25 years’ experience in the legal, natural resources and banking
sectors with a particular expertise in capital markets, mining, commodities and African
related matters. He has worked in London for several prestigious investment banks,
including Goldman Sachs, Barclays Capital, Lehman Brothers and Macquarie Bank
with a focus on Commodities and Equity and Debt Capital Markets and has extensive
on-the-ground African mining, oil and gas and infrastructure experience as the Senior
Negotiator and Advisor for Power, Mining and Infrastructure at Industrial Promotion
Services, the global infrastructure development arm of the Aga Khan Fund for
Economic Development (AKFED) whilst resident in Nairobi, Kenya. Mr. Huljich holds
a Bachelor of Commerce degree and an LLB from the University of Western Australian
and is a Graduate of the Securities Institute of Australia with National Prizes in Applied
Valuation and Financial Analysis. Mr. Huljich is also a graduate of the AICD Company
Directors Course.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
3,000,000
3,000,000
Directorships in last 3 years Kogi Iron Limited (appointed 7 May 2019)
Amani Gold Limited (appointed 27 May 2021)
GoldOz Limited (appointed 14 September 2021)
AVZ Minerals Limited | 19
Directors’ Report
JJaann ddee JJaaggeerr
CFO & Joint Company Secretary (appointed 15 April 2021)
Qualifications
B.Com(Hons), CA (SA)
Experience
Mr. de Jager is a Chartered Accountant in Australia with more than 25 years of
experience who has worked in senior management positions for the past 20 years in
a variety of locations. His experience includes executive finance roles for listed
companies and exposure to a variety of commodities (including Coal, Nickel, Gold,
Iron Ore and Lithium) in South Africa and Australia.
Mr de Jager possesses a wide range of prior experience in corporate finance,
treasury, ERP system implementation, risk management, project controls, new
business development and commercial. His previous positions include CFO for
Covalent Lithium (Joint Venture company of Kidman Resources), prior to it being
bought out by Wesfarmers; General Manager, Treasury and Reporting for Roy Hill
Australia and General Manager, Finance for Xstrata Nickel Australia.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
615,000
2,500,000
BBeennjjaammiinn CCoohheenn
Commercial Manager & Joint Company Secretary (appointed 30 April 2021)
Qualifications
B.Com, CPA
Experience
Mr. Cohen is a commercially focused CPA with more than 20 years’ experience in
the bulk commodity, shipping, mining and corporate sectors. He has an intimate
knowledge of the challenging environment of offtake agreements, bulk shipping
and the commercial aspects of commodity trading.
Interest in Securities
Fully Paid Ordinary Shares
Performance Rights
750,000
1,700,000
1133.. AAuuddiitteedd RReemmuunneerraattiioonn RReeppoorrtt
This report details the nature and amount of remuneration for all key management personnel of AVZ Minerals Limited
and its subsidiaries. The information provided in this remuneration report has been audited as required by section
308(C) of the Corporations Act 2001. For the purposes of this report, key management personnel (KMP) of the Group
are defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company and the Group, directly or indirectly, including any Director (whether executive or otherwise)
of the Group.
The individuals included in this report are:
NNoonn--EExxeeccuuttiivvee DDiirreeccttoorrss
John Clarke
Rhett Brans
Peter Huljich
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
EExxeeccuuttiivvee DDiirreeccttoorrss
Nigel Ferguson
Managing Director
Graeme Johnston Technical Director
Appointed 2 December 2019
Appointed 5 February 2018
Appointed 1 May 2019
Appointed 2 February 2017
Appointed 30 July 2018
OOtthheerr KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell ((EExxeeccuuttiivveess))
Michael Hughes
Jan de Jager
Benjamin Cohen
Leonard Math
Appointed 14 August 2019
Project Director
CFO & Joint Company Secretary
Appointed 15 April 2021
Commercial Manager & Joint Company Secretary Appointed 30 April 2021
Former CFO and Company Secretary
Appointed 9 July 2018, resigned 12 April 2021
AVZ Minerals Limited | 20
Directors’ Report
((aa))
RReemmuunneerraattiioonn PPoolliiccyy
The remuneration policy of AVZ Minerals Limited has been designed to align director objectives with shareholder and
business objectives by providing a fixed remuneration component which is assessed on an annual basis in line with
market rates. By providing components of remuneration that are indirectly linked to share price appreciation (in the
form of Options and/or Performance Rights), executive, business and shareholder objectives are aligned. The board of
AVZ Minerals Limited believes the remuneration policy to be appropriate and effective in its ability to attract and retain
the best directors to run and manage the company, as well as create goal congruence between directors and
shareholders. The Board’s policy for determining the nature and amount of remuneration for Board members is as
follows:
i.
Executive Directors & Other Key Management Personnel
The remuneration policy and the relevant terms and conditions has been developed by the Remuneration Committee.
In determining competitive remuneration rates, the Committee reviews local and international trends among
comparative companies and industry generally. It examines terms and conditions for employee incentive schemes,
benefit plans and share plans. Reviews are performed to confirm that executive remuneration is in line with market
practice and is reasonable in the context of Australian executive reward practices.
The Company is an exploration and development entity, and therefore speculative in terms of performance. Consistent
with attracting and retaining talented executives, directors and senior executives are paid market rates associated with
individuals in similar positions, within the same industry.
The Remuneration Committee has used remuneration consultants as part of the executive remuneration review process.
The Board’s remuneration policies are outlined below:
Fixed Remuneration
All executives receive a base cash salary or fixed consulting fee which is based on factors such as length of service and
experience as well as other fringe benefits. If entitled, all executives also receive a superannuation guarantee
contribution required by the government, which is 9.50% during the financial year and do not receive any other
retirement benefits.
Short-term Incentives (STI)
Under the Group’s current remuneration policy, executives can from time to time receive short-term incentives in the
form of cash bonuses. No short-term incentives were paid in the current financial year. The Board is responsible for
assessing whether Key Performance Indicators (“KPI’s”) are met. The Board considers market rates of salaries for levels
across the Group, which have been based on industry data provided by a range of employment agencies.
Long-term Incentives (LTI)
Executives are encouraged by the Board to hold shares in the company and it is therefore the Group’s objective to
provide incentives for participants to partake in the future growth of the Group and, upon becoming shareholders in the
Company, to participate in the Group’s profits and dividends that may be realised in future years.
Performance rights
Performance Rights in AVZ Minerals Limited are granted by the Board under the AVZ Performance Rights Plan and issued
and held by the AVZ Mineral Limited Rights Share Trust (RST). Performance Rights are issued for no consideration and
vest according to a set of performance criteria being met. The vesting of the Performance Rights is determined at the
Board’s discretion.
ii.
Non-Executive Directors
The Board’s policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. In determining competitive remuneration rates, the Board review local and
international trends among comparative companies and the industry generally. Typically, the Company will compare
non-executive remuneration to companies with similar market capitalisations in the exploration and resource
development business Group.
Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which will be periodically
recommended for approval by shareholders. The maximum currently stands at $650,000 per annum which was
approved by shareholders at the 30 November 2018 Annual General Meeting. Fees for non-executive directors are not
linked to the performance of the Company. However, to align directors’ interests with shareholder interests, the directors
are encouraged to hold shares in the Company and from time to time, non-executives may receive options or
Performance Rights subject to shareholder approval, to further align directors’ interests with shareholders.
AVZ Minerals Limited | 21
Directors’ Report
((bb))
SSeerrvviiccee AAggrreeeemmeennttss
The agreements relating to remuneration and other terms of employment for the key management personnel for the
financial year are set out below:
Dr. Clarke - Non-Executive Chairman
Receives a monthly fee of $10,000
Appointment will not exceed 3 years from the date of re-election at the annual general meeting
12-month termination period in the event of a takeover, scheme of arrangement or change of control of the
Company
Mr. Ferguson - Managing Director
Mr. Ferguson provides management services via Ridgeback Holdings Pty Ltd as trustee for the Ferguson Family
Trust (‘Ridgeback’)
Mr. Ferguson was appointed as Managing Director effective 5 February 2018 and receives a monthly fee of
$33,333 plus GST effective 1 January 2021 (increased from $29,166)
6-month termination period unless there is a breach or unremedied continued neglect of the terms of the
agreement by Ridgeback in which there is a one-month termination period
Mr. Johnston - Technical Director
No term of agreement
Receives a monthly fee of $25,000 plus GST
6-month termination period unless there is a breach or unremedied continued neglect of the terms of the
agreement in which there is a one-month termination period
Mr. Hughes - Project Director
No term of agreement
Receives a monthly base salary of $27,083 plus statutory superannuation
3-month notice period to terminate employment by either party
Mr. de Jager - Chief Financial Officer & Joint Company Secretary
No term of agreement
Receives a monthly fee of $27,500 plus GST effective 15 April 2021
3-month notice period to terminate employment by either party
Mr. Cohen - Commercial Manager & Joint Company Secretary
No term of agreement
Receives a monthly base salary of $17,123 plus statutory superannuation effective 30 April 2021
3-month notice period to terminate employment by either party
Mr. Math - Chief Financial Officer & Company Secretary (resigned 12 April 2021)
No term of agreement
Receives a monthly fee of $14,312 plus GST
6-month termination period unless there is a breach or unremedied continued neglect of the terms of the
agreement in which there is a one-month termination period
AVZ Minerals Limited | 22
Directors’ Report
((cc))
CCoommppaannyy PPeerrffoorrmmaannccee,, SShhaarreehhoollddeerr WWeeaalltthh aanndd DDiirreeccttoorrss’’ aanndd EExxeeccuuttiivveess’’ RReemmuunneerraattiioonn
Performance Rights issued during the year are detailed in Note 24 of the financial statements.
Voting and comments made at the Company’s 2020 Annual General Meeting
At the 2020 Annual General Meeting the Company remuneration report was passed by the requisite majority.
((dd))
DDeettaaiillss ooff KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell RReemmuunneerraattiioonn
22002211
Short term employee
benefits
Salary
$
Consulting
fees
$
Post
employment
Share
based
payments
Total
$
$
$
Remuneration
consisting of
share-based
payments
%
Fixed
remuneration
%
NNoonn--EExxeeccuuttiivvee CChhaaiirrmmaann
John Clarke
EExxeeccuuttiivvee DDiirreeccttoorrss
Nigel Ferguson
Graeme Johnston
NNoonn--EExxeeccuuttiivvee DDiirreeccttoorrss
Rhett Brans
Peter Huljich
EExxeeccuuttiivveess
Michael Hughes
Jan de Jager1
Benjamin Cohen2
Leonard Math3
-
-
-
120,000
375,000
300,000
-
-
-
640,357
760,357
262,898
228,835
637,898
528,835
54,794
-
-
60,000
5,205
-
131,449
152,297
191,448
212,297
325,000
-
35,564
-
-
68,438
-
134,538
21,695
-
3,379
-
144,022
4,301
1,204
123,208
490,717
72,739
40,147
257,746
TTOOTTAALL
441155,,335588
11,,005577,,997766
3300,,227799
11,,668888,,557711
33,,119922,,118844
1 Jan de Jager was appointed on 15 April 2021.
2 Benjamin Cohen was appointed on 30 April 2021.
3 Leonard Math resigned on 12 April 2021.
84
41
43
69
72
29
6
3
48
16
59
57
31
28
71
94
97
52
22002200
Short term employee
benefits
Salary
$
Consulting
fees
$
Post
employment
Share
based
payments
Total
$
$
$
Remuneration
consisting of
share-based
payments
%
NNoonn--EExxeeccuuttiivvee CChhaaiirrmmaann
John Clarke1
EExxeeccuuttiivvee DDiirreeccttoorrss
Nigel Ferguson
Graeme Johnston
-
-
-
NNoonn--EExxeeccuuttiivvee DDiirreeccttoorrss
Rhett Brans
Hongliang Chen2
Peter Huljich
54,794
-
-
70,000
300,000
250,000
19,500
-
60,000
-
-
-
-
70,000
354,816
325,664
654,816
575,664
5,205
-
-
177,408
-
291,391
256,907
-
351,391
EExxeeccuuttiivveess
Michael Hughes3
Leonard Math
287,083
-
-
156,000
19,869
-
138,000
118,271
444,952
274,271
TTOOTTAALL
334411,,887777
885555,,550000
2255,,007744
11,,440055,,555500
22,,662288,,000011
-
54
57
69
-
83
31
43
Fixed
remuneration
%
100
46
43
31
-
17
69
57
1 John Clarke was appointed on 2 December 2019.
2 Hongliang Chen resigned on 12 May 2020.
3 Michael Hughes was appointed on 14 August 2019.
AVZ Minerals Limited | 23
Directors’ Report
((ee))
i.
SShhaarree--bbaasseedd ccoommppeennssaattiioonn
Options
There have been no options issued to current Directors and executives as part of their remuneration during the year.
ii.
Performance Rights
The number of Performance Rights granted to key management personnel as part of compensation during the year
ended 30 June 2021 are set out below.
Class N
Class M
Tranche 1
Tranche 2
Tranche 1
Tranche 2
Tranche 3
Total
-
3,000,000
3,000,000
3,000,000
John Clarke
Nigel Ferguson
Graeme Johnston
Rhett Brans
Peter Huljich
-
-
-
-
-
-
-
-
-
Michael Hughes
500,000
500,000
Jan de Jager
1,250,000
1,250,000
Benjamin Cohen
350,000
350,000
Leonard Math
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
2,000,000
1,500,000
1,500,000
2,000,000
-
-
-
1,500,000
99,,000000,,000000
33,,000000,,000000
22,,000000,,000000
11,,550000,,000000
11,,550000,,000000
33,,000000,,000000
22,,550000,,000000
770000,,000000
11,,550000,,000000
Details on Performance Rights Class M and N above are included in Note 24 Share Based Payments.
The number of Performance Rights held by key management personnel converted into fully paid ordinary shares during
the year ended 30 June 2021 are set out below.
John Clarke
Nigel Ferguson
Graeme Johnston
Rhett Brans
Peter Huljich
Benjamin Cohen
Leonard Math
NNuummbbeerr ooff rriigghhttss ccoonnvveerrtteedd
dduurriinngg tthhee yyeeaarr 22002211
3,000,0001
3,000,0002
2,000,0002
1,500,0002
1,500,0002
500,0003
1,000,0002
1 The vesting condition for Tranche 1 of Class M Performance Rights were met during 2021 upon the Company executing an offtake
agreement for at least 25% of the product in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
2 The vesting conditions for Tranche 3 of Class E Performance Rights were met during 2021 upon the Company executing an offtake
agreement for at least 25% of the product in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
3 The vesting conditions for Class L Performance Rights were met during 2021 upon the Company executing an offtake agreement for
at least 50% of the product (Lithium and Tin) in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
AVZ Minerals Limited | 24
Directors’ Report
Values of rights over ordinary shares granted, exercised and lapsed for key management personnel as part of
compensation during the year ended 30 June 2021 are set out below.
Value of rights granted
during the year
Value of rights converted
during the year
John Clarke
Nigel Ferguson
Graeme Johnston
Rhett Brans
Peter Huljich
Michael Hughes
Jan de Jager
Benjamin Cohen
Leonard Math
$
882,000
294,000
196,000
147,000
147,000
160,000
400,000
152,000
-
$
294,000
240,000
160,000
120,000
120,000
-
-
40,000
80,000
The number of Performance Rights held during the financial year by each director of AVZ Minerals Limited and other
key management personnel of the Group, including related parties, are set out below.
Performance
Rights
Balance at
the start of
the year
Granted
during the
year
Other
Lapsed/
Cancelled
during the
year
Vested and
Exercised
during the
year
Balance at
the end of
the year
Perform
-ance
Rights
vested
%
Vested
22002211
John Clarke
Nigel Ferguson
Graeme
Johnston
Rhett Brans
-
9,000,000
6,000,000
3,000,000
6,100,000
2,000,000
3,000,000
1,500,000
Peter Huljich
3,000,000
1,500,000
Michael Hughes
Jan de Jager
Benjamin Cohen
-
-
-
3,000,000
2,500,000
-
-
-
-
-
-
-
-
-
(3,000,000)2
6,000,000
(3,000,000)1
6,000,000
(2,100,000)3
(2,000,000)1
4,000,000
-
-
-
-
-
(1,500,000)1
3,000,000
(1,500,000)1
3,000,000
-
-
-
3,000,000
2,500,000
1,700,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Leonard Math
2,000,000
1,500,000
-
(2,500,000)5
(1,000,000)1
-
700,000
1,000,0004
1 The vesting conditions for Tranche 3 of Class E Performance Rights were met during 2021 upon the Company executing an offtake
agreement for at least 25% of the product in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
2 The vesting condition for Tranche 1 of Class M Performance Rights were met during 2021 upon the Company executing an offtake
agreement for at least 25% of the product in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
3 The Class D Performance Rights lapsed unexercised on 2 February 2021 when vesting conditions of the 10-day VWAP for the Shares
on the ASX reaching $0.34-$0.44 or higher during the vesting period have not been met.
4 This represents Benjamin Cohen’s holding as at 30 April 2021 being his appointment date. He was granted Class L Performance Rights
while he was consultant to the Company prior to his appointment as KMP.
5 1,000,000 Class E Performance Rights and 1,500,000 Class M Performance Rights were cancelled when Leonard Math resigned from
the Company.
AVZ Minerals Limited | 25
Directors’ Report
((ff))
OOrrddiinnaarryy sshhaarreehhoollddiinnggss
The number of shares in the company held during the financial year by each director of AVZ Minerals Limited and other
key management personnel of the Group, including related parties, are set out below. There were no shares granted
during the year as remuneration, apart from those issued as a result of Performance Rights vesting.
Ordinary shares
Balance at the
start of the
year
Received as
remuner-
ation
Other
Purchased/(sold)
during the year
Balance at the end
of the year
22002211
John Clarke
Nigel Ferguson
Graeme Johnston
Rhett Brans
Peter Huljich
Michael Hughes
Jan de Jager3
Benjamin Cohen
1,000,000
43,478,070
7,849,737
3,463,158
1,500,000
3,000,000
-
-
Leonard Math
2,630,487
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,0004
-
-
-
(2,000,000)
-
-
(1,010,000)5
1,000,0002
(2,620,487)
-
-
-
-
-
4,000,000
46,478,070
9,849,737
4,963,158
3,000,000
1,000,000
-
500,000
-
Conversion
of
performance
rights
3,000,0001
3,000,0002
2,000,0002
1,500,0002
1,500,0002
1 The vesting condition for Tranche 1 of Class M Performance Rights were met during 2021 upon the Company executing an offtake
agreement for at least 25% of the product in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
2 The vesting conditions for Tranche 3 of Class E Performance Rights were met during 2021 upon the Company executing an offtake
agreement for at least 25% of the product in the Manono Lithium Project. These Performance Rights were converted into fully paid
ordinary shares on 31 March 2021.
3 Appointed on 15 April 2021.
4 Benjamin Cohen was appointed on 30 April 2021. This reflects number held at the date of appointment as KMP.
5 Leonard Math resigned on 12 April 2021. The negative amount reflects number held at the date ceasing to be a KMP.
((gg)) OOtthheerr ttrraannssaaccttiioonnss wwiitthh KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell
Loans and amount owing to key management personnel
i.
No loans were made to any director or other key management personnel of the Group, including related parties during
the financial year. Amount owing to related parties at 30 June 2021 was Nil (2020: $48,417).
Other transactions with key management personnel
ii.
During the year ended 30 June 2021, the Company paid $56,749 plus GST to Corad Pty Ltd, a company controlled by
Mr. Graeme Johnston, for the provision of technical consultancy services (2020:$Nil).
No other transactions were made to any director or other key management personnel of the Group, including related
parties during the financial year.
TThhiiss iiss tthhee eenndd ooff tthhee aauuddiitteedd rreemmuunneerraattiioonn rreeppoorrtt..
AVZ Minerals Limited | 26
Directors’ Report
1144.. MMeeeettiinnggss ooff DDiirreeccttoorrss
The number of Board and Committee meetings held during the financial year and the number of meetings attended
by each director is:
Director
Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Eligible to
Attend
Attended
Eligible to
Attend
Attended
Eligible to
Attend
Attended
John Clarke
Nigel Ferguson
Graeme Johnston
Rhett Brans
Peter Huljich
8
8
8
8
8
1155..
IInnssuurraannccee ooff OOffffiicceerrss
8
8
8
8
8
3
-
-
3
3
3
-
-
3
3
2
-
-
2
2
2
-
-
2
2
During the financial year, AVZ Minerals Limited paid a premium of $89,915 plus GST (2020: $45,058) to insure the
directors and officers of the Company and its controlled entities.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from
conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of
information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible
to apportion the premium between amounts relating to the insurance against legal costs and those relating to other
liabilities.
1166.. SShhaarreess uunnddeerr OOppttiioonn
At the date of this report, unissued ordinary shares of AVZ Minerals Limited under option are as follows:
Grant date
Expiry Date
Exercise Price
Number of Options
8 April 2020
8 April 2022
$0.06
76,666,668
No option holder has any right under the options to participate in any other share issue of the Company or any other
entity.
1177.. SShhaarreess iissssuueedd oonn eexxeerrcciissee ooff OOppttiioonnss
During the year, 51,666,667 ordinary shares of the Company were issued on the exercise of Options.
Expiry date
Exercise
price
Balance at start
of year
Exercised
during the
year
Granted
during
the year
Lapsed
during the
year
Balance at
end of the
year
5 March 2021
$0.0475
1,000,000
(1,000,000)
5 September 2021
$0.057
5,000,000
(5,000,000)
5 March 2022
8 April 2022
$0.0665
$0.060
5,000,000
(4,000,000)
120,000,002
(41,666,667)
-
-
-
-
-
-
-
-
-
-
1,000,000
78,333,335
AVZ Minerals Limited | 27
Directors’ Report
1188.. PPrroocceeeeddiinnggss oonn bbeehhaallff ooff tthhee CCoommppaannyy
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
1199.. AAuuddiittoorr’’ss IInnddeeppeennddeennccee DDeeccllaarraattiioonn
Section 307c of the Corporations Act 2001 requires our auditors, Hall Chadwick WA Audit Pty Ltd (Formerly Bentleys
Audit & Corporate (WA) Pty Ltd), to provide the directors of the Company with an Independence Declaration in relation
to the audit of the financial report. This Independence Declaration is set out on page 29 and forms part of this directors’
report for the year ended 30 June 2021.
2200.. NNoonn--AAuuddiitt SSeerrvviicceess
During the year, Hall Chadwick WA Audit Pty Ltd (Formerly Bentleys Audit & Corporate (WA) Pty Ltd (‘Bentleys’)), the
Company’s external auditor, did not perform any services other than their statutory audits (2020: $Nil). Other Bentleys
division provided corporate finance services to the Company of $440 (2020: $Nil). Details of remuneration paid or
payable to the auditor can be found within the financial statements at Note 4 Auditor’s Remuneration.
In the event that non-audit services are provided by Hall Chadwick WA Audit Pty Ltd, the Board has established certain
procedures to ensure that the provision of non-audit services are compatible with, and do not compromise, the auditor
independence requirements of the Corporations Act 2001. These procedures include: non-audit services will be subject
to the corporate governance procedures adopted by the Company and will be reviewed by the Board to ensure they do
not impact the integrity and objectivity of the auditor; and ensuring non-audit services do not involve reviewing or
auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an
advocate for the Company or jointly sharing risks and rewards.
Signed in accordance with a resolution of the Board of Directors.
NNiiggeell FFeerrgguussoonn
MMaannaaggiinngg DDiirreeccttoorr
Perth, Western Australia
3300 SSeepptteemmbbeerr 22002211
AVZ Minerals Limited | 28
Auditor’s Independence Declaration
AVZ Minerals Limited | 29
Auditor’s Independence Declaration
TTHHEE
FFIINNAANNCCIIAALL
SSTTAATTEEMMEENNTTSS
AVZ Minerals Limited | 30
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Profit or Loss and Other Comprehensive
For the Year Ended 30 June 2021
RReevveennuuee
Other income
R&D Tax Incentive
EExxppeennsseess
Administrative costs
Directors and consultancy expenses
Share-based payment expense
Compliance and regulatory expenses
Insurance expenses
Depreciation expense
Depreciation expense of right-of use asset
Movement in fair value of financial liabilities
Interest expense
Foreign currency (loss)/gain
LLoossss bbeeffoorree iinnccoommee ttaaxx
Income tax expense
Note
3
24
9
10
13
Consolidated
2021
$
2020
$
45,347
926,507
217,276
-
(1,768,769)
(332,840)
(2,561,150)
(201,080)
(131,262)
(355,022)
(72,149)
(864,437)
(8,266)
(214,511)
(1,600,545)
(374,178)
(2,029,407)
(185,569)
(78,108)
(379,143)
(72,149)
(722,552)
(32,965)
(42,518)
((55,,553377,,663322))
((55,,229999,,885588))
5
-
-
LLoossss aafftteerr iinnccoommee ttaaxx ffoorr tthhee yyeeaarr
((55,,553377,,663322))
((55,,229999,,885588))
OOtthheerr ccoommpprreehheennssiivvee iinnccoommee::
IItteemmss tthhaatt mmaayy bbee rreeccllaassssiiffiieedd ttoo pprrooffiitt oorr lloossss
Exchange differences arising on translation of foreign operations
Other comprehensive income
(7,571,376)
(7,571,376)
1,113,712
1,113,712
TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr
((1133,,110099,,000088))
((44,,118866,,114466))
LLoossss ffoorr tthhee yyeeaarr iiss aattttrriibbuuttaabbllee ttoo:
Owners of AVZ Minerals Limited
Non-controlling interests
TToottaall ccoommpprreehheennssiivvee lloossss ffoorr tthhee yyeeaarr aattttrriibbuuttaabbllee ttoo::
Owners of AVZ Minerals Limited
Non-controlling interests
(5,401,290)
(136,342)
((55,,553377,,663322))
(5,134,821)
(165,037)
((55,,229999,,885588))
(11,946,710)
(1,162,298)
((1133,,110099,,000088))
(4,260,747)
74,601
((44,,118866,,114466))
Basic and diluted loss per share attributable to owners of AVZ
Minerals Limited (cents per share)
18
(0.19)
(0.22)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
AVZ Minerals Limited | 31
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
As at 30 June 2021
CCuurrrreenntt AAsssseettss
Cash and cash equivalents
Trade and other receivables
TToottaall CCuurrrreenntt AAsssseettss
NNoonn--CCuurrrreenntt AAsssseettss
Mineral exploration and evaluation
Property, plant and equipment
Right-of-use asset
TToottaall NNoonn--CCuurrrreenntt AAsssseettss
TToottaall AAsssseettss
CCuurrrreenntt LLiiaabbiilliittiieess
Trade and other payables
Provisions
Financial liabilities
Lease liability
TToottaall CCuurrrreenntt LLiiaabbiilliittiieess
NNoonn--CCuurrrreenntt LLiiaabbiilliittiieess
Financial liabilities
Lease liability
TToottaall NNoonn--CCuurrrreenntt LLiiaabbiilliittiieess
TToottaall LLiiaabbiilliittiieess
NNeett AAsssseettss
EEqquuiittyy
Share capital
Reserves
Accumulated losses
Capital and reserves attributable to owners of AVZ Minerals Ltd
Non-controlling interests
TToottaall EEqquuiittyy
Note
Consolidated
2021
$
2020
$
6
7
8
9
10
11
12
13
10
13
10
14
16
22
2,463,632
390,174
14,202,294
395,980
2,853,806
14,598,274
90,525,946
732,585
48,099
84,896,432
1,092,204
120,248
91,306,630
86,108,884
9944,,116600,,443366
110000,,770077,,115588
469,151
72,227
6,661,275
51,343
393,576
36,714
-
72,881
7,253,996
503,171
-
-
-
77,,225533,,999966
5,796,838
51,351
5,848,189
66,,335511,,336600
8866,,990066,,444400
9944,,335555,,779988
107,916,233
3,439,770
103,495,333
9,332,520
(34,977,319)
(30,162,109)
76,378,684
10,527,756
82,665,744
11,690,054
8866,,990066,,444400
9944,,335555,,779988
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
AVZ Minerals Limited | 32
Consolidated Statement of Changes in Equity
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
Contributed
Equity
Accumulated
Losses
$
$
Share
Options
Reserve
$
Foreign
Currency
Reserve
$
Non-
controlling
Interests
$
Total
$
Total
Equity
$
BBaallaannccee aatt 11 JJuullyy 22001199
Loss for the year
Exchange differences on
translation of foreign
operations
Total comprehensive
income/(loss)
for the year
81,097,191
-
(25,347,888)
(5,134,821)
6,361,769
-
3,268,870 65,379,942 11,615,453 76,995,395
(5,299,858)
(5,134,821)
(165,037)
-
-
-
-
(5,134,821)
-
-
874,074
874,074
239,638
1,113,712
874,074
(4,260,747)
74,601
(4,186,146)
TTrraannssaaccttiioonnss wwiitthh oowwnneerrss iinn tthheeiirr ccaappaacciittyy aass oowwnneerrss::
Issue of shares
Share issue transaction costs
Share-based payments
Performance Rights lapsed
Exercise of Options
Conversion of Performance
Rights
Total transactions with owners
in their capacity as owners
14,287,570
(1,020,748)
141,000
-
6,109,320
-
-
-
320,600
-
-
-
2,029,407
(320,600)
-
- 14,287,570
(1,020,748)
-
2,170,407
-
-
-
6,109,320
-
- 14,287,570
(1,020,748)
-
2,170,407
-
-
-
6,109,320
-
2,881,000
-
(2,881,000)
-
-
-
-
22,398,142
320,600
(1,172,193)
- 21,546,549
- 21,546,549
BBaallaannccee aatt 3300 JJuunnee 22002200
103,495,333
(30,162,109)
5,189,576
4,142,944 82,665,744 11,690,054 94,355,798
BBaallaannccee aatt 11 JJuullyy 22002200
Loss for the year
Exchange differences on
translation of foreign
operations
Total comprehensive
income/(loss)
for the year
103,495,333
-
(30,162,109)
(5,401,290)
5,189,576
-
4,142,944 82,665,744 11,690,054 94,355,798
(5,537,632)
(5,401,290)
(136,342)
-
-
-
-
-
(6,545,420)
(6,545,420)
(1,025,956)
(7,571,376)
(5,401,290)
-
(6,545,420) (11,946,710)
(1,162,298) (13,109,008)
TTrraannssaaccttiioonnss wwiitthh oowwnneerrss iinn tthheeiirr ccaappaacciittyy aass oowwnneerrss::
Contributions of equity
(net of transaction costs)
Share-based payments
Performance Rights lapsed
Exercise of Options
Conversion of Performance
Rights
Total transactions with owners
in their capacity as owners
-
-
-
3,098,500
-
-
586,080
-
-
2,561,150
(586,080)
-
1,322,400
-
(1,322,400)
-
-
-
-
-
-
2,561,150
-
3,098,500
-
-
-
-
-
-
-
2,561,150
-
3,098,500
-
4,420,900
586,080
652,670
-
5,659,650
-
5,659,650
BBaallaannccee aatt 3300 JJuunnee 22002211
110077,,991166,,223333
((3344,,997777,,331199))
55,,884422,,224466
((22,,440022,,447766)) 7766,,337788,,668844 1100,,552277,,775566 8866,,990066,,444400
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
AVZ Minerals Limited | 33
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2021
CCaasshh FFlloowwss ffrroomm OOppeerraattiinngg AAccttiivviittiieess
Payments to suppliers and employees
Interest received
Interest expense
COVID-19 cashflow boost government incentive
R&D Tax Incentive
Note
Consolidated
2021
$
2020
$
(2,556,182)
(1,921,203)
54,880
(8,266)
37,500
926,507
76,524
(13,839)
42,234
-
NNeett ccaasshh oouuttffllooww ffrroomm ooppeerraattiinngg aaccttiivviittiieess
19
((11,,554455,,556611))
((11,,881166,,228844))
CCaasshh FFlloowwss ffrroomm IInnvveessttiinngg AAccttiivviittiieess
Payments for exploration and evaluation
Payments for property, plant and equipment
Payment of deferred consideration
Advanced payment to Dathomir (additional 10%)
(11,940,729)
(9,448,589)
(82,048)
(89,240)
-
(2,162,731)
(685,235)
-
NNeett ccaasshh oouuttffllooww ffrroomm iinnvveessttiinngg aaccttiivviittiieess
((1122,,770088,,001122))
((1111,,770000,,556600))
CCaasshh FFlloowwss ffrroomm FFiinnaanncciinngg AAccttiivviittiieess
Proceeds from issue of shares and other equity securities
Proceeds from exercise of options
Share issue transaction costs
Proceed from convertible note
Payment of convertible note
Payment of lease liability
-
3,098,500
-
-
-
14,136,815
6,109,320
(1,020,748)
1,530,531
(1,555,529)
(72,889)
(68,165)
NNeett ccaasshh iinnffllooww ffrroomm ffiinnaanncciinngg aaccttiivviittiieess
33,,002255,,661111
1199,,113322,,222244
NNeett iinnccrreeaassee//((ddeeccrreeaassee)) iinn ccaasshh aanndd ccaasshh eeqquuiivvaalleennttss
(11,227,962)
5,615,380
Exchange rate adjustments
(510,700)
(163,727)
Cash and cash equivalents at the start of the year
14,202,294
8,750,641
CCaasshh aanndd ccaasshh eeqquuiivvaalleennttss aatt tthhee eenndd ooff tthhee yyeeaarr
6
22,,446633,,663322
1144,,220022,,229944
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
AVZ Minerals Limited | 34
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess
The principal accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all the years presented, unless otherwise stated. These financial statements
present the financial information for AVZ Minerals Limited as a consolidated entity consisting of AVZ Minerals Limited
and the entities is controlled throughout the year (Group or consolidated entity). The Group is a for-profit entity for the
purpose of this financial report.
(a)
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with the
requirements of Australian Accounting Standards, other authoritative pronouncements of the Australian
Accounting Standards Board, Accounting Interpretations and the Corporations Act 2001.
i.
Statement of Compliance
The financial report complies with Australian Accounting Standards which include International Financial
Reporting Standards as adopted in Australia. Compliance with these standards ensures that the consolidated
financial statements and notes as presented comply with International Financial Reporting Standards (IFRS).
ii.
Historical cost convention
These financial statements have been prepared under the historical cost convention.
(b)
Going concern
The financial report has been prepared on the going concern basis, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Group incurred a loss for the year of $5,537,632 (2020: $5,299,858) and net cash outflows from operating
activities of $1,545,561 (2020: $1,816,284). As at 30 June 2021, the Group has a working capital deficit of
$4,400,190.
Subsequent to the end of the financial year, in July 2021 , the Company successfully raised A$40 million (before
costs) via an institutional placement to investors at $0.13 per new share (See Note 26).
The directors have prepared a cash flow forecast, which indicates that the Group will have sufficient cash flows
to meet all commitments and working capital requirements for the 12-month period from the date of signing
this financial report.
Based on the cash flow forecasts, the directors are satisfied that the going concern basis of preparation is
appropriate. In determining the appropriateness of the basis of preparation, the Directors have considered the
impact of the COVID-19 pandemic on the position of the Group at 30 June 2021 and its operations in future
periods.
AVZ Minerals Limited | 35
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
(c)
Basis of Consolidation
i.
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of AVZ Minerals
Limited as at 30 June 2021 and the results of all subsidiaries for the year then ended. AVZ Minerals Limited and
its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls
an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-
consolidated from the date that control ceases.
Minority interests, being that portion of the profit or loss and net assets of subsidiaries attributable to equity
interests held by persons outside the consolidated entity, are shown separately within the Equity section of the
consolidated statement of financial position and in the consolidated statement of profit or loss and other
comprehensive income.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of
the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
ii.
Control over subsidiaries
In determining whether the consolidated entity has control over subsidiaries that are not wholly owned,
judgement is applied to assess the ability of the consolidated entity to control the day-to-day activities of the
partly owned subsidiary and its economic outcomes. In exercising this judgement, the commercial and legal
relationships that the consolidated entity has with other owners of partly owned subsidiaries are taken into
consideration.
Whilst the consolidated entity is not able to control all activities of a partly owned subsidiary, the partly owned
subsidiary is consolidated within the consolidated entity where it is determined that the consolidated entity
controls the day-to-day activities and economic outcomes of a partly owned subsidiary. Changes in agreements
with other owners of partly owned subsidiaries could result in a loss of control and subsequently de-
consolidation.
During 30 June 2017, AVZ Minerals Limited acquired 60% of the issued shares of Dathcom Mining SA (previously
known as Dathcom Mining SAS) by the issue of shares and cash. Under the terms of shareholders agreements,
the Company is at this stage solely responsible for funding exploration activities and therefore has control over
the day-to-day activities and economic outcomes of Dathcom Mining SA. Future changes to the shareholders
agreements may impact on the ability of the Company to control Dathcom Mining SA.
(d)
Share-based payment transactions for the acquisition of goods and services
Share-based payment arrangements in which the Group receives goods or services as in exchange for its own
equity instruments are accounted for as equity-settled share-based payment transactions. The Group measures
the value of equity instruments granted at the fair value of the goods and services received, unless that fair value
cannot be measured reliably.
If the fair value of the goods or services received cannot be reliably measured, the transaction is measured by
the by reference to the fair value of the instruments granted.
The calculation of the fair value of equity instruments at the date at which they are granted is determined using
a Black-Scholes option pricing model, calculation of the fair value involves estimations of the relevant inputs to
the pricing model.
AVZ Minerals Limited | 36
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
(e)
Financial Instruments
Financial assets and financial liabilities are recognised in the statement of financial position when the Group
becomes a party to the contractual provisions of the instrument.
Financial Assets
Trade receivables are held in order to collect the contractual cash flows and are initially measured at the
transaction price (excludes estimates of variable consideration) as defined in AASB 15 Revenue, as the contracts
of the Group do not contain significant financing components. Impairment losses are recognised based on
lifetime expected credit losses in profit or loss.
Other receivables are held in order to collect the contractual cash flows and accordingly are measured at initial
recognition at fair value, which ordinarily equates to cost and are subsequently measured at cost less impairment
due to their short-term nature. A provision for impairment is established based on 12-month expected credit
losses unless there has been a significant increase in credit risk when lifetime expected credit losses are
recognised. The amount of any provision is recognised in profit or loss.
Financial Liabilities and Equity
Financial liabilities and equity instruments issued by the Group are classified in accordance with the substance
of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting
all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of
direct issue costs.
All other loans including convertible loan notes are initially recorded at fair value, which is ordinarily equal to the
proceeds received net of transaction costs. These liabilities are subsequently measured at amortised cost, using
the effective interest rate method.
Effective Interest Rate Method
The effective interest rate method is a method of calculating the amortised cost of a financial asset or liability
and allocating interest income or expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash flows through the expected life of the financial asset or liability, or, where
appropriate, a shorter period, to the net carrying amount on initial recognition.
(f)
Segment reporting
Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the board of directors.
(g)
Revenue recognition
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount
to which the Group expected to be entitled. If the consideration promised includes a variable amount, the Group
estimates the amount of consideration to which it will be entitled.
COVID-19 revenue is recognised when it is received or when the right to receive payment is established.
AVZ Minerals Limited | 37
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
(h)
Income tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts
in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply
when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or
substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of
deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is
made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other
than a business combination, that at the time of the transaction did not affect either accounting profit or taxable
profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses
only if it is probable that future taxable amounts will be available to utilise those temporary differences and
losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets
and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle
on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances
attributable to amounts recognised directly in equity are also recognised directly in equity.
(i)
Impairment of assets
At each reporting date the Group assesses whether there is any indication that an asset may be impaired. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the
purposes of assessing impairment, assets are Grouped at the lowest levels for which there are separately
identifiable cash inflows which are largely independent of the cash inflows from other assets or Groups of assets
(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for
possible reversal of the impairment at each reporting date.
(j)
Cash and cash equivalents
For the purpose of presentation of the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities
of three months or less that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value, and bank overdrafts.
(k)
Exploration and evaluation expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are carried forward only if they relate to an area of interest for which rights of tenure
are current and in respect of which:
Such costs are expected to be recouped through successful development and exploitation or from sale of the
area: or
Exploration and evaluation activities in the area have not, at reporting date, reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
operations in, or relating to, the area are continuing.
Accumulated costs in respect of areas of interest which are abandoned are written off in full against profit in the
year in which the decision to abandon the area is made. A regular review is undertaken of each area of interest
to determine the appropriateness of continuing to carry forward costs in relation to that area of interest.
AVZ Minerals Limited | 38
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
(l)
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of financial
year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due
within 12 months.
(m)
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at
each financial year end. Depreciation is calculated on a diminishing value basis over the estimated useful life of
the assets as follows:
Vehicles, IT equipment and furniture – 5 years
(n)
Provisions
Provisions are recognised when the company has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation and the amount has
been reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at
the present value of management’s best estimate of the expenditure required to settle the present obligation at
the reporting date. The discount rate used to determine the present value reflects current market assessments
of the time value of money and the risks specific to the liability. The increase in the provision due to the passage
of time is recognised as interest expense.
(o)
Employee benefits
i.
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
within 12 months of the reporting date are recognised in respect of employee’s services up to the end of the
reporting period and are measured at the amounts expected to be paid when liabilities are settled. The liability
for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit
obligations are presented as other payables.
ii.
Share-based payments
The Company provides benefits to employees (including directors) of the Company 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 using an appropriate option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected volatility of the
underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. In valuing
equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to
the price of shares of AVZ Minerals Limited (‘market conditions’).
(p)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue
of new shares for the acquisition of a business are not included in the cost of the acquisition as part of the
purchase consideration.
AVZ Minerals Limited | 39
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
(q)
Earnings per share
i.
Basic earnings per share
Basic earnings per share is calculated by dividing the profit/loss attributable to equity holders of the company
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the
year.
ii. Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after-tax effect of interest and other financing costs associated with the dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
(r)
Goods and services tax (GST) and Value added tax (VAT)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is
not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the
asset or as part of the expense. Revenue, expenses and assets incurred in overseas are recorded inclusive of
VAT and no receivable or payable is recorded as the recoverability of the VAT from the relevant taxation authority
is uncertain.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows
arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
(s)
Foreign currency translation
i.
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (‘the functional currency’). The consolidated
financial statements are presented in Australian dollars, which is AVZ Mineral’s functional and presentation
currency.
ii.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in the statement of profit or loss and other comprehensive income, except
when they are deferred in equity as qualifying cash flow hedges and qualifying net investment hedges or are
attributable to part of the net investment in a foreign operation.
Translation differences on financial assets and liabilities carried at fair value are reported as part of the fair value
gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair
value through profit or loss are recognised in profit or loss as part of the fair value gain or loss. Translation
differences on non-monetary financial assets such as equities classified as available for sale financial assets are
included in the fair value reserve in equity.
AVZ Minerals Limited | 40
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
(s)
Foreign currency translation (continued)
iii.
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
Assets and liabilities for each statement of financial position presented are translated at the closing rate
at the date of that statement of financial position;
Income and expenses for the statement of profit or loss and other comprehensive income are translated
at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the
rates prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions); and
All resulting exchange differences are recognised as a separate component of comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and
of borrowings and other financial instruments designated as hedges of such investments, are recognised in
other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net
investment are repaid, a proportionate share of such exchange differences are recognised in the statement of
profit or loss and other comprehensive income, as part of the gain or loss on sale where applicable. Goodwill
and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entities and translated at the closing rate.
(t)
Share based payments
Equity settled transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of share-based
payments, 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 of the
equity instruments at the date at which they are granted. The fair value is determined by using an appropriate
valuation technique, further details of which are given in the remuneration report.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of AVZ Minerals Limited.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects:
(i)
(ii)
the extent to which the vesting period has expired; and
the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment
is made for the likelihood of market performance conditions being met as the effect of these conditions
is included in the determination of fair value at grant date. The statement of profit or loss and other
comprehensive income charge or credit for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
AVZ Minerals Limited | 41
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
11..
SSuummmmaarryy ooff SSiiggnniiffiiccaanntt AAccccoouunnttiinngg PPoolliicciieess ((ccoonnttiinnuueedd))
(t)
Share based payments (continued)
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had
not been modified. In addition, an expense is recognised for any modification that increases the total fair value
of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the date
of modification.
If 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.
(u)
New accounting standards and interpretations
Adoption of new and revised standards
In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Company and effective for the current reporting
periods beginning on or after 1 July 2020.
As a result of this review, the Directors have determined that there is no material impact of new Standards and
Interpretations issued and, therefore, no change is necessary to the Group’s accounting policies.
(v)
New accounting standards and interpretations not yet adopted
The Directors have also reviewed all Standards and Interpretations in issue not yet adopted for the year ended
30 June 2021. As a result of this review, the Directors have determined that there is no material impact of the
Standards and Interpretations in issue not yet adopted on the Group and, therefore, no change is necessary to
Group accounting policies.
(w)
Parent Entity Financial Information
The financial information for the parent entity, AVZ Minerals Limited, disclosed in Note 25 has been prepared
on the same basis as the consolidated financial statements.
AVZ Minerals Limited | 42
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
22..
CCrriittiiccaall aaccccoouunnttiinngg eessttiimmaatteess aanndd jjuuddggeemmeennttss
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable
under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates and judgements may differ from the related actual results and may have a significant effect on the carrying
amount of assets and liabilities within the next financial year and on the amounts recognised in the financial statements.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
a)
Impairment of deferred exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current. These costs
are carried forward in respect of an area that has not at reporting date reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves. The Board and Management have assessed the
carrying value of the Exploration and Evaluation Expenditure to be impaired. Refer to the accounting policy stated in
Note 1(k) and to Note 8 for movements in the exploration and evaluation expenditure balance.
b)
Share based payment transactions
The Group measures the cost of equity-settled transactions with employees and consultants by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value for options is determined by an
internal valuation using a Black-Scholes option pricing model. The fair value of Performance Rights is determined by
using the underlying share price at grant date.
c)
Tax in foreign jurisdictions
The consolidated entity operates in overseas jurisdictions and accordingly is required to comply with the taxation
requirements of those relevant countries. This results in the consolidated entity making estimates in relation to taxes
including but not limited to income tax, goods and services tax, withholding tax and employee income tax. The
consolidated entity estimates its tax liabilities based on the consolidated entity’s understanding of the tax law. Where
the final outcome of these matters is different from the amounts that were initially recorded, such differences will impact
profit or loss in the period in which they are settled.
d) Deferred consideration
Deferred consideration is required to be paid at any time over a three-year period. As such management have made
judgements around the financing component associated with the deferred consideration, and an estimated repayment
date to assess the present value of the deferred consideration.
e) Estimation of the Group's borrowing rate
The lease payments used to determine the lease liability and right-of-use of asset at 1 July 2020 under AASB 16 Leases
are discounted using the Group’s incremental borrowing rate of 6.6%.
33..
RReevveennuuee
Interest received
Rental income
Admin on charges
COVID-19 cashflow boost government incentive
Other income
TToottaall rreevveennuuee aanndd ootthheerr iinnccoommee
Consolidated
2021
$
2020
$
45,347
-
-
-
-
45,347
86,058
16,498
11,044
100,000
3,676
217,276
AVZ Minerals Limited | 43
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
44..
AAuuddiittoorr’’ss RReemmuunneerraattiioonn
Hall Chadwick (WA) Pty Ltd (Formerly Bentleys Audit & Corporate (WA) Pty
Ltd)
Audit and review of financial statements
Other services
Total remuneration of auditors
55..
((aa))
IInnccoommee TTaaxx EExxppeennssee
NNuummeerriiccaall rreeccoonncciilliiaattiioonn ooff iinnccoommee ttaaxx eexxppeennssee ttoo pprriimmaa ffaacciiee ttaaxx ppaayyaabbllee
Loss from continuing operations before income tax expense
Tax at the tax rate of 30% (2020: 30%)
Tax effect of amounts which are not deductible in calculating taxable income:
Non-deductible expenses
Non-assessable amounts
Unrecognised tax losses
Movement in unrecognised temporary differences
Deductible equity raising costs
Income tax expense
(b)
DDeeffeerrrreedd ttaaxx aasssseett nnoott rreeccooggnniisseedd**
Tax losses
Exploration and expenditure
Other
NNeett ddeeffeerrrreedd ttaaxx nnoott rreeccooggnniisseedd
Consolidated
2021
$
2020
$
80,510
440
80,950
85,000
-
85,000
Consolidated
2021
$
2020
$
(5,537,632)
(1,661,290)
(5,299,858)
(1,589,957)
1,140,012
(277,697)
932,085
(133,110)
-
953,162
-
776,716
166,304
(306,225)
-
-
4,881,180
378,248
3,981,456
494,977
5,259,428
4,476,433
*The deferred tax asset attributable to tax losses does not exceed taxable amounts arising from the reversal
of existing assessable temporary differences.
66..
CCaasshh && CCaasshh EEqquuiivvaalleennttss
Cash at bank & in hand
TToottaall ccaasshh && ccaasshh eeqquuiivvaalleennttss
Consolidated
2021
$
2020
$
2,463,632 14,202,294
2,463,632 14,202,294
Cash on hand is non-interest bearing. Cash at bank bears interest rates between 0.01% and 1.60% (2020:
0.01% and 2.9%). Refer to Note 17 for the Group’s exposure to interest rate and credit risk.
AVZ Minerals Limited | 44
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
77..
TTrraaddee aanndd OOtthheerr RReecceeiivvaabblleess
Advances to employees for field work purposes
Accrued interest income
GST receivable
Deposits and securities
COVID-19 cashflow boost government incentive receivable
Prepayments
Other receivables
TToottaall ttrraaddee aanndd ootthheerr rreecceeiivvaabblleess
88..
EExxpplloorraattiioonn && EEvvaalluuaattiioonn EExxppeennddiittuurree
Opening balance
Acquisition of further interest (i)
Exploration costs
Net exchange differences on translation
CClloossiinngg bbaallaannccee
Consolidated
2021
$
2020
$
119,382
-
117,180
47,378
-
104,236
66,912
9,534
179,603
47,302
57,766
18,352
1,998 16,511
390,174 395,980
Consolidated
2021
$
2020
$
84,896,432
685,235
12,122,357
(7,178,078)
90,525,946
74,184,250
-
9,456,611
1,255,571
84,896,432
(i) On 21 September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake
in Dathcom Mining Resources SA from its joint venture partner, Dathomir Mining Resources SARL for US$15.5
million. Under the agreement, AVZ paid US$500,000 in September 2020 to Dathomir as an advance payment,
with the remaining US$15M to be paid to Dathomir at any time within 12 months of the Share Sale Purchase
Agreement being executed, or as soon as AVZ secures a minimum of US$50 million project financing. Should
the payment not be made within 12 months, AVZ will forego its US$500,000 advance payment and lose the
rights to secure the additional 10% equity in the Manono Lithium and Tin Project.
The value of the Group’s interest in exploration expenditure is dependent upon:
The continuance of the Company’s rights to tenure of the areas of interest;
-
The results of future exploration; and
-
The recoupment of costs through successful development and exploration of the areas of interest, or
-
alternatively, by their sale.
99..
PPrrooppeerrttyy,, ppllaanntt aanndd eeqquuiippmmeenntt
At cost
Less: accumulated depreciation
Reconciliation
Opening balance
Additions
Depreciation expense
Foreign currency translation difference movement
CClloossiinngg bbaallaannccee
Consolidated
Consolidated
2021
$
2020
$
1,921,485
(1,188,900)
732,585
1,991,258
(899,054)
1,092,204
1,092,204
82,048
(355,022)
(86,645)
732,585
1,348,416
89,240
(379,143)
33,691
1,092,204
AVZ Minerals Limited | 45
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1100..
((aa))
LLeeaasseess
AAmmoouunnttss rreeccooggnniisseedd iinn tthhee bbaallaannccee sshheeeett
RRiigghhttss--ooff--uussee aasssseett
Balance as at 1 July
Right-of-use assets recognised
Less: Depreciation
CClloossiinngg bbaallaannccee
LLeeaassee lliiaabbiilliittiieess
Balance as at 1 July
Lease liabilities recognised
Add: Interest
Less: Payment per Consolidated Statement of Cash Flows
CClloossiinngg bbaallaannccee
Current
Non-current
CClloossiinngg bbaallaannccee
Consolidated
2021
$
2020
$
120,248
-
(72,149)
48,099
124,232
-
5,640
(78,529)
51,343
51,343
-
51,343
-
192,397
(72,149)
120,248
-
192,397
10,364
(78,529)
124,232
72,881
51,351
124,232
((bb))
AAmmoouunnttss rreeccooggnniisseedd iinn tthhee ccoonnssoolliiddaatteedd ssttaatteemmeenntt ooff pprrooffiitt oorr lloossss
Depreciation of right-of-use asset
Interest expense on lease liabilities
72,149
5,640
72,149
10,364
((cc))
LLeeaassiinngg AAccttiivviittiieess
The Company leases the office property at Level 2, 8 Colin Street, West Perth. The lease of the property
commenced on 1 March 2019 and remains in force until 28 February 2022.
The lease is recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the Company. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to profit or loss over the lease period as to produce a constant periodic rate
of interest on the remaining balance of the liability for each period. The right-of-use asset is amortised over
the shorter of the asset’s useful life and the lease term on a straight-line basis.
IInniittiiaall mmeeaassuurreemmeenntt
Assets and liabilities from a lease are initially measured on a present value basis. The lease liability includes
the present value of the fixed payments and variable lease payments that depend on an index, initially
measured using the index as at the commencement date (reconciled and adjusted for actual index each
year). The lease payments are discounted using the Company’s incremental borrowing rate of 6.66%.
The right-of-use asset is measured at cost comprising of the initial measurement of the lease liability.
SSuubbsseeqquueenntt mmeeaassuurreemmeenntt
The right-of-use asset is subsequently measured at cost less any accumulated amortisation and any
accumulated impairment losses and adjusted for any re-measurement of the lease liability.
The lease liability is subsequently measured to reflect the interest on the lease liability, the lease payments
made and any reassessment of the variable payments.
AVZ Minerals Limited | 46
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1111..
TTrraaddee && OOtthheerr PPaayyaabblleess
Current
Trade payables
Employee benefits and related payables
Accrued expenses
FBT Payable
Others
TToottaall ccuurrrreenntt ttrraaddee && ootthheerr ppaayyaabblleess
The Group’s exposure to liquidity risk is noted in Note 17.
1122..
PPrroovviissiioonnss
Current
Employee benefits
TToottaall ccuurrrreenntt pprroovviissiioonnss
The Group’s provision for employee benefits represents annual leave payable.
1133..
FFiinnaanncciiaall LLiiaabbiilliittiieess
Acquisition of a 60% interest in Dathcom Mining SA (previously known as
Dathcom Mining SAS) on 23 May 2017
DDeeffeerrrreedd CCoonnssiiddeerraattiioonn
CCuurrrreenntt LLiiaabbiilliittyy
Principal
Principal repayments (i)
Realised foreign exchange loss on repayments
Fair value decrease taken to profit or loss
Transfer between current/non-current
AAtt 3300 JJuunnee
Consolidated
2021
$
2020
$
42,792
44,218
368,221
4,204
9,716
469,151
320,935
19,894
35,000
-
17,747
393,576
Consolidated
2021
$
2020
$
72,227
72,227
36,714
36,714
Consolidated
2021
$
2020
$
-
-
-
-
-
-
1,425,456
(1,450,241)
24,785
-
-
-
(i) Paid to La Congolaise d’Exploitation Minière SA in deferred consideration under the terms of the Joint
Venture Agreement. The key terms of the Joint Venture Agreement were disclosed in the company’s ASX
announcement dated 2 February 2017.
AVZ Minerals Limited | 47
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1133..
FFiinnaanncciiaall LLiiaabbiilliittiieess ((ccoonnttiinnuueedd))
Acquisition of 5% interest in Dathcom Mining SA on 24 June 2019
DDeeffeerrrreedd CCoonnssiiddeerraattiioonn
CCuurrrreenntt LLiiaabbiilliittyy
Principal
Principal repayments
Fair value decrease on repayment
Fair value increase
AAtt 3300 JJuunnee
NNoonn--CCuurrrreenntt LLiiaabbiilliittyy
Opening balance
Fair value increase taken to profit or loss
AAtt 3300 JJuunnee
TToottaall
Consolidated
2021
$
2020
$
5,796,838
-
-
864,437
6,661,275
712,901
(712,490)
(411)
-
-
-
-
-
6,661,275
5,074,286
722,552
5,796,838
5,796,838
On 24 June 2019, the Company announced that it had executed a Share Sale Purchase Agreement
(“Agreement”) with Dathomir Mining Resources SARL to increase the Group’s equity in the Manono Lithium
and Tin Project for a total consideration of US$5,500,000. Under the Agreement, the first tranche payment of
US$500,000 is to be paid within 14 days of execution and the balance of the consideration can be paid at
any time within 36 months from execution of the Agreement. The first tranche payment of US$500,000 was
paid in July 2019.
The value of the deferred consideration is the board’s assessment of the value of contracted future payments
issued under the agreement for the acquisition of Dathcom Mining SA. The fair value is based on assumptions
to present value the future payments based on a discount rate of 12%. The principal payments are
contractually required in U.S. dollars and have been converted to Australian dollars at 30 June 2021.
TToottaall DDeeffeerrrreedd CCoonnssiiddeerraattiioonn
Total current liability
Total non-current liability
TToottaall LLiiaabbiilliittyy
6,661,275
-
6,661,275
-
5,796,838
5,796,838
Consolidated
2021
Shares
2020
Shares
Consolidated
2021
$
2020
$
1144..
SShhaarree ccaappiittaall
Ordinary shares - fully paid
TToottaall SShhaarree CCaappiittaall
2,906,165,175
2,906,165,175
2,838,498,508
2,838,498,508
107,916,233
107,916,233
103,495,333
103,495,333
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held and in proportion to the amount paid up on the shares held. At shareholders meetings,
each ordinary share is entitled to one vote in proportion to the paid-up amount of the share when a poll is called,
otherwise each shareholder has one vote on a show of hands.
AVZ Minerals Limited | 48
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1144..
SShhaarree ccaappiittaall ((ccoonnttiinnuueedd))
Date
Number of
Shares
Fair
Value
per share
Total
$
MMoovveemmeennttss iinn sshhaarree ccaappiittaall
Opening Balance 1 July 2019
Conversion of Performance Rights1
Share based payment2
Conversion of Performance Rights3
Exercise of Listed Options4
Issue of shares
Share placement5
Share placement6
Share placement7
Conversion of Performance Rights8
Less: Transaction costs arising on share issues
CClloossiinngg BBaallaannccee aatt 3300 JJuunnee 22002200
Opening Balance 1 July 2020
Exercise of unlisted options9
Exercise of unlisted options9
Exercise of unlisted options9
Exercise of unlisted options10
Exercise of unlisted options11
Exercise of unlisted options11
Exercise of unlisted options12
Exercise of unlisted options13
Exercise of unlisted options14
Conversion of Performance Rights15
CClloossiinngg BBaallaannccee aatt 3300 JJuunnee 22002211
19-Jul-18
5-Jul-19
11-Jul-19
Various
11-Feb-20
8-Apr-20
24-Apr-20
14-May-20
12-Jun-20
21-Oct-20
24-Nov-20
10-Dec-20
14-Dec-20
4-Jan-21
13-Jan-21
18-Jan-21
18-Jan-21
19-Jan-21
30-Mar-21
2,287,198,459
81,097,191
-
3,000,000
13,950,000
203,649,049
1,000
40,000,000
40,000,000
237,500,000
13,200,000
-
2,838,498,508
$0.029
$0.047
$0.100
$0.030
$0.070
$0.045
$0.045
$0.045
$0.072
580,000
141,000
1,341,000
6,109,320
70
1,800,000
1,800,000
10,687,500
960,000
(1,020,748)
103,495,333
2,838,498,508
103,495,333
10,000,000
5,000,000
10,000,000
4,000,000
5,000,000
11,666,667
4,000,000
1,000,000
1,000,000
16,000,000
2,906,165,175
$0.060
$0.060
$0.060
$0.057
$0.060
$0.060
$0.065
$0.048
$0.057
$0.083
600,000
300,000
600,000
228,000
300,000
700,000
266,000
47,500
57,000
1,322,400
107,916,233
1 On 19 July 2018, 20,000,000 Performance Rights vested and were converted to Ordinary Shares. The fair value of the Performance Rights of $580,000
was transferred from Share based payment reserve to Share Capital during the year ended 30 June 2020.
2 On 5 July 2019, 3,000,000 shares were issued to a supplier in lieu of cash payments for investor relations services received.
3 On 11 July 2019, 5,000,000 Class C Performance Rights and 8,950,000 Class E Performance Rights vested and converted to Ordinary Shares. The fair
value of the Performance Rights of $1,341,000 was transferred from Share based payment reserve to Share Capital.
4 During the year ended 30 June 2020, a total of 203,649,049 Listed Options (exercisable at $0.03 per share on or before 24 May 2020) were exercised.
5 On 8 April 2020, the Company completed a $1.8 million placement through the issue of 40,000,000 shares at $0.045 per share and 60,000,002 free-
attaching options exercisable at $0.06 per share expiring on 8 April 2022 to Lithium Plus and other sophisticated and professional investors, all of whom
are non-related parties.
6 On 24 April 2020, the Company completed a $1.8 million placement through the issue of 40,000,000 shares at $0.045 per share and 60,000,002 free-
attaching options exercisable at $0.06 per share expiring on 8 April 2022 to Lithium Plus and other sophisticated and professional investors, all of whom
are non-related parties.
7 On 14 May 2020, the Company completed a $10.7 million placement through the issue of 237,500,000 shares at $0.045 per share to Yibin Tianyi
Lithium Industry Co. Ltd.
8 On 12 June 2020 the Company issued 13,200,000 fully paid ordinary shares following the vesting of Class E and Class H Performance Rights
(Completion of the Definitive Feasibility Study on the Manono Project).
9 During the year ended 30 June 2021, a total of 25,000,000 Unlisted Options (exercisable at $0.06 per share on or before 8 April 2022) were exercised.
AVZ Minerals Limited | 49
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1144..
SShhaarree ccaappiittaall ((ccoonnttiinnuueedd))
MMoovveemmeennttss iinn sshhaarree ccaappiittaall ((ccoonnttiinnuueedd))
10 During the year ended 30 June 2021, a total of 4,000,000 Unlisted Options (exercisable at $0.057 per share on or before 5 September 2021) were exercised.
11 During the year ended 30 June 2021, a total of 16,666,667 Unlisted Options (exercisable at $0.06 per share on or before 8 April 2022) were exercised.
12 During the year ended 30 June 2021, a total of 4,000,000 Unlisted Options (exercisable at $0.0665 per share on or before 5 March 2022) were exercised.
13 During the year ended 30 June 2021, a total of 1,000,000 Unlisted Options (exercisable at $0.0475 per share on or before 5 March 2022) were exercised.
14 During the year ended 30 June 2021, a total of 1,000,000 Unlisted Options (exercisable at $0.057 per share on or before 5 September 2021) were exercised.
15 On 31 March 2021 the Company issued 16,000,000 fully paid ordinary shares following the vesting of Class E, Class L and Class M Performance Rights (Executing
an offtake agreement for at least 25% and 50% of the product (Lithium and Tin) in the Manono Lithium Project).
1155..
SShhaarree OOppttiioonnss aanndd PPeerrffoorrmmaannccee RRiigghhttss
((aa))
SShhaarree OOppttiioonnss
Expiry
date
Exercise
price
(cents)
Balance at
start of year
Granted
during the
year
Exercised
during the
year
Lapsed
during
the year
Balance at
end of the
year
22002211
Unlisted
Unlisted
Unlisted
Unlisted
22002200
5-Mar-21
5-Sep-21
5-Mar-22
8-Apr-22
Unlisted
28-Apr-20
Listed
Unlisted
Unlisted
Unlisted
Unlisted
24-May-20
5-Mar-21
5-Sep-21
5-Mar-22
8-Apr-22
4.75
5.7
6.65
6.0
30.5
3.0
4.75
5.7
6.65
6.0
1,000,000
5,000,000
5,000,000
120,000,002
131,000,002
30,000,000
203,649,049
1,000,000
5,000,000
5,000,000
-
-
-
-
-
-
-
-
-
-
-
120,000,0021
(1,000,000)
(5,000,000)
(4,000,000)
(41,666,667)
(51,666,667)
-
-
-
-
-
-
(30,000,000)
(203,649,049)
-
-
-
-
-
-
1,000,000
78,333,335
79,333,335
-
-
1,000,000
5,000,000
5,000,000
-
-
-
-
- 120,000,002
244,649,049
120,000,002
(203,649,049)
(30,000,000) 131,000,002
1 On 8 April 2020 and 24 April 2020, the Company completed a $3.6 million placement through the issue of
80,000,000 shares at $0.045 per share and 120,000,002 free-attaching options exercisable at $0.06 per share expiring
on 8 April 2022 to Lithium Plus and other sophisticated and professional investors, all of whom are non-related parties.
((bb))
PPeerrffoorrmmaannccee RRiigghhttss
Expiry
date
Exercise
price
Balance at
start of year
Granted
during the
year
Converted
during the
year
Cancelled/
lapsed during
the year
Balance at
end of the
year
22002211
Class D
Class E
Class F
Class H
Class I
Class K
Class L
Class M
Class N
Various
3-Dec-21
2-Jun-22
3-Dec-21
11-Nov-20
3-Dec-21
3-Dec-21
9-Dec-23
26-Jun-24
-
-
-
-
-
-
-
-
-
3,600,000
17,400,000
8,000,000
3,000,000
3,000,000
1,600,000
-
-
-
36,600,000
-
-
-
-
-
-
4,000,000
24,100,000
5,200,000
33,300,000
-
(8,700,000)
-
(1,500,000)
-
(800,000)
(2,000,000)
(3,000,000)
-
(16,000,000)
(3,600,000)
(1,000,000)
-
-
(3,000,000)
-
-
(1,500,000)
-
(9,100,000)
-
7,700,000
8,000,000
1,500,000
-
800,000
2,000,000
19,600,000
5,200,000
44,800,000
AVZ Minerals Limited | 50
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1155..
SShhaarree OOppttiioonnss aanndd PPeerrffoorrmmaannccee RRiigghhttss ((ccoonnttiinnuueedd))
((bb)) PPeerrffoorrmmaannccee RRiigghhttss ((ccoonnttiinnuueedd))
Expiry date
Exercise
price
(cents)
Balance at
start of year
Granted
during the
year
Converted
during the
year
Cancelled/
lapsed during
the year
Balance at
end
of the year
30-Nov-21
12-Oct-18
Various
3-Dec-21
2-Jun-22
2-Jun-22
3-Dec-21
11-Nov-20
1-Nov-22
3-Dec-21
-
-
-
-
-
-
-
-
-
-
7,500,000
5,000,000
14,850,000
35,800,000
8,000,000
3,000,000
4,500,000
-
-
-
78,650,000
-
-
(5,000,000)
-
-
-
- (17,650,000)
-
-
-
-
(1,500,000)
-
3,000,000
-
(3,000,000)
3,000,000
1,600,000
-
7,600,000 (27,150,000)
(7,500,000)
-
(11,250,000)
(750,000)
-
(3,000,000)
-
-
-
-
(22,500,000)
-
-
3,600,000
17,400,000
8,000,000
-
3,000,000
3,000,000
-
1,600,000
36,600,000
22002200
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Class J
Class K
1166..
RReesseerrvveess
Share Options Reserve (a)
Foreign Currency Translation Reserve (b)
TToottaall rreesseerrvveess
((aa))
SShhaarree OOppttiioonnss RReesseerrvvee ((ii))
Opening balance
Unlisted Options issued during the year
Share-based payment expense during the year
Less: Conversion of Performance Rights
Less: Performance Rights lapsed
CClloossiinngg bbaallaannccee
((bb))
FFoorreeiiggnn CCuurrrreennccyy TTrraannssllaattiioonn RReesseerrvvee ((iiii))
Opening balance
Exchange difference arising on translation of foreign operations
CClloossiinngg bbaallaannccee
Consolidated
2021
$
2020
$
5,842,246
(2,402,476)
3,439,770
5,189,576
4,142,944
9,332,520
5,189,576
-
2,561,150
(1,322,400)
(586,080)
5,842,246
6,361,769
-
2,029,407
(2,881,000)
(320,600)
5,189,576
4,142,944
(6,545,420)
(2,402,476)
3,268,870
874,074
4,142,944
NNaattuurree aanndd ppuurrppoossee ooff rreesseerrvveess
(i) Share Options Reserve
The Share Options Reserve contains amounts received on the issue of options over unissued capital of the
Company. It is used to recognise the fair value of options and Performance rights issued to employees and
consultants but not exercised.
(ii) Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign
controlled entities. The exchange differences arising are recognised in other comprehensive income as
detailed in Note 1(s) and accumulated within a separate reserve within equity. The cumulative amount is
reclassified to the statement of profit or loss and other comprehensive income when the net investment is
disposed of.
AVZ Minerals Limited | 51
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1177..
FFiinnaanncciiaall IInnssttrruummeennttss,, RRiisskk MMaannaaggeemmeenntt OObbjjeeccttiivveess aanndd PPoolliicciieess
The consolidated entity’s principal financial instruments comprise cash and cash equivalents. The main purpose of the
financial instruments is to earn the maximum amount of interest at a low risk to the Company. The consolidated entity
also has other financial instruments such as trade debtors and creditors which arise directly from its operations. For the
year under review, it has been the consolidated entity’s policy not to trade in financial instruments. The main risks arising
from the consolidated entity’s financial instruments are interest rate risk and credit risk. The Board reviews and agrees
policies for managing each of these risks and they are summarised below:
((aa))
IInntteerreesstt RRaattee RRiisskk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a
result of changes in market interest rates and the effective weighted average interest rate for each class of
financial assets and financial liabilities comprises:
Consolidated
2021
Weighted
Average
Interest Rate
%
Floating
Interest
Rate
$
FFiinnaanncciiaall aasssseettss
Cash and cash equivalents
Trade and other receivables
FFiinnaanncciiaall lliiaabbiilliittiieess
Trade and other payables
Financial liabilities
0.86%
-
-
-
Fixed
Interest
$
20,175
-
20,175
Non-
interest
bearing
$
-
285,938
285,938
2,443,457
-
2,443,457
-
-
-
-
-
-
469,151
6,661,275
7,130,426
Consolidated
2020
FFiinnaanncciiaall aasssseettss
Weighted
Average
Interest Rate
%
Floating
Interest
Rate
$
Fixed
Interest
$
Non-
interest
bearing
$
Total
$
2,463,632
285,938
2,749,570
469,151
6,661,275
7,130,426
Total
$
Cash and cash equivalents
1.11%
9,182,294
5,020,000
-
14,202,294
Trade and other receivables
FFiinnaanncciiaall lliiaabbiilliittiieess
Trade and other payables
Financial liabilities
-
-
-
-
-
9,182,294
5,020,000
377,628
377,628
377,628
14,579,922
-
-
-
-
-
-
393,576
5,796,838
6,190,414
393,576
5,796,838
6,190,414
The maturity date for cash included in the above tables is one year or less from reporting date.
(i)
Sensitivity analysis
The Group’s main interest rate risk arises from cash equivalents with variable and fixed interest rates. At
30 June 2021 and 30 June 2020, the Group’s exposure to interest rate risk is not deemed material.
((bb))
CCrreeddiitt rriisskk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. The Group has adopted the policy of only dealing with credit worthy counterparties and obtaining
sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Group does not have any significant credit risk exposure to any single counterparty or any Group
of counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial
statements, net of any provisions for losses, represents the Group’s maximum exposure to credit risk. All cash
equivalents are held with financial institutions with a credit rating of -AA or above.
AVZ Minerals Limited | 52
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1177..
FFiinnaanncciiaall IInnssttrruummeennttss,, RRiisskk MMaannaaggeemmeenntt OObbjjeeccttiivveess aanndd PPoolliicciieess ((ccoonnttiinnuueedd))
((cc))
FFoorreeiiggnn CCuurrrreennccyy RRiisskk
The Group is exposed to fluctuations in foreign currencies arising from exploration commitments in currencies
other than the Group’s presentational currency Australian Dollars (AUD).
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposure to
the United States Dollar (USD). The Group has not formalised a foreign currency risk management policy,
however it monitors its foreign currency expenditure in light of exchange rate movements and retains the right
to withdraw from the foreign exploration commitments.
(i)
Sensitivity analysis
The Group’s main foreign currency risk arises from cash equivalents held in foreign currency denominated bank
accounts and other payable amounts denominated in USD. At 30 June 2021 and 30 June 2020, the Group’s
exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollar, was as
follows:
Cash and cash equivalents
Trade & other receivables - current
Trade and other payables
Financial liabilities
2021
$
192,240
121,379
313,619
(4,187)
(6,661,275)
(6,665,462)
2020
$
2,589,013
58,094
2,647,107
(24,912)
(5,796,838)
(5,821,750)
A reasonably possible strengthening (weakening) of the AUD against USD at 30 June 2021 would have affected
the measurement of financial instruments denominated in a foreign currency and affected equity and profit or
loss for the Group by the amounts shown below, expressed in AUD. This analysis assumes all other variables
remain constant.
Cash and cash equivalents
Trade & other receivables - current
Trade and other payables
Financial liabilities
2021
2020
Increase (Decrease) in Equity and Profit or Loss
AUD to USD
AUD to USD
+10%
+10%
+10%
-10%
$
$
$
$
(17,478)
(11,034)
(28,512)
17,478
11,034
28,512
(235,365)
(5,281)
(240,646)
235,365
5,281
240,646
380
605,570
605,950
(380)
(605,570)
(605,950)
2,265
526,986
529,251
(2,265)
(526,986)
(529,251)
((dd))
LLiiqquuiiddiittyy rriisskk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities. Due to the dynamic nature of the underlying businesses, the
Group aims at ensuring flexibility in its liquidity profile by maintaining the ability to undertake capital raisings.
AVZ Minerals Limited | 53
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1177..
FFiinnaanncciiaall IInnssttrruummeennttss,, RRiisskk MMaannaaggeemmeenntt OObbjjeeccttiivveess aanndd PPoolliicciieess ((ccoonnttiinnuueedd))
((dd))
LLiiqquuiiddiittyy rriisskk ((ccoonnttiinnuueedd))
Contractual
maturities of financial
assets/(liabilities)
Less than 6
months
6-12 months
Between 1
and 2
years
Between 2
and 5 years
At 30 June 2021
Cash and cash
equivalents
Trade and other
receivables
Trade and other
payables
Financial liabilities
At 30 June 2020
Cash and cash
equivalents
Trade and other
receivables
Trade and other
payables
Financial liabilities
$
2,463,632
285,938
(469,151)
2,280,419
14,202,294
377,628
(393,576)
-
14,186,346
$
-
-
-
(6,661,275)
(6,661,275)
-
-
-
-
-
Total
contractual
cash inflows
/(outflows)
$
Carrying
amount
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,463,632
2,463,632
285,938
285,938
(469,151)
(6,661,275)
(4,380,856)
(469,151)
(6,661,275)
(4,380,856)
14,202,294
14,202,294
377,628
377,628
-
(7,271,553)
(7,271,553)
(393,576)
(7,271,553)
6,914,793
(393,576)
(7,271,553)
6,914,793
((ee))
NNeett ffaaiirr vvaalluuee
The carrying value and net fair values of financial assets and liabilities at reporting date are:
Consolidated
Financial assets:
Cash and cash equivalents
Trade and other receivables - current
Financial liabilities:
Trade and other payables - current
Financial liabilities - current
Financial liabilities - non-current
2021
Carrying
Amount
$
2020
Net fair
Value
$
Carrying
Amount
$
Net fair
Value
$
2,463,632
285,938
2,749,570
2,463,632
285,938
2,749,570
14,202,294
377,628
14,579,922
14,202,294
377,628
14,579,922
469,151
6,661,275
-
7,130,426
469,151
6,661,275
-
7,130,426
393,576
-
5,796,838
6,190,414
393,576
-
5,796,838
6,190,414
((ff))
FFaaiirr vvaalluuee mmeeaassuurreemmeennttss
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by
level of the following fair value measurement hierarchy:
i) Quoted prices in active markets for identical assets or liabilities (level 1)
ii)
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
iii)
Due to their short-term nature, the carrying amount of the current receivables and current payables is assumed to
approximate their fair value. Refer to Note 13 for assumptions made in relation to determining fair value of financial
liabilities.
AVZ Minerals Limited | 54
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
1188..
((aa))
LLoossss ppeerr SShhaarree
LLoossss
Loss used in the calculation of basic and diluted EPS ($)
((bb)) WWeeiigghhtteedd aavveerraaggee nnuummbbeerr ooff oorrddiinnaarryy sshhaarreess ((‘‘WWAANNOOSS’’))
WANOS used in the calculation of basic and diluted loss per share
Basic and diluted loss per share
Consolidated
2021
$
2020
$
(5,401,291)
(5,134,821)
2,870,608,398
cents per
share
(0.19)
2,379,675,452
cents per share
(0.22)
Diluted earnings per share is equal to basic loss per share as the Group is in a loss position.
1199.. CCaasshh FFllooww IInnffoorrmmaattiioonn
RReeccoonncciilliiaattiioonn ooff ccaasshh fflloowwss ffrroomm ooppeerraattiinngg aaccttiivviittiieess wwiitthh lloossss
ffrroomm oorrddiinnaarryy aaccttiivviittiieess aafftteerr iinnccoommee ttaaxx::
Loss for the year
Depreciation
Share-based payment
Movement in fair value of financial liabilities
Interest income accrued
Interest expense on convertible note
Unrealised foreign exchange loss on convertible note
Net realised and unrealised foreign exchange losses
Depreciation expense of right-of-use asset
Changes in assets and liabilities:
(Increase)/Decrease in operating receivables and prepayments
Increase/(Decrease) in trade and other payables
Consolidated
2021
$
2020
$
(5,537,632)
(5,299,858)
355,022
2,561,150
864,437
9,534
-
-
214,507
72,149
(8,941)
(75,787)
379,143
2,170,407
722,552
(9,534)
19,126
(238)
42,756
72,149
(169,916)
257,129
Net cash outflows from operating activities
(1,545,561)
(1,816,284)
NNoonn--ccaasshh iinnvveessttiinngg aanndd ffiinnaanncciinngg aaccttiivviittiieess
Issue of ordinary shares for investor relations services
Issue of ordinary shares from conversion of Performance Rights
-
1,322,400
1,322,400
141,000
2,881,000
3,022,000
Changes in financial liabilities arising from financing activities are disclosed in Note 13. Changes in lease
liabilities arising from financing activities are disclosed in Note 10.
2200..
SSeeggmmeenntt IInnffoorrmmaattiioonn
The Group is organised into one operating segment, being exploration in the DRC. This is based on the internal reports
that are being reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers
(CODM) in assessing performance and in determining the allocation of resources. As a result, the operating segment
information is as disclosed in the statements and notes to the financial statements throughout the report.
Geographical information
All non-current assets are based in the DRC.
AVZ Minerals Limited | 55
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2211.. CCoommmmiittmmeennttss aanndd CCoonnttiinnggeenncciieess
On 21 September 2020, AVZ executed a Share Sale Purchase Agreement for an additional 10% equity stake in Dathcom
Mining SA from its joint venture partner, Dathomir Mining for US$15.5 million. Under the agreement, AVZ has paid
US$500,000 to Dathomir Mining as an advance payment, with the remaining US$15 million committed to be paid to
Dathomir Mining at any time within 12 months of the Share Sale Purchase Agreement being executed, or as soon as AVZ
secures a minimum of US$50 million project financing. Since the end of the reporting period, AVZ has purchased Dathomir
Mining’s 15% shareholding in Dathcom Mining SA (Refer to Note 26).
There are no other commitments or contingent liabilities outstanding at the end of the year.
2222.. SSuubbssiiddiiaarriieess aanndd nnoonn--ccoonnttrroolllliinngg eennttiittiieess
((aa)) SSuubbssiiddiiaarriieess
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 1(c):
Name of entity
Country of
incorporation
Class
of shares
Equity holding1
2021
2020
AVZ International Pty Ltd
AVZ Minerals Congo SARL
AVZ Power
Dathcom Mining SA
Maji Bora Ya Manono2
Nyuki Logistics Company2
Australia
DRC
DRC
DRC
DRC
DRC
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
%
100
100
100
60
100
100
%
100
100
100
60
-
-
1 The proportion of ownership interest is equal to the proportion of voting power held.
2 Incorporated on 7 October 2020.
((bb)) NNoonn--ccoonnttrroolllliinngg eennttiittiieess
The following table sets out the summarised financial information for each subsidiary that has a non-controlling
interests (NCI). Amounts disclosed are before intercompany eliminations (AASB 12.B11).
Summarised statement of
Financial Position
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Net Assets
AAccccuummuullaatteedd NNCCII
Dathcom Mining SA
30 June 2021
30 June 2020
182,622
76,683,367
76,865,989
4,187
51,736,429
51,740,616
25,125,373
10,527,756
565,217
71,893,672
72,458,889
7,480
44,654,926
44,662,406
27,796,483
11,690,054
2233..
RReellaatteedd PPaarrttyy IInnffoorrmmaattiioonn
((aa))
((bb))
PPaarreenntt eennttiittyy
The ultimate parent entity within the Group is AVZ Minerals Limited.
SSuubbssiiddiiaarriieess
Interests in subsidiaries are set out above.
AVZ Minerals Limited | 56
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2233..
RReellaatteedd PPaarrttyy IInnffoorrmmaattiioonn ((ccoonnttiinnuueedd))
((cc))
KKeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell
The key management personnel compensation is as follows:
KKeeyy MMaannaaggeemmeenntt PPeerrssoonnnneell CCoommppeennssaattiioonn
Summary remuneration
Short-term benefits
Post-employment benefits
Share-based payments
TToottaall kkeeyy mmaannaaggeemmeenntt ppeerrssoonnnneell ccoommppeennssaattiioonn
Consolidated
2021
$
2020
$
1,473,334
30,279
1,688,571
3,192,184
1,197,377
25,074
1,405,550
2,628,001
Details of remuneration disclosures are provided within the audited remuneration report which can be found on pages 20
to 26 of the Directors’ report. Refer page 25 for transactions with related parties.
2244..
SShhaarree BBaasseedd PPaayymmeennttss
Options (a)
Performance Rights (b)
TToottaall sshhaarree--bbaasseedd ppaayymmeenntt eexxppeennssee
((aa)) OOppttiioonnss
Consolidated
2021
$
2020
$
-
2,561,150
2,561,150
-
2,029,407
2,029,407
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt dduurriinngg tthhee yyeeaarr eennddeedd 3300 JJuunnee 22002211
No options were issued to current directors and executives as part of their remuneration during year ended 30 June
2021.
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt ggrraanntteedd iinn pprriioorr yyeeaarrss aanndd ssttiillll iinn eexxiisstteennccee aatt 3300 JJuunnee 22002211
During the year ended 30 June 2019, 15,000,000 unlisted options were issued to Patersons Securities Limited for
being an advisor and underwriter for the February 2019 capital raising. The total fair value of the options was
estimated at $587,718 as at the date of grant using the Black-Scholes model taking into account the terms and
conditions upon which the options were granted.
Number granted
Expected volatility (%)
Risk-free interest rate (%)
Expected life of option (years)
Exercise price (cents)
Share price at grant date (cents)
Fair value at grant date (cents)
Tranche 1
Tranche 2
Tranche 3
5,000,000
103
1.75
2.13
4.75
6.5
3.78
5,000,000
103
1.72
2.63
5.7
6.5
3.8
5,000,000
110
1.69
3.13
6.65
6.5
4.1
4,000,000 of Tranche 1 unlisted options were exercised during the year ended 30 June 2019. The remaining
1,000,000 of Tranche 1, 5,000,000 of Tranche 2 and 4,000,000 of Tranche 3 unlisted options were exercised during
the year ended 30 June 2021. The remaining 1,000,000 Tranche 3 unlisted options have a remaining contractual
life of 248 days.
AVZ Minerals Limited | 57
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2244..
SShhaarree BBaasseedd PPaayymmeennttss ((ccoonnttiinnuueedd))
((bb)) PPeerrffoorrmmaannccee RRiigghhttss
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt dduurriinngg tthhee yyeeaarr eennddeedd 3300 JJuunnee 22002211
On 12 October 2020, 4,000,000 Class L Performance Rights were issued to consultants of the Company. These
Performance Rights are split into three tranches with the following vesting conditions:
1.
Tranche 1 – 2,000,000 shall vest upon executing an offtake agreement for at least 50% of the product (Lithium
and Tin) in the Manono Project.
Tranche 2 – 1,000,000 shall vest upon executing an offtake agreement for at least 75% of the product (Lithium
and Tin) in the Manono Project.
Tranche 3 – 1,000,000 shall vest upon executing an offtake agreement for at least 100% of the product (Lithium
and Tin) in the Manono Project.
2.
3.
Class L
Number
Issued
Grant Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Value per
Performance
Right on Grant
Date
Total Fair
Value
%
Vested
($)
($)
4,000,000
12-Oct-20
Nil
3-Dec-21
0.08
$320,000
50%
The 4,000,000 Class I Performance Rights were valued using the underlying share price at grant date.
2,000,000 Tranche 1 of Class L Performance Rights vested and were converted on 31 March 2021.
Share based payment of $299,150 in relation to Class L Performance Rights has been expensed to statement of
profit or loss and other comprehensive income over its vesting period.
On 10 December 2020, 24,100,000 Class M Performance Rights were issued to Directors and employees of the
Company. These Performance Rights are split into three tranches with the following vesting conditions:
1.
Tranche 1 – 3,000,000 shall vest upon upon executing an offtake agreement for at least 25% of the product
(Lithium and Tin) from the Manono Project.
Tranche 2 – 3,000,000 shall vest upon the completion of the Manono Project financing.
Tranche 3 – 18,100,00 shall vest upon the Company making a Decision to Mine in respect of the Manono
Project.
2.
3.
Class M
Number
Issued
Grant Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Underlying
Share Price on
Grant Date
Total Fair
Value
%
Vested
($)
($)
24,100,000
10-Dec-20
Nil
9-Dec-23
0.098
$2,361,800
19%
1,500,000 Tranche 3 of Class M Performance Rights were cancelled when an employee resigned.
3,000,000 Tranche 1 of Class M Performance Rights vested and were converted on 31 March 2021.
Share based payment of $1,714,733 in relation to Class M Performance Rights has been expensed to statement of
profit or loss and other comprehensive income over its vesting period at a 100% probability of meeting vesting
conditions.
AVZ Minerals Limited | 58
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2244..
SShhaarree BBaasseedd PPaayymmeennttss ((ccoonnttiinnuueedd))
((bb)) PPeerrffoorrmmaannccee RRiigghhttss ((ccoonnttiinnuueedd))
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt dduurriinngg tthhee yyeeaarr eennddeedd 3300 JJuunnee 22002211 ((ccoonnttiinnuueedd))
On 29 June 2021, 5,200,000 Class N Performance Rights were issued to employees and consultants of the
Company. These Performance Rights are split into two equal tranches with the following vesting conditions:
1.
2.
Tranche 1 – 2,600,000 shall vest upon upon the completion of the Manono Project financing.
Tranche 2 – 2,600,000 shall vest upon the Company making a Final Investment Decision (FID) in respect of the
Manono Project.
Class N
Number
Issued
Grant Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Underlying
Share Price
on Grant Date
Total Fair
Value
%
Vested
($)
($)
5,200,000
29-Jun-21
Nil
29-Jun-24
0.16
$832,000
Nil
Share based payment of $8,946 in relation to Class N Performance Rights has been expensed to the statement of
profit or loss and other comprehensive income over its vesting period at a 100% probability of meeting vesting
conditions.
During the year ended 30 June 2021, 16,000,000 Performance Rights vested and were converted to Ordinary
Shares following the satisfaction of various vesting conditions as below:
1.
8,700,000 Class E Performance Rights vested upon executing an offtake agreement for at least 25% of the
product (Lithium and Tin) in the Manono Lithium Project.
1,500,000 Class H Performance Rights vested upon executing an offtake agreement for at least 25% of the
product (Lithium and Tin) in the Manono Lithium Project.
800,000 Class K Performance Rights vested upon executing an offtake agreement for at least 25% of the
product (Lithium and Tin) in the Manono Lithium Project.
2,000,000 Class L Performance Rights vested upon executing an offtake agreement for at least 50% of the
product (Lithium and Tin) in the Manono Lithium Project.
3,000,000 Class M Performance Rights vested upon executing an offtake agreement for at least 25% of the
product (Lithium and Tin) in the Manono Lithium Project.
2.
3.
4.
5.
During the year ended 30 June 2021, 9,100,000 Performance Rights lapsed/cancelled due to the following:
1.
3,600,000 Class D Performance Rights which vest if the 10-day VWAP for the Shares on the ASX is $0.34-$0.44
or higher for the period commencing 6 months from the date of issue lapsed when the vesting conditions were
not met.
1,000,000 Class E Performance Rights were cancelled when an employee resigned.
3,000,000 Class I Performance Rights which vest if the volume weighted average share price (“VWAP”) for the
shares on the ASX is A$0.10 or higher during the vesting period for a period of consecutive 15 trading days
when vesting conditions were not met.
1,500,000 Class M Performance Rights were cancelled when an employee resigned.
2.
3.
4.
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt ggrraanntteedd iinn pprriioorr yyeeaarrss aanndd ssttiillll iinn eexxiisstteennccee aatt 3300 JJuunnee 22002211
750,000 Class D Performance Rights were cancelled on 11 July 2019 when an employee resigned. 3,600,000 Class
D Performance Rights lapsed on 5 February 2021. As such, there are no Class D Performance Rights in existence at
30 June 2021.
Share based payment of $91,833 (2020: $152,777) in relation to Class D Performance Rights has been expensed to
statement of profit or loss and other comprehensive income over its vesting period.
AVZ Minerals Limited | 59
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2244..
SShhaarree BBaasseedd PPaayymmeennttss ((ccoonnttiinnuueedd))
((bb))
PPeerrffoorrmmaannccee RRiigghhttss ((ccoonnttiinnuueedd))
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt ggrraanntteedd iinn pprriioorr yyeeaarrss aanndd ssttiillll iinn eexxiisstteennccee aatt 3300 JJuunnee 22002211 ((ccoonnttiinnuueedd))
On 30 November 2018, 35,800,000 Class E Performance Rights were granted to directors, employees and
contractors of the Company, with the vesting terms as below:
1.
Tranche 1 – 8,950,000 Performance Rights shall vest upon the Company defining a 150Mt measured and
indicated mineral resource in accordance with the JORC Guidelines with a minimum 1% Li2O being
delineated within the Manono Project area.
Tranche 2 – 8,950,000 Performance Rights shall vest upon completion of a Feasibility Study on the Manono
Project.
Tranche 3 – 8,950,000 Performance Rights shall vest upon executing an offtake agreement for at least 25%
of the product (Lithium and Tin) from Manono Project.
Tranche 4 – 8,950,000 Performance Rights shall vest upon the completion of the Manono Project financing.
2.
3.
4.
Class E
Number
Issued
Grant
Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Underlying
Share Price
on Grant
Date
($)
Total Fair
Value
% Vested/
Cancelled
($)
Tranche 1 8,950,000 30-Nov-18
Tranche 2 8,950,000 30-Nov-18
Tranche 3 8,950,000 30-Nov-18
Tranche 4 8,950,000 30-Nov-18
Nil
Nil
Nil
Nil
3-Dec-21
3-Dec-21
3-Dec-21
3-Dec-21
0.08
$716,000
0.08
$716,000
0.08
$716,000
0.08
$716,000
100%
100%
100%
11%
8,950,000 Tranche 1 Class E Performance Rights vested and converted on 11 July 2019. 750,000 of Tranche 2,
3 and 4 Performance Rights were cancelled when an employee resigned. 8,700,000 Tranche 2 Performance
Rights vested and converted on 12 June 2020.
8,700,000 Tranche 3 Performance Rights vested and converted on 31 March 2021. 1,000,000 of Tranche 4
Performance Rights were cancelled when an employee resigned.
The share-based payments in relation to Class E Performance Rights of $143,393 (2020: $1,028,965) were
expensed to the statement of profit or loss and other comprehensive income over its vesting period at a 100%
probability of meeting vesting conditions.
On 3 June 2019, 8,000,000 Class F Performance Rights were issued to a contractor of the Company, with the
vesting terms as below:
1.
Tranche 1 – 2,000,000 Performance Rights shall vest upon successfully converting the Manono Project
licence from PR to PE and lodgement of the Bankable Feasibility Study with the DRC and Provincial
Government.
Tranche 2 – 2,000,000 Performance Rights shall vest on completion and acceptance of the Mining
Convention by the DRC Government, ensure Manono Project licence remains in good standing with the
relevant government departments.
Tranche 3 – 4,000,000 Performance Rights shall vest upon the issue of a legally binding exoneration on
corporate and regional tax and import duty on major capital items for a period of 3 years from start-up – in
event that the Company secures a longer period a further tranche will be awarded pro-rata, i.e. 6 years a
further 2 million.
2.
3.
AVZ Minerals Limited | 60
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2244..
SShhaarree BBaasseedd PPaayymmeennttss ((ccoonnttiinnuueedd))
((bb))
PPeerrffoorrmmaannccee RRiigghhttss ((ccoonnttiinnuueedd))
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt ggrraanntteedd iinn pprriioorr yyeeaarrss aanndd ssttiillll iinn eexxiisstteennccee aatt 3300 JJuunnee 22002211 ((ccoonnttiinnuueedd))
Class F
Number
Issued
Grant
Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Underlying
Share Price on
Grant Date
Total Fair
Value
%
Vested
Tranche 1 2,000,000
3-Jun-19
Tranche 2 2,000,000
3-Jun-19
Tranche 3 4,000,000
3-Jun-19
Nil
Nil
Nil
3-Jun-22
3-Jun-22
3-Jun-22
($)
0.08
0.08
0.08
($)
$160,000
$160,000
$320,000
Nil
Nil
Nil
The share-based payments in relation to Class F Performance Rights of $168,980 (2020: $376,004) were
expensed to the statement of profit or loss and other comprehensive income over its vesting period at a 100%
probability of meeting vesting conditions.
On 3 June 2019, 4,500,000 Class H Performance Rights were issued to a director of the Company, with the
vesting terms as below.
1.
Tranche 1 – 1,500,000 Performance Rights shall vest upon Performance Rights shall vest upon the
completion of Feasibility Study on the Manono Project.
Tranche 2 – 1,500,000 Performance Rights shall vest executing an offtake agreement for at least 25% of the
product (Tin and Lithium) from the Manono Project.
Tranche 3 – 1,500,000 Performance Rights shall vest upon the completion of the Manono Project financing.
2.
3.
Class H
Number
Issued
Grant
Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Underlying
Share Price
on Grant
Date
($)
Total Fair
Value
%
Vested
($)
Tranche 1
1,500,000
3-Jun-19
Tranche 2
1,500,000
3-Jun-19
Tranche 3
1,500,000
3-Jun-19
Nil
Nil
Nil
3-Dec-21
3-Dec-21
3-Dec-21
0.08
0.08
0.08
$120,000
100%
$120,000
100%
$120,000
Nil
1,500,000 Tranche 1 of Class H Performance Rights vested and were converted on 12 June 2020.
1,500,000 Tranche 2 of Class H Performance Rights vested and were converted on 31 March 2021.
The share-based payments in relation to Class H Performance Rights of $45,571 (2020: $291,391) were
expensed to the statement of profit or loss and other comprehensive income over its vesting period at a 100%
probability of meeting vesting conditions.
The 3,000,000 Class I Performance Rights expired unexercised on 11 November 2020 due to vesting conditions
not being met. As such, there are no Class I Performance Rights in existence at 30 June 2021.
Share based payment of $17,207 (2020: $29,793) in relation to Class I Performance Rights has been expensed
to statement of profit or loss and other comprehensive income over its vesting period.
On 12 June 2020, 1,600,000 Class K Performance Rights were issued to employees of the Company. These
Performance Rights are split into two equal tranches with the following vesting conditions:
1.
Tranche 1 – 800,000 shall vest upon executing an offtake agreement for at least 25% of the product (Lithium
and Tin) from the Manono Project.
Tranche 2 – 800,000 shall vest upon the completion of the Manono Project financing.
2.
AVZ Minerals Limited | 61
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2244..
SShhaarree BBaasseedd PPaayymmeennttss ((CCoonnttiinnuueedd))
((bb))
PPeerrffoorrmmaannccee RRiigghhttss ((ccoonnttiinnuueedd))
SShhaarree bbaasseedd ppaayymmeenntt aarrrraannggeemmeenntt ggrraanntteedd iinn pprriioorr yyeeaarrss aanndd ssttiillll iinn eexxiisstteennccee aatt 3300 JJuunnee 22002211 ((ccoonnttiinnuueedd))
Class K
Number
Issued
Grant Date
Exercise
Price
Expiry Date of
Milestone
Achievements
Underlying
Share Price on
Grant Date
Total Fair
Value
%
Vested
Tranche 1
800,000
12-Jun-20
Tranche 2
800,000
12-Jun-20
Nil
Nil
($)
($)
3-Dec-21
0.058
$46,400
100%
3-Dec-21
0.058
$46,400
Nil
Share based payment of $71,336 (2020: $12,477) in relation to Class K Performance Rights has been expensed to
statement of profit or loss and other comprehensive income over its vesting period at a 100% probability of
meeting vesting conditions.
800,000 Tranche 1 of Class K Performance Rights vested and were converted on 31 March 2021.
All remaining 44,800,000 Performance Rights at 30 June 2021 have a weighted average remaining contractual
life of 449 days.
((cc)) SShhaarreess iissssuueedd aass sshhaarree bbaasseedd ppaayymmeennttss
There were no shares issued as share based payments for the year ended 30 June 2021.
During the year ended 30 June 2020, the Company settled payments for investor relation services received
through the issue of ordinary shares. On 5 July 2019, the Company issued 3,000,000 shares to a supplier in lieu
of cash payments for investor relation services received. The share-based payment was valued at the fair value of
the services received. The shares were issued at the share price of 4.7c. Expenses of $141,000 were recognised
as investor relations fees in the statement of profit or loss and other comprehensive income.
AVZ Minerals Limited | 62
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2255..
(a)
PPaarreenntt EEnnttiittyy IInnffoorrmmaattiioonn
Assets
Current assets
Non-current assets
Total assets
(b)
Liabilities
Current liabilities
Non-current Liabilities
Total liabilities
(c)
(d)
Net Assets
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
Total comprehensive loss for the year
Loss for the year
Other comprehensive income for the year
Total comprehensive loss for the year
Company
2021
$
2020
$
2,547,511
84,008,007
86,555,518
14,024,919
71,148,634
85,173,553
7,249,805
-
7,249,805
495,691
5,848,189
6,343,880
79,305,713
78,829,673
107,916,233
(34,452,767)
5,842,247
79,305,713
103,495,333
(29,855,236)
5,189,576
78,829,673
(5,183,611)
-
(5,183,611)
(4,887,265)
-
(4,887,265)
The parent entity has not guaranteed any loans for any entity during the year. The parent entity does not have any
contingent liabilities, or capital commitments.
2266.. EEvveennttss OOccccuurrrriinngg aafftteerr tthhee RReeppoorrttiinngg DDaattee
In July 2021, the Company issued 307,692,308 new shares at $0.13 per share via a share placement to raise $40 million
(before costs) from high-quality institutional, sophisticated and professional investors. Proceeds from the placement,
increased AVZ’s cash reserve, which allowed the Company to increase its interest in the Manono Project from 60% to
75%, negotiate project financing from an enhanced balance sheet position, assist to establish a working capital and
contingency cost buffer during project development and enhance AVZ’s limited early capital works program prior to
making a Final Investment Decision (FID) on the Manono Project.
In August 2021, the Company increased its interest in the Manono Project from 60% to 75% by exercising options to
purchase Dathomir’s minority shareholding of 15% equity in Dathcom Mining for US$20 million.
On 8 September 2021, the Company advised it had issued 16,675,000 Performance Rights to employees and
consultants under the Company’s Performance Rights Plan. In addition, the Company advised it was proposing to issue
31,750,000 Performance Rights to Directors subject to shareholder approval at the Company’s 2021 Annual General
Meeting to be held on 18 November 2021.
On 24 September 2021, a wholly owned entity of the Company, AVZ International Pty Ltd (the holder of the Company’s
equity interest in the Manono Project) executed a “Transaction Implementation Agreement” with Suzhou CATH Energy
Technologies Co. Ltd and related parties (“Suzhou Group”) in which AVZ International has agreed, on the achievement
of certain key project and corporate milestones, to divest a 24% equity interest in Dathcom Mining SA (the owner of
the Manono Project tenements) to the Suzhou Group for US$240 million.
AVZ Minerals Limited | 63
Notes to the Consolidated Financial Statements for the year ended 30 June 2021
2266.. EEvveennttss OOccccuurrrriinngg aafftteerr tthhee RReeppoorrttiinngg DDaattee ((CCoonnttiinnuueedd))
Other than the abovementioned, no other matter or circumstance has arisen that has significantly affected, or may
significantly affect:
the Group’s operations in future financial years, or
the results of those operations in future financial years, or
the Group’s state of affairs in future financial years.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive for the
consolidated entity up to 30 June 2021, it is not practicable to estimate the potential impact, positive or negative, after
the reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions
and any economic stimulus that may be provided.
AVZ Minerals Limited | 64
Directors’ Declaration
In the directors’ opinion:
(a) the financial statements and notes set out on pages 30 to 64 are in accordance with the Corporations Act 2001,
including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(ii) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance for
the financial year ended on that date; and
(b) the audited remuneration disclosures set out on pages 20 to 26 of the directors’ report comply with section 300A
of the Corporations Act 2001; and
(c) at the date of this declaration, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable; and
(d) the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
NNiiggeell FFeerrgguussoonn
MMaannaaggiinngg DDiirreeccttoorr
Perth, Western Australia
30 September 2021
AVZ Minerals Limited | 65
Independent Auditor’s Report
AVZ Minerals Limited | 66
Independent Auditor’s Report
AVZ Minerals Limited | 67
Independent Auditor’s Report
AVZ Minerals Limited | 68
Independent Auditor’s Report
AVZ Minerals Limited | 69
Independent Auditor’s Report
AVZ Minerals Limited | 70
Independent Auditor’s Report
AVZ Minerals Limited | 71
ASX Additional Information
SShhaarreehhoollddiinngg
The distribution of members and their holdings of equity securities in the holding company as at 6 October 2021 is as
follows:
Number Held
Number of Holders
Number of Shares
Fully Paid Ordinary Shares
1- 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
TToottaall
146
1,754
1,749
5,442
2,267
1111,,335588
18,590
5,758,864
14,515,260
205,300,423
2,992,579,543
33,,221188,,117722,,668800
Holders of less than a marketable parcel: 266 with a total of 195,467 shares amounting to 0.006% of the Issued Capital.
TTwweennttyy LLaarrggeesstt SShhaarreehhoollddeerrss
The names of the twenty largest ordinary fully paid shareholders are as follows:
Shareholder
Number
%
YIBIN TIANYI LITHIUM INDUSTRY CO LTD
HUAYOU INTERNATIONAL MINING (HONGKONG) LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
LITHIUM PLUS PTY LTD
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
CERTANE CT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
SMARTEQUITY EIS PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MRS LIYUN HUANG
MR KEVIN GRIFFITHS
STECOL CONSULTING PTY LTD
MR KAI GUO
MR CRAIG ALAN DORAN
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
BNP PARIBAS NOMS PTY LTD
TToottaall
SSuubbssttaannttiiaall SShhaarreehhoollddeerrss
The names of the substantial shareholders:
Shareholder
YIBIN TIANYI LITHIUM INDUSTRY CO LTD
HUAYOU INTERNATIONAL MINING (HONGKONG) LIMITED
OOnn--MMaarrkkeett BBuuyy--BBaacckk
There is no current on-market buy-back.
237,500,000
216,615,790
196,395,601
118,447,369
102,707,869
99,756,295
96,439,460
62,788,050
48,950,713
37,791,673
37,478,070
32,150,000
27,883,103
27,500,000
26,288,400
23,435,500
22,000,000
20,650,000
18,216,024
14,542,410
7.38%
6.73%
6.10%
3.68%
3.19%
3.10%
3.00%
1.95%
1.52%
1.17%
1.16%
1.00%
0.87%
0.85%
0.82%
0.73%
0.68%
0.64%
0.57%
0.45%
11,,446677,,553366,,332277
4455..6600%%
Number
%
237,500,000
216,615,790
7.38%
6.73%
AVZ Minerals Limited | 72
ASX Additional Information
RReessttrriicctteedd SSeeccuurriittiieess
There are no restricted ordinary shares in escrow.
UUnnqquuootteedd eeqquuiittyy sseeccuurriittiieess –– OOppttiioonnss
Unlisted options exercisable at $0.06 expiring on or before 8 April
2022
NNuummbbeerr oonn iissssuuee
76,666,668
NNuummbbeerr ooff hhoollddeerrss
3
UUnnqquuootteedd eeqquuiittyy sseeccuurriittiieess –– PPeerrffoorrmmaannccee RRiigghhttss
Performance rights expiring 3 December 2021
Performance rights expiring 2 June 2022
Performance rights expiring 3 December 2021
Performance rights expiring 3 December 2021
Performance rights expiring 3 December 2021
Performance rights expiring 9 December 2023
Performance rights expiring 26 June 2024
Performance rights expiring 7 September 2024
NNuummbbeerr oonn iissssuuee
7,700,000
8,000,000
1,500,000
800,000
2,000,000
19,600,000
5,200,000
16,675,000
NNuummbbeerr ooff hhoollddeerrss
7
1
1
2
2
13
4
14
VVoottiinngg RRiigghhttss
The voting rights attaching to each class of equity securities are set out below:
(i) Ordinary Shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
(ii) Performance Rights and Unlisted Options
These securities have no voting rights.
CCoorrppoorraattee GGoovveerrnnaannccee
The Board of AVZ Minerals Limited is committed to Corporate Governance. The Board is responsible to its Shareholders
for the performance of the Company and seeks to communicate with Shareholders. In accordance with ASX Listing Rule
4.10.3, the Company has elected to disclose its Corporate Governance policies and its compliance with them on its
website, rather than in the Annual Report. Accordingly, information about the Company's Corporate Governance
practices is set out on the Company's website at hhttttppss::////aavvzzmmiinneerraallss..ccoomm..aauu//ccoorrppoorraattee--ggoovveerrnnaannccee.
AApppplliiccaattiioonn ooff FFuunnddss
During the financial year, AVZ Minerals Limited confirms that it has used its cash and assets (in a form readily convertible
to cash) in a manner which is consistent with the Company’s business objectives.
IInnffoorrmmaattiioonn rreeqquuiirreedd uunnddeerr AASSXX LLiissttiinngg RRuullee 55..33..33
LLiisstt ooff ccuurrrreenntt mmiinniinngg aanndd eexxpplloorraattiioonn tteenneemmeennttss::
Country / Project
Tenement
Interest
Status
DRC – Manono Project
PR 13359
DRC – Manono Extension Project
PR 4029, PR 4030
75%*
100%
Granted
Granted
*Upon completion of the acquisition of a further 15% from Dathomir Mining Resources SARL in August 2021, AVZ
Minerals Limited now holds 75% interest in the Project.
AVZ Minerals Limited | 73
AVZ Minerals Limited
L2, 8 Colin Street
West Perth WA 6005