Corporate Directory
DIRECTORS
Dr John Clarke (Non-Executive Chairman)
Nigel Ferguson (Managing Director)
Graeme Johnston (Technical Director)
Serge Ngandu (Executive Director)
Rhett Brans (Non-Executive Director)
Her Excellency Salome T. Sijaona (Non-Executive
Director)
CHIEF FINANCIAL
OFFICER
Jan de Jager
COMPANY
SECRETARIES
Jan de Jager
Benjamin Cohen
PRINCIPAL PLACE
OF BUSINESS &
REGISTERED OFFICE
35/4 Ventnor Avenue
West Perth WA 6005
T: +61 8 6186 7600
F: +61 8 6118 2106
SHARE REGISTRY
Automic Registry Services
Level 5, 191 St. George’s Terrace
Perth WA 6000
T: 1300 288 664 (within Australia)
: +61 8 9698 5414 (outside Australia)
E: hello@automic.com.au
AUDITORS
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road
Subiaco WA 6008
T: +61 8 9426 0666
WEBSITE ADDRESS www.avzminerals.com.au
AVZ MINERALS LIMITED | 2
Table of Contents
03
Review of Operations
12
Directors’ Report
29
Auditor’s Independence Declaration
30
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
31
Consolidated Statement of Financial Position
32
Consolidated Statement of Changes in Equity
33
Consolidated Statement of Cash Flows
34
Notes to the Consolidated Financial Statements
65
Directors’ Declaration
66
Independent Auditor’s Report
REVIEW OF OPERATIONS
2024 ANNUAL REPORT
AVZ Minerals Limited | 3
Review of Operations
Manono Lithium and Tin Project (“Manono Project”)
Democratic Republic of the Congo (“DRC”)
•
The Company released its updated mineral resource estimate for the Manono Project, increasing total mineral
resources for the Manono Project by 47% to 842 million tonnes @ 1.61% Li2O 1;
•
AVZ continued to affirm its legal rights to a 75% interest in Dathcom Mining SA (Dathcom), the entity holding legal
rights to PR13359, comprising the Manono Project and its continuing pre-emptive rights over 15% of the 25%
interest held by La Congolaise d’Exploitation Minière (Cominière);
•
The Company continued to work with its legal and corporate advisors in respect of the International Chamber of
Commerce (ICC) and International Centre for Settlement of Investment Disputes (ICSID) arbitration proceedings to
confirm the Company’s and its subsidaries’ interests in the Manono Project which included:
o obtaining ICSID tribunal interim orders that, among other things, ordered the Democratic Republic of Congo
(DRC) to take the necessary steps to reflect that Dathcom is the holder of PR 13359 (excluding the perimeter
covered by PR 15775);
o AVZ’s subsidiaries filing a subsequent motion requesting the ICSID tribunal to make financial penalty orders
for non-compliance with the ICSID interim orders;
o AVZI applying to the ICC for a partial award seeking to liquidate (i.e. have paid) the accrued fines in respect of
the emergency ICC orders dated 15 November 2023 and 5 May 2023;
o AVZI successfully challenging the ICC arbitration proceeding (ICC No. 26986/SP) commenced by Jin Cheng
Mining Company (Jin Cheng) which is the subsidiary of Zijin Mining Limited (Zijin), finding that Jin Cheng is
not entitled to have recourse to ICC arbitration as it is not a shareholder of Dathcom; and
o enforcement of the previous ICC order in the case ICC No. 27401/SP granting emergency measures against
Dathomir Mining Resources SARL (Dathomir) on 18 December 2023, including an injunction compelling
Dathomir to withdraw the application to the Commercial Court of Lubumbashi seeking a judgment to wind-
up Dathcom;
•
AVZ’s securities were removed from the official list of the ASX on 13 May 2024;
•
The Company announced on 8 January 2025 that it has entered into a pre-completion funding agreement for
US$ 20 Million, a revised transaction implementation agreement (TIA) and a relationship deed with Suzhou CATH
Energy Technologies (CATH). The Restructured JV Arrangement is a continuation of the strong relationship and
partnership between AVZ and CATH, with both parties committed to the development of the Manono Lithium
and Tin Project (Manono Project).
Arbitral and Judicial Proceedings
With reference to the Company announcement dated 31 July 2024 titled "Arbitrations Update" and to the subsequent
announcements providing updates dated 13 March 2024, 19 March 2024, 12 May 2024 and 16 May 2024 relating to the
following proceedings:
1
Title Dispute – the International Centre for Settlement of Investment Disputes (ICSID) arbitration proceedings (ICSID
Case No. ARB/23/20) commenced by the Company’s subsidiaries AVZ International Pty Ltd (AVZI), Green Lithium
Holdings Pte Ltd (GLH), and Dathcom Mining SA (Dathcom) against the Democratic Republic of the Congo (DRC)
in relation to the DRC’s failure to procure the grant of an exploitation permit or mining permit (PE) to Dathcom in
respect of the land the subject of PR 13359;
2
Dathcom JV Dispute – the two International Chamber of Commerce (ICC) arbitration proceedings (ICC No.
27720/SP initiated by AVZI and ICC No. 27769/SP initiated by Cominière and Jin Cheng Mining Company (Jin
Cheng), a subsidiary of Zijin Mining Limited (Zijin)) in relation to alleged breaches of the shareholders’ obligations
1 Refer ASX announcement dated 31 January 2024 ‘Manono Project Mineral Resource increases 47% to 842Mt as Roche Dure
tonnages expanded’
REVIEW OF OPERATIONS
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AVZ Minerals Limited | 4
under the Dathcom joint venture agreement dated 27 January 2017 as amended (Dathcom JVA) and the purported
termination of the Dathcom JVA by Cominière (on the basis of which PR 13359 was purportedly transferred to
Cominière and an application to wind-up Dathcom was brought by Dathomir Mining Resources SARLU (Dathomir));
3
Jin Cheng Dispute – the ICC arbitration proceedings initiated by Jin Cheng against AVZI in relation to an alleged
abuse of majority position by AVZI in respect of its failure to acknowledge the sale of 15% of the shares in Dathcom
from Cominière to Jin Cheng (which AVZI contends was void because it was entered into in breach of AVZI’s pre-
emptive right);
4
Dathomir Dispute – the two ICC arbitration proceedings brought by AVZI against Dathomir in relation to Dathomir’s
attempts to challenge the sale to AVZI of its 15% shareholding in Dathcom; and
5
Fat Tail Dispute – the proceedings commenced by Fat Tail Holdings Pty Ltd (Fat Tail) against the Company and two
of its directors (Mr Nigel Ferguson and Dr John Clarke) in the Supreme Court of Western Australia alleging
oppressive conduct and misleading and deceptive conduct.
AVZ provides the following updates regarding certain procedural and interim milestones in respect of the above
proceedings together with information regarding the next steps in respect of each dispute.
Dispute
Case(s)
Parties
Summary
Status
1 Title
Dispute
ICSID Case
No. ARB/23/20
Claimants:
AVZI, GLH,
Dathcom
Respondent:
DRC
The primary relief AVZ
seeks is a declaration
that it holds title to PR
13359 over the entirety
of the Manono Project
and an order compelling
the grant of the PE over
the entirety of the
Manono Project. 2
The DRC has not complied with the
interim orders by the ICSID tribunal
on 16 January 2024 3
In the substantive proceeding, the
DRC filed its statement of defence on
1 August 2024. The defence did not
disclose any new issues or
arguments that has caused AVZ to
doubt its prospects of success.
The next step in the proceedings is
for AVZ and the DRC to complete
document production which is
currently underway.
The matter is currently scheduled for
hearing in June 2025.
2 Dathcom
JV Dispute
ICC 27720/SP
Claimants:
AVZI, GLH,
Dathcom
Respondent:
Cominière
AVZI seeks a declaration
that the Dathcom JV
remains on foot, and
damages for various
breaches of the
Dathcom JV including
for breaching of AVZI's
pre-emptive right under
the Dathcom JV and for
the steps taken by
Cominière to prevent
the grant of the PE and
disrupting the Manono
Project.
AVZI obtained
emergency orders
In the substantive proceeding,
Cominière filed its statement of
defence in the ICC No. 27720/SP
proceedings on 1 August 2024.
The defence did not disclose any
new issues or arguments that has
caused AVZ to doubt its prospects of
success. As previously announced,
based on the material that has been
filed in the proceedings to date and
having regard to the failure by
Cominière to comply with the
emergency orders, the Company
remains confident that it will prevail
in relation to this dispute. 6
2 Refer to ASX announcement dated 15 November 2023 titled 'ICSID Proceedings Update'.
3 Refer to ASX announcement dated 18 January 2024 titled 'AVZ Successful in ICSID Interim Measures' and announcement dated 13
March 2024 titled 'Dispute Update'.
6 Refer to ASX announcement dated 13 March 2024 titled 'Dispute Update'.
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AVZ Minerals Limited | 5
against Cominière, 4 and
applied to the ICC for a
partial award seeking to
liquidate (i.e. have paid)
the accrued fines in
respect of both
emergency orders. 5
The hearing in respect of AVZI's
claim is currently scheduled for April
or May 2025.
AVZI is still awaiting the decision of
the ICC tribunal in relation to its
application to liquidate the financial
penalties for Cominière's non-
compliance with the emergency
orders.
ICC 27769/SP
Claimants:
JCM,
Cominière
Respondents:
AVZI, GLH
Cominière seek a
declaration that the
Dathcom JV was
terminated and seek
damages for alleged
breaches of the
Dathcom JV by AVZI (ie
a counterclaim).
On 6 August 2024, the ICC tribunal
granted AVZ's request for a
preliminary hearing in relation to the
joinder of Dathomir.
The parties failed to agree on a
procedural calendar so it will be set
by the ICC tribunal. It is likely that
Cominière's counterclaim will be
deferred and potentially stayed
pending the outcome of AVZ's claim.
3
Jin
Cheng
Dispute
ICC 26986/SP
Claimant: Jin
Cheng
Respondent:
AVZI
The ICC tribunal
dismissed Jin Cheng's
action on jurisdictional
grounds, being that Jin
Cheng is not entitled to
have recourse to
arbitration because it is
not a shareholder of
Dathcom. The
purported acquisition of
its 15% shareholding
from Cominière was
ineffective and occurred
in contravention of
AVZI's pre-emptive
right. 7
AVZ has been notified that Jin
Cheng has applied to the Paris Court
of Appeals for an annulment of the
decision of the ICC Tribunal on 15
March 2024 dismissing Jin Cheng's
claim 8. The brief, setting out Jin
Cheng's grounds for its application,
has not yet been served on AVZI.
4
Dathomir
Dispute
ICC 27401/SP
Claimants:
AVZ, AVZI
Respondent:
Dathomir
AVZ and AVZI seek a
determination that it has
acquired 10% of the
shares in Dathcom
pursuant to the 2020
share purchase
agreement (2020 SPA
Proceedings). 9
Dathomir filed its rejoinder in the
2020 SPA Proceedings on 9 August
2024. 10
AVZ then filed its rejoinder on
Dathomir’s counterclaims on 16
September 2024.
The ICC hearing in the 2020 SPA
Proceedings occurred on 15-18
October 2024.
ICC 27425/SP
Claimant:
AVZI
Respondent:
AVZI seeks a
determination that it has
acquired 5% of the
Programming was delayed due to
the preliminary issue as to whether
AVZI could seek arbitration in
4 Refer to ASX announcement dated 8 May 2023 titled ‘Favourable Ruling in ICC Emergency Arbitration Proceedings against
Cominière’ and ASX announcement dated 17 November 2023 titled 'AVZ Successfully Restrains Cominière and Additional ICC
Arbitration Updates’.
5 Refer to ASX announcement dated 13 March 2024 titled 'Dispute Update'.
7 Refer to ASX announcement dated 9 October 2023 titled 'ICC Arbitration Hearing Jin Cheng Jurisdictional Challenge'.
8 Refer to announcement dated 31 July 2024 titled "Arbitrations Update".
9 Refer to ASX announcement dated 2 November 2023 titled ‘Update on Dathomir Dispute’.
10 Refer to announcement dated 31 July 2024 titled "Arbitrations Update".
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AVZ Minerals Limited | 6
Dathomir
shares in Dathcom
pursuant to the 2019
share purchase
agreement (2019 SPA
Proceedings). 11
circumstances where the 2019 SPA
Proceedings was signed by AVZ
(AVZ was successful on this issue).
5 Fat Tail
Dispute
Supreme
Court COR
198 of 2023
Claimant: Fat
Tail
(shareholder)
Respondent:
AVZ,
directors
Fat Tail allege AVZ has
engaged in oppressive
conduct against
shareholders and that
Mr Ferguson and Mr
Clarke have engaged in
misleading or deceptive
conduct. Fat Tail seeks
orders that Mr Ferguson
and Mr Clarke be
removed as directors of
AVZ and not be eligible
for re-election for 24
months or such other
period ordered. 12
It will be recalled that Fat Tail
provided security for costs in June
2024. 13 The parties are in the early
stages of the document discovery
process.
Title Dispute
On 3 May 2023, the first-instance court of Kalemie ordered the CAMI to register Cominière as the holder of PR 13359
(pertaining to the Manono Project) in the stead of Dathcom. Dathcom and AVZI immediately challenged this ruling
before the first-instance court of Kalemie as soon as they were informed of its existence, and filed appropriate motions
in ICC Case 27720 and ICSID case ARB/23/20 as this action is in direct violation of several injunctions ordered against
Cominière and the DRC by the arbitral tribunals.
On 16 January 2024, the ICSID tribunal made interim orders to protect AVZI, GLH and Dathcom’s rights pending the
final outcome of the Title Dispute including orders that the DRC take the necessary steps to reflect that Dathcom is the
holder of PR 13359 (Interim Orders). 14
It is noted that the reinstatement of PR 13359 in the name of Dathcom excluded the northern portion of PR 13359 which
Cominière purportedly relinquished to enable the grant of PR 15775 to Manono Lithium SA 15 (a joint venture between
Cominière and Zijin). The ICSID tribunal declined to deal with title to the northern area on an interim basis because it
affected the interests of Manono Lithium SA. Dathcom’s title to the northern area remains to be determined in the
substantive proceedings (together with final confirmation of Dathcom’s title to the balance of PR 13359). 16
The Interim Orders are binding on all parties and took effect immediately, but the parties were invited to provide
comments on the implementation of the Interim Orders.
The DRC has not yet complied with the Interim Orders. In its comments, the DRC presented new arguments directed to
achieving a cancellation of the Interim Orders (rather than provide comments on their implementation).
The ICSID tribunal has responded by reminding the DRC that it is bound by the Interim Orders and indicating that it will,
in due course, draw the appropriate conclusions from any failure to comply with the Interim Orders.
The acceptance of jurisdiction by the ICSID tribunal to hear the claim coupled with the ICSID tribunal’s acceptance that
it had power to compel the reinstatement of title on an interim basis bodes well for the prospects of this claim.
11 Refer to ASX announcement dated 2 November 2023 titled ‘Update on Dathomir Dispute’.
12 Refer to ASX announcement dated 18 December 2023 titled 'Fat Tail Proceedings'.
13 Refer to announcement dated 31 July 2024 titled "Arbitrations Update".
14 Refer to ASX announcement dated 18 January 2024 titled ‘AVZ Successful in ICSID Interim Measures’.
15 Manono Lithium SA is a joint venture between Cominière (39%) and Jinxiang Lithium Limited (61%) which is a subsidiary of Zijin
Mining Ground Company Ltd, a Chinese group. Jin Cheng is also a subsidiary of Zijin Mining Ground Company Ltd.
16 Refer to ASX announcement dated 18 January 2024 titled ‘AVZ Successful in ICSID Interim Measures’.
REVIEW OF OPERATIONS
2024 ANNUAL REPORT
AVZ Minerals Limited | 7
The Company reiterates that its preference remains to achieve a negotiated resolution with the DRC and the Directors
are confident that its rights in PR 13359 will be vindicated in due course.
Dathcom JV Dispute
As announced on 8 May 2023, AVZI obtained emergency orders restraining Cominière from taking steps to implement
its purported termination of the Dathcom JVA and ordered that Cominière pay to AVZI a fine of €50,000 per day for any
non-compliance with that emergency order. 17
As announced on 17 November 2023, AVZI obtained further emergency orders restraining Cominière from conducting
exploration or mining within the boundaries of PR 13359 or PR 15775 and ordered that Cominière pay a fine to AVZI of
€50,000 per day for any non-compliance with that emergency order. 18
AVZI has now applied to the ICC for a partial award seeking to liquidate (i.e. have paid) the accrued fines in respect of
both emergency orders.
Based on the material that has been filed in the proceedings to date and having regard to the failure by Cominière to
comply with the emergency orders, the Company remains confident that it will prevail in relation to this dispute.
Jin Cheng Dispute
AVZI’s jurisdictional challenge was heard on 5 and 6 October 2023, at which AVZI presented its case that the sale of the
15% of the shares Dathcom was ineffective, either due to the breach of AVZI’s pre-emptive right under the Dathcom JVA
or due to the circumstances in which that agreement was entered into by Jin Cheng and Cominière some of which were
addressed in the IGF Report dated 30 September 2022. 19
On 15 March 2024, the ICC tribunal found in favour of AVZI, ruling that, for the purposes of jurisdiction the status of a
shareholder in Dathcom is determined by its registration in Dathcom’s internal share register and that the ICC tribunal
did not have jurisdiction to preside over the proceedings commenced by Jin Cheng. 20
The ICC tribunal held that Jin Cheng’s recourse to arbitration was unjustified, and ordered that Jin Cheng reimburse
AVZI USD 75,000 in respect of its arbitration costs and AUD 813,474 in respect of AVZI’s defence costs. This amount has
still not been settled.
AVZ was recently notified Jin Cheng filed an action in the Paris Court of Appeals to set aside the ICC award. AVZ has not
been informed of the grounds for the annulment and will have to wait until Jin Cheng files its brief.
Dathomir Dispute
The Dathomir Dispute comprises two separate proceedings:
•
ICC proceedings (ICC No. 27425/SP) were instituted by AVZI to obtain an order confirming that it validly acquired
a further 5% shareholding in Dathcom pursuant to an agreement executed in 2019 (2019 SPA Proceedings); and
•
ICC proceedings (ICC No. 27401/SP) were instituted by AVZ and AVZI to obtain an order confirming that AVZI validly
acquired a further 10% shareholding in Dathcom pursuant to an agreement executed into in 2020 (2020 SPA
Proceedings).
In the 2019 SPA Proceedings, Dathomir’s jurisdictional challenge was heard on 19 January 2024 during which the parties
addressed the issue of whether AVZ executed the 2019 agreement on behalf of AVZI. The Company is awaiting the ICC
tribunal’s decision in respect of this hearing.
As announced on 19 December 2023, in the 2020 SPA Proceedings, the ICC tribunal made emergency measures
requiring Dathomir to preserve the status quo pending the outcome of the 2020 SPA Proceedings including by
withdrawing its application before the Commercial Court of Lubumbashi seeking the winding-up of Dathcom. 21 To date,
the hearings have been blocked by Dathcom’s legal counsel and the Company understands that the competent DRC
authorities are investigating judicial irregularities in this matter.
17 Refer to ASX announcement dated 8 May 2023 titled ‘Favourable Ruling in ICC Emergency Arbitration Proceedings against
Cominière’.
18 Refer to ASX announcement dated 17 November 2023 titled ‘‘AVZ Successfully Restrains Cominière and Additional ICC Arbitration
Updates’.
19 Refer to ASX announcement dated 27 September 2023 titled ‘Arbitration Proceedings Update’.
20 Refer to ASX announcement dated 19 March 2024 titled ‘AVZI Successfully Defends Against Jin Cheng ICC
Proceedings’.
21 Refer to ASX announcement dated 19 December 2023 titled ‘AVZ Successfully Restrains Dathomir’.
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AVZ Minerals Limited | 8
Based on the material that has been filed in the proceedings to date the Company remains confident that it will prevail
in the 2019 SPA Proceedings and 2020 SPA Proceedings.
Fat Tail Dispute
As announced on 18 December 2023 and 13 March 2024, the Company is continuing to vigorously defend the claims
made by Fat Tail in the Supreme Court of Western Australia proceedings.
Updated Mineral Resource Estimate 22
The updated Mineral Resource Estimate for the Manono Lithium and Tin Project (Manono Project) was announced
during January 2024 after generating new results from the 2022 – 2023 drilling programme at the Roche Dure
pegmatite.
The updated lithium Mineral Resource includes the Roche Dure deposit, hosting 79% of the lithium Mineral Resource of
the Manono Project, with the balance hosted by the Carriere de l’Este mineral deposit 23.
Corporate
On 13 May 2024, AVZ Minerals Limited was delisted from the Official List of ASX. The Company remains an unlisted
disclosing entity and continues to be required to fulfill all the obligations of Australia’s Corporations Act, including
continuous disclosure obligations.
Expiration of Performance Rights
During the financial year ended 30 June 2024 a total of 22,456,600 Performance Rights lapsed unexercised.
A further 31,035,000 Performance Rights lapsed post financial year end on 7 September 2024, leaving the balance of
Performance Rights at nil.
As of 30 June 2024, the Company confirmed its current securities on issue were as follows:
Unquoted Securities
Number
Ordinary Fully Paid
3,528,729,748
Unquoted Securities
Number
Performance Rights
31,035,000
22 Refer to ASX Announcement dated 31 January 2024 ‘Manono Project Mineral Resource increases 47% to 842Mt as Roche Dure
tonnages expanded’.
23 Refer to ASX Announcement dated 18 December 2023 ‘Carriere de l’Este Maiden Mineral Resource Estimate’.
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AVZ Minerals Limited | 9
List of current mining and exploration tenements (as of 30 June 2024):
Country / Project
Tenement
Interest
Status
DRC – Manono Project
PR 13359
75%*
Granted
DRC – Manono Extension Exploration
PR 4029
PR 4030
100%
Granted
*AVZ through its wholly owned entity, AVZ International Pty Ltd (“AVZI”) has a 75% legal interest in the Manono Project. On 27 September
2021, AVZ announced that Suzhou Cath Energy Technologies (“CATH”) will earn a 24% interest in the Manono Project subject to the
satisfaction or waiver of several conditions’ precedent stipulated in the Transaction Implementation Agreement (“TIA”). Since 30
November 2021, both parties have agreed on several occasions to amend the closure date for the TIA. On 3 July 2023, the Company
advised that the TIA remains valid until either the completion or the cancellation by parties. On 8 January 2025, the Company announced
that it has entered into a revised transaction implementation agreement (TIA). Refer to Company Announcement dated 8 January 2025.
Manono Project - Ore Reserve Estimate (as of 30 June 2024):
Reserve
Category
Tonnes
(Mt)
Grade
Li2O
%
Contained
Li20
(Mt)
Grade Sn
(g/t)
Contained Sn
(kt)
Proved
65.0
1.64
1.07
942
61.2
Probable
66.6
1.61
1.075
1,037
69.1
Total
131.7
1.63
2.14
990
130.3
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.
Manono Project Mineral Resource at a 0.5% Li2O cut-off (as of 30 June 2024):
Category
Tonnes
(Millions)
Li2O
%
Sn
ppm
Ta
Ppm
Measured
132
1.65
898
36
Indicated
367
1.62
703
34
Inferred
342
1.57
643
42
Total
842
1.61
709
37
Tabulated data have been rounded and as a result figures may not sum due to rounding.
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AVZ Minerals Limited | 10
INFORMATION ABOUT THE MANONO PROJECT
AVZ holds a 75% interest in the Manono Project, located 500km north of Lubumbashi in the south of the Democratic Republic of
Congo, hosting the world class Manono Project one of the largest undeveloped hard rock lithium deposits in the world, which
includes the Roche Dure and the Carriere de l’Este deposit.
Important information regarding ownership of the Roche Dure and Carriere de l’Este deposit
On 28 December 2016, PR 13359 which authorises exploration and feasibility studies to be undertaken, was granted for a period of 5
years. On 29 December 2016, PR13359 was transferred from La Congolaise d’Exploitation Miniere SA (Cominiere) to Dathcom Mining
SA (Dathcom). On 4th May 2021, Dathcom applied to convert PR13359 into an exploitation permit (PE) which authorises mining. Upon
lodging the PE application, PR13359’s term was extended indefinitely to allow determination of the PE application.
Dathcom undertook the drilling of the Carriere de l’Este deposit pursuant to PR 13359 between 2017 and 2021. It also carried out
further drilling of the Roche Dure deposit as part of its Early Works Programme in 2022 and 2023. Subsequently, disputes have
emerged relating to the ownership of PR 13359. These disputes are the subject of various arbitration proceedings which are
summarised in AVZ’s ASX announcements dated October 30th, November 2nd, 15th and 17th, December 19th 2023, 18th January
2024 and 13th March 2024.
The allegation that Manono Lithium SA holds PR 15775 over the northern portion of the Manono Project is without any legal foundation.
This northern area includes the Carriere de l’Este, Malata and Kahungwe deposits, the rebuilt Colline Manono construction camp and
administrative centre as well as the Dathcom core yard and core farm that hosts the sample library.
AVZ maintains that Dathcom is the holder of PR 13359 in respect of the entire Manono Project (including both the southern and northern
areas) and remains the applicant for a PE in respect of that land. AVZ has grounds to believe it has strong prospects of success and is
confident of its position. The purpose of the ICSID proceedings which were commenced by AVZ on 8 May 2023 and registered on 8
June 2023 is to authoritatively establish this.
On 18 January 2024, the Company announced the ICSID tribunal issued interim orders to the effect that the DRC take all necessary
steps to reflect that Dathcom is the holder of PR 13359 (but excluding the northern area) and to protect AVZI, GLH and Dathcom’s rights
during the pendency of the proceedings. The Company considers the unlawfulness of the transfer of PR 13359 from Dathcom to
Cominiere, which has been reversed under the Interim Orders, renders Cominiere’s relinquishment of the northern portion of PR 13359
and the subsequent grant of PR 15775 to Manono Lithium SA to be equally unlawful. Accordingly, the Company will continue with its
efforts to confirm its and Dathcom’s ownership of the northern area of the Manono Project either through its continued negotiations
with the DRC government’s senior public officials or the prosecution of the ICSID and ICC proceedings to their conclusion. However,
the Company’s board of directors considers the ICSID tribunal’s interim decision provides significant further impetus for a negotiated
outcome.
Considering the above, there is a reasonable prospect that a party, including the Company, will be granted a PE in respect of both the
Roche Dure and Carriere de l’Este Mineral Resources. If Dathcom is granted a PE in respect of both the Roche Dure and Carriere de
l’Este Mineral Resources, further negotiations will then be undertaken with the shareholders of Dathcom in relation to the terms of the
mining joint venture.
The Manono Project is strategically positioned as a clean, sustainable source of lithium, significantly contributing to the green energy
transition, feeding the global lithium-ion battery value chain. With industry leading ESG credentials, it is forecast to be one of the lowest
carbon emitting hard rock mines in the world.
Competent Person Statement
The technical information in the document that relates to the geology of the Roche Dure pegmatite is based upon information
compiled by Mr Michael Cronwright, who is a fellow of The Geological Society of South Africa (GSSA) and is a registered professional
with the South African Council for Natural Professions (SACNASP). Mr Cronwright was a Principal Consultant with CSA Global Pty Ltd
(an independent consulting company). Mr Cronwright has sufficient experience relevant to the style of mineralisation and type of
deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 edition of
the JORC Code. Mr Cronwright consents to the inclusion in this report of the matters based on this information in the form and context
in which it appears.
The Roche Dure pegmatite Mineral Resource estimate has been completed by Mr Anton Geldenhuys (BSc Hons, MEng) who is a
geologist with 20 years’ experience in exploration and mining as well as Mineral Resource evaluation and reporting. He is a Principal
Resource Consultant for CSA Global Pty Ltd (an independent consulting company), is a member in good standing with the South
African Council for Natural Scientific Professions (SACNASP) and is a Member of the Geological Society of South Africa (GSSA). Mr
Geldenhuys 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.
The information that relates to Roche Dure pegmatite Ore Reserves is based on information compiled by Mr Daniel Grosso who was
an employee of CSA Global Pty Ltd. Mr Grosso takes overall responsibility for the Report as Competent Person. Mr Grosso is a Member
of the Australian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style or mineralisation and
type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the JORC
(2012 Edition). The Competent Person, Daniel Grosso, has review the Ore Reserve statement and given permission for the publication
of this information in the form and context within which it appears.
REVIEW OF OPERATIONS
2024 ANNUAL REPORT
AVZ Minerals Limited | 11
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.
No New Information
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 references the Company’s previous ASX announcements noting the
following:
•
Prior to 18 December 2023, Mineral Resources and Ore Reserves for the Manono Lithium and Tin Operation “MLTO”,
“Manono Project” or “Roche Dure” references the Company’s previous ASX Announcements “Updated Mineral Resource
Estimate Includes Pit Floor “Wedge” Drill Results” released to ASX on 24 May 2021 followed by “JORC Ore Reserves
increase by 41.6% at Roche Dure” released to ASX on 14 July 2021.
•
On 18 December 2023, the maiden Mineral Resource estimate for Carriere de l’Este (CDL MRE) was announced via ASX
Announcement “Carriere de l’Este Maiden Mineral Resource Estimate.”
•
Post 18 December 2023, the Mineral Resources and Ore Reserves for the Manono Lithium and Tin Operation “MLTO” or
“Manono Project” include both the Roche Dure and CDL MRE.
•
Any reference to tin exploration targets should be read in conjunction with the Company’s previous ASX Announcement
“Initial Exploration Target for Alluvial Placer Hosted Tin Defined at the Manono Lithium and Tin Project” dated 18 May
2021.
•
The Definitive Feasibility Study (DFS) refers to the April 2020 DFS, announced to the ASX on 21 April 2020.
These 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 confrms that the form and context in which the Competent Persons’ findings are presented have not been materially
modified from the relevant original market announcements.
Forward Looking Information
This announcement contains certain forward-looking statements and comments about future events, including the Company’s
expectations about the Manono Project and the performance of its businesses. Forward looking statements can generally be identified
by the use of forward-looking words such as ‘expect’, ‘anticipate’, ‘likely’, ‘intend’, ‘should’, ‘could’, ‘may’, ‘predict’, ‘plan’, ‘propose’,
‘will’, ‘believe’, ‘forecast’, ‘estimate’, ‘target’ and other similar expressions within the meaning of securities laws of applicable
jurisdictions. Indications of, and guidance on, future earnings or financial position or performance are also forward-looking statements.
Forward looking statements involve inherent risks and uncertainties, both general and specific, and there is a risk that such predictions,
forecasts, projections and other forward-looking statements will not be achieved. Forward looking statements are provided as a
general guide only and should not be relied on as an indication or guarantee of future performance. Forward looking statements
involve known and unknown risks, uncertainty and other factors which can cause the Company’s actual results to differ materially from
the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements and many of these factors
are outside the control of the Company. As such, undue reliance should not be placed on any forward-looking statement. Past
performance is not necessarily a guide to future performance and no representation or warranty is made by any person as to the
likelihood of achievement or reasonableness of any forward-looking statements, forecast financial information or other forecast.
Nothing contained in this announcement, nor any information made available to you is, or shall be relied upon as, a promise,
representation, warranty or guarantee as to the past, present or the future performance of the Company.
Except as required by law, the Company assumes no obligation to provide any additional or updated information or to update any
forward-looking statements, whether as a result of new information, future events or results, or otherwise.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 12
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 2024. To comply with the
provisions of the Corporations Act 2001, the Directors report as follows:
1.
DIRECTORS
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.
Dr John Clarke
Non-Executive Chairman (appointed 2 December 2019)
Nigel Ferguson
Managing Director (appointed 2 February 2017)
Graeme Johnston
Technical Director (appointed 30 July 2018)
Serge Ngandu
Executive Director (appointed 25 September 2023)
Rhett Brans
Non-Executive Director (appointed 5 February 2018)
Her Excellency Salome T. Sijaona
Non-Executive Director (appointed 16 October 2023)
Dr Casta Tungaraza
Non-Executive Director (appointed 25 September 2023, resigned 7 December
2024)
2.
CHIEF FINANCIAL OFFICER
Jan de Jager
3.
COMPANY SECRETARIES
Jan de Jager
Benjamin Cohen
4.
PRINCIPAL ACTIVITIES
The principal activity of the consolidated entity during the financial year was mineral exploration and project
development. There were no significant changes in the nature of the consolidated entity’s principal activities during the
financial year.
5.
DIVIDENDS PAID OR RECOMMENDED
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.
6.
OPERATING RESULTS
The loss of the consolidated entity after income tax amounted to $7,267,667 (2023: $14,223,495).
7.
REVIEW OF OPERATIONS
A detailed review of the Group’s operations during the financial year is contained in this report.
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, transformation of mineral resources to reserves to support mining activities,
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 13
acquisition of additional prospective mineral interests and, in general, the value added to the Group’s mineral portfolio
during 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.
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. 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; and
capital requirement and lack of future funding.
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.
8.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
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.
9.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
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.
10. ENVIRONMENTAL REGULATION
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.
11. RISK MANAGEMENT
The Board of Directors regularly reviews the key risks associated with conducting exploration and project development
in the Democratic Republic of Congo “DRC” and take the necessary steps to manage these risks. The key risks are:
Titles and Permits
The Board of Directors is acutely aware of state and non-state actors that continue to publicly claim that title of its flagship
Manono Lithium and Tin project has been or will be transferred to them.
The Board continues to monitor the situation and actively defends these claims in various court cases as alluded to in
the corporate overview section of this report.
The Company is fully compliant with the DRC law and Mining Code and is in possession of all favourable opinions as
issued by the government departments to convert its exploration licence to an operating permit.
The Board confirms that it owns 75% of AVZ Minerals subsidiary Company Dathcom Mining SA, which has full legal rights
as contained in its research permit PR13359.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 14
The DRC Government publicly stated that the only way by which exoneration of mining permits is for non-payment of
surface right fees.
The Board confirms that all surface rights fees has been paid to date.
Project Development
The future value of the Company will depend on its ability to economically develop the Manono Lithium and Tin project.
The Transaction Implementation Agreement “TIA” with Suzhou CATH Energy Technologies (“CATH”) as announced on
27 September 2021 once implemented will provide sufficient funding to kick start the project. Logistical risks regarding
the remote location to transport equipment in and out of Manono with the current limited accessibility via road are
assessed and managed on a continuous basis. In the restructured TIA as announced on 8 January 2025, subject to certain
conditions, CATH may contribute all project development costs to the Phase I Manono Project joint venture pursuant to
a capital expenditure funding agreement to be agreed between CATH and GLH.
Key Management Personnel
Current management personnel and Directors of the Company have the extensive experience, skillset and relationships
required to progress the Manono Lithium and Tin Project. The risk of key management personnel and/or Directors
exiting the Company on their own accord or via other means could impact the Company’s ability to progress its projects.
The AVZ Board regularly reviews the skillset of its directors against a prescribed skills matrix. The AVZ Board is of the
view that the Directors in place as at the publication of this annual report provide the requisite experience and skills
against this skills matrix.
12. EVENTS OCCURRING AFTER THE REPORTING DATE
Escrow Account - Unauthorised transactions
As announced in AVZ's 31 July 2024 announcement titled "In-Country Legal Update", AVZ had terminated the
engagement of its former DRC lawyer. The files in respect of the domestic proceedings had been delivered to its newly
appointed counsel under the oversight of AVZ's international counsel, DLA Piper.
After careful consideration, the AVZ board had determined a path of recourse regarding allegations of unauthorised
transactions involving the lawyer’s escrow account in the DRC.
On 1 October 2024, AVZI filed a complaint against its former DRC legal counsel with the DRC Attorney General (the
“Procureur général près la Cour d’appel”) (Criminal Complaint). The Criminal Complaint was authorised by the Dean of
the National Bar on 17 September 2024 meaning that it was concluded that there are potential criminal implications
which warrant investigation.
Convertible Note Fundraising
In August 2024, the Company raised A$1.4 million via an initial issuance of unsecured convertible notes (Convertible
Notes) to certain professional or sophisticated investors (Noteholders), including directors and management personnel
of the Company. The funds will be used to meet operational costs and, until entry into a binding litigation funding facility,
fund the ongoing legal proceedings to which AVZ and its subsidiaries are a party.
The Convertible Notes have a 5-year term, 12% per annum coupon and conversion price at a 15% discount to the
deemed or implied value of shares in AVZ under a change of control, IPO or material fundraising.
Performance Rights Expiration
The remaining 31,035,000 Performance Rights lapsed post financial year end on 7 September 2024, leaving the balance
of Performance Rights at nil.
Restructured Transaction Implementation Agreement and Joint Venture including US$20m Pre-Completion Facility
The Company entered into a pre-completion funding agreement (Pre-Completion Funding Agreement), a revised
transaction implementation agreement (TIA) and a relationship deed with Suzhou CATH Energy Technologies (CATH)
(together the Restructured JV Arrangement). 24
Under the terms of the Restructured JV Arrangement:
24 For further information relating to CATH or the previous TIA, refer to AVZ's announcement dated 27 September 2021 titled
“Cornerstone investor secured for development of Manono Lithium and Tin Project” and subsequent announcements dated 29
September 2021, 30 November 2021, 16 February 2022, 2 May 2022, 1 June 2022, 29 July 2022, 30 September 2022, 3 January
2023, 28 February 2023, 4 April 2023 and 3 July 2023.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 15
•
CATH will provide AVZ with a facility of US$20 million to be drawn over the coming twelve months or so, to
finance AVZ's legal expenditures and also for working capital and general corporate purposes;
•
CATH will pay AVZ US$259.25 million to acquire a 30.5% indirect interest in the Manono Project, through the
acquisition of shares in Green Lithium Holding Pte. Ltd (GLH) (a wholly owned subsidiary of AVZ International
Pty Ltd (AVZI) and the holder of legal title to AVZ's interest in Dathcom Mining SA (Dathcom)), on satisfaction of
certain conditions precedent, including the grant of a mining licence for the project area covered by PR 13359
(Mining Licence) to Dathcom;
•
AVZ and CATH will enter a multi-faceted joint venture to develop the Manono Project;
•
Subject to certain conditions, CATH may contribute all project development costs to the Phase I Manono Project
joint venture pursuant to a capital expenditure funding agreement to be agreed between CATH and GLH;
•
Until the later of 5 years and repayment of any CATH funding of AVZ project development costs, CATH will be
entitled to purchase up to 100% of the uncommitted offtake produced and thereafter a reduced rate equal to
its and each non-AVZ JV participant's economic interest in the Manono Project;
•
AVZ and CATH have entered a relationship deed under which, among other things, CATH undertakes to
reasonably support AVZ under certain circumstances; 25 and
•
As a consequence of the revised JV and funding arrangements, AVZ no longer needs to draw upon the Locke
litigation funding facility.
Locke Funding Facility
On 28 November 2024 AVZ announced it had agreed the key terms and conditions for a litigation funding facility of up
to US$15 million with Locke Capital II, LLC (Locke). 26
Due to the availability of the Pre-Completion Funding Agreement from CATH, AVZ had elected not to proceed with the
funding facility agreement with Locke. No funds had been drawn down by AVZ from Locke.
Funding Update and Payment of ICSID and ICC tribunal fees
On 31 January 2025, the Company announced that it had received the first tranche of funding under the Pre-Completion
Funding Agreement with Suzhou CATH Energy Technologies (CATH). The funds received would be applied in
accordance with the Pre-Completion Funding Agreement including in respect of the conduct of the various proceedings
involving AVZ and its subsidiaries.
AVZ had paid the tribunal fees which were due in respect of:
1.
Title Dispute – the arbitration proceedings against the Democratic Republic of the Congo (DRC) before the
ICSID tribunal (ICSID Case No. ARB/23/20;
2.
Dathcom JV Dispute – the arbitration proceedings against La Congolaise d’Exploitation Minière (Cominière)
and Jin Cheng Mining Company (Jin Cheng), before the ICC tribunal (ICC No. 27720/SP); and
3.
Dathomir Dispute – the arbitration proceedings against Dathomir Mining Resources SARLU before the ICC
Tribunal (ICC No 27401/SP/ETT).
These arbitration proceedings will now proceed.
Internal Registry Dispute – Jin Cheng
On 19 March 2024 the Company announced that an ICC tribunal had dismissed an abuse of majority position action
brought by Jin Cheng Mining (JCM) against AVZI for lack of jurisdiction because JCM had not established that it was a
shareholder in Dathcom Mining (“Dathcom”), and therefore could not avail itself of the arbitration agreements in force
as between Dathcom’s shareholders. The ICC tribunal ordered that JCM reimburse AVZI USD 75,000 in respect of its
arbitration costs and AUD 813,474 in respect of defence costs, and that it bear its legal costs (in excess of €3 million).
25 As at 8 January 2025, CATH and its associates hold a relevant interest in 7.1% of AVZ shares on issue
26 Refer to AVZ's announcement titled "US$15,000,000 Funding Facility agreed with Locke". For further information relating to Locke,
refer to AVZ's announcement dated 17 November 2024 titled “AVZ Secures US$20 Million Funding Facility” and subsequent
announcements dated 2 April 2023, 14 June 2024 and 30 July 2024.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 16
The decision is entirely consistent with the position maintained by the Company, i.e. that it holds clear legal title to a 75%
interest in Dathcom.
JCM lodged an application to set aside the award before the Court of Appeals of Paris, and then turned to the domestic
courts in the Democratic Republic of Congo (“DRC”) seeking orders to force Dathcom to record it as a shareholder in its
shares register. The Company is strongly opposing this action from JCM, and the Directors are confident that it has solid
grounds to challenge this action.
Dissolution of Dathcom
In September 2023, Dathomir initiated an action before the Commercial Court of Lubumbashi seeking a judgment to
wind up Dathcom. Pursuant to an application in ICC Case 27401, Dathomir was forced to file a withdrawal brief in March
2024. On 2 December 2024, however, the Commercial Court of Lubumbashi dismissed Dathomir’s withdrawal, and
ordered that the proceedings proceed on the merits. This decision will be challenged before the Court of Appeals of
High Katanga which, in the first instance, should have the effect of staying the proceedings before the Commercial Court
of Lubumbashi. The Directors are confident that this case will not succeed.
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.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 17
13. INFORMATION ON DIRECTORS
(INCLUDING DIRECTORS’ INTERESTS AT THE DATE OF THIS REPORT)
Dr John
Clarke
Independent Non-Executive
Chairman
Nigel
Ferguson
Managing Director
Appointed
2 December 2019
Appointed
2 February 2017
Qualifications
Ph.D. (Metallurgy), B.Sc. (Metallurgy),
MBA
Qualifications
BSc (Geology), FAusIMM, MAIG
Experience
Dr Clarke brings considerable
experience in mine management,
mineral exploration, corporate
acquisition and mine development in
the mining sector in Africa. He has
worked both in Smelting and Mining
operations during his career and has
been a director of several companies
which have had exploration,
development and mining activities in
Africa. Having joined Ashanti
Goldfields in 1982, Dr Clarke held a
succession of mine management,
strategic and corporate planning
roles before becoming the Executive
Director in charge of Business
development. He contributed to
establishing Ashanti’s gold
exploration program throughout sub-
Saharan Africa. In 1997 Dr Clarke
joined Nevsun Resources as
President and CEO, taking the
Company into Eritrea and the
discovery the Bisha Mine.
Experience
Mr Ferguson is a geologist with over
37 years of experience having
worked in senior management
positions for the past 27 years in a
variety of locations. He has
experience in the exploration,
definition of precious and base metal
mineral resources throughout the
world, including DRC, Zambia,
Tanzania, Saudi Arabia, Southeast
Asia and Central America. He has
been active in the DRC since 2004 in
gold and base metals exploration
and resource development.
Interests in
Securities
51,013,404 Ordinary Shares
Nil Performance Rights
Directorships
in last 3 years
AJN Resources Inc. (CSE:AJN)
(resigned 8 May 2022)
Interests in
Securities
8,035,333 Ordinary Shares
Nil Performance Rights
Directorships
in last 3 years
Great Quest Fertilizer Limited
(TSXV:GQ)
Alpha Exploration Limited
(TSXV:ALEX)
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 18
13. INFORMATION ON DIRECTORS (con’t)
(INCLUDING DIRECTORS’ INTERESTS AT THE DATE OF THIS REPORT)
Graeme
Johnston
Technical Director
Serge
Ngandu
Executive Director
Appointed
30 July 2018
Appointed
25 September 2023
Qualifications
BSc (Geology), M.Sc. (Structural
Geology), DIC, FGS
Qualifications
BSC and MSC (Chemical Engineering),
M.Sc. (Mineral Processing), MBA
Experience
Mr Johnston is a geologist with over 30
years’ experience in Australia, the
Middle East, Romania, Malaysia and the
DRC. He 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 founding
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.
His 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.
Experience
Mr Ngandu has over 40 years of
experience in the mining industry
across various African countries where
he has been involved in delivering
major mining projects. Mr Ngandu is
currently the Director for Corporate
affairs of the Company’s subsidiary,
Dathcom Mining SA. Mr Ngandu has
been instrumental in delivering the
Company’s favourable opinions
obtained from various departments of
the government of the Democratic
Republic of Congo “DRC”. These four
favourable opinions (Technical,
Environmental, Cadastral and
Financial) underpin the rights to the
Manono Lithium and Tin project and
will be instrumental in obtaining the
Company’s mining licence. Mr Ngandu
previously held Senior Management
and Board positions with several
international mining and engineering
companies including Hatch Africa
(South Africa), Areva (France, Central
African Republic, and South Africa),
West African Minerals Corporation
(Sierra Leone), Worley Parsons (South
Africa) and Gecamines (DRC).
Interests in
Securities
11,398,070 Ordinary Shares
Nil Performance Rights
Interests in
Securities
Nil Ordinary Shares
Nil Performance Rights
Directorships
in last 3 years
Mount Ridley Mines Limited (ASX: MRD)
(resigned 18 July 2022)
Directorships
in last 3 years
Nil
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 19
13. INFORMATION ON DIRECTORS (con’t)
(INCLUDING DIRECTORS’ INTERESTS AT THE DATE OF THIS REPORT)
Rhett
Brans
Independent Non-Executive Director
Salome T.
Sijaona
Independent Non-Executive Director
Appointed
5 February 2018
Appointed
16 October 2023
Qualifications
Dip. Engineering (Civil)
Qualifications
AdvDip in Rural Development
Planning, AdvDip in Integrated Surveys
for Development, BA Economics
Experience
Mr Brans is an experienced director
and civil engineer with over 48 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. He is currently a Non-
Executive Director of Australian
Potash Limited and Carnavale
Resources Ltd. Previously, Mr Brans
was a founding director of Perseus
Mining Limited and served on the
boards of Syrah Resources Limited,
Tiger Resources Limited and
Monument Mining Limited.
Experience
Her Excellency Salome T. Sijaona is a
Tanzanian citizen and economist with
vast experience in governance, project
execution, private sector engagement
and international economic diplomacy.
In 2010, Her Excellency Salome T.
Sijaona was appointed as the
Ambassador Extraordinary and
Plenipotentiary by the Tanzanian
Government, serving as the Tanzanian
Ambassador in Japan and is also
accredited with Australia, New
Zealand, South Korea and Papua New
Guinea. Before being appointed as
Ambassador, she was a long serving
Chief Executive of two major
government Ministries and Advisor to
their respective Ministers. Her
Excellency Salome T. Sijaona’s 20
years’ experience in high level
management and governance has
seen her chair various Boards,
including serving on international
bodies.
Interests in
Securities
7,064,158 Ordinary Shares
Nil Performance Rights
Interests in
Securities
Nil Ordinary Shares
Nil Performance Rights
Directorships
in last 3 years
Australian Potash Limited (ASX:APC)
(resigned 29 January 2024)
Carnavale Resources Limited
(ASX:CAV)
Directorships
in last 3 years
Nil
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 20
13. INFORMATION ON DIRECTORS (con’t)
(INCLUDING DIRECTORS’ INTERESTS AT THE DATE OF THIS REPORT)
Dr Casta
Tungaraza
Former Independent Non-Executive
Director
Appointed
25 September 2023 (resigned 7 December
2024)
Qualifications
BA Hons (International Relations) Masters in
Development Studies,
Ph.D. (International Politics)
Experience
Dr Tungaraza has over 40 years of
domestic and international industry
experience. She has managed multiple
projects in Australia and Africa and has
delivered key projects across these regions
within the public, private and not-for-profit
sectors. She also has extensive experience
and knowledge of international trade
between Australia and Africa as the chair of
the Australian Government’s Advisory
Group on Australia-Africa Relations
(AGAAR) advising the Minister of Foreign
Affairs and Trade on Australia’s
engagement with the countries of Africa to
enhance commercial, investment and
people-to-people relations for the mutual
benefit of the two Continents.
Interests in
Securities
Nil Ordinary Shares*
Nil Performance Rights*
*At the time of resignation
Directorships
in last 3 years
Nil
14. INFORMATION ON COMPANY SECRETARIES
Jan de Jager
CFO & Joint Company Secretary
Benjamin
Cohen
Commercial Manager &
Joint Company Secretary
Appointed
15 April 2021
Appointed
30 April 2021
Qualifications
B.Com (Hons), CA (SA)
Qualifications
B.Com, CPA
Experience
Mr de Jager is a Chartered Accountant
with more than 25 years’ 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.
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.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 21
15. AUDITED REMUNERATION REPORT
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:
EXECUTIVE DIRECTORS
Nigel Ferguson
Managing Director
Appointed 2 February 2017
Graeme Johnston
Technical Director
Appointed 30 July 2018
Serge Ngandu
Executive Director
Appointed 25 September 2023
NON-EXECUTIVE DIRECTORS
John Clarke
Non-Executive Chairman
Appointed 2 December 2019
Rhett Brans
Non-Executive Director
Appointed 5 February 2018
Casta Tungaraza
Non-Executive Director
Appointed 25 September 2023,
Resigned 7 December 2024
Salome Sijaona
Non-Executive Director
Appointed 16 October 2023
OTHER KEY MANAGEMENT PERSONNEL (EXECUTIVES)
Jan de Jager
CFO & Joint Company Secretary
Appointed 15 April 2021
Benjamin Cohen
Commercial Manager &
Joint Company Secretary
Appointed 30 April 2021
(a)
Remuneration Policy
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:
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 22
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 11% 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 (Plan) and
issued and held by the AVZ Mineral Limited Rights Share Trust (RST). The Plan was approved by shareholders at the 25
November 2021 Annual General Meeting for a term of three years. 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.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 23
(b)
Service Agreements
The agreements relating to remuneration and other terms of employment for the key management personnel (KMP) for
the financial year are set out below.
Name
Position
Note
Fees/Salaries p.a. according to original agreement
(inc. of statutory superannuation where applicable)
$
John Clarke
Non-Executive Chairman
1
120,000
Nigel Ferguson
Managing Director
400,000
Graeme Johnston
Technical Director
2
350,000
Serge Ngandu
Executive Director
3
30,000
Rhett Brans
Non-Executive Director
1, 2
60,000
Casta Tungaraza
Non-Executive Director
1
93,000
Salome Sijaona
Non-Executive Director
1
93,000
Jan de Jager
CFO & Joint Company Secretary
4
330,000
Benjamin Cohen
Commercial Manager & Joint Company
Secretary
283,050
1
Effective 1 June 2024, all Non-Executive Directors have ceased receiving monthly fees in an effort for the Company to conserve
cash. The unpaid fees have been accrued.
2
Effective 1 January 2024, Graeme Johnston receives a monthly director fee of $7,750 per month (previously $29,166). Fees have
been deferred from 1 June 2024 onwards. Refer to Section (g) of the Remuneration Report for further details.
3
In addition to his $30,000 p.a. Directors Fees, Serge Ngandu undertakes work for the Company on consultancy basis pursuant to
the terms of his consultancy services agreement. He receives a daily rate for the work performed. Fees have been deferred from 1
June 2024 onwards. Refer to Section (g) of the Remuneration Report for further details.
4
From 15 January 2024, Jan de Jager’s consultancy fees was reduced by 20% to $264,000 per annum. From 15 May 2024 onwards,
he ceased working for the Company on a full-time basis. He continued to provide Company Secretarial and CFO services on an ad
hoc basis and receives an hourly rate for the work performed.
(c)
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The Company’s Performance for the past five years up to and including the current financial year:
2024
2023
2022
2021
2020
Net loss after tax ($)
(7,267,667)
(14,223,495)
(20,402,730)
(5,537,632)
(5,299,858)
Share Price at year end ($)
n/a
0.780*
0.780*
0.160
0.052
Basic EPS (cents per share) ($)
(0.21)
(0.40)
(0.61)
(0.19)
(0.22)
* Share price prior to AVZ’s trading halt on 9 May 2022 and voluntary suspension on 11 May 2022.
AVZ Securities were removed from ASX Official Listing on 13 May 2024.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 24
(d)
Details of Key Management Personnel Remuneration
2024
Short-term benefits
Post-
employment
Benefits
Share-
based
payments
Total
Remuneration
consisting of
share-based
payments
Fixed
remuneration
Cash Salary
and Fees
Annual
Leave
Cash
Out
Superannuation
LTIP Rights
$
$
$
$
$
%
%
Non-Executive Chairman
John Clarke
120,000
-
-
-
120,000
-
100
Executive Directors
Nigel Ferguson
400,000
43,290
-
-
443,290
-
100
Graeme Johnston
221,502
-
-
-
221,502
-
100
Serge Ngandu1
22,500
-
-
-
22,500
-
100
Non-Executive Directors
Rhett Brans
54,550
-
5,450
-
60,000
-
100
Casta Tungaraza1
71,300
-
-
-
71,300
-
100
Salome Sijaona2
65,875
-
-
-
65,875
-
100
Executives
Jan de Jager
271,750
-
-
-
271,750
-
100
Benjamin Cohen
255,000
24,519
30,747
-
310,266
-
100
Total
1,482,477
67,809
36,197
-
1,586,483
-
-
1Appointed on 25 September 2023.
2 Appointed on 16 October 2023.
2023
Short-term benefits
Post-
employment
Benefits
Share-
based
payments
Total
Remuneration
consisting of
share-based
payments
Fixed
remuneration
Cash Salary
and Fees
Cash
Bonus
Superannuation
LTIP Rights
$
$
$
$
$
%
%
Non-Executive Chairman
John Clarke
120,000
-
-
169,913
289,913
59
41
Executive Directors
Nigel Ferguson
400,000
240,000
-
210,701
850,701
25
75
Graeme Johnston
345,300
140,000
-
162,809
648,109
25
75
Non-Executive Directors
Rhett Brans
54,299
-
5,701
105,351
165,351
64
33
Peter Huljich1
5,000
-
-
105,351
110,351
95
5
Executives
Jan de Jager
330,000
148,500
-
34,827
513,327
7
93
Benjamin Cohen
240,000
81,448
33,752
10,183
365,383
3
88
Total
1,494,599
609,948
39,453
799,135
2,943,135
1 Resigned on 3 August 2022.
Share-based payments are calculated in accordance with Australian Accounting Standards and are the amortised fair value of equity-related awards that
have been granted to KMP.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 25
(e)
Share-based compensation
i.
Options
No options issued to current Directors and executives as part of their remuneration during the year.
ii.
Performance Rights
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
Other
Lapsed/
Cancelled
Vested and
converted
to shares
Balance at the
end of the year
Balance
vested and
exercisable
2024
John Clarke
9,048,000
-
-
(3,798,000)
-
5,250,000
-
Nigel Ferguson
10,000,000
-
-
(3,000,000)
-
7,000,000
-
Graeme Johnston
7,500,000
-
-
(2,000,000)
-
5,500,000
-
Rhett Brans
5,000,000
-
-
(1,500,000)
-
3,500,000
-
Serge Ngandu
-
-
-
-
-
-
-
Casta Tungaraza
-
-
-
-
-
-
-
Salome Sijaona
-
-
-
-
-
-
-
Jan de Jager
5,082,500
-
-
(1,582,500)
-
3,500,000
-
Benjamin Cohen
1,668,100
-
-
(443,100)
-
1,225,000
-
Total
38,298,600
-
-
(12,323,600)
-
25,975,000
-
(f)
Ordinary shareholdings
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.
Ordinary shares
Balance at the
start of the year
Received as
remuneration
Other
Conversion of
performance
rights
Purchased/
(sold) during
the year
Balance at
the end of
the year
2024
John Clarke
8,035,333
-
-
-
-
8,035,333
Nigel Ferguson
51,013,404
-
-
-
-
51,013,404
Graeme Johnston
11,398,070
-
-
-
-
11,398,070
Rhett Brans
7,064,158
-
-
-
-
7,064,158
Serge Ngandu
-
-
-
-
-
-
Casta Tungaraza
-
-
-
-
-
-
Salome Sijaona
-
-
-
-
-
-
Jan de Jager
-
-
-
-
-
-
Benjamin Cohen
2,306,900
-
-
-
-
2,306,900
Total
79,817,865
-
-
-
-
79,817,865
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 26
(g)
Other transactions with Key Management Personnel
i.
Loans and amount owing to key management personnel
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 as at 30 June 2024 was $Nil (2023: Nil).
ii.
Other transactions with key management personnel
During the year, Corad Pty Ltd, a company controlled by Mr Graeme Johnston provided technical consultancy services
to the Company. Amount paid for the services and reimbursements of business expenses during the year was $13,379
(2023: $60,259).
During the year, Serge Ngandu provided consultancy services to the Company through a consultancy agreement. The
amount paid during the year was $376,176 to (of which $96,160 was related to prior to his appointment as director).
Australian Institute of Kiswahili Language and African Culture Pty Ltd, a company controlled by Casta Tungaraza provided
consulting services to the Company prior to Casta’s appointment as Non-Executive Director. During the reporting period
the amount paid was $7,750.
No other transactions were made to any director or other key management personnel of the Group, including related
parties during the financial year.
This is the end of the audited remuneration report.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 27
16.
MEETINGS OF DIRECTORS
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 (AR)
Committee
Eligible to
Attend
Attended
Eligible to
Attend
Attended
Eligible to
Attend
Attended
John Clarke
16
16
2
2
2
2
Nigel Ferguson
16
16
n/a
n/a
n/a
n/a
Graeme Johnston
16
15
n/a
n/a
n/a
n/a
Serge Ngandu1
14
14
n/a
n/a
n/a
n/a
Rhett Brans
16
15
2
2
2
2
Casta Tungaraza1
14
12
2
1
1
1
Salome Sijaona2
14
11
n/a
n/a
n/a
n/a
1Appointed on 25 September 2023.
2 Appointed on 16 October 2023.
17. INSURANCE OF OFFICERS
During the financial year, AVZ Minerals Limited paid a premium of $Nil (2023: $916,121) 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. The insurance lapsed during the reporting period and the Company remains in discussions with brokers and
underwriters regarding the inception of renewed cover.
18. SHARES UNDER OPTION
At the date of this report, there are no unissued ordinary shares of AVZ Minerals Limited under options.
19. SHARES ISSUED ON EXERCISE OF OPTIONS
No options were exercised during the year.
20. PROCEEDINGS ON BEHALF OF THE COMPANY
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.
21. AUDITOR’S INDEPENDENCE DECLARATION
Section 307c of the Corporations Act 2001 requires our auditors, Hall Chadwick WA Audit 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 immediately after this Directors’ Report.
DIRECTORS’ REPORT
2024 ANNUAL REPORT
AVZ Minerals Limited | 28
22. NON-AUDIT SERVICES
During the year, Hall Chadwick WA Audit Pty Ltd, the Company’s external auditor, did not perform any services other
than their statutory audits (2023: $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.
Nigel Ferguson
Managing Director
Perth, Western Australia
4 February 2025
To the Board of Directors,
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead audit Director for the audit of the financial statements of AVZ Minerals Limited for the financial year
ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been no contraventions
of:
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
•
any applicable code of professional conduct in relation to the audit.
Yours Faithfully,
HALL CHADWICK WA AUDIT PTY LTD
CHRIS NICOLOFF FCA
Director
Dated this 4th day of February 2025
Perth, Western Australia
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
2024 ANNUAL REPORT
AVZ Minerals Limited | 30
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2024
Consolidated
Note
2024
2023
$
$
Revenue
Other income
3
175,121
859,933
Expenses
Administrative costs
(2,436,318)
(4,697,264)
Legal costs
(11,040,746)
(5,413,961)
Employee costs
(1,033,167)
(1,873,782)
Directors’ fees
(311,725)
(179,299)
Share-based payment expense reversal
23
9,238,021
(844,293)
Compliance and regulatory expenses
(364,743)
(285,526)
Insurance expenses
(690,200)
(774,161)
Depreciation expense
9
(504,890)
(666,891)
Depreciation expense of right-of use asset
10
(240,524)
(287,881)
Interest expense on lease liabilities
10
(55,254)
(81,622)
Foreign exchange (loss)/gain
(3,242)
21,252
Loss before income tax
(7,267,667)
(14,223,495)
Income tax expense
5
-
-
Loss after income tax for the year
(7,267,667)
(14,223,495)
Other comprehensive income:
Items that may be reclassified to profit or loss
Exchange differences arising on translation of foreign operations
(377,241)
5,688,147
Other comprehensive(loss)/income
(377,241)
5,688,147
Total comprehensive loss for the year
(7,644,908)
(8,535,348)
Loss for the year is attributable to:
Owners of AVZ Minerals Limited
(7,012,907)
(13,858,735)
Non-controlling interests
(254,760)
(364,760)
(7,267,667)
(14,223,495)
Total comprehensive loss for the year attributable to:
Owners of AVZ Minerals Limited
(7,359,708)
(8,757,349)
Non-controlling interests
(285,200)
222,001
(7,644,908)
(8,535,348)
Basic and diluted loss per share attributable to owners of AVZ
Minerals Limited (cents per share)
17
(0.21)
(0.40)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
2024 ANNUAL REPORT
AVZ Minerals Limited | 31
Consolidated Statement of Financial Position
As at 30 June 2024
Consolidated
Note
2024
2023
$
$
Current Assets
Cash and cash equivalents
6
698,693
18,949,635
Trade and other receivables
7
305,460
1,526,860
Total Current Assets
1,004,153
20,476,495
Non-Current Assets
Mineral exploration and evaluation
8
188,874,544
182,096,970
Property, plant and equipment
9
2,597,583
3,283,318
Right-of-use asset
10
-
1,082,359
Total Non-Current Assets
191,472,127
186,462,647
Total Assets
192,476,280
206,939,142
Current Liabilities
Trade and other payables
11
7,273,726
3,690,479
Provisions
12
80,571
99,314
Lease liability
10
-
268,098
Total Current Liabilities
7,354,297
4,057,891
Non-Current Liabilities
Lease liability
10
-
876,341
Total Non-Current Liabilities
-
876,341
Total Liabilities
7,354,297
4,934,232
Net Assets
185,121,983
202,004,910
Equity
Share capital
13
226,455,235
226,455,235
Reserves
15
14,508,123
25,980,504
Accumulated losses
(71,385,098)
(66,259,751)
Capital and reserves attributable to owners of AVZ Minerals
Ltd
169,578,260
186,175,988
Non-controlling interests
21
15,543,723
15,828,922
Total Equity
185,121,983
202,004,910
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
2024 ANNUAL REPORT
AVZ Minerals Limited | 32
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2024
Contributed
Equity
Accumulated
Losses
Share
Options
Reserve
Foreign
Currency
Reserve
Total
Non-
controlling
Interests
Total Equity
$
$
$
$
$
$
$
Balance at 1 July
2022
226,455,235
(53,613,316)
13,819,046
7,428,079
194,089,044
15,606,921
209,695,965
Loss for the year
-
(13,858,735)
-
-
(13,858,735)
(364,760)
(14,223,495)
Exchange
differences on
translation of
foreign
operations
-
-
-
5,101,386
5,101,386
586,761
5,688,147
Total
comprehensive
income/(loss) for
the year
-
(13,858,735)
-
5,101,386
(8,757,349)
222,001
(8,535,348)
Transactions with owners in their capacity as owners:
Share-based
payments
-
-
844,293
-
844,293
-
844,293
Performance
Rights lapsed
-
1,212,300
(1,212,300)
-
-
-
-
Total
transactions with
owners in their
capacity as
owners
-
1,212,300
(368,007)
-
844,293
-
844,293
Balance at 30
June 2023
226,455,235
(66,259,751)
13,451,039
12,529,465
186,175,988
15,828,922
202,004,910
Balance at 1 July
2023
226,455,235
(66,259,751)
13,451,039
12,529,465
186,175,988
15,828,922
202,004,910
Loss for the year
-
(7,012,907)
-
-
(7,012,907)
(254,759)
(7,267,666)
Exchange
differences on
translation of
foreign
operations
-
-
-
(346,800)
(346,800)
(30,440)
(377,240)
Total
comprehensive
income/(loss) for
the year
-
(7,012,907)
-
(346,800)
(7,359,707)
(285,199)
(7,644,906)
Transactions with owners in their capacity as owners:
Share-based
payments
-
-
(9,238,021)
-
(9,238,021)
-
(9,238,021)
Performance
Rights lapsed
-
1,887,560
(1,887,560)
-
-
-
-
Total
transactions with
owners in their
capacity as
owners
-
1,887,560
(11,125,581)
-
(9,238,021)
-
(9,238,021)
Balance at 30
June 2024
226,455,235
(71,385,098)
2,325,458
12,182,665
169,578,260
15,543,723
185,121,983
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
2024 ANNUAL REPORT
AVZ Minerals Limited | 33
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2024
Consolidated
Note
2024
2023
$
$
Cash Flows from Operating Activities
Other revenue
4,744
-
Payments to suppliers and employees
(11,362,813)
(12,086,971)
Payments for exploration and evaluation
(81,687)
(288,545)
Interest received
170,378
627,937
Interest expense
(93)
-
Interest expense on lease liability
(55,254)
(81,622)
Bank guarantee release
199,508
-
R&D Tax Incentive
81,346
137,533
Net cash outflow from operating activities
18
(11,043,871)
(11,691,668)
Cash Flows from Investing Activities
Payments for exploration and evaluation
(7,612,489)
(29,055,427)
Payments for property, plant and equipment
(1,625)
(1,578,144)
Proceeds for sale of PPE
909
14,837
Net cash outflow from investing activities
(7,613,205)
(30,618,734)
Cash Flows from Financing Activities
Proceeds from issue of shares and other equity
securities
-
-
Proceeds from exercise of options
-
-
Share issue transaction costs
-
-
Repayment of lease liabilities
(221,236)
(240,501)
Net cash inflow from financing activities
(221,236)
(240,501)
Net decrease in cash and cash equivalents
(18,878,312)
(42,550,903)
Exchange rate adjustments
627,370
774,317
Cash and cash equivalents at the start of the year
18,949,635
60,726,221
Cash and cash equivalents at the end of the year
6
698,693
18,949,635
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 34
Notes to the Consolidated
Financial Statements
1.
Summary of Significant Accounting Policies
The principal accounting policies adopted in the preparation of these consolidated 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 consolidated 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 $7,267,667 (2023: $14,223,495) and net cash outflows from
operating activities of $11,043,871 (2023: $11,691,668). As at 30 June 2024, the Group’s cash and cash
equivalents were $698,693 (2023: $18,949,635) and had a working capital deficit of $6,350,144 (2023:
$16,418,604 surplus).
The Board of Directors routinely assesses the Company’s current and forecast cash position and any short-
to-medium-term fundraising requirement for the Group’s prospective activities on a continuous basis. In
addition to the continuous oversight over the actual cashflow figures as against budgeted performance, a
similar more detailed assessment is undertaken at periodic junctures during each 12 month reporting
period.
The Company announced on 8 January 2025 that it has entered into a pre-completion funding agreement
for US$ 20 Million, a revised transaction implementation agreement (TIA) and a relationship deed with
Suzhou CATH Energy Technologies (CATH). The Restructured JV Arrangement is a continuation of the
strong relationship and partnership between AVZ and CATH, with both parties committed to the
development of the Manono Lithium and Tin Project (Manono Project). The Manono Project has the
potential to become a leading global producer of lithium products.
The pre-completion funding agreement will provide sufficient working capital over the next 12 months to
ensure that the Company achieve its strategy to secure the mining rights for the Manono Lithium and Tin
project.
Should the Group not be able to fund its operations in accordance with the factors set out above, there is
material uncertainty whether it would be able to continue as a going concern and therefore whether it would
realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in
the financial statements.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 35
1.
Summary of Significant Accounting Policies (con’t)
(b)
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 2024 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 the 2017 financial year, 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.
*Upon completion of a further acquisition of 15% interest from Dathomir Mining Resources SARL in August
2021, AVZ Minerals has a 75% interest in the Manono Project.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 36
1.
Summary of Significant Accounting Policies (con’t)
(c)
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.
(d)
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.
(e)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 37
1.
Summary of Significant Accounting Policies (con’t)
(f)
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.
(g)
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.
(h)
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.
(i)
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.
(j)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 38
1.
Summary of Significant Accounting Policies (con’t)
(j)
Exploration and evaluation expenditure (con’t)
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.
(k)
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.
(l)
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
(m)
Provisions
Provisions are recognised when the Group 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.
(n)
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 Group 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’).
(o)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 39
1.
Summary of Significant Accounting Policies (con’t)
(p)
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.
(q)
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.
(r)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 40
1.
Summary of Significant Accounting Policies (con’t)
(r) Foreign currency translation (con’t)
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.
(s)
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)
the extent to which the vesting period has expired; and
(ii)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 41
1.
Summary of Significant Accounting Policies (con’t)
(t)
Share-based payments (con’t)
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 2024, 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 2023.
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 2024. 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 24 has been
prepared on the same basis as the consolidated financial statements.
2.
Critical accounting estimates and judgements
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 42
2.
Critical accounting estimates and judgements (con’t)
(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 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) 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 2023 under AASB
16 Leases are discounted using the Group’s incremental borrowing rate of 6.57%. The lease borrowing rate
was an estimate of 6.51% on 1 April 2022.
Consolidated
2024
2023
$
$
3. Other income
Interest received
170,378
627,936
R&D tax incentive
-
218,879
Net gain on disposal of asset
4,743
13,118
Total revenue and other income
175,121
859,933
Consolidated
2024
2023
$
$
4. Auditor’s Remuneration
Hall Chadwick (WA) Pty Ltd
Audit and review of financial statements
86,707
102,697
Other services
-
-
Total remuneration of auditors
86,707
102,697
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 43
Consolidated
2024
2023
$
$
5. Income Tax Expense
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
(7,267,667)
(14,223,495)
Tax at the tax rate of 30% (2023: 30%)
(2,180,300)
(4,267,048)
Tax effect of amounts which are not deductible in calculating taxable
income:
Non-deductible expenses
(2,419,263)
736,247
Non-assessable amounts
(24,411)
(65,664)
Unrecognised tax losses
4,719,168
3,706,750
Movement in unrecognised temporary differences
(96,195)
(110,285)
Income tax expense
-
-
(b) Deferred tax asset not recognised*
Tax losses
15,891,823
11,179,375
Exploration and expenditure
88,299
143,550
Net deferred tax not recognised
15,980,123
11,322,925
*The deferred tax asset attributable to tax losses does not exceed taxable amounts arising from the reversal of existing
assessable temporary differences.
Consolidated
2024
2023
$
$
6. Cash & Cash Equivalents
Cash at bank & in hand
698,693
18,949,635
Total cash & cash equivalents
698,693
18,949,635
Cash on hand is non-interest bearing. Cash at bank bears interest rates between 0.01% and 2.20% (2023: 0.38%
and 2.40%). Refer to Note 16 for the Group’s exposure to interest rate and credit risk.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 44
Consolidated
2024
2023
$
$
7. Trade and Other Receivables
Advances to employees for field work purposes
67,675
113,507
GST receivable
66,622
220,001
Deposits and securities
55,314
199,508
Prepayments
92,067
895,838
R&D tax incentive receivable
-
81,346
Other receivables
23,782
16,660
Total trade and other receivables
305,460
1,526,860
Consolidated
2024
2023
$
$
8. Exploration & Evaluation Expenditure
Opening balance
182,096,970
145,670,930
Acquisition of further interest (i)
-
-
Exploration costs
7,219,772
30,203,107
Impairment (ii)
-
-
Net exchange differences on translation
(442,198)
6,222,933
Closing balance
188,874,544
182,096,970
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 exploitation of the areas of interest, or
alternatively, by their sale.
i.
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. This transaction is the subject of the ‘Dathomir Dispute’ described in the section entitled ‘Review
of Operations’ above.
ii.
Impairment due to 50% relinquishment of tenements comprising PR 4029 and PR 4030.
iii.
On 28 January 2023, the Minister of Mines of the DRC issued two ministerial decrees which purported
to cancel the ministerial order dated 7 April 2022 (which had approved relinquishment of the portion of
PR 13359) and cancel the ministerial order dated 25 April 2022 (which had approved grant of the PE).
The Company continues to contend it has full legal rights over its tenure for PR 13359. This is the subject
of the ‘Title Dispute’ described in the section entitled ‘Review of Operations’ above.
iv.
On 16 January 2024 the ICSID tribunal made interim orders to protect AVZI, GLH and Dathcom’s rights
pending the final outcome of the Title Dispute including orders that the DRC take the necessary steps to
reflect that Dathcom is the holder of PR 13359 (Interim Orders).
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 45
8. Exploration & Evaluation Expenditure (con’t)
v.
It is noted that the reinstatement of PR 13359 in the name of Dathcom excluded the northern portion of
PR 13359 which Cominière purportedly relinquished to enable grant of PR 15775 to Manono Lithium
SA. The ICSID tribunal declined to deal with title to the northern area on an interim basis because it
affected the interests of Manono Lithium SA. Dathcom’s title to the northern area remains to be
determined in the substantive proceedings (together with final confirmation of Dathcom’s title to the
balance of PR 13359).
The acceptance of jurisdiction by the ICSID tribunal to hear the claim coupled with the ICSID tribunal’s
acceptance that it had power to compel the reinstatement of title on an interim basis bodes well for the
prospects of this claim.
vi.
ICSID is, in the case at stake, the tribunal with ultimate judicial authority to determine if Dathcom is legally
entitled to hold PR 13359. The fact that CAMI has not yet updated its register to reflect the ICSID
tribunal’s decision (i.e. Dathcom’s ownership of PR 13359) is not relevant to the issue of title.
The DRC Mining Code, put in place a system of registration of mining titles, not a system of title by
registration (i.e. title flows from decisions issued by the competent authorities not from the fact of
registration). The CAMI is therefore a mere curator of information that is supposed to reflect underlying
decisions that are legally effective.
As far as Dathcom is concerned, the ICSID tribunal has ordered that the DRC reinstate Dathcom as the
holder of PR 13359 (at least in respect of the south which hosts Roche Dure). Dathcom is therefore legally
entitled to hold PR13359 exploration permit.
The Company notes that its preference remains to achieve a negotiated resolution with the DRC.
Consolidated
2024
2023
$
$
9. Property, plant and equipment
At cost
5,420,983
5,733,187
Less: accumulated depreciation
(2,823,400)
(2,449,869)
2,597,583
3,283,318
Reconciliation
Opening balance
3,283,318
2,319,138
Additions
1,625
1,500,800
Depreciation expense
(504,890)
(666,891)
Foreign currency translation difference movement
(182,469)
130,271
Closing balance
2,597,583
3,283,318
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 46
Consolidated
2024
2023
$
$
10. Right-of-use Assets and Leases
(a) Amounts recognised in the balance sheet
Rights-of-use asset
Balance as at 1 July
1,082,359
1,356,774
Right-of-use assets recognised
-
13,466
Less: Depreciation
(240,524)
(287,881)
Derecognise right-of-use asset
(841,835)
-
Closing balance
-
1,082,359
Lease liabilities
Balance as at 1 July
1,144,439
1,371,475
Lease liabilities recognised
-
13,466
Add: Interest
55,254
81,622
Less: Payment per Consolidated Statement of Cash Flows
(276,490)
(322,124)
Derecognise lease liabilities
(923,203)
-
Closing balance
-
1,144,439
Current
-
268,098
Non-current
-
876,341
Closing balance
-
1,144,439
(b) Amounts recognised in the consolidated statement of profit or loss
Depreciation of right-of-use asset
240,524
287,881
Interest expense on lease liabilities
55,254
81,622
In April 2024, the Company terminated the office lease at Level 2, 1 Walker Avenue, West Perth and relocated to
its new office at 35/4 Ventnor Avenue, West Perth. The new office lease commenced in April 2024 and remains in
force until April 2025. The new lease has been exempted from AASB 16 as it is a short-term lease.
Initial measurement
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 6.51%.
The right-of-use asset is measured at cost comprising of the initial measurement of the lease liability.
Subsequent measurement
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 47
Consolidated
2024
2023
$
$
11. Trade & Other Payables
Current
Trade payables
1,116,254
1,011,740
Employee benefits and related payables
18,252
45,899
Accrued expenses
6,136,645
2,621,043
FBT Payable
(2,142)
7,072
Others
4,717
4,725
Total current trade & other payables
7,273,726
3,690,479
The Group’s exposure to liquidity risk is noted in Note 16.
Consolidated
2024
2023
$
$
12. Provisions
Current
Employee benefits
80,571
99,314
Total current provisions
80,571
99,314
The Group’s provision for employee benefits represents annual leave payable and payroll tax payable.
Consolidated
Consolidated
2024
2023
2024
2023
Shares
Shares
$
$
13. Share capital
Ordinary shares - fully paid
3,528,729,748
3,528,729,748
226,455,235
226,455,235
Total Share Capital
3,528,729,748
3,528,729,748
226,455,235
226,455,235
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 48
13. Share capital (con’t)
Date
Number of
Shares
Fair Value
per share
Total
$
Movements in share capital
Opening Balance 1 July 2022
3,528,729,748
226,455,235
Issue of shares
-
-
Less: transaction cost
-
-
Closing Balance at 30 June 2023
3,528,729,748
226,455,235
Opening Balance 1 July 2023
3,528,729,748
226,455,235
Issue of shares
-
-
Less: transaction cost
-
-
Closing Balance at 30 June 2024
3,528,729,748
226,455,235
14.
Share Options and Performance Rights
(a) Share Options
There are no options on issue as at 30 June 2024 (30 June 2023: Nil).
(b) Performance Rights
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
2024
Class M
9-Dec-23
-
14,648,000
-
-
(14,648,000)
-
Class N
29-Jun-24
-
2,658,600
-
-
(2,658,600)
-
Class O
7-Sep-24
-
11,435,000
-
-
(1,650,000)
9,785,000
Class P
7-Sep-24
-
24,750,000
-
-
(3,500,000)
21,250,000
Total
53,491,600
-
-
(22,456,600)
31,035,000
2023
Class M
9-Dec-23
-
17,398,000
-
-
(2,750,000)
14,648,000
Class N
29-Jun-24
-
3,291,600
-
-
(633,000)
2,658,600
Class O
7-Sep-24
-
13,235,000
-
-
(1,800,000)
11,435,000
Class P
7-Sep-24
-
24,750,000
-
-
-
24,750,000
Class Q
7-Oct-22
-
3,500,000
-
-
(3,500,000)
-
Total
62,174,600
-
-
(8,683,000)
53,491,600
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 49
Consolidated
2024
2023
$
$
15. Reserves
Share Options and Performance Rights Reserve (a)
2,325,458
13,451,039
Foreign Currency Translation Reserve (b)
12,182,665
12,529,465
Total reserves
14,508,123
25,980,504
(a) Share Options and Performance Rights Reserve (i)
Opening balance
13,451,039
13,819,046
Share-based payment expense during the year
(9,238,021)
844,293
Less: Conversion of Performance Rights
-
-
Less: Options exercised
-
-
Less: Performance Rights lapsed
(1,887,560)
(1,212,300)
Closing balance
2,325,458
13,451,039
(b) Foreign Currency Translation Reserve (ii)
Opening balance
12,529,465
7,428,079
Exchange difference arising on translation of foreign operations
(346,800)
5,101,386
Closing balance
12,182,665
12,529,465
Nature and purpose of reserves
(i) Share Options and Performance Rights Reserve
The Share Options and Performance Rights Reserve contains amounts received (if any) on the issue of Options and
Performance Rights over unissued capital of the Company. It is also used to recognise the fair value of Options and
Performance Rights issued to eligible 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 50
16.
Financial Instruments, Risk Management Objectives and Policies
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:
(a)
Interest Rate Risk
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
Weighted
Average
Interest
Rate
Floating
Interest Rate
Fixed
Interest
Non-interest
bearing
Total
2024
$
$
$
$
Financial assets
Cash and cash equivalents
1.82%
640,478
-
58,215
698,693
Trade and other receivables
0.70%
-
50,000
255,460
305,460
640,478
50,000
313,675
1,004,153
Financial liabilities
Trade and other payables
-
-
-
7,273,726
7,273,726
-
-
7,273,726
7,273,726
Consolidated
Weighted
Average
Interest
Rate
Floating
Interest Rate
Fixed
Interest
Non-interest
bearing
Total
2023
$
$
$
$
Financial assets
Cash and cash equivalents
2.14%
16,909,854
-
2,039,781
18,949,635
Trade and other receivables
-
-
-
329,675
329,675
16,909,854
-
2,369,456
19,279,310
Financial liabilities
Trade and other payables
-
-
-
3,690,479
3,690,479
Lease liabilities
6.51%
1,144,439
-
1,144,439
Financial liabilities
-
-
-
-
-
-
1,144,439
3,690,479
4,834,918
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 2024 and 30 June 2023, the Group’s exposure to interest rate risk was not deemed
material.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 51
16.
Financial Instruments, Risk Management Objectives and Policies (con’t)
(b) Credit risk
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.
(c)
Foreign Currency Risk
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 considering 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 2024 and 30 June 2023, the
Group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollar,
was as follows:
2024
2023
$
$
Cash and cash equivalents
113,055
2,017,352
Trade & other receivables -
current
-
342,478
113,055
2,359,830
Trade and other payables
(1,011,888)
(1,513,741)
Financial liabilities
-
-
(1,011,888)
(1,513,741)
A reasonably possible strengthening (weakening) of the AUD against USD at 30 June 2024 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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 52
16.
Financial Instruments, Risk Management Objectives and Policies (con’t)
2024
2023
Increase (Decrease) in Equity and Profit or Loss
AUD to USD
AUD to USD
10%
-10%
10%
-10%
$
$
$
$
Cash and cash
equivalents
(7,537)
7,537
(134,253)
134,253
Trade & other
receivables - current
-
-
(22,792)
22,792
(7,537)
7,537
(157,045)
157,045
Trade and other
payables
67,460
(67,460)
100,738
(100,738)
Financial liabilities
-
-
-
-
67,460
(67,460)
100,738
(100,738)
(d)
Liquidity risk
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.
Contractual
maturities of
financial
assets/(liabilities)
Less than 6
months
6-12
months
Between
1 and 2
years
Between
2 and 5
years
Total
contractual cash
inflows
/(outflows)
Carrying
amount
$
$
$
$
$
$
At 30 June 2024
Cash and cash
equivalents
698,693
-
-
-
698,693
698,693
Trade and other
receivables
250,146
55,314
-
-
305,460
305,460
Trade and other
payables
(7,273,726)
-
-
-
(7,273,726)
(7,273,726)
(6,324,887)
55,314
-
-
(6,269,573)
(6,269,573)
At 30 June 2023
Cash and cash
equivalents
18,949,635
-
-
-
18,949,635
18,949,635
Trade and other
receivables
329,675
-
-
-
329,675
329,675
Trade and other
payables
(3,690,479)
-
-
-
(3,690,479)
(3,690,479)
Lease liabilities
(165,511)
(167,424)
(340,640)
(614,518)
(1,288,093)
(1,144,439)
Financial
liabilities
-
-
-
-
-
-
15,423,320
(167,424)
(340,640)
(614,518)
14,300,738
14,444,392
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 53
16.
Financial Instruments, Risk Management Objectives and Policies (con’t)
(e)
Net fair value
The carrying value and net fair values of financial assets and liabilities at reporting date are:
Consolidated
2024
2023
Carrying
Amount
$
Net fair
Value
$
Carrying
Amount
$
Net fair
Value
$
Financial assets:
Cash and cash equivalents
698,693
698,693
18,949,635
18,949,635
Trade and other receivables - current
305,460
305,460
329,675
329,675
1,004,153
1,004,153
19,279,310
19,279,310
Financial liabilities:
Trade and other payables - current
7,273,726
7,273,726
3,690,479
3,690,479
Lease liabilities
-
-
1,144,439
1,144,439
Financial liabilities - current
-
-
-
-
7,273,726
7,273,726
4,834,918
4,834,918
(f)
Fair value measurements
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
iii)
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level
3).
Due to their short-term nature, the carrying amount of the current receivables and current payables is assumed
to approximate their fair value.
17. Loss per Share
Consolidated
2024
2023
$
$
(a) Loss
Loss used in the calculation of basic and diluted EPS ($)
(7,267,667)
(14,223,495)
(b) Weighted average number of ordinary shares (‘WANOS’)
WANOS used in the calculation of basic and diluted loss per
share
3,528,729,748
3,528,729,748
cents per
share
cents per
share
Basic and diluted loss per share
(0.21)
(0.40)
Diluted earnings per share is equal to basic loss per share as the Group is in a loss position.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 54
Consolidated
2024
2023
$
$
18. Cash Flow Information
Reconciliation of cash flows from operating activities with loss
from ordinary activities after income tax:
Loss for the year
(7,267,667)
(14,223,495)
Depreciation
504,890
666,891
Depreciation expense of right-of-use asset
240,524
287,881
Share-based payment
(9,238,021)
844,293
Loss on disposal of fixed assets
183,550
(11,753)
Gain on termination of lease
(81,369)
-
Fuel Inventory write down
478
5,254
Net realised and unrealised foreign exchange losses
-
(20,369)
Changes in assets and liabilities:
Increase/(Decrease) in provisions, trade and other payables
4,201,907
1,758,831
(Increase)/Decrease in prepayments, trade and other receivables
411,837
(999,201)
Net cash outflows from operating activities
(11,043,871)
(11,691,668)
Non-cash investing and financing activities
Issue of ordinary shares for investor relations services
-
-
Issue of ordinary shares from conversion of Performance Rights
-
-
-
-
Changes in lease liabilities arising from financing activities are disclosed in Note 10.
19.
Segment Information
The Group is organised into one operating segment, being exploration in the Democratic Republic of the Congo
(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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 55
20.
Commitments and Contingencies
(a) International Chamber of Commerce (“ICC”) proceedings by Jin Cheng
The Company currently defends a case in the ICC brought against its subsidiary AVZ International Pty Ltd (“AVZI”) by
Jin Cheng Mining Company regarding a 15% interest Jin Cheng purportedly acquired from Cominière in Dathcom.
In these proceedings, AVZI has disputed that the ICC has jurisdiction on the basis Jin Cheng is not entitled to have
recourse to arbitration because it is not a shareholder of Dathcom because the purported acquisition of its 15%
shareholding from Cominière was ineffective because it occurred in contravention of AVZI’s pre-emptive right.
AVZI’s jurisdictional challenge was heard on 5 and 6 October 2023, at which AVZI presented its case that the sale of
the 15% of the shares Dathcom was ineffective, either due to the breach of AVZI’s pre-emptive right under the Dathcom
JVA or due to the circumstances in which that agreement was entered into by Jin Cheng and Cominière some of which
were addressed in the IGF Report dated 30 September 2022.
On 15 March 2024, the ICC tribunal found in favour of AVZI, ruling that, for the purposes of jurisdiction, the status of a
shareholder in Dathcom is determined by its registration in Dathcom’s internal share register and that the ICC tribunal
did not have jurisdiction to preside over the proceedings commenced by Jin Cheng.
The ICC tribunal held that Jin Cheng’s recourse to arbitration was unjustified, and ordered that Jin Cheng reimburse
AVZI USD 75,000 in respect of its arbitration costs and AUD 813,474 in respect of AVZI’s defence costs.
(b) ICC proceedings against Dathomir
AVZ was recently notified Jin Cheng filed an action in the Paris Court of Appeals to set aside the ICC award. AVZ has
not been informed of the grounds for the annulment and will have to wait until Jin Cheng files its brief (it has
approximately 4 months to do so).
The Company (AVZ) and its subsidiary AVZI lodged claims against Dathomir Mining SARL (“Dathomir”) with the ICC to
affirm AVZ’s acquisition in August 2021 of a 15% interest in Dathcom from Dathomir under the Dathomir SPAs and to
put an end, once and for all, to Dathomir’s claims and to recover losses sustained from them.
The status of the Dathomir proceedings is as follows:
The Dathomir arbitration proceedings comprise two separate proceedings:
ICC proceedings (ICC No. 27425/SP) were instituted by AVZI to obtain confirmation AVZI validly acquired a further
5% shareholding in Dathcom pursuant to an agreement executed in 2019; and
ICC proceedings (ICC No. 27401/SP) were instituted by AVZ and AVZI to obtain confirmation AVZI validly acquired
a further 10% shareholding in Dathcom pursuant to an agreement executed into in 2020.
AVZ paid the purchase prices and completed both sales in 2021, but Dathomir purported to terminate the sale
agreements and sought to renegotiate the purchase price. Dathomir then issued various proceedings in the DRC to
challenge the sale and prevent the registration of the share transfers. However, according to the sale agreements, any
dispute needed to be resolved by arbitration.
Consequently, on or about 1 December 2022 and 9 December 2022, AVZI and AVZ were forced to commence the
two ICC arbitration proceedings.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 56
20.
Commitments and Contingencies (con’t)
(b) ICC proceedings against Dathomir (con’t)
In the 2019 SPA Proceedings, Dathomir’s jurisdictional challenge was conducted in Paris on 19 January 2024 during
which the parties addressed Dathomir’s jurisdictional and inadmissibility claims under both French law and Australian
law. The arbitral tribunal held that regardless of whether French law or Australian law is applied, the result is the same:
AVZI is a party to the 2019 SPA. Under the partial award, the arbitral tribunal amongst other things:
•
declared that AVZI is a Party to the SPA 2019;
•
declared itself competent to hear the dispute between AVZI and Dathomir;
•
rejected Dathomir’s pleas of lack of jurisdiction and inadmissibility; and
•
reserved its decision on costs to a later stage of the proceedings, and accordingly, denied the request
for provisional enforcement of the partial award.
Whilst the issue of costs has not been decided by the arbitral tribunal at this stage, AVZI is confident that given it was
the resoundingly successful party in the partial award that it will ultimately be awarded the majority if not all of its costs
incurred related to the jurisdiction and admissibility challenge, regardless of the arbitral tribunal’s decision on the
merits.
As announced on 19 December 2023, in the 2020 SPA Proceedings, the ICC tribunal made emergency measures
requiring Dathomir to preserve the status quo pending the outcome of the 2020 SPA Proceedings including by
withdrawing its application before the Commercial Court of Lubumbashi seeking the winding-up of Dathcom. 27 To
date, the hearings have been blocked by Dathcom’s legal counsel and the Company understands that the competent
DRC authorities are investigating judicial irregularities in this matter.
Based on the material that has been filed in the proceedings to date the Company remains confident that it will prevail
in the 2019 SPA Proceedings and 2020 SPA Proceedings.
(c) ICC proceedings against Cominière
On 11 April 2023, AVZI issued the proceedings against Cominière to ensure Cominière is liable for (i) breach of the
pre-emptive right and (ii) other disruptive actions made in breach of the Dathcom JVA.
Following the introduction of these proceedings, Cominière purported to terminate the Dathcom JVA on the
grounds of alleged breaches of the Dathcom JVA by AVZI under various spurious grounds. AVZ does not believe
AVZI breached the Dathcom JVA and disputes that the termination occurred in accordance with the Dathcom JVA.
As announced on 8 May 2023, AVZI obtained emergency orders restraining Cominière from taking steps to
implement its purported termination of the Dathcom JVA and ordered that Cominière pay to AVZI a fine of €50,000
per day for any non-compliance with that emergency order.
As announced on 17 November 2023, AVZI obtained further emergency orders restraining Cominière from
conducting exploration or mining within the boundaries of PR 13359 or PR 15775 and ordered that Cominière pay a
fine to AVZI of €50,000 per day for any non-compliance with that emergency order.
AVZI has now applied to the ICC for a partial award seeking to liquidate (i.e. have paid) the accrued fines in respect
of both emergency orders.
Based on the material that has been filed in the proceedings to date and having regard to the failure by Cominière
to comply with the emergency orders, the Company remains confident that it will prevail in relation to this dispute.
27 Refer to ASX announcement dated 19 December 2023 titled ‘AVZ Successfully Restrains Dathomir’.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 57
20.
Commitments and Contingencies (con’t)
(d) ICC proceedings by Cominière and Jin Cheng
On or about 28 April 2023, Cominière and Jin Cheng jointly issued proceedings against AVZI seeking a declaration
the Dathcom JVA was terminated and damages for breach of the Dathcom JVA.
Following the commencement of these proceedings, Cominière and Jin Cheng filed a request for consolidation of
the three proceedings (ICC No. 26986/SP, ICC No. 27720/SP and ICC No. 27769/SP). AVZ believes the primary
motive of Cominière and Jin Cheng in commencing and seeking consolidation of these proceedings was to delay
the determination of the jurisdictional issue in the proceedings commenced by Jin Cheng and the constitution of the
tribunal, which will hear AVZI’s claims against Cominière. This application was refused by the ICC Court on 1
September 2023.
AVZ remains confident the Tribunal will rule that the Dathcom JVA is not terminated and that it is in fact Cominière
who has breached the Dathcom JVA.
(e) International Centre for Settlement of Investment Disputes (“ICSID”) Proceedings
On 8 June 2023, AVZ’s subsidiaries commenced ICSID proceedings against the DRC in relation to its failure to procure
the expeditious grant to Dathcom of an exploitation permit in respect of the Manono Project in accordance with the
DRC Mining Code.
The ICSID proceedings were commenced as a last resort after a lengthy dialogue with the DRC Government had failed
to procure the grant of the exploitation licence in accordance with the Mining Code.
AVZ acknowledges the coordinated actions of Jin Cheng, Dathomir and Cominière has contributed to the delay in
granting the exploitation licence. These parties have shown a determination to create an environment of confusion
and misinformation, which has delayed a conclusion by the competent DRC authorities.
On 16 January 2024, the ICSID tribunal made interim orders to protect AVZI, GLH and Dathcom’s rights pending the
final outcome of the Title Dispute including orders that the DRC take the necessary steps to reflect that Dathcom is the
holder of PR 13359 (Interim Orders).
It is noted that the reinstatement of PR 13359 in the name of Dathcom excluded the northern portion of PR 13359
which Cominière purportedly relinquished to enable the grant of PR 15775 to Manono Lithium SA (a joint venture
between Cominière and Zijin). The ICSID tribunal declined to deal with title to the northern area on an interim basis
because it affected the interests of Manono Lithium SA. Dathcom’s title to the northern area remains to be determined
in the substantive proceedings (together with final confirmation of Dathcom’s title to the balance of PR 13359).
The Interim Orders are binding on all parties and took effect immediately, but the parties were invited to provide
comments on the implementation of the Interim Orders.
The DRC has not yet complied with the Interim Orders. In its comments, the DRC presented new arguments directed
to achieving a cancellation of the Interim Orders (rather than provide comments on their implementation).
The ICSID tribunal has responded by reminding the DRC that it is bound by the Interim Orders and indicating that it
will, in due course, draw the appropriate conclusions from any failure to comply with the Interim Orders. The ICSID
tribunal also invited AVZI, GLH and Dathcom to provide submissions as to the basis upon which they contend they are
entitled to be paid penalties in respect of any failure to comply with the Interim Orders.
The acceptance of jurisdiction by the ICSID tribunal to hear the claim coupled with the ICSID tribunal’s acceptance that
it had power to compel the reinstatement of title on an interim basis bodes well for the prospects of this claim.
The Company notes that its preference remains to achieve a negotiated resolution with the DRC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 58
21. Subsidiaries and non-controlling entities
(a) Subsidiaries
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
2024
2023
%
%
AVZ International Pty Ltd
Australia
Ordinary
100
100
AVZ Minerals Congo SARL
DRC
Ordinary
100
100
AVZ Power
DRC
Ordinary
100
100
Dathcom Mining SA1
DRC
Ordinary
75
75
Maji Bora Ya Manono2
DRC
Ordinary
100
100
Nyuki Logistics Company2
DRC
Ordinary
100
100
Nyuki Logistics Tanzania Limited3
Tanzania
Ordinary
100
100
Green Lithium Holdings Pte Ltd4
Singapore
Ordinary
100
100
1 The proportion of ownership interest is equal to the proportion of voting power held.
2 Incorporated on 7 October 2020.
3 Incorporated on 28 October 2021.
4 Incorporated on 8 March 2022.
(b)
Non-controlling entities
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
Dathcom Mining SA
Financial Position
30-Jun-24
30-Jun-23
Current Assets
131,326
2,154,729
Non-current Assets
51,679,089
51,254,007
Total Assets
51,810,415
53,408,736
Current Liabilities
1,008,138
1,511,912
Non-current Liabilities
-
-
Total Liabilities
1,008,138
1,511,912
Net Assets
50,802,277
51,896,824
Accumulated NCI
15,543,723
15,828,922
22.
Related Party Information
(a)
Parent entity
The ultimate parent entity within the Group is AVZ Minerals Limited.
(b)
Subsidiaries
Interests in subsidiaries are set out above.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 59
22.
Related Party Information (con’t)
(c)
Key management personnel
The key management personnel compensation is as follows:
Consolidated
2024
2023
$
$
Key Management Personnel Compensation
Summary remuneration
Short-term benefits
1,482,477
2,104,547
Annual leave cash out
67,809
-
Post-employment benefits
36,197
39,453
Share-based payments
-
799,135
Total key management personnel compensation
1,586,483
2,943,135
Details of remuneration disclosures are provided within the audited remuneration report of the Directors’
report.
23.
Share-based Payments
Share-based payments during the year are summarised below:
Consolidated
2024
2023
$
$
Options (a)
-
-
Performance Rights (b)
(9,238,021)
844,293
Total share-based payment expense
(9,238,021)
844,293
(a)
Options
No options were issued as share-based payments during the year ended 30 June 2024 (2023: Nil).
There are no options on issue at 30 June 2024 (2023: Nil).
(b)
Performance Rights
No Performance Rights were issued during the year ended 30 June 2024 (2023: Nil).
No Performance Rights were exercised during the year ended 30 June 2024 (2023: Nil).
During the year, previously recognised share-based payment of $9,238,021 in relation to Performance Rights
Class N, O and P was reversed due to the probability of meeting its respective vesting conditions being assessed
at nil as at 30 June 2024.
No value was expensed for Class O and P Tranche 1-4 Performance Rights during the year as the probability of
meeting the relevant vesting conditions as at 30 June 2024 was assessed at nil.
On 9 December 2023, 14,648,000 Class M Performance Rights lapsed unexercised due to vesting conditions
not met. The share-based payment expense previously recognised of $1,451,900 in relation to Class M
Performance Rights were reversed.
On 29 June 2024, 2,658,600 Class N Performance Rights lapsed unexercised due to vesting conditions not met.
The share-based payment expense previously recognised of $435,660 in relation to Class N Performance Rights
were reversed.
Previously recognised share-based payment $1,417,657 in relation to Performance Rights Class N, O and P
were also reversed from consolidated statement of profit and loss and comprehensive income as a result of
resignation of employees and consultants during the year.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 60
23. Share-based Payments (con’t)
(b) Performance Rights (con’t)
A summary of the performance rights on issue during the year is as follows:
Class
Tranche
Grant Date
Expiry Date
Opening
Balance
Granted
Vested
Exercised
Cancelled/
Lapsed
Closing Balance
Underlying
Share Price on
Grant Date
Unvested
Vested
Share Price on
Grant Date
$
M
2
10-Dec-20
9-Dec-23
798,000
-
-
-
(798,000)
-
-
0.098
M
3
10-Dec-20
9-Dec-23
13,850,000
-
-
-
(13,850,000)
-
-
0.098
N
1
29-Jun-21
29-Jun-24
558,600
-
-
-
(558,600)
-
-
0.160
N
2
29-Jun-21
29-Jun-24
2,100,000
-
-
-
(2,100,000)
-
-
0.160
O
1
26-Aug-21
7-Sep-24
3,190,000
-
-
-
(350,000)
2,840,000
-
0.225
O
2
26-Aug-21
7-Sep-24
2,015,000
-
-
-
(600,000)
1,415,000
-
0.225
O
3
26-Aug-21
7-Sep-24
3,365,000
-
-
-
(600,000)
2,765,000
-
0.225
O
4
26-Aug-21
7-Sep-24
2,865,000
-
-
-
(100,000)
2,765,000
-
0.225
P
1
18-Nov-21
7-Sep-24
7,000,000
-
-
-
(1,000,000)
6,000,000
-
0.575
P
2
18-Nov-21
7-Sep-24
3,750,000
-
-
-
(500,000)
3,250,000
-
0.575
P
3
18-Nov-21
7-Sep-24
7,000,000
-
-
-
(1,000,000)
6,000,000
-
0.575
P
4
18-Nov-21
7-Sep-24
7,000,000
-
-
-
(1,000,000)
6,000,000
-
0.575
53,491,600
-
-
-
(22,456,600)
31,035,000
-
Class M vesting conditions:
Tranche 2 – vest upon the completion of the Manono Project financing.
Tranche 3 –vest upon the Company making a Decision to Mine in respect of the Manono Project.
Class N vesting conditions:
Tranche 1 – vest upon the completion of the Manono Project financing.
Tranche 2 – vest upon the Company making a Final Investment Decision (FID) in respect of the Manono Project.
Class O and Class P vesting conditions:
Tranche 1 - vest on signature of a binding EPC contract for the construction of the operating plant for the Manono
Lithium and Tin Project.
Tranche 2 - vest on designation of a standalone JORC indicated and inferred tin resource of 10,000 tonnes of
contained Cassiterite.
Tranche 3 - vest on designation of a JORC indicated and inferred resource at Carriere de l’Este of 150m tonne
grading at least 1.5% lithium.
Tranche 4 - vest on operation of the plant at 4.5 million tonnes per annum capacity for three consecutive months.
(c)
Shares issued as share-based payments
There were no shares issued as share-based payments for the year ended 30 June 2024.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 61
Company
2024
2023
$
$
24. Parent Entity Information
(a) Assets
Current assets
781,307
18,123,398
Non-current assets
166,437,979
161,557,950
Total assets
167,219,286
179,681,348
(b) Liabilities
Current liabilities
6,323,423
2,544,148
Non-current Liabilities
-
876,341
Total liabilities
6,323,423
3,420,489
Net Assets
160,895,863
176,260,859
(c) Equity
Contributed equity
226,455,235
226,455,235
Accumulated losses
(67,884,830)
(63,645,415)
Reserves
2,325,458
13,451,039
Total equity
160,895,863
176,260,859
(d) Total comprehensive loss for the year
Loss for the year
(6,126,975)
(12,654,744)
Other comprehensive income for the year
-
-
Total comprehensive loss for the year
(6,126,975)
(12,654,744)
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 62
25. Events Occurring after the Reporting Date
Escrow Account - Unauthorised transactions
As announced in AVZ's 31 July 2024 announcement titled "In-Country Legal Update", AVZ has terminated the
engagement of its former DRC lawyer and the files in respect of the domestic proceedings have been delivered to its
newly appointed counsel under the oversight of AVZ's international counsel, DLA Piper.
After careful consideration, the AVZ board has determined a path of recourse regarding allegations of unauthorised
transactions involving the lawyer’s escrow account in the DRC.
On 1 October 2024, AVZI filed a complaint against its former DRC legal counsel with the DRC Attorney General (the
“Procureur général près la Cour d’appel”) (Criminal Complaint). The Criminal Complaint was authorised by the Dean
of the National Bar on 17 September 2024 meaning that it was concluded that there are potential criminal implications
which warrant investigation.
Convertible Note Fundraising
In August 2024, the Company raised A$1.4 million via an initial issuance of unsecured convertible notes (Convertible
Notes) to certain professional or sophisticated investors (Noteholders), including directors and management
personnel of the Company. The funds will be used to meet operational costs and, until entry into a binding litigation
funding facility, fund the ongoing legal proceedings to which AVZ and its subsidiaries are a party.
The Convertible Notes have a 5-year term, 12% per annum coupon and conversion price at a 15% discount to the
deemed or implied value of shares in AVZ under a change of control, IPO or material fundraising.
Performance Rights Expiration
The remaining 31,035,000 Performance Rights lapsed post financial year end on 7 September 2024, leaving the
balance of Performance Rights at nil.
Restructured Transaction Implementation Agreement and Joint Venture including US$20m Pre-Completion Facility
The Company entered into a pre-completion funding agreement (Pre-Completion Funding Agreement), a revised
transaction implementation agreement (TIA) and a relationship deed with Suzhou CATH Energy Technologies (CATH)
(together the Restructured JV Arrangement). 28
Under the terms of the Restructured JV Arrangement:
•
CATH will provide AVZ with a facility of US$20m to be drawn over the coming twelve months or so, to finance
AVZ's certain expenditures and also for working capital and general corporate purposes;
•
CATH will pay AVZ US$259.25m to acquire a 30.5% indirect interest in the Manono Project, through the
acquisition of shares in Green Lithium Holding Pte. Ltd (GLH) (a wholly owned subsidiary of AVZ International
Pty Ltd (AVZI) and the holder of legal title to AVZ's interest in Dathcom Mining SA (Dathcom)), on satisfaction
of certain conditions precedent, including grant of a mining licence for the project area covered by PR 13359
(Mining Licence) to Dathcom;
•
AVZ and CATH will enter a multi-faceted joint venture to develop the Manono Project;
•
Subject to certain conditions, CATH may contribute all project development costs to the Phase I Manono
Project joint venture pursuant to a capital expenditure funding agreement to be agreed between CATH and
GLH;
28 For further information relating to CATH or the previous TIA, refer to AVZ's announcement dated 27 September 2021 titled
“Cornerstone investor secured for development of Manono Lithium and Tin Project” and subsequent announcements dated 29
September 2021, 30 November 2021, 16 February 2022, 2 May 2022, 1 June 2022, 29 July 2022, 30 September 2022, 3 January
2023, 28 February 2023, 4 April 2023 and 3 July 2023.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 63
25. Events Occurring after the Reporting Date (con’t)
•
Until the later of 5 years and repayment of any CATH funding of AVZ project development costs, CATH will
be entitled to purchase up to 100% of the uncommitted offtake produced and thereafter a reduced rate
equal to its and each non-AVZ JV participant's economic interest in the Manono Project;
•
AVZ and CATH have entered a relationship deed under which, among other things, CATH undertakes to
reasonably support AVZ under certain circumstances; 29 and
•
As a consequence of the revised JV and funding arrangements, AVZ no longer needs to draw upon the Locke
litigation funding facility.
Locke Funding Facility
On 28 November 2024 AVZ announced it had agreed the key terms and conditions for a litigation funding facility of
up to US$15 million with Locke Capital II, LLC (Locke). 30
Due to the availability of the Pre-Completion Funding Agreement from CATH, AVZ had elected not to proceed with
the funding facility agreement with Locke. No funds had been drawn down by AVZ from Locke.
Funding Update and Payment of ICSID and ICC tribunal fees
On 31 January 2025, the Company announced that it had received the first tranche of funding under the Pre-
Completion Funding Agreement with Suzhou CATH Energy Technologies (CATH). The funds received would be
applied in accordance with the Pre-Completion Funding Agreement including in respect of the conduct of the various
proceedings involving AVZ and its subsidiaries.
AVZ had paid the tribunal fees which were due in respect of:
1.
Title Dispute – the arbitration proceedings against the Democratic Republic of the Congo (DRC) before the
ICSID tribunal (ICSID Case No. ARB/23/20;
2.
Dathcom JV Dispute – the arbitration proceedings against La Congolaise d’Exploitation Minière (Cominière)
and Jin Cheng Mining Company (Jin Cheng), before the ICC tribunal (ICC No. 27720/SP); and
3.
Dathomir Dispute – the arbitration proceedings against Dathomir Mining Resources SARLU before the ICC
Tribunal (ICC No 27401/SP/ETT).
These arbitration proceedings will now proceed.
Internal Registry Dispute – Jin Cheng
On 19 March 2024 the Company announced that an ICC tribunal had dismissed an abuse of majority position action
brought by Jin Cheng Mining (JCM) against AVZI for lack of jurisdiction because JCM had not established that it was
a shareholder in Dathcom Mining (“Dathcom”), and therefore could not avail itself of the arbitration agreements in
force as between Dathcom’s shareholders. The ICC tribunal ordered that JCM reimburse AVZI USD 75,000 in respect
of its arbitration costs and AUD 813,474 in respect of defence costs, and that it bear its legal costs (in excess of €3
million). The decision is entirely consistent with the position maintained by the Company, i.e. that it holds clear legal
title to a 75% interest in Dathcom.
JCM lodged an application to set aside the award before the Court of Appeals of Paris, and then turned to the domestic
courts in the Democratic Republic of Congo (“DRC”) seeking orders to force Dathcom to record it as a shareholder in
its shares register. The Company is strongly opposing this action from JCM, and the Directors are confident that it has
solid grounds to challenge this action.
Dissolution of Dathcom
In September 2023, Dathomir initiated an action before the Commercial Court of Lubumbashi seeking a judgment to
wind up Dathcom. Pursuant to an application in ICC Case 27401, Dathomir was forced to file a withdrawal brief in
March 2024. On 2 December 2024, however, the Commercial Court of Lubumbashi dismissed Dathomir’s withdrawal,
and ordered that the proceedings proceed on the merits. This decision will be challenged before the Court of Appeals
of High Katanga which, in the first instance, should have the effect of staying the proceedings before the Commercial
Court of Lubumbashi. The Directors are confident that this case will not succeed.
29 As at 8 January 2025, CATH and its associates hold a relevant interest in 7.1% of AVZ shares on issue
30 Refer to AVZ's announcement titled "US$15,000,000 Funding Facility agreed with Locke". For further information relating to
Locke, refer to AVZ's announcement dated 17 November 2024 titled “AVZ Secures US$20 Million Funding Facility” and subsequent
announcements dated 2 April 2023, 14 June 2024 and 30 July 2024.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2024 ANNUAL REPORT
AVZ Minerals Limited | 64
25. Events Occurring after the Reporting Date (con’t)
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.
DIRECTORS’ DECLARATION
2024 ANNUAL REPORT
AVZ Minerals Limited | 65
Directors’ Declaration
In the Directors’ opinion:
(a) the attached financial statements and notes 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 2024 and of its performance for the
financial year ended on that date; and
(b) the attached audited remuneration disclosures 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.
Nigel Ferguson
Managing Director
Perth, Western Australia
4 February 2025
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF AVZ MINERALS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of AVZ Minerals Limited (“the Company”) , which comprises the statement
of financial position as at 30 June 2024, the statement of profit or loss and other comprehensive income, the
statement of changes in equity and the statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Company is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Company’s financial position as at 30 June 2024 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed in Note
1.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of
the Financial Report section of our report. We are independent of the Company in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1b in the financial report which indicates that the Company incurred a net loss of
$7,267,667 during the year ended 30 June 2024. As stated in Note 1b, these events or conditions, along with
other matters as set forth in Note 1b, indicate that a material uncertainty exists that may cast significant doubt
on the Consolidated Entity’s ability to continue as a going concern. Our opinion is not modified in this respect
of this matter.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2024, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or has
no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. Our objectives are to
obtain reasonable assurance about whether the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
•
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Company audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
HALL CHADWICK WA AUDIT PTY LTD
CHRIS NICOLOFF FCA
Director
Dated this 4th day of February 2025
Perth, Western Australia
ABN: 81 125 176 703
35/4 Ventnor Avenue
West Perth WA 6005
T: + 61 8 6186 7600
E: admin@avzminerals.com.au
W: www.avzminerals.com.au