Azure Minerals Limited
ABN 46 106 346 918
Annual Report and Financial Statements
for the year ended 30 June 2021
Azure Minerals Limited – 2021 Annual Report
Corporate Information
ABN 46 106 346 918
Directors
Mr. Brian Thomas (Chairman)
Mr. Anthony Rovira (Managing Director)
Ms. Annie Guo (Non-Executive Director)
Mr. Hansjörg Plaggemars (Non-Executive Director)
Company Secretary
Mr. Brett Dickson
Registered Office
Level 1, 34 Colin Street
West Perth WA 6005
(08) 9481 2555
Solicitors
K & L Gates
Level 32
44 St Georges Terrace
Perth WA 6000
Bankers
Commonwealth Bank of Australia Limited
Share Register
Computershare Investor Services Pty Ltd
Level 11
172 St Georges Terrace
Perth WA 6000
Telephone: 1300 787 272
Auditors
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
Internet Address
www.azureminerals.com.au
ASX Code
Shares
AZS
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Azure Minerals Limited – 2021 Annual Report
Contents
Chairman’s Letter
Review of Operations
Directors' Report
Corporate Governance Statement
Financial Statements
- Consolidated Statement of Profit or Loss and Other Comprehensive Income
- Consolidated Statement of Financial Position
- Consolidated Statement of Changes in Equity
- Consolidated Statement of Cash Flows
- Notes to the Consolidated Financial Statements
- Directors' Declaration
- Independent Audit Report
- Auditor’s Independence Declaration
ASX Additional Information
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Azure Minerals Limited – 2021 Annual Report
Chairman’s Letter
Dear Shareholders,
I am pleased to be able to write to you after my relatively recent appointment as Chairman of Azure Minerals Limited. I am
very much looking forward to the opportunity of leading the board of Azure through this next stage of your Company’s growth.
I would like to pay tribute to my predecessor Mr Peter Ingram, an absolute icon of the Australian exploration and mining
industry who for nearly 10 years played a critical role in guiding the Company through its efforts in Mexico and the subsequent
transition back to Australia in 2020.
He has left the Company, led by our Managing Director Tony Rovira and his management team, in a very sound position. The
acquisition of our Western Australian nickel, copper and gold portfolio from prominent mining investor and prospector Mr
Mark Creasy and the Creasy Group, including the flagship Andover Nickel-Copper project, has been a game-changer for Azure.
Mark Creasy is arguably one of the world’s best prospectors and to have him as a project partner and Azure shareholder is a
strong endorsement of the pathway we are on and the track record of Tony Rovira as a leader of mineral exploration and project
development teams.
The Andover acquisition has already delivered discoveries at VC-07 and VC-23, confirming significant quantities of nickel
and copper sulphide mineralisation at these prospects, with an intensive drilling program expected to deliver a maiden mineral
resource in early 2022. Azure is also aggressively exploring several other very attractive targets at Andover and we see at see
this project very much as a company-making opportunity.
Rounding out the project portfolio is our exciting gold exposure. Drilling at the 100%-owned Barton Gold Project, which
adjoins Genesis Minerals’ new Puzzle North gold as part of the growing Kookynie Gold District, will be underway very shortly.
Meanwhile, we are just awaiting the granting of exploration licences at Turner River, which is another Creasy Group joint
venture located close to De Grey Mining’s multi-million-ounce Hemi gold deposit.
Due to the onset of the COVID-19 pandemic in early 2020 and the challenges of managing offshore projects, we decided to
pivot from our Mexican business strategy and return to our exploration roots in Western Australia. As much as we valued the
Mexican assets and are proud of your Company’s exploration success there, the reality is we are now totally focused on the
opportunities in front of us in WA. As such, we conducted a strategic review of those assets and are now running a process to
divest the projects to generate the best possible outcome for you our shareholders.
The next 12 months are going to be very busy and very exciting for your Company. The markets for our various commodities
of nickel, copper and gold are very sound. Gold prices are strong, and the ongoing global electrification decarbonisation
revolution means the future demand outlook for the high-value, clean and green battery metals, nickel and copper, is solid and
exciting.
Finally, I would like to thank you our shareholders for their ongoing support plus my fellow directors, our management team,
staff and contractors for their hard work and excellent outcomes.
Yours sincerely,
Brian Thomas
Chairman
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Azure Minerals Limited – 2021 Annual Report
Review of Operations
AUSTRALIA
In July 2020, Azure announced that it had entered into two Tenement Sale and Exploration Joint Venture Agreements with
entities controlled by prominent mining prospector Mr Mark Creasy (“Creasy Group”); one to acquire a 60% interest in the
Andover Nickel-Copper (Ni-Cu) Project and another to acquire 70% interests in the Turner River, Meentheena and Coongan
Gold Projects, all located in the Pilbara region of Western Australia.
Figure 1: Locations of Azure’s Pilbara projects overlying geology
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Azure Minerals Limited – 2021 Annual Report
NICKEL
ANDOVER NICKEL-COPPER PROJECT (AZURE 60% / CREASY GROUP 40%)
The Andover Nickel-Copper Project (Andover) comprises a single Exploration Licence (E47/2481) located 35km southeast of
Karratha and immediately south of Roebourne, with excellent local infrastructure such as airports, port access, railway, gas-
fired grid power, sealed highways, and support services readily available.
Figure 2: Location map of Andover Project
Andover covers 70km2 and contains most of the Andover Mafic-Ultramafic Intrusive Complex which is similar geologically
to the Fraser Range Province (host to the Nova-Bollinger Ni-Cu Mine and Legend Mining’s Mawson Ni-Cu discovery), the
Gonneville Intrusive Complex (host to Chalice Gold Mine’s Julimar palladium-platinum-copper-nickel project), and the
Savannah Intrusive Complex (host to Panoramic Resources’ Savannah Nickel Mine).
Since acquisition, Azure has undertaken intensive exploration, comprising:
• Geophysical surveying:
o Airborne electromagnetics (VTEM);
o Airborne magnetics;
o Surface fixed loop electromagnetics (FLTEM);
o Downhole electromagnetics (DHTEM);
• Diamond drilling
• Geological mapping and surface sampling
Azure initiated exploration with FLTEM surveys being undertaken over several electromagnetic anomalies previously detected
in an historical VTEM survey. The FLTEM surveys confirmed the presence of at least 10 high-quality, bedrock-hosted
conductors that were considered prospective for representing sulphide bodies. Importantly, the Andover project area does not
appear to host graphitic shales, conductive overburden, saline water or other properties that may generate false positives for
the EM surveys. This provides Azure with confidence that electromagnetic conductors, when identified, represent bedrock-
hosted sulphide bodies.
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Azure Minerals Limited – 2021 Annual Report
Figure 3: Geological map of Andover
A large-scale FLTEM survey utilising four 600m x 600m loops identified a strong, laterally extensive, bedrock-hosted EM
conductor with a strike extent of 1,000m east-west and a down-dip extent of at least 400m. Designated as VC-07, this anomaly
was interpreted to represent a body of primary sulphide mineralisation. The eastern end of the conductor coincided with two
historical holes drilled by the Creasy Group in 2018 which intersected minor Ni-Cu sulphide mineralisation.
Azure commenced its maiden drill program in October 2020 to test VC-07, with seven drill holes completed by December
2020. Impressively, all holes intersected broad intervals containing substantial nickel and copper sulphide mineralisation.
Importantly, in every hole, massive sulphide zones coincided with electromagnetic conductors defined by the FLTEM and
subsequent DHTEM surveys.
Following the success of the Company’s initial seven hole drill program, Azure immediately commenced a large diamond
drilling program utilising three diamond drill rigs. By September 2021, 95 diamond drill holes have been completed for a total
of 42,830m, with 87 holes drilled at VC-07 (76 holes at VC-07 East and 11 holes at VC-07 West) and 8 holes drilled at the
nearby VC-23 prospect.
VC-07 Mineral Resource Drill-Out Program
Drilling confirmed that VC-07 represents an extensive mineralised system containing two significant zones of Ni-Cu sulphide
mineralisation; named VC-07 East and VC-07 West.
Most drill holes intersected visible nickel and copper sulphide mineralisation, usually comprising a broad mineralised envelope
containing an intermixed combination of massive, semi-massive, matrix, stringer, blebby and disseminated pentlandite (nickel
sulphide), chalcopyrite (copper sulphide) and pyrrhotite (iron sulphide) hosted in gabbro and similar mafic rocks.
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Azure Minerals Limited – 2021 Annual Report
Figure 4: Andover VC-07 prospect showing drill hole locations and long section line A-AA
The DHTEM surveys carried out at VC-07 confirmed the strong relationship between massive sulphides and electromagnetic
conductors, providing Azure with a high level of confidence that drilling of EM conductors leads to nickel and copper sulphide
mineralisation.
VC-07 East
Mineral resource drilling is still ongoing in September 2021, with the VC-07 East zone now been confirmed as a significant
Ni-Cu sulphide deposit in its own right. Sulphide mineralisation starts within 40m of surface, extends to at least 500m below
surface, is at least 400m long (east-west), is up to 30m broad in true width, and has excellent internal continuity of grade and
thickness.
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Azure Minerals Limited – 2021 Annual Report
Figure 5: Long section A-AA showing grade-thickness heat map (Ni% x width[m]) of the VC-07 East Ni-Cu sulphide
deposit
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Azure Minerals Limited – 2021 Annual Report
Figure 6: ANDD0005 drill core
Massive Ni-Cu sulphides @ 330.0m-330.2m
1.0m @ 3.49% Ni & 0.44% Cu
Figure 7: ANDD0006 drill core
Massive Ni-Cu sulphides @ 416.9m-417.3m
0.75m @ 3.75% Ni and 0.21% Cu
(refer ASX: 12 January 2021)
Table 1: Significant mineralised intersections at VC-07 East
(refer ASX: 29 January, 30 April, 30 July, 2 August 2021 & 13 September)
4.6m @ 2.41% Ni & 0.48% Cu within 13.6m @ 1.19% Ni and 0.38% Cu from 104.0m (ANDD0002)
8.5m @ 2.77% Ni & 1.04% Cu within 26.6m @ 1.50% Ni and 0.71% Cu from 347.5m (ANDD0004)
7.0m @ 2.23% Ni & 0.63% Cu within 19.2m @ 1.47% Ni and 0.41% Cu from 406.3m (ANDD0006)
7.6m @ 2.07% Ni & 1.47% Cu within 16.7m @ 1.67% Ni and 0.88% Cu from 434.5m (ANDD0015)
5.8m @ 2.81% Ni & 0.67% Cu within 14.8m @ 1.77% Ni and 0.69% Cu from 176.1m (ANDD0021)
6.3m @ 3.45% Ni & 0.47% Cu within 11.4m @ 1.99% Ni and 0.37% Cu from 267.3m (ANDD0021)
3.4m @ 2.13% Ni & 0.49% Cu within 11.2m @ 1.31% Ni and 0.45% Cu from 491.0m (ANDD0037)
4.5m @ 2.72% Ni & 0.59% Cu within 20.9m @ 1.81% Ni and 0.87% Cu from 390.7m (ANDD0046)
5.5m @ 2.12% Ni & 0.61% Cu within 10.3m @ 1.54% Ni and 0.59% Cu from 557.6m (ANDD0047)
4.1m @ 3.35% Ni & 0.87% Cu within 8.35m @ 2.58% Ni and 0.71% Cu from 234.4m (ANDD0061)
4.8m @ 2.17% Ni & 1.06% Cu within 18.2m @ 1.14% Ni and 0.62% Cu from 397.2m (ANDD0063)
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Azure Minerals Limited – 2021 Annual Report
VC-07 West
Azure also carried out a short diamond drilling program to test conductors identified by the FLTEM survey in the western
portion of the VC-07 mineralised corridor, completing 11 holes.
The first two holes were drilled as platforms to provide DHTEM coverage in this new area and several conductors were
detected. Targeting those conductors, most of the follow-up holes intersected Ni-Cu sulphide mineralisation of variable
intensity, ranging from massive sulphides containing high grades of nickel and copper through to lower grade disseminated
sulphides.
Once again, zones of massive sulphides coincide with the modelled locations of the EM conductor plates, confirming the strong
relationship between sulphide mineralisation and electromagnetic conductance.
Once the resource drill-out of the neighbouring VC-07 East deposit is completed, additional drilling will be undertaken at VC-
07 West to follow the mineralisation along strike to the east and west, up-dip closer to surface, deeper down-dip and to test
other nearby, as yet undrilled, DHTEM conductors.
Table 2: Significant mineralised intersections at VC-07 West (refer ASX: 2 August 2021)
4.5m @ 3.95% Ni & 0.80% Cu from 486.6m (ANDD0045); and
3.4m @ 2.01% Ni & 0.43% Cu within 6.6m @ 1.52% Ni and 0.49% Cu from 602.5m (ANDD0045)
Regional Drilling Program
VC-23 Discovery
To date, ten high-priority surface FLTEM conductor anomalies have been identified throughout the Andover project area, with
VC-23 being the second (after the successful discovery of VC-07) of the targets to be tested as part of the regional drilling
program.
Azure continued its strong run of success at Andover with the discovery of significant Ni-Cu sulphide mineralisation at VC-
23. Eight diamond drill holes were completed, with holes targeting the modelled locations of EM conductor plates or interpreted
down-dip extensions of those conductor plates.
All eight holes intersected varying amounts of visible Ni-Cu sulphide mineralisation, defining an interpreted east-west down-
dip mineralised extent in excess of 200m, with mineralisation remaining open in all directions.
Six holes intersecting significant quantities of Ni-Cu sulphide mineralisation. Peak assay results of 4.76% Ni and 2.69% Cu
were hosted in massive sulphides in ANDD0011, confirming the high nickel and copper tenor of this sulphide mineralisation.
Figure 8: ANDD0011 at VC-23; semi-massive sulphides: 0.67m @ 3.62% Ni & 0.15% Cu
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Azure Minerals Limited – 2021 Annual Report
Figure 9: Drill hole locations at VC-23
Azure is well funded to continue advancing exploration and development of the nickel-copper sulphide deposits identified at
Andover.
Initially, the Company is focused on completing the mineral resource drill-out programs on the VC-07 East Ni-Cu sulphide
deposit, with the maiden mineral resource to be released in 2022. When the mineral resource drill program concludes at VC-
07 East, Azure will re-focus the drilling campaign to expanding the VC-07 West mineralised zone to resource status and testing
regional targets.
The Andover regional exploration program comprises geophysical surveying, detailed geological mapping and surface
sampling, which will be followed up by Reverse Circulation and diamond drilling. The ongoing surface FLTEM surveys
continue to define additional EM conductors interpreted to represent bedrock-hosted sulphide bodies and are high-quality drill
targets, for example at VC-23, VC-18, VC-41, VC-30, VC-31 and VC-32.
Table 3: Significant mineralised intersections at VC-23 (refer ASX: 7 April 2021)
1.3m @ 3.51% Ni & 0.21% Cu within 4.0m @ 1.69% Ni and 0.21% Cu from 32.7m (ANDD0011)
2.7m @ 2.29% Ni & 0.48% Cu within 7.0m @ 1.35% Ni and 0.45% Cu from 95.0m (ANDD0012)
2.3m @ 1.60% Ni & 0.75% Cu within 4.4m @ 1.17% Ni and 0.61% Cu from 84.6m (ANDD0013)
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Azure Minerals Limited – 2021 Annual Report
Figure 10: Aeromagnetic image with locations of significant EM conductor targets at Andover
GOLD
BARTON GOLD PROJECT (AZURE 100%)
Azure bolstered its gold portfolio through the acquisition of 100% of the Barton Gold Project (Barton), a single Exploration
Licence (EL 40/393) which was granted on 1 July 2021. Barton is adjacent to the historical gold mining town of Kookynie,
located approximately 40km south of Leonora in the Eastern Goldfields region of Western Australia.
Barton covers approximately 200km2 of the Kookynie Gold District and adjoins several growing gold deposits / projects,
including:
• Genesis Minerals Ltd (ASX: GMD): Ulysses Gold Project (1,608,000oz);
• Genesis Minerals’ recent gold discovery at Puzzle North;
• Saturn Metals Ltd (ASX: STN): Apollo Hill Gold Project (944,000oz); and
• Recent high-grade gold discoveries at Kookynie by Metalicity Ltd (ASX:MCT) and other companies.
Since the 1890s, the Kookynie-Orient Well-Ulysses district has produced more than 1.1Moz of gold from open pit and
underground mining of high-grade, quartz vein gold deposits and currently hosts additional gold resources of >3Moz.
Historically, the larger mines in the district were:
• Kookynie (combined): produced ~366,000oz Au; located 4km south of Azure’s Barton Project
• Puzzle: produced ~100,000oz Au; located 1.3km south of Barton
• Orient Well: produced ~220,000oz Au; located 4km west of Barton
• Admiral / Butterfly: produced ~320,000oz Au; located 10km west of Barton
• Ulysses: produced ~50,000oz Au; located 15km west of Barton.
Most of the historical exploration in the Kookynie district focused on areas of outcrop and shallow soil-covered terrain.
However, due to transported soils covering most of the Barton project area, soil sampling and shallow drilling previously
undertaken within the project area was ineffective in testing for bedrock-hosted gold mineralisation.
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Azure Minerals Limited – 2021 Annual Report
The only deeper drilling that penetrated into bedrock was in the southwest of the property at the Daisy Corner prospect, which
is situated within the Kookynie-Orient Well-Ulysses shear corridor between the Orient Well (247,000oz Au resources) and
Puzzle (59,000oz Au resources) gold deposits.
In 1995-1997, drilling at Daisy Corner returned best results (refer ASX: 4 September 2020) of:
•
•
•
7m @ 1.26g/t Au from 42m within 18m @ 0.77g/t Au;
40m @ 0.2g/t Au from 20m; and
8m @ 0.53g/t Au from 48m.
Recent drilling by neighbouring company Genesis Minerals Ltd (https://genesisminerals.com.au) at their newly discovered
Puzzle North prospect has identified wide zones of shallow gold mineralisation over a strike length in excess of 400m.
Mineralisation is associated with quartz veining hosted in hematite-sericite altered granite adjacent to a north-striking granite-
greenstone contact. The Puzzle North mineralised zone remains open and trends directly towards Azure’s property.
Figure 11: Plan of the Barton tenement, surrounding projects and gold prospects
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Azure Minerals Limited – 2021 Annual Report
Planned Exploration Program
To date, Azure has completed an airborne magnetic survey over the Barton project area and preparation is underway for aircore
and RC drilling programs.
Initially, Azure’s drilling will follow-up gold mineralisation intersected historically at Daisy Corner, which may represent the
northern extensions of the recent Puzzle North discovery where Genesis Minerals is currently undertaking a resource definition
drilling program. Azure will also test for structurally controlled, bedrock-hosted gold associated with cross-cutting shears and
fault zones elsewhere on the property.
Figure 12: The Barton Project showing areas of gold prospectivity
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Azure Minerals Limited – 2021 Annual Report
PILBARA GOLD PROJECTS
Azure has also acquired an exciting gold project portfolio from the Creasy Group, providing an opportunity to diverse its
commodity exposure and give shareholders exposure to a new and exciting gold district which has seen several recent large
gold discoveries. The Company has acquired 70% interests in the Turner River, Meentheena and Coongan Gold Projects,
located in the Pilbara region of Western Australia.
Turner River Gold Project (Azure 70% / Creasy Group 30%)
The Turner River Gold Project (Turner River) comprises two unexplored Exploration Licence applications covering 450km2,
located just south of Port Hedland and close to De Grey Mining’s Mallina Gold Project and their newly discovered Hemi gold
deposit (total of 9.0Moz of gold resources).
Figure 13: Turner River Gold Project showing geology, structural setting & gold deposits/occurrences
This district is rapidly emerging as a major gold province, with multiple intrusive-related gold deposits giving it potential to be
of world-class scale. De Grey’s Hemi gold deposit (6.8Moz gold resources and growing), together with another 2.2Moz of gold
resources hosted in multiple deposits throughout the De Grey’s Mallina project, demonstrate that substantial gold deposits have
been formed with the confluence of granite intrusions into the Mallina sediments and major cross-cutting shear zones like the
regionally-extensive Mallina and Berghaus Shear Zones.
The mostly sand-covered Turner River project area hosts similar geology to De Grey’s ground, with Mallina Formation
sediments, granite intrusions and the Archean-age Louden Volcanics greenstone belt all occurring within the property. Turner
River also contains 12km of the northeast-trending, gold-rich Berghaus Shear Zone and parallel structures that are associated
with Hemi and other nearby gold deposits like Mt Berghaus (De Grey) and Cookes Hill (Haoma Mining).
The Louden greenstone belt is prospective for more conventional structurally-controlled gold mineralisation, a geological
concept that to date remains relatively untested in this district.
There are no indications of drilling or other historical exploration within the Turner River project area. The extensive sand
cover, proximity to De Grey’s strongly mineralised project area and gold deposits, favourable rock types and fertile structural
setting, all highlight the significant prospectivity for Turner River to host substantial gold mineralisation.
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Azure Minerals Limited – 2021 Annual Report
Meentheena and Coongan Gold Projects (Azure 70% / Creasy Group 30%)
The Meentheena and Coongan gold exploration projects are located in the eastern Pilbara.
Meentheena is located approximately 80km east of Marble Bar, with easy access via the sealed Marble Bar to Telfer Gold Mine
road and Coongan is located 8km to the west of Nullagine)
Meentheena covers 223km2 and been explored by the Creasy Group for more than 25 years. The project is prospective for
epithermal-style gold mineralisation and geological mapping and geochemical sampling over several years defined a large
(~20km2) zone of epithermal alteration at surface. Strongly anomalous gold and silver values and high levels of the pathfinder
minerals arsenic, antimony and mercury are associated with silica flooding, quartz and sulphide veining, and crackle breccias
indicative of an epithermal event.
The Creasy Group drill-tested this zone completing five RC holes for 2,204m and one 706m diamond core hole. Several holes
intersected epithermal-style alteration, veining and brecciation with anomalous precious metals and pathfinder elements. Azure
plans to undertake further exploration, initially comprising surface studies followed by drilling.
Coogan covers an area of 141km2. The Project is situated immediately west of Nullagine and adjoins the western boundary of
Novo Resources’ Beatons Creek Conglomerate Gold Project (current resources of 903,000oz @ 2.53g/t Au in conglomerate,
alluvial and reef gold2).
There are numerous mineral occurrences and deposits reported in the immediate vicinity of Coongan, including gold to the
northwest and east, copper to the north, Channel Iron Deposits (CID) to the south and tin, tantalum and lithium to the east. The
project is considered prospective for alluvial and conglomerate-hosted gold similar to that at Beatons Creek and also bedrock-
hosted primary gold mineralisation.
Exploration undertaken by Creasy Group focused on the western half of the project area and comprised surface geochemical
sampling (stream sediment and rock chip) and a close-spaced detailed aeromagnetic survey. Numerous target areas were
identified that warrant follow-up with infill stream sediment sampling, soil sampling, detailed rock chip sampling and
geological mapping. In addition, the eastern half of the property requires similar reconnaissance exploration and an
aeromagnetic survey.
MEXICO
Azure completed a strategic review of its precious metals and base metals projects in Mexico, including the 100%-owned
Alacrán silver-gold-copper and Oposura zinc-lead-silver projects.
With increased Company attention on the exciting Andover Ni-Cu Project, the Board’s objective in conducting the review was
to determine how to best optimise the value of the Company’s Mexican mineral projects.
The review concluded that with the Company now clearly focused on advancing Andover, that a trade sale of the Mexican
assets would provide the best outcome for shareholders.
Following an assessment of a number of alternative pathways forward, Azure mandated PCF Capital Group to commence and
complete a targeted and structured sale process of its Mexican project portfolio. PCF Capital Group provides services to the
resource sectors in Australia and North America, with a range of corporate advisory services including project evaluations,
M&A, asset divestment and acquisition processes plus project finance solutions and international capital raisings.
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Azure Minerals Limited – 2021 Annual Report
Directors' Report
Your directors present their report on the consolidated entity (referred to hereafter as “the Group”) consisting of Azure Minerals Limited
(“Azure”) and the entities it controlled at the end of or during the year ended 30 June 2021.
DIRECTORS
The following persons were directors of Azure Minerals Limited during the whole of the financial year and up to the date of this report,
unless otherwise stated.
Brian Thomas (Appointed 1/3/2021)
Anthony Rovira
Hansjörg Plaggemars
Annie Guo (Appointed 1/3/2021)
Peter Ingram (Resigned 30/06/2021)
Wolf Martinick (Resigned 24/11/2020)
Wayne Bramwell (Appointed 14/10/2020 & Resigned 19/02/2021)
PRINCIPAL ACTIVITIES
During the year the principal continuing activity of the Group was exploration for precious and base metals principally in Australia with
continuing exploration activities in Mexico.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.
REVIEW OF OPERATIONS
Group Overview
Azure Minerals Limited was incorporated on 19 September 2003. Up until early 2020 its principal focus was on exploration for gold,
copper, silver and zinc in Mexico, but following the worldwide onset of COVID-19 during 2020 the company transitioned back to Australia
with the acquisition of a number of gold and base metal projects in Western Australia.
Operating Results for the Year
The operating loss after income tax of the Group for the year ended 30 June 2021 was $16,900,178 (2020: $5,671,296). Included in this
loss figure is $9,096,498 (2020: $3,467,734) of exploration expenditure. Refer to notes 1(c) and 5 to the financial statements.
Shareholder Returns
Basic loss per share (cents)
Diluted loss per shares (cents)
2021
(6.28)
(6.28)
2020
(3.75)
(3.75)
Investments for Future Performance
The future performance of the group is dependent upon exploration success, the progress of development of those projects where precious and
base metals are already present, and continued funding. To this end the group has budgeted to continue exploration on its projects.
Review of Financial Condition
At the date of this report the consolidated entity has a sound capital structure and is in a strong position to progress its mineral properties.
Risk Management
The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that activities are aligned with the
risks and opportunities identified by the board.
The board has adopted a Risk Management Policy and performs the role of the Audit and Risk Management Committee.
The board has a number of mechanisms in place to ensure that management's objectives and activities are aligned with the risks identified by
the board. These include the following:
• Board approval of a strategic plan, which covers strategy statements designed to meet stakeholders’ needs and manage business risk.
•
Implementation of board approved operating plans and budgets and board monitoring of progress against these budgets.
The company undertakes risk review meetings as required with the involvement of senior management. Identified risks are weighed with action
taken to mitigate key risks.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the year the Company issued a total of 145,893,104 fully paid ordinary shares (FPOS) being:
•
•
•
•
The issue of 2,100,000 FPOS as a result of the exercise of 2,100,000 options raising $958,000;
The issue of 90,000,000 FPOS to raise $41,000,000 before expenses of the issues;
The issue of 40,000,000 FPOS as consideration for the acquisition of minerals exploration projects in Western Australia; and
The issue of 13,793,104 FPOS as the result of the conversion of 2,000,000 convertible notes with a face value of $2,000,000.
There were no other significant changes in the state of affairs of the Group during the financial year.
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Azure Minerals Limited – 2021 Annual Report
Directors' Report
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 1 July 2021 the Barton tenement (EL 40/393) was granted. As a result, the Company issued 1,150,000 fully paid ordinary shares and
$20,000 to the vendor.
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new strain of coronavirus
originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community as the virus spreads globally beyond its point
of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is therefore uncertain as to the full impact
that the pandemic will have on its financial condition, liquidity, and future results of operations during FY2021.
Management is actively monitoring the global situation and its impact on the Group's financial condition, liquidity, operations, suppliers,
industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Group is not
able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for the 2021 financial year.
No other matter or circumstance has arisen since the end of the financial year which significantly affected or may significantly affect the
operations of the group, the results of those operations, or the state of affairs of the group in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The group expects to maintain the present status and level of operations. The impact of COVID-19 on the company going forward, including
its financial condition cannot be reasonably estimated at this stage and will be reflected in the Group’s 2022 interim and annual financial
statements.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The company is subject to significant environmental regulation in respect to its exploration activities.
The company aims to ensure the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in
compliance with all environmental legislation. The directors of the company are not aware of any breach of environmental legislation for the
year under review. The directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which requires
entities to report annual greenhouse gas emissions and energy use. The directors have assessed that the Company has no current reporting
requirement but may be required to report in the future.
INFORMATION ON DIRECTORS
Mr. Brian Thomas, BSc MBA Grad Cert App Fin Inv MAusIMM MAICD SAFin (Appointed 1 March 2021)
Mr. Thomas is a very experienced Director and Corporate Executive with significant domestic and international resources management
experience. In addition, Mr. Thomas spent 15 years in the financial services sector with executive roles in corporate stockbroking, investment
banking and banking with Morgan Stockbroking, McIntosh Securities, Merrill Lynch Investment Bank and Westpac Institutional Bank.
He has more than 35 years of mining and exploration industry experience covering a broad range of commodities from precious, base and
battery metals, bulk and industrial minerals, diamonds plus oil and gas.
Mr Thomas graduated from the University of Adelaide with a BSc in Geology and Mineral Economics, the University of Western Australia
Business School with an MBA and the Securities Institute of Australia (now FinSIA) with a Certificate in Applied Finance and Investment.
Other Current Directorships
Nil
Former Directorships in the last 3 years
Non-Executive Director Paterson Resources Ltd (Resigned 11 December 2020)
Non-Executive Director Auris Resources Ltd (Resigned 31 March 2020)
Non-Executive Director Cougar Metals NL (Resigned 31 July 2019)
Special Responsibilities
Chairman of the Board
Interests in Shares and Options
Nil
Mr. Anthony Paul Rovira, BSc (Hons) Flinders University, MAusIMM (Managing Director)
Tony Rovira has over 30 years technical and management experience in the mining industry, as an exploration and mining geologist, and as
a company executive at Board level. Since graduating from Flinders University in South Australia in 1983, Tony has worked for companies
both large and small, including BHP, Barrack Mines, Pegasus Gold and Jubilee Mines. From 1997-2003 Tony was the General Manager of
Exploration with Jubilee Mines, during which time he led the team that discovered and developed the world class Cosmos and Cosmos
Deeps nickel sulphide deposits in Western Australia. In the year 2000, the Association of Mining and Exploration Companies awarded
Tony the “Prospector of the Year Award” for these discoveries.
Tony joined Azure Minerals as the inaugural Managing Director in December 2003, held the position of Executive Chairman from June
2007 until December 2011, then reverted to his current position of Managing Director. Tony is responsible for the decision in 2020 to
change the Company’s focus from precious and base metals in Mexico to nickel and gold in Western Australia, leading the company to
significant exploration success at the Andover Nickel-Copper Project.
18
Azure Minerals Limited – 2021 Annual Report
Directors' Report
INFORMATION ON DIRECTORS (cont’d)
Other Current Directorships
Nil
Former Directorships in the last 3 years
Ionic Rare Earths Limited (resigned 21 December 2020)
Interests in Shares and Options
1,506,002 ordinary shares in Azure Minerals Limited, of which 109,667 are held indirectly
1,500,000 options over ordinary shares in Azure Minerals Limited
Mr Hansjörg Plaggemars
Mr Plaggemars was appointed a director on 26 November 2019 and is an experienced company director with a deep background in corporate
finance, corporate strategy and governance. He has served on the Board of Directors of many listed and unlisted companies in a variety of
industries including mining, agriculture, shipping, construction and investments. This includes the Board of Delphi Unternehmensberatung
AG, a major shareholder of Azure.
Mr. Plaggemars has qualifications in Business Administration and is fluent in English and German.
Other Current Directorships
2invest AG, Ming Le Sports AG, Decheng Technology AG i.I., Snowbird Ag i.I., Wiluna Mining Corporation Limited, Gascoyne Resources
(WA) Pty Ltd, PNX Metals Limited, 4basebio UK Limited, Altech Chemicals Limited, South Harz Potash Limited, KIN Mining NL, Alltech
Advanced Metals AG
Former Directorships in the last 3 years
The Grounds Real Estate Development AG, CARUS AG, Enapter AG, KlickOwn AG, MARNA Beteiligungen AG, Biofrontera AG, Nordic
SSW 1000 Verwaltungs AG
Special Responsibilities
Nil
Interests in Shares and Options
60,000 ordinary shares in Azure Minerals Limited
Ms. Annie Guo, B.Econ, M.Fin (Appointed 1 March 2021)
Ms. Guo, a highly proficient corporate executive with more than 20 years’ experience in the mining and resources sector.
During Ms. Guo’s earlier career with PricewaterhouseCoopers, she held senior roles in transaction services, with a focus on the mining and
resources sector. In addition, she is an experienced public and private company director and executive and has run her own investment platform
focused on Australian and international mining and resource projects for the past decade. Ms. Guo brings significant experience across mining
project evaluation, mergers and acquisitions, capital markets, project development and corporate finance, and is currently the Managing
Director of Zuleika Gold Limited and a Non-Executive Director Azure Minerals Limited
Other Current Directorships
Zuleika Gold Limited (since November 2013)
CZR Resources Limited (since February 2021)
Former Directorships in the last 3 years
Nil
Special Responsibilities
Nil
Interests in Shares and Options
Nil
Mr. Peter Anthony Ingram BSc. (Resigned 30 June 2021)
Mr. Ingram was appointed a director on 12 October 2011 and assumed the Chair on 1 December 2011. He is a geologist with over fifty years’
experience in the mining and mineral exploration industries within Australia, including over forty years’ experience in public company
management. He was the founding Chairman and Managing Director of Universal Resources Limited (later Altona Mining Limited).
Mr. Ingram was a founding councilor and past President of the Association of Mining and Exploration Companies (AMEC) and has been
made an Honorary Life Member in recognition of his services to AMEC. He was also a founding director of the Australian Gold Mining
Industry Council. He has served on the board of management of the WA School of Mines at Curtin University and was instrumental in the
establishment of the Chair of Mineral Economics within that institution.
Mr. Ingram’s previous directorships include: Managing Director of Metana Minerals NL and Eastmet Limited, both successful gold mining
companies; Executive Chairman of Australia Oriental Minerals NL and Glengarry Resources Limited; and Non-executive Director of Dragon
Mining Limited, Metana Petroleum Limited and Carnarvon Petroleum Limited.
19
Azure Minerals Limited – 2021 Annual Report
Directors' Report
INFORMATION ON DIRECTORS (cont’d)
Other Current Directorships
Nil
Former Directorships in the last 3 years
Nil
Interests in Shares and Options at time of retirement
1,500,055 ordinary shares in Azure Minerals Limited all of which are held indirectly.
Dr Wolf Martinick, PhD, BSc (Agric) (Resigned 24 November 2020)
Dr Martinick was appointed a director on 1 September 2007 and is an environmental scientist with over 40 years’ experience in mineral
exploration and mining projects around the world, attending to environmental, water, land access and indigenous people issues. He has
conducted due diligence on mining projects around the world on behalf of international financial institutions and resource companies for a
variety of transactions including listings on international stock exchanges, mergers and debt financing. He is a Fellow of the Australian Institute
of Mining and Metallurgy.
He was a founding director and chairman of Weatherly International plc, an AIM listed company with copper mines in Namibia, and a founding
director of Basin Minerals Limited, an ASX listed mineral exploration company that discovered a world-class mineral project in Victoria,
Australia, that was acquired by Iluka Resources Limited in 2003.
Other Current Directorships
Nil
Former Directorships in the last 3 years
Ionic Rare Earths Limited – resigned 30 November 2018
Interests in Shares and Options at time of retirement
1,265,000 ordinary shares in Azure Minerals Limited
Mr W Bramwell, BSc (Extractive Metallurgy), Grad Dip Bus, MSc (Min. Econ), GAICD) – Appointed 14 October 2020, Resigned 19
February 2021)
Mr Bramwell is a metallurgist and mineral economist, experienced director and mining executive with extensive project and corporate
development, executive management and governance expertise in precious and base metal companies spanning nearly three decades. He holds
a Bachelor of Science in Extractive Metallurgy, a Graduate Diploma in Business, a Master of Science in Mineral Economics and is a graduate
of the Australian Institute of Company Directors.
Other Current Directorships
Westgold Resources Limited
Former Directorships in the last 3 years
CZR Resources Limited (appointed 3 November 2020, resigned 19 February 2021)
Ardea Resources Limited (appointed 29 January 2018, resigned 3 July 2020).
Interests in Shares and Options at time of retirement
40,000 ordinary shares in Azure Minerals Limited all of which are held indirectly.
DIRECTORS' MEETINGS
The number of directors' meetings held (including meetings of committees of directors) and number of meetings attended by each of the
directors of the company during the financial year are:
Directors'
Meetings
Meetings of Committees
Audit & Risk Management
Remuneration & Nomination
Mr Brian Thomas
Mr Anthony Rovira
Mr Hansjörg Plaggemars
Ms Annie Guo
Mr Peter Ingram
Dr Wolf Martinick
Mr Wayne Bramwell
Notes
A - Number of meetings attended.
B - Number of meetings held during the time the director held office or was a member of the committee during the year.
B
4
12
12
4
12
5
5
A
4
12
12
4
12
5
5
A
-
-
-
-
1
1
-
A
-
1
1
-
1
-
1
B
-
-
-
-
1
1
-
B
-
1
1
-
1
-
1
20
Azure Minerals Limited – 2021 Annual Report
Directors' Report
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the following main headings:
A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation
E Additional Information
Key management personnel (KMP) covered in this report
Name
Mr Brian Thomas
Mr Anthony Rovira
Mr Hansjörg Plaggemars
Ms Annie Guo
Mr Peter Ingram
Dr Wolf Martinick
Mr Wayne Bramwell
Mr Brett Dickson
Position
Term as KMP
Non-Executive Chair
Executive Managing Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Company Secretary & CFO
From 1 March 2021
Full financial year
Full financial year
From 1 March 2021
Full financial year
Resigned 24 November 2020
From 14 October 2020 to 19 February 2021
Full financial year
The information provided in this remuneration report has been audited as required by section 308 (3C) of the Corporation Act 2001.
A Principles used to determine the nature and amount of remuneration
The remuneration policy of Azure Minerals Limited has been designed to align director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component and where appropriate offering specific short and long-term incentives
based on key performance areas affecting the Groups results. Short-term incentives implemented by the Company are detailed later in the
report in section E. At present the Company has not implemented any specific long-term incentives and as such the remuneration policy is
not impacted by the Groups performance, including earnings in shareholder wealth (dividends, changes in share price or return on capital
to shareholders). The board of Azure Minerals Limited believes the remuneration policy to be appropriate and effective in its ability to
attract and retain the best executives and directors to run and manage the Group.
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the
board. All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation. The
board reviews executive packages annually by reference to the Groups performance, executive performance and comparable information
from industry sectors and other listed companies in similar industries.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract the highest
calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.
Executives are also entitled to participate in the employee share and option arrangements.
The executive directors and executives receive a superannuation guarantee contribution required by the government, which is currently
10.0% of cash salary, and do not receive any other retirement benefits. Some individuals, however, may choose to sacrifice part of their
salary to increase payments towards superannuation.
All remuneration paid to directors and executives is valued at the cost to the company and expensed. Shares given to directors and
executives are valued as the difference between the market price of those shares and the amount paid by the director or executive; to date
no shares have been awarded to directors or executives. Options are valued using either the Black-Scholes or Binomial methodologies.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and
responsibilities. The board determines payments to the non-executive directors and reviews their remuneration annually based on market
practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can
be paid to non-executive directors is subject to approval by shareholders at the Annual General Meeting (currently $400,000) as approved
at the Annual General Meeting held on 24 November 2020. In line with standard industry practice fees for non-executive directors are not
linked to the performance of the economic entity. However, to align directors’ interests with shareholder interests, the directors are
encouraged to hold shares in the company and are able to participate in employee option plans.
The full board acts as the Remuneration Committee under the Remuneration Committee Charter. It is primarily responsible for making
recommendations to the board on:
• Non-executive director’s fees
• Remuneration levels of executive directors and other key management personnel
• Key performance indicators and performance hurdles of the executive team
It’s objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the
Group. The Corporate Governance Statement provides further information on the role of this committee.
In the event of serious misconduct or a material misstatement in the Group’s financial statements, the Board can reduce, cancel or defer
performance-based remuneration and may also claw back performance-based remuneration paid in previous financial years.
Remuneration consultants were not engaged during the year.
21
Azure Minerals Limited – 2021 Annual Report
Directors' Report
REMUNERATION REPORT (AUDITED) (Cont’d)
There is no Retirement Benefit Policy for directors, other than the payment of statutory superannuation.
B Details of remuneration
Amount of remuneration
Details of the remuneration of the directors and key management personnel (as defined in AASB 124 Related Party Disclosures) of Azure
Minerals Limited are set out below in the following tables.
The key management personnel of Azure Minerals Limited includes the directors as disclosed earlier in this report and the following who
have authority and responsibility for planning, directing and controlling the exploration activities of the entity and the Company
Secretary/CFO, Mr B Dickson is an executive whose remuneration must be disclosed under the Corporations Act 2001.
Key management personnel of the Group
Short-Term
Name
Cash, salary
& fees
Cash
Bonus
Non-monetary
benefits
Directors
Brian Thomas – Chairman (appointed 1 March 2021)
Post-Employment
Superannuation
Share-based
Payments
Options
Total
Share Based
Payment %
-
-
-
-
-
-
-
-
-
-
2,058
-
25,000
25,000
-
-
356
-
4,988
3,561
2021
2020
21,666
-
Anthony Rovira – Managing Director
2021
2020
384,750
387,375
Hansjörg Plaggemars –Non Executive
2021
2020
48,750
15,688
-
-
-
-
-
-
Annie Guo – Non Executive (appointed 1 Mar. 2021)
-
-
2021
2020
15,000
-
Peter Ingram – Non Executive
52,500
37,500
Wolf Martinick –Non Executive (resigned 24 Nov. 2020)
21,726
33,750
2021
2020
-
-
-
-
2021
2020
2,064
3,207
Wayne Bramwell – Non Executive (appointed 14 Oct 2020, Resigned 19 Feb 2021)
1,274
-
17,160
-
-
-
-
-
-
-
2021
2020
Executives
Brett Dickson – Company Secretary
2021
2020
Total
2021
2020
172,125
172,125
733,677
646,438
-
-
-
-
-
-
-
-
-
-
35,740
31,768
-
-
-
57,818
-
-
-
-
-
28,909
-
28,909
-
-
-
40,473
-
156,109
23,724
-
409,750
470,193
48,750
15,688
15,356
-
57,488
69,970
23,790
65,866
18,434
-
172,125
212,598
769,417
834,315
-
-
-
12.3
-
-
-
-
41.3
-
43.9
-
-
19.0
-
18.7
Compensation options
There were no alterations to the terms and conditions of options granted as remuneration since their grant date. During the year no options
were granted as remuneration (2020: 2,700,000) and 2,100,000 options were exercised (2020: Nil). During the year no options lapsed or were
forfeited (2020: 1,350,000 lapsed).
The Company’s remuneration policy prohibits directors and executives from entering into transactions or arrangements which limit the
economic risk of participating in unvested entitlements.
Retirement benefits provided for the non-executive directors in the financial statements do not form part of the above remuneration until such
time as the amount is paid to the retiring director.
Apart from the issue of options the company currently has no performance based remuneration component built into non-executive director
remuneration (2020: Nil). Performance based remuneration for executives is detailed later in section E of this report.
22
Azure Minerals Limited – 2021 Annual Report
Directors' Report
REMUNERATION REPORT (AUDITED) (Cont’d)
C Service Agreement
Remuneration and other terms of employment for the following key management personnel are formalised in service agreements, the terms
of which are set out below:
Anthony Rovira, Managing Director
Brett Dickson, Company Secretary/Chief Financial Officer:
Term of agreement – to 31 December 2022.
Base salary, exclusive of superannuation, of $413,000 to be
reviewed annually by the remuneration committee.
As the result of disruptions caused by the COVID-19
pandemic, for the 6 month period from 1 March 2020 to 30
September 2020 Mr Rovira voluntarily undertook a 25%
reduction to this base salary.
Payment of termination benefit on early termination by the
employer, other than for gross misconduct, includes an amount
equal to the amounts due for the balance of the term of the
contract from the date of termination or the equivalent of 6
months remuneration, whichever is the greater.
Term of agreement – to 31 December 2022.
Fixed fee, $15,300 per month.
As the result of disruptions caused by the COVID-19
pandemic, for the 6 month period from 1 March 2020 to 30
September 2020 Mr Dickson undertook a 25% reduction to this
base salary.
Payment of termination benefit on early termination by the
employer, other than for gross misconduct, includes an amount
equal to the amounts due for the balance of the term of the
contract from the date of termination or the equivalent of 6
months remuneration whichever is the greater.
Retirement Benefits
Other retirement benefits may be provided directly by the company if approved by shareholders.
D Share based compensation
Options over shares in Azure Minerals Limited may be issued to directors and executives. The options are not issued based on performance
criteria but are issued to directors and executives of Azure Minerals Limited, where appropriate, to increase goal congruence between
executives, directors and shareholders. There are no standard vesting conditions to options awarded with vesting conditions, if any, at the
discretion of Directors at the time of grant. Options are granted for nil consideration.
During the year no options were awarded to or vested with Directors and Executives (2020: 2,700,000 options with a fair value of $156,109).
Refer to Note 22 of the Notes to the Consolidated Financial Statements for more information.
2,100,000 options held by directors or executives were exercised during the financial year and no options have been exercised since the end of
the financial year. During the year nil (2020: 1,350,000) options lapsed.
The Company’s remuneration policy prohibits executives from entering into transactions or arrangements which limit the “at risk” aspect of
participating in unvested entitlements.
E Additional Information
Performance based remuneration
Variable Remuneration – Short Term Incentive (“STI”)
Objective
The objective of the STI program is to link the achievement of the Company’s operational targets with the remuneration received by the
executives charged with meeting those targets. The total potential STI available is set at a level so as to provide sufficient incentive to the
executive to achieve those operational targets and such that the cost to the Company is reasonable in the circumstances.
Structure
Actual STI payments granted to executives depend on the extent to which specific targets set at the beginning of the review period, being a
fiscal year, are met. The targets consist of a number of Key Performance Indicators (KPI’s) covering both financial and non-financial, corporate
and individual measures of performance. Typically included are measures such as contribution to exploration success, share price appreciation,
risk management and cash flow sustainability. These measures were chosen as they represent the key drivers for the short term success of the
business and provide a framework for delivering long term value.
The Board has predetermined benchmarks that must be met in order to trigger payments under the STI scheme. On an annual basis, after
consideration of performance against KPI’s, the Remuneration Committee, determines the amount, if any, of the STI to be paid to each
executive. This process usually occurs in the last quarter of the fiscal year. Payments made are delivered as a cash bonus in the fourth quarter
of the fiscal year.
STI bonus for 2020 and 2021 financial years
No STI payment was awarded for the 2020 and 2021 financial years.
Variable Remuneration – Long Term Incentive (“LTI”)
Objective
The objective of the LTI plan is to reward senior managers in a manner which aligns this element of remuneration with the creation of
shareholder wealth. As such LTI grants are only made to executives who are able to influence the generation of shareholder wealth.
23
Azure Minerals Limited – 2021 Annual Report
Directors' Report
REMUNERATION REPORT (AUDITED) (Cont’d)
Structure
LTI grants to executives are delivered in the form of options.
The options, when issued to executives, will not be exercisable for a price less than the then current market price of the Company’s shares.
The grant of LTI’s is reviewed annually, though LTI’s may not be granted each year. Exercise price and performance hurdles, if any, are
determined at the time of grant of the LTI.
To date no performance hurdles have been set on options issued to executives. The Company believes that as options are issued at not less
than the current market price of the Company’s shares there is an inherent performance hurdle on those options as the share price of the
Company’s shares must increase significantly before there is any reward to the executive.
Shares issued on exercise of compensation options
2,100,000 shares were issued on exercise of compensation options during the year.
Option holdings of key management personnel
2021
Balance at
beginning of
year
Granted as
Remuneration
Options
Exercised
Options
Lapsed
Balance at end
of year*
Vested at 30 June
Vested &
Exercisable
Unvested
Directors
Brian Thomas
Wolf Martinick
Peter Ingram
Anthony Rovira
Hansjörg Plaggemars
Annie Guo
Wayne Bramwell
Executives
Brett Dickson
Total
-
1,000,000
1,000,000
2,000,000
-
-
-
1,400,000
5,400,000
*Or date of retirement from the board.
Shareholdings of key management personnel
-
-
-
-
-
-
-
-
-
-
(1,000,000)
(250,000)
(500,000)
-
-
-
(350,000)
(2,100,000)
-
-
-
-
-
-
-
-
-
-
-
750,000
1,500,000
-
-
-
-
-
750,000
1,500,000
-
-
-
1,050,000
1,050,000
3,300,000
3,300,000
-
-
-
-
-
-
-
-
2021
Brian Thomas
Wolf Martinick
Peter Ingram
Anthony Rovira
Hansjörg Plaggemars
Annie Guo
Executives
Brett Dickson
Total
Balance
1 July
Ord
-
265,000
500,055
806,000
-
-
-
1,571,055
Granted
Ord
-
-
-
-
-
-
-
-
On Exercise
of Options
Ord
-
1,000,000
250,000
500,000
-
-
Purchased
Ord
-
-
250,000
200,002
60,000
-
Balance
30 June
Ord
-
1,265,000
1,000,055
1,506,002
60,000
-
350,000
25,000
375,000
2,100,000
535,002
4,206,057
Balance Indirectly Held
Ord
-
215,000
1,000,055
109,667
60,000
-
375,000
1,759,722
*Or date of retirement from the board.
Other Related Party Transactions
The Company has entered into a sub-lease agreement on normal commercial terms with Ionic Rare Earths Limited (IonicRE), a company of
which Brett Dickson is a director. During the year IonicRE paid sub-lease fees totalling $9,255 (2020: $17,872).
The Company has also entered into a sub-lease agreement on normal commercial terms with Rox Resources Limited, a company of which
Brett Dickson was an officer. During the year Rox Resources Limited paid sub-lease fees totalling $104,457 (2020: $110,399).
24
Azure Minerals Limited – 2021 Annual Report
Directors' Report
REMUNERATION REPORT (AUDITED) (Cont’d)
Directors and executive options
Set out below are summaries of current Directors & Executives options granted.
Grant Date
Expiry Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance at
the start of
the year
Number
Granted
during
the year
Number
Exercised
during the
year
Number
Lapsed
during the
year
Balance at
end of the
year
Number
Vested and
exercisable at
end of the year
Number
2021
20 Nov ‘17
30 Nov ‘20
30 Nov ‘18
30 Nov ‘21
58
29
26 Nov ‘19
30 Nov ‘22
20.5
1.6
10.3
5.8
1,350,000
1,350,000
2,700,000
5,400,000
-
-
-
-
(1,350,000)
(250,000)
(500,000)
(2,100,000)
-
-
-
-
-
1,100,000
2,200,000
3,300,000
Weighted average exercise price
The weighted average remaining contractual life of share options outstanding at the end of the period was 1.7 years (2019: 1.4 years)
Total expenses arising from share-based payment transactions recognised during the year were as follows:
$0.456
$0.32
-
-
$0.233
-
1,100,000
2,200,000
3,300,000
$0.233
Options issued to directors and other executives
Company’s Performance
Consolidated
2021
$
-
2020
$
156,109
Company’s share price performance
The Company’s share price performance shown in the below graph is a reflection of the Company’s performance during the year and of
general market conditions.
The variable components of the executives’ remuneration including short-term and long-term incentives are indirectly linked to the
Company’s share price performance.
The graph below shows the Company’s share price performance during the financial year ended 30 June 2021.
25
$0.00$0.10$0.20$0.30$0.40$0.50$0.60$0.70$0.80$0.90$1.0001-Jul-2031-Jul-2030-Aug-2029-Sep-2029-Oct-2028-Nov-2028-Dec-2027-Jan-2126-Feb-2128-Mar-2127-Apr-2127-May-2126-Jun-2126-Jul-2125-Aug-21Share Price $Company's Share Price Performance
Azure Minerals Limited – 2021 Annual Report
Loss per share
Below is information on the Company’s loss per share for the previous four financial years and for the current year ended 30 June 2021.
Basic loss per share (cents)
* After 1:20 share consolidation
2021
(6.28)
2020
(3.75)
2019
(8.77)
2018
(10.06) *
2017
(0.42)
Voting and comments made at the company’s 2020 Annual General Meeting
Azure Minerals Limited received approximately 98.6% of “yes” votes on its remuneration report for the 2020 financial year. Remuneration
consultants were not engaged during the year and the company did not receive any specific feedback at the AGM or throughout the year on
its remuneration practices.
LOANS TO DIRECTORS OR EXECUTIVES
No loans have been provided to directors or executives.
End of Audited Remuneration Report
26
Azure Minerals Limited – 2021 Annual Report
Directors' Report
SHARES UNDER OPTION
At the date of this report there are 6,750,000 unissued ordinary shares in respect of which options are outstanding.
Total Number of
options
Balance at the beginning of the year
Share option movements during the year Issued Other
Exercisable at 49.0 cents, on or before 30 June 2024 500,000
Exercisable at 57.0 cents, on or before 30 June 2024 1,000,000
Exercisable at 65.0 cents, on or before 30 June 2024 1,500,000
Options Exercised (2,100,000)
Options Lapsed (2,800,000) (2,800,000)
Total options issued, exercised and lapsed in the year to 30 June 2021
500,000
1,000,000
1,500,000
(2,100,000)
(1,900,000)
8,650,000
Total number of options outstanding as at 30 June 2021 and at the date of this report
6,750,000
The balance is comprised of the following
Date granted
30 Nov 2018
26 Nov 2019
22 Jun 2021
22 Jun 2021
22 Jun 2021
Expiry date
30 Nov 2021
30 Nov 2022
30 Jun 2024
30 Jun 2024
30 Jun 2024
Total number of options outstanding at the date of this report
Exercise price (cents)
29.0
20.5
49.0
57.0
60.0
Number of options
1,250,000
2,500,000
500,000
1,000,000
1,500,000
6,750,000
No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to participate in any share issue of
any other body corporate.
During the financial year no options were exercised by parties unrelated to the Company. Since the end of the financial year no options
have been exercised.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, Azure Minerals Limited paid a premium of $39,051 (2020: $24,017) to insure the directors and secretary of the
company and its Australian based controlled entities.
The liabilities insured include 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.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company,
or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for
all or part of those proceedings.
No Proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations
Act 2001
27
Azure Minerals Limited – 2021 Annual Report
Directors' Report
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and
experience with the company and/or the Group are important.
Details of the amount paid or payable to the auditor (BDO Audit (WA) Pty Ltd) for audit and non-audit services provided during the year
are set out below.
The Board of directors has considered the position and, in accordance with advice received from the audit committee, is satisfied that the
provisions of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001. The directors are satisfied that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor
independence requirements of the Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of
the auditor
• None of the services undermine the general principals relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and
non-audit firms:
1. Audit Services
BDO Audit (WA) Pty Ltd
Audit and review of financial reports
BDO Castillo Miranda y Campania, S.C. (BDO México)
Audit and review of financial reports of Mexican subsidiaries
Total remuneration for audit services
2. Non audit Services
Taxation Services
BDO Corporate Tax (WA) Pty Ltd
Tax compliance services
Total remuneration for non-audit services
Consolidated
2021
$
2020
$
44,545
41,882
42,887
26,430
87,432
68,312
17,252
17,252
4,202
4,202
AUDITOR’S INDEPENDENCE
A copy of the auditor’s independence declaration as required under section 307c of the Corporations Act 2001 is set out on page 61.
AUDITOR
BDO Audit (WA) Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the directors.
Brian Thomas
Chairman
Perth, 22 September 2021.
28
Azure Minerals Limited - Financial Statements
Approach to Corporate Governance
Azure Minerals Limited ABN 46 106 346 918 (Company) has established a corporate governance framework, the key features of which are
set out in this statement. In establishing its corporate governance framework, the Company has referred to the recommendations set out in
the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 4th edition. The Company has followed
each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its corporate governance
practices. Where the Company's corporate governance practices follow a recommendation, the Board has made appropriate statements
reporting on the adoption of the recommendation. In compliance with the "if not, why not" reporting regime where, after due consideration,
the Company's corporate governance practices do not follow a recommendation, the Board has explained it reasons for not following the
recommendation and disclosed what, if any, alternative practices the Company has adopted instead of those in the recommendation.
The following governance-related documents can be found on the Company's website at:
http://www.azureminerals.com.au/ corporate/corporate-governance/
Charters
Board
Audit and Risk Committee
Nomination and Remuneration Committee
Policies and Procedures
Anti-Bribery and Corruption Policy
Code of Conduct (summary)
Compliance Procedures (summary)
Diversity Policy (summary)
Policy and Procedure for the Selection and (Re)Appointment of Directors
Policy on Assessing the Independence of Directors
Policy on Continuous Disclosure (summary)
Procedure for the Selection, Appointment and Rotation of External Auditor
Process for Performance Evaluations
Risk Management Policy (summary)
Securities Trading Policy
Shareholder Communication and Investor Relations Policy
Whistle Blower Policy
The Company reports below on whether it has followed each of the recommendations during the 2020/2021 financial year (Reporting
Period). The information in this statement is current at 21 September 2021. This statement was approved by a resolution of the Board on
21 September 2021.
Principle 1 – Lay solid foundations for management and oversight
Recommendation 1.1
The Company has established the respective roles and responsibilities of its Board and management, and those matters expressly reserved to
the Board and those delegated to management and has documented this in its Board Charter, which is disclosed on the Company’s website.
Recommendation 1.2
The Company undertakes appropriate checks before appointing a person or putting forward to shareholders a candidate for election as a
director and provides shareholders with all material information in its possession relevant to a decision on whether or not to elect or re-elect
a director. The checks which are undertaken, and the information to be provided to shareholders are set out in the Company’s Policy and
Procedure for the Selection and (Re)Appointment of Directors, which is disclosed on the Company’s website.
The Company provided shareholders with all material information in relation to election of Mr Wayne Bramwell and Mr Hansjoerg
Plaggemars as directors at its 2020 Annual General Meeting.
The Company appointed Mr Wayne Bramwell to the board on 14 October 2021, and the checks referred to in the Company’s policies and
Procedures for the selection and (Re)Appointment of Directors were undertaken.
The Company appointed Mr. Brian Thomas and Ms. Annie Guo to the board on 1 March 2021, and the checks referred to in the Company’s
policies and Procedures for the selection and (Re)Appointment of Directors were undertaken.
Recommendation 1.3
The Company has a written agreement with each director and senior executive setting out the terms of their appointment. The material terms
of any employment, service or consultancy agreement the Company, or any of its child entities, has entered into with its Managing Director,
any of its directors, and any other person or entity who is related party of the Managing Director or any of its directors has been disclosed in
accordance with ASX Listing Rule 3.16.4 (taking into consideration the exclusions from disclosure outlined in that rule).
29
Azure Minerals Limited - Financial Statements
Recommendation 1.4
The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board
as outlined in the Company’s Board Charter. The Company Secretary’s role is also outlined in the consultancy agreement between the
Company Secretary and the Company.
Recommendation 1.5
The Company has a Diversity Policy. However, the Diversity Policy does not include requirements for the Board to set measurable objectives
for achieving gender diversity and to assess annually both the objectives and the Company’s progress in achieving them. Nor has the Board
set measurable objectives for achieving gender diversity. Given the Company’s stage of development as an exploration company, the number
of employees in Australia and the nature of the labour market in Mexico, the Board considers that it is not practical to set measurable
objectives for achieving gender diversity.
The respective proportions of men and women on the Board, in senior executive positions and across the whole organisation are set out in
the following table. “Senior executive” for these purposes means a person who makes, or participates in the making of, decisions that affect
the whole or a substantial part of the business or has the capacity to significantly affect the company’s financial standing. For the Reporting
Period, this included the Managing Director and the Company Secretary & Chief Financial Officer:
Whole organisation (including Board members)
4 out of 13 (30%)
Proportion of women
Senior executive positions
Board
Recommendation 1.6
0 out of 4 (0%)
1 out of 4 (25%)
The Chair is responsible for evaluation of the Board and, when deemed appropriate, Board committees and individual directors. The
evaluations are undertaken in accordance with the Company’s Process for Performance Evaluations, which is disclosed on the Company’s
website.
During the Reporting Period an evaluation of the Board, its committees, and individual directors took place in accordance with the process
disclosed in the Company’s Process for Performance Evaluations.
Recommendation 1.7
The Managing Director is responsible for evaluating the performance of senior executives in accordance with the process disclosed in the
Company’s Process for Performance Evaluations.
During the Reporting Period an evaluation of the Company Secretary & Chief Financial Officer (the Company’s sole senior executive, other
than the Managing Director) took place in accordance with the process disclosed in the Company’s Process for Performance Evaluations.
The Chairman is responsible for evaluating the Managing Director.
During the Reporting Period, an evaluation of the Managing Director took place in accordance with the process disclosed in the Company’s
Process for Performance Evaluations.
Principle 2 – Structure the board to be effective and add value
Recommendation 2.1
The Board had established a Nomination and Remuneration Committee comprising two of the Company’s independent non-executive
directors, Peter Ingram (Chairman) and Wolf Martinick. However upon the retirement of Wolf Martinick on 24 November 2020, leaving
only one independent director, the Nomination and Remuneration Committee was disbanded as the Board believed that there would be no
efficiencies or other benefits gained by maintaining or establishing a separate Nomination Committee. Accordingly, the Board performs
the role of the Nomination Committee. Although the Board has not established a separate Nomination Committee, it has adopted a
Nomination Committee Charter which describes the role, composition, functions and responsibilities of the full Board in its capacity as the
Nomination Committee. The Company’s Nomination Committee Charter is disclosed on the Company’s website.
The Board carries out those functions which are delegated to it in the Company’s Nomination Committee Charter. When matters that are
within the responsibility of the full Board in its capacity as the Nomination Committee are considered, they are marked as separate agenda
items at Board meetings. The Board deals with any conflicts of interest that may occur when nomination related matters are considered by
ensuring that the director with conflicting interests is not party to the relevant discussions.
Details of director attendance at Nomination and Remuneration Committee meetings held during the Reporting Period are set out in a table
in the Directors’ Report on page 20.
Recommendation 2.2
Significant geological experience, environmental management experience and professional skills including leadership, governance and
strategy are the skills and diversity which the Board is looking to achieve in its membership, and these are collectively held by current
members of the Board.
While the Company is at exploration stage, it does not wish to increase the size of the Board and considers that the current Board has the
appropriate skills and knowledge and is appropriate at this stage of the Company’s development. The Board may bring in external consultants
30
Azure Minerals Limited - Financial Statements
with specialist knowledge as and when required to address any areas where the Board does not collectively possess the relevant attribute.
Recommendation 2.3
The Board considers the independence of directors having regard to the relationships listed in Box 2.3 of the Principles & Recommendations.
The independent director of the Company is Mr Brian Thomas, Chairman.
The length of service of each director is set out in the Directors’ Report on page 18.
Recommendation 2.4
The Board does not have a majority of directors who are independent. The Board does not wish to increase its size at present and considers
that the current composition of the Board is adequate for the Company’s current size and operations and includes an appropriate mix of
skills and expertise relevant to the Company’s business.
Recommendation 2.5
The independent Chair of the Board is Brian Thomas, who is not also Managing Director of the Company.
Recommendation 2.6
Mr Brian Thomas, Mr Wayne Bramwell and Ms Annie Guo were appointed during the Reporting Period. The Company has an induction
program, coordinated by the Company Secretary. The goal of the program is to assist new directors to participate fully and actively in Board
decision-making at the earliest opportunity, and to assist senior executives to participate fully and actively in management decision-making
at the earliest opportunity. All directors participated in the induction program.
The full board and Remuneration Committee, or the full board from 24 November 2020, regularly reviews whether the directors as a group
have the skills, knowledge and familiarity with the Company and its operating environment required to fulfil their role on the Board and the
Board committees effectively using a Board skills matrix. Where any gaps are identified, the Nomination and Remuneration Committee, or
the full board from 24 November 2020, considers what training or development should be undertaken to fill those gaps. In particular, the
Board ensures that any director who does not have specialist accounting skills or knowledge has a sufficient understanding of accounting
matters to fulfil his or her responsibilities in relation to the Company’s financial statements. Directors also receive ongoing education on
developments in accounting standards.
Principle 3 – Instil a culture of acting lawfully, ethically and responsibly
Recommendation 3.1
The Company expects that its board and senior executives will conduct themselves with integrity and honesty in accordance with the Code
of Conduct. Directors, executives and employees shall deal with the Company's customers, suppliers, competitors, shareholders and each
other with honesty, fairness and integrity and observe the rule and spirit of the legal and regulatory environment in which the Company
operates.
The Company aims to increase shareholder value within an appropriate framework which safeguards the rights and interests of the Company’s
shareholders and the financial community and to comply with systems of control and accountability which the Company has in place as part
of its corporate governance with openness and integrity.
The Company is to comply with all legislative and common law requirements which affect its business wherever it operates. Where the
Company has operations overseas, it shall comply with the relevant local laws as well as any applicable Australian laws. Any transgression
from the applicable legal rules is to be reported to the Managing Director as soon as a person becomes aware of such a transgression.
Recommendation 3.2
The Company has established a Code of Conduct for its directors, senior executives and employees, a summary of which is disclosed on the
Company’s website. Any breach of that code is reported to the board at the next board meeting.
Recommendation 3.3
The Company has adopted a Whistle blower Policy to encourage the raising of any concerns or reporting of instances of any violations (or
suspected violations) of the Code of Conduct (or any potential breach of law or any other legal or ethical concern) without the fear of
intimidation or reprisal.
Recommendation 3.4
The Company has established an anti-bribery and corruption policy which is disclosed on the Company’s website. Any breach of that policy
is immediately reported to the Managing Director and Chairman of the board of directors.
Principle 4 – Safeguard the integrity of corporate reports
Recommendation 4.1
The Board had established an Audit and Risk Committee comprising two of the Company’s independent non-executive directors, Peter
Ingram (Chairman) and Wolf Martinick. However, upon the retirement of Wolf Martinick on 24 November 2020, leaving only one
independent director, the Audit and Risk Committee was disbanded as the Board believed that there would be no efficiencies or other benefits
gained by establishing a separate Audit and Risk Committee. Accordingly, the Board performs the role of the Audit and Risk Committee.
Although the Board has not established a separate Audit and Risk Committee, it has adopted an Audit and Risk Committee Charter which
describes the role, composition, functions and responsibilities of the full Board in its capacity as the Audit and Risk Committee. The
Company’s Audit and Risk Committee Charter is disclosed on the Company’s website.
31
Azure Minerals Limited - Financial Statements
The Board carries out those functions which are delegated to it in the Company’s Audit and Risk Committee Charter. When matters that are
within the responsibility of the full Board in its capacity as the Audit and Risk Committee are considered, they are marked as separate agenda
items at Board meetings. The Board deals with any conflicts of interest that may occur when audit or risk related matters are considered by
ensuring that the director with conflicting interests is not party to the relevant discussions.
The Company has also established a Procedure for the Selection, Appointment and Rotation of its External Auditor, which is an appendix to
its Audit and Risk Committee Charter disclosed on the Company’s website. The Board is responsible for the initial appointment of the
external auditor and the appointment of a new external auditor when any vacancy arises. Candidates for the position of external auditor must
demonstrate complete independence from the Company through the engagement period. The Board may otherwise select an external auditor
based on criteria relevant to the Company’s business and circumstances. The performance of the external auditor is reviewed on an annual
basis by the Audit and Risk Committee (or its equivalent) and any recommendations are made to the Board.
Recommendation 4.2
Before the Board approved the Company financial statements for the half year ended 31 December 2020 and the full-year ended 30 June
2021, it received from the Managing Director and the Chief Financial Officer a declaration that, in their opinion, the financial records of the
Company for the relevant financial period have been properly maintained and that the financial statements for the relevant financial period
comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the Company
and the consolidated entity and that the opinion has been formed on the basis of a sound system of risk management and internal control
which is operating effectively (Declaration).
Recommendation 4.3
Processes are in place to verify the integrity of the Company’s periodic corporate reports released to the market and not audited or reviewed
by the external auditor. Examples of periodic corporate reports released by the company include quarterly cash flow reports. Azure has
adopted a Continuous Disclosure Policy which sets out how market announcements are prepared and released and has appointed the Company
Secretary as the Continuous Disclosure officer who oversees the drafting of and approves the final release of announcements. The Company
Secretary is responsible for satisfying him/herself that the content of any announcement is accurate and not misleading and is supported by
appropriate verification.
Principle 5 – Make timely and balanced disclosure
Recommendation 5.1
The Company has established written policies and procedures for complying with its continuous disclosure obligations under the ASX Listing
Rules. A summary of the Company’s Policy on Continuous Disclosure and Compliance Procedures are disclosed on the Company’s website.
Recommendation 5.2
The Company secretary circulates all material market announcements to the board prior to release to ASX.
Recommendation 5.3
All new presentations are released to ASX Markets Platform ahead of any presentation to investors.
Principle 6 – Respect the rights of security holders
Recommendation 6.1
The Company provides information about itself and its governance to investors via its website at www.azureminerals.com.au.
Recommendation 6.2
The Company has designed and implemented an investor relations program to facilitate effective two-way communication with investors.
The program is set out in the Company’s Shareholder Communication and Investor Relations Policy.
Recommendation 6.3
The Company has in place a Shareholder Communication and Investor Relations Policy which outlines the policies and processes that it has
in place to facilitate and encourage participation at meetings of shareholders.
Recommendation 6.4
All resolutions put to the AGM are decided by way of a poll.
Recommendation 6.5
Shareholders are given the option to receive communications from, and send communications to, the Company and its share registry
electronically. The Company engages its share registry to manage the majority of communications with shareholders. Shareholders are
encouraged to receive correspondence from the Company electronically, thereby facilitating a more effective, efficient and environmentally
friendly communication mechanism with shareholders. Shareholders not already receiving information electronically can elect to do so
through the share registry, Computershare Investor Services Pty Ltd at www.computershare.com.au
Principle 7 – Recognise and manage risk
Recommendation 7.1
As noted above, the Board has not established a combined Audit and Risk Committee. Please refer to the disclosure above under
Recommendation 4.1 in relation to the Audit and Risk Committee.
32
Azure Minerals Limited - Financial Statements
Recommendation 7.2
The Board reviews the Company’s risk management framework annually to satisfy itself that it continues to be sound, to determine whether
there have been any changes in the material business risks the Company faces and to ensure that the Company is operating within the risk
appetite set by the Board. The Board carried out these reviews during the Reporting Period.
Recommendation 7.3
The Company does not have an internal audit function. To evaluate and continually improve the effectiveness of the Company’s risk
management and internal control processes, the Board relies on ongoing reporting and discussion of the management of material business
risks as outlined in the Company’s Risk Management Policy, a summary of which is disclosed on the Company’s website.
Recommendation 7.4
As the Company is not in production, the Company has not identified any material exposure to any environmental and/or social sustainability
risks. However, the Company does have a material exposure to the following economic risks:
• Market risk – movements in commodity prices. The Company manages its exposure to market risk by monitoring market
conditions, and making decisions based on industry experience; and
•
Future capital risk – cost and availability of funds to meet the Company’s business requirements. The Company manages this risk
by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.
The Board has adopted a Risk Management Policy and Risk Management Procedures. Under the Risk Management Policy, the Board
oversees the processed by which risks are managed. This includes defining the Company’s risk appetite, monitoring of risk performance and
those risks that may have a material impact to the business. Management is responsible for the implementation of the risk management and
internal control system to manage the Company’s risk and to report to the Board whether those risks are being effectively managed.
The Company’s system to manage its material business risks includes the preparation of a risk register by management to identify the
Company’s material business risks, analyse those risks, evaluate those risks (including assigning a risk owner to each risk) and treat those
risks. Risks and their management are to be monitored and reviewed at least annually by senior management. The risk register is to be updated
and a report submitted to the Managing Director. The Managing Director is to provide a risk report at least annually to the Board.
A summary of the Company’s Risk Management Policy is disclosed on the Company’s website.
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.1
As noted above, the Board has not established a Nomination or Remuneration Committee. Please refer to the disclosure above under
Recommendation 2.1 in relation to the Nomination and Remuneration Committee.
The Board has adopted a Remuneration Committee Charter which describes the role, composition, functions and responsibilities of the
Remuneration Committee and is disclosed on the Company’s website. As noted above, the Board has combined the Nomination and
Remuneration committees.
Recommendation 8.2
Details of remuneration, including the Company’s policy on remuneration and “clawback policy” regarding the lapsing of performance-based
remuneration in the event of fraud or serious misconduct and the clawback of the performance-based remuneration in the event of a material
misstatement in the Company’s financial statements, are contained in the “Remuneration Report” which forms of part of the Directors’ Report
and commences at page 21 of the Company’s Annual Report for year ended 30 June 2021.
Recommendation 8.3
The Company has an Employee Share Option Plan. The Company’s Securities Trading Policy includes a statement on the Board’s policy
that participations in the Company’s equity based remuneration schemes are prohibited from entering into transactions (whether through the
use of derivatives or otherwise) which limit the economic risk of participating in the scheme.
33
Azure Minerals Limited - Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
YEAR ENDED 30 JUNE 2021
Notes
Consolidated
Other Income
Expenditure
Depreciation
Salaries and employee benefits expense
Directors fees
Exploration expenses
Travel expenses
Promotion expenses
Administration expenses
Consulting expenses
Insurance expenses
Lease Interest
Lease Amortisation
Convertible Note Interest
Fair Value adjustments of convertible notes
Share based payment expense
Other expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income/(loss)
Items that may subsequently be reclassified to profit or loss
Exchange differences on translation of foreign operations
5
5
11
22
6
2021
$
2020
$
251,809
510,802
(56,636)
(695,079)
(156,476)
(9,096,498)
(20,660)
(183,844)
(534,269)
(85,153)
(53,207)
(23,323)
(122,422)
(120,512)
(5,517,242)
(86,607)
(400,059)
(16,900,178)
(48,263)
(533,973)
(109,438)
(3,467,734)
(178,339)
(58,418)
(334,292)
(31,094)
(30,452)
(14,359)
(135,310)
(237,022)
-
(254,400)
(749,004)
(5,671,296)
-
-
(16,900,178)
(5,671,296)
520,359
(1,375,662)
Other comprehensive income/(loss) for the year net of tax
520,359
(1,375,662)
Total comprehensive loss for the Year
(16,379,819)
(7,046,958)
The loss for the year and total comprehensive loss for the year is fully attributable to the owners of Azure Minerals Limited
Loss per share from continuing operations attributable to the ordinary equity
holders of the company
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
18
18
(6.28)
N/A
(3.75)
N/A
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the Notes to the Financial
Statements.
34
Azure Minerals Limited - Financial Statements
Consolidated Statement of Financial Position
AT 30 JUNE 2021
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Investments
Security Deposit
Office right of use
Plant and equipment
Capitalised exploration expenditure
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Lease Liability
Provisions
Total Current Liabilities
Non-Current Liabilities
Provisions
Lease Liability
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Notes
Consolidated
2021
$
2020
$
14
7
9
10
11
12
12
30,267,222
876,900
31,144,122
948
4,500
492,904
369,594
15,216,335
16,084,281
849,549
284,689
1,134,238
948
-
67,655
123,865
7,889,184
8,081,652
47,228,403
9,215,890
1,641,257
120,558
198,983
1,960,798
121,623
382,791
-
504,414
393,846
71,050
144,085
608,981
114,687
2,000,000
2,114,687
2,465,212
2,723,668
44,763,191
6,492,222
142,324,512
3,861,673
(101,422,994)
44,763,191
87,760,331
3,254,707
(84,522,816)
6,492,222
The above Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements
35
Azure Minerals Limited - Financial Statements
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2021
30 JUNE 2021
Issued
Share Capital
Share
Option
Reserve
Financial
Asset
Reserve
$
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
$
$
87,760,331
5,642,711
(39,996) (2,348,008)
(84,522,816)
6,492,222
Balance at 1 July 2020
Loss for period
Other comprehensive loss
Exchange differences on translation of foreign operations
Total other comprehensive loss
Total comprehensive loss for the period
Transactions with owners in their capacity as owners:
Issue of shares net of transaction costs
54,564,181
Share based payments (Note 22)
-
86,607
Total transactions with owners
54,564,181
86,607
-
-
-
-
-
-
-
-
(16,900,178)
(16,900,178)
520,359
520,359
-
-
520,359
520,359
520,359
(16,900,178)
(16,379,819)
-
-
-
- 54,564,181
-
86,607
- 54,650,788
Balance as at 30 June 2021
142,324,512
5,729,318
(39,996) (1,827,649)
(101,422,994) 44,763,191
30 JUNE 2020
Balance at 1 July 2019
Loss for period
Issued
Share Capital
Share
Option
Reserve
Financial
Asset
Reserve
$
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
$
$
80,732,475
5,388,311
(39,996)
(972,346)
(78,851,520)
6,256,924
Other comprehensive loss
Exchange differences on translation of foreign operations
Total other comprehensive loss
Total comprehensive loss for the period
Transactions with owners in their capacity as owners:
Issue of shares net of transaction costs
7,027,856
Share based payments (Note 22)
Total transactions with owners
Balance as at 30 June 2020
-
254,400
7,027,856
254,400
-
-
(5,671,296) (5,671,296)
- (1,375,662)
- (1,375,662)
- (1,375,662)
- (1,375,662)
- (1,375,662)
(5,671,296) (7,046,958)
-
-
-
-
-
-
-
-
-
7,027,856
254,400
7,282,256
87,760,331
5,642,711
(39,996) (2,348,008)
(84,522,816)
6,492,222
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
36
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Azure Minerals Limited - Financial Statements
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2021
Notes
Consolidated
2021
$
2020
$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Other Income
Expenditure on mining interests
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Acquisition Payments for projects
Security Deposit
Proceeds from sale of mineral projects
NET CASH OUTFLOW FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares
Share issue costs
Proceeds from exercise of options
Proceeds from convertible notes
Interest expense
Lease payments
NET CASH INFLOW FROM FINANCING ACTIVITIES
14(b)
7
NET INCREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on cash and cash equivalents
CASH AND CASH EQUIVALENTS AT END OF YEAR
14(a)
(1,980,637)
3,721
52,580
(8,249,544)
(10,173,880)
(2,248,162)
15,166
1,086,721
(3,737,637)
(4,883,912)
(322,934)
(228,559)
(4,500)
104,260
(451,733)
41,000,000
(1,511,062)
958,000
-
(232,534)
(132,858)
40,081,546
29,455,933
849,549
(38,260)
30,267,222
(29,116)
(163,400)
-
35,435
(157,081)
4,020,000
(300,612)
-
2,000,000
(125,000)
(150,872)
5,443,516
402,523
650,348
(203,322)
849,549
The above Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
37
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated. The financial report includes separate financial statements for Azure Minerals
Limited as an individual entity and the consolidated entity consisting of Azure Minerals Limited and its subsidiaries.
BASIS OF PREPARATION
This general purpose financial report has been prepared in accordance with the Australian Accounting Standards, and interpretations issued
by the Australian Accounting Standards Board and the Corporations Act 2001. Azure Minerals Limited is a for-profit entity for the purpose
of preparing the financial statements.
Compliance with IFRSs
The consolidated financial statements of Azure Minerals Limited and the separate financial statements of Azure Minerals Limited also comply
with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Historical cost convention
These financial statements have been prepared under the historical cost convention except for financial assets and liabilities at fair value
through other comprehensive income or P&L.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 3.
(a) Principles of consolidation
Subsidiaries
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
deconsolidated from the date that control ceases.
The acquisitions method of accounting is used to account for business combinations by the Group.
The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies which may exist.
All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full.
Unrealised losses are eliminated unless costs cannot be recovered.
Investments in subsidiaries are accounted for at cost in the individual financial statements of Azure Minerals Limited.
(b) Property, plant and equipment
Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis. The carrying amount of plant and equipment is reviewed annually by directors to ensure
it is not in excess of the recoverable amount from these assets.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs
and maintenance are charged to the income statement during the financial period in which they are incurred.
Depreciation
Depreciation of plant and equipment is calculated on a reducing balance basis so as to write off the net costs of each asset over the expected
useful life. The rates vary between 20% and 40% per annum.
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement. When
revalued assets are sold, it is group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.
(c) Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are carried forward where
right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation
of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
38
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(c) Exploration and evaluation costs (Cont’d)
Where an area of interest is abandoned or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that
area are written off in the financial period the decision is made. Each area of interest is also reviewed at the end of each accounting period and
accumulated costs written off to the extent that they will not be recoverable in the future.
(d) Leases
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
•
•
leases of low value assets; and
leases with a term of 12 months or less.
Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the
group’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of
the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element
will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.
On initial recognition, the carrying value of the lease liability also includes:
•
•
•
amounts expected to be payable under any residual value guarantee;
the exercise price of any purchase option granted in favour of the group if it is reasonably certain to assess that option; and
any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being
exercised.
Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for:
•
•
•
lease payments made at or before commencement of the lease;
initial direct costs incurred; and
the amount of any provision recognised where the group is required to dismantle, remove or restore the leased asset.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are
reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the
remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term.
When the group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or
termination option being exercised), it adjusts the carrying amount of the lease liability to reflect the payments to make over the revised term,
which are discounted using a revised discount rate (being the interest rate implicit in the lease for the remainder of the lease term or, if that
cannot be readily determined, the Group’s incremental borrowing rate at the re-assessment date). An equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term.
The carrying value of lease liabilities is also revised when the variable element of future lease payments dependent on a rate or index is revised
or there is a revision to the estimate of amounts payable under a residual value guarantee. In both cases an unchanged discount rate is used.
In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised
over the remaining (revised) lease term.
When the group renegotiates the contractual terms of a lease with the lessor, the accounting depends on the nature of the modification:
•
•
•
if the renegotiation results in one or more additional assets being leased for an amount commensurate with the standalone price for the
additional rights-of-use obtained, the modification is accounted for as a separate lease in accordance with the above policy
in all other cases where the renegotiated increases the scope of the lease (whether that is an extension to the lease term, or one or more
additional assets being leased), the lease liability is remeasured using the discount rate applicable on the modification date, with the
right-of-use asset being adjusted by the same amount.
if the renegotiation results in a decrease in the scope of the lease, both the carrying amount of the lease liability and right-of-use asset
are reduced by the same proportion to reflect the partial of full termination of the lease with any difference recognised in profit or loss.
The lease liability is then further adjusted to ensure its carrying amount reflects the amount of the renegotiated payments over the
renegotiated term, with the modified lease payments discounted at the rate applicable on the modification date. The right-of-use asset is
adjusted by the same amount.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or
loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are items such as IT-equipment and small items of
office furniture.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged on a straight-line basis
over the length of the lease.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the lease term.
39
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(e) Income tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is
calculated using the tax rates that have been enacted or are substantially enacted by the statement of financial position date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax
is credited in the income statement except where it relates to items that may be credited directly to equity, in which case the deferred tax is
adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible
temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will
occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable
the benefit to be realised and comply with the conditions of deductibility imposed by the law.
(f) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from
the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of
the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities,
which are disclosed as operating cash flows.
(g) Foreign currency translation
Functional and presentation currency
The functional currency of each of the group's entities is measured using the currency of the primary economic environment in which that
entity operates. The consolidated financial statements are presented in Australian dollars which is Azure Minerals Limited’s functional and
presentation currency. The functional currency of Australian subsidiary (Azure Mexico Pty Ltd) is the Australian dollar. The functional
currency of the Mexican overseas subsidiaries (Minera Piedra Azul CV de SA, Minera Azure CV de SA, Minera Capitana CV de SA and
Servicios AzuPerth CV de SA) is the Mexican Peso.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried
at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date
when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the profit or loss, except where deferred in equity as a
qualifying cash flow or net investment hedge.
Group companies
The financial results and position of foreign operations whose functional currency is different from the group's presentation currency are
translated as follows:
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; and
income and expenses are translated at average exchange rates for the period.
Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign currency translation reserve in
the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed.
(h) Trade and other payables
Liabilities for trade creditors are recognised initially at fair value and subsequently at amortised cost.
Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accrual
basis.
(i) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits
include wages and salaries, annual leave, and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled wholly within twelve
months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the
liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflow to be made in
respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the market yield
as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.
40
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(i) Employee benefits (Cont’d)
Share-based payments
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment transactions, whereby
employees render services in exchange for shares or rights over shares (‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted.
The fair value is determined by an internal valuation using Black Scholes or a Binomial option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance
conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the
vesting period has expired and (ii) the number of options that, in the opinion of the directors of the Group, will ultimately vest. This opinion
is formed based on the best available information at reporting date. 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.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for
the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award
on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award.
(j) Revenue recognition
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.
(k) Contributed Equity
Ordinary shares are classified as equity.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received
(l) Earnings per share (EPS)
Basic earnings per share
Basic EPS is calculated as the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary
shares, divided by the weighted average number of ordinary shares outstanding during the financial year, adjusted for any bonus elements in
ordinary shares issued during the year.
Diluted earnings per share
Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after income tax effect of interest and other
financing costs associated with 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.
(m) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original
maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the
statement of financial position.
(n) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current
financial year.
(o) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting 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
Executive Chairman.
(p) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.
The fair value of financial instruments traded in active markets (such as publicly traded derivative, and trading and financial assets at fair
value through other comprehensive income or P&L) is based on quoted market prices at the reporting date. The quoted market price used for
financial assets held by the Group is the current bid price.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using
valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each
reporting date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques,
such as estimated discounted cash flow, are used to determined fair value for the remaining financial instruments. The fair value of interest
rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward exchange contracts is determined
using forward exchange market rates at the reporting date.
41
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(p) Fair value estimation (Cont’d)
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-
term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the
current market interest rate that is available to the Group for similar financial instruments.
(q) Convertible loans
Convertible notes were issued by the Group which include embedded derivatives (options to convert to a variable number of shares).
Convertible notes are initially recognised as financial liabilities at fair value.
On initial recognition the fair value of the convertible notes equates the proceeds received and subsequently the convertible note is measured
at fair value. The movements are recognised in profit or loss as a finance cost, except if the movement is attributable to changes in the
Group’s own credit risk status in which case it is recognised in other comprehensive income.
(r) Asset acquisition
Acquisition costs for mineral projects are capitalised to Exploration Expenditure at cost, or fair value if not acquired for cash consideration,
and carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful
development and exploitation of the area of interest or, where exploration and evaluation activities in the area of interest have not reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves.
(s) Adoption of new and amended accounting standards
The Company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting
Standards Board (“AASB”) that are mandatory for the current reporting period. There has been no material impact on the financial statements
by their adoption.
Other standards not yet applicable
A number of other standards, amendments to standards and interpretations issued by the AASB which are not materially applicable to the
Group have not been applied in preparing these consolidated financial statements.
2 .
FINANCIAL RISK MANAGEMENT
Overview
The Company and Group have exposure to the following risks from their use of financial instruments:
liquidity risk
credit risk
market risk
Currency risk
This note presents information about the Company’s and Group’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Management
monitors and manages the financial risks relating to the operations of the group through regular reviews of the risks.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers and cash and cash equivalents. For the Company it arises
from receivables due from subsidiaries.
Cash and Cash Equivalents
The Group manages its credit risk on cash and cash equivalents by only dealing with banks licensed to operate in Australia or Mexico.
Trade and other receivables
As the Group operates in the mining exploration sector, it generally does not have trade receivables and therefore is not exposed to credit
risk in relation to trade receivables.
Presently, the Group undertakes exploration and evaluation activities in Australia and Mexico. At the reporting date there were no
significant concentrations of credit risk.
42
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
2 .
FINANCIAL RISK MANAGEMENT (Cont’d)
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit
risk at the reporting date was:
Trade and other receivables
Cash and cash equivalents
Expected credit losses
Note
14
Consolidated Carrying Amount
2020
2021
$
$
59,426
332,445
849,549
30,267,222
None of the Company’s other receivables are past due (2020: nil).
The Group operates in the mining exploration sector and generally does not have trade receivables and is therefore not materially exposed to
credit risk in relation to trade receivables. Other receivables are principally value added taxes withheld by third parties and due to the Group
from sovereign governments, as such the Group does not consider it is exposed to any significant credit risk.
The allowance accounts in respect of other receivables is used to record expected credit losses unless the Group is satisfied that no recovery
of the amount owing is possible; at that point the amount is considered irrecoverable and is written off against the financial asset directly. At
30 June 2021 the Group does not have any collective expected credit on its other receivables.
The Group places its cash deposits with institutions with a credit rating of -AA or better and only with major banks.
Guarantees
The Group has provided a financial guarantee of $94,475(2020: $94,475) to secure its office lease. Otherwise, the Group only provides
guarantees to wholly owned subsidiaries.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash flows.
Typically, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 180 days,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be
predicted, such as natural disasters.
The following are the contractual maturities of financial liabilities at amortised cost:
Consolidated
30 June 2021
Trade and other payables
Lease Liability
30 June 2020
Trade and other payables
Lease Liability
Convertible note
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
2-5 years
More than
5 years
1,641,257
503,349
1,641,257
603,954
1,641,257
61,784
-
64,108
-
130,610
-
347,452
393,846
71,050
2,000,000
393,846
71,050
2,000,000
393,846
71,050
-
-
-
-
-
-
2,000,000
-
-
-
-
-
-
-
-
The Convertible Note was repaid on 23 December 2020, by the issue of 13,793,103 shares in the Company.
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
43
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
2 .
FINANCIAL RISK MANAGEMENT (Cont’d)
Currency risk
The Group is exposed to currency risk on purchases that are denominated in a currency other than the respective functional currencies of
Group entities, primarily the United Sates Dollar (USD) and Mexican Peso (MxP).
The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts or payments
that are denominated in a foreign currency.
The Group’s investments in its subsidiaries are not hedged as those currency positions are considered to be long term in nature.
Exposure to currency risk
The Group’s exposure to foreign currency risk at reporting date was as follows, based on notional amounts:
Trade receivables
Trade payables
Gross statement of financial position
2021
2020
USD
246,056
56,878
302,934
MXD
246,056
56,878
302,934
USD
102,176
85,594
187,770
MXD
102,176
85,594
187,770
Net exposure
302,934
302,934
187,770
187,770
The following significant exchange rates applied during the year:
USD/AUD
MXD/AUD
Sensitivity analysis
Average rate
2021
1.3406
0.0646
2020
1.4921
0.0732
Reporting date spot rate
2021
1.3321
0.0671
2020
1.4541
0.0630
Over the reporting period there have been significant movements in the Australian dollar when compared to other currencies, it is therefore
considered reasonable to review sensitivities base on a 10% movement in the Australian dollar. A 10 percent strengthening of the Australian
dollar against the following currencies at 30 June would have increased equity and decrease loss, before tax, by the amounts shown below.
This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for
2019.
30 June 2021
USD
30 June 2020
USD
Consolidated
Profit or loss
30,293
18,777
A 10 percent weakening of the Australian dollar against the above currencies at 30 June would have had the equal but opposite effect on
the above currencies to the amounts shown above, on the basis that all other variables remain constant.
Interest rate risk
Interest rate risk is the risk that the Groups financial position will be adversely affected by movements in interest rates that will increase
the costs of floating rate debt or opportunity losses that may arise on fixed rate borrowings in a falling interest rate environment. The Group
does not have any borrowings therefore is not exposed to interest rate risk in this area. Interest rate risk on cash and short-term deposits is
not considered to be a material risk due to the short-term nature of these financial instruments.
At the reporting date the interest rate profile of the Company’s and the Group’s interest-bearing financial instruments was:
Variable rate instruments
Short term cash deposits
Consolidated
Carrying amount
2021
2020
30,206,279
823,584
44
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
2 .
FINANCIAL RISK MANAGEMENT (Cont’d)
Cash flow sensitivity analysis for variable rate instruments
The Group has reviewed the likely movements in interest rates and considers that a movement of +/- 100 basis points is reasonable.
Group Sensitivity
At 30 June 2021 if interest rates had changed +/- 100 basis points from year end rates with all other variables held constant, equity and post-
tax profit would have been $302,672 higher /lower (2020 – change of 100 basis points $8,496 higher/lower).
Fair values
Fair values versus carrying amounts
The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as
follows:
Consolidated
2021
2020
Trade and other receivables
Cash and cash equivalents
Other financial assets
Trade and other payables
Lease liability
Convertible note
Carrying amount
Fair value
Carrying amount
Fair value
876,900
30,267,222
948
(1,641,257)
(503,349)
-
876,900
30,267,222
948
(1,641,257)
(503,349)
-
284,689
849,549
948
(393,846)
(71,050)
(2,000,000)
284,689
849,549
948
(393,846)
(71,050)
(2,000,000)
The methods and assumptions used to estimate the fair value of instruments are:
Cash and cash equivalent: The carrying amount approximates fair value because of their short-term to maturity.
Receivables and payables: The carrying amount approximates fair value.
Other financial assets: The quoted market price
Lease Liability: The carrying amount approximates fair value.
Convertible Note: The carrying amount approximates fair value because of their short-term to maturity.
Capital Management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benefits of other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may issue new shares or sell assets.
There were no changes in the Group’s approach to capital management during the year.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
3.
CRITICAL ACCOUNTING ESTIMATES AND SIGNIFICANT JUDGEMENTS
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key
estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities
within the next annual reporting period are:
Impact of Coronavirus (COVID-19) pandemic.
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the company
based on known information. Other than as addressed in specific notes, there does not currently appear to be either any significant impact
upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the company
unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are carried forward where
right of tenure of the area of interest is current. The future recoverability of exploration and evaluation expenditure is dependent on a number
of factors, including whether the Group decides to exploit the related lease itself, or, if not, whether it successfully recovers the related
exploration and evaluation assets through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological changes, which could
impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity
prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets
will be reduced in the period in which this determination is made.
45
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
3.
CRITICAL ACCOUNTING ESTIMATES AND SIGNIFICANT JUDGEMENTS (Cont’d)
SEGMENT INFORMATION
Share options
The Company measures the cost of equity-settled transactions with employees, including directors, by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using the binominal formula. For options issued in this
financial year, the assumptions detailed as per Note 22 were used.
Asset acquisition
The Group has determined that the acquisition of the Andover, Turner River, Meentheena and Coongan projects from the Creasy Group is
deemed to be an asset acquisition not a business combination. In assessing the requirements of AASB 3 Business Combinations, the Group
has determined that the assets acquired do not constitute a business. The assess acquired consists of mineral exploration tenements. When
an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying amount based on their
relative fair values in the purchase transaction and no deferred tax will arise in relation to the acquired asset as the initial recognition
exemption for deferred tax under AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition.
4.
The Company currently does not have production and is only involved in exploration. As a consequence, activities in the operating segments
are identified by management based on the manner in which resources are allocated, the nature of the resources provided and the identity of
service line manager and country of expenditure. Discrete financial information about each of these areas is reported to the executive
management team on a monthly basis.
Based on these criteria, management has determined that the company has one operating segment being mineral exploration, and the segment
operations and results are the same as the Group’s results. As the company is focused on mineral exploration, the Board monitors the
company based on actual versus budgeted exploration expenditure incurred by area of interest. These areas of interest meet aggregating
criteria and are aggregated into one reporting sector. This internal reporting framework is the most relevant to assist the Board with making
decisions regarding the company and its ongoing exploration activities, while also taking into consideration the results of exploration work
that has been performed to date.
As a result, the operating segment information is as disclosed in the primary statements, and notes to the financial statements, throughout
this report.
During the period the Company conducted its activities across two geographic locations, being Australia and Mexico.
2021
Revenues
Loss
Non-current assets
Total assets
Total liabilities
2020
Revenues
Loss
Non-current assets
Total assets
Total liabilities
Australia
$
40,871
(15,936,683)
7,656,700
38,281,288
(2,351,457)
Australia
$
74,621
(1,860,044)
103,828
1,026,697
(2,552,480)
Mexico
$
210,938
(963,495)
8,427,581
8,947,115
(113,755)
Mexico
$
436,181
(3,811,252)
7,977,824
8,189,193
(171,188)
Total
$
251,809
(16,900,178)
16,084,281
47,228,403
(2,465,212)
Total
$
510,802
(5,671,296)
8,081,652
9,215,890
(2,723,668)
5.
EXPENSES
Loss before income tax includes the following specific expenses
Depreciation of plant and equipment
Exploration expenditure
Superannuation
30 June 2021
$
30 June 2020
$
56,636
9,096,498
87,882
48,263
3,467,734
64,774
46
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
6.
INCOME TAX
(a) Income tax expense
Current tax
Deferred tax
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2020: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Share-based payments
Sundry items
Movement in unrecognised temporary differences
Tax effect of current year tax losses for which no deferred tax asset has been recognised
Income tax expense
(c) Unrecognised temporary differences
Deferred Tax Assets (at 27.5%)
On Income Tax Account
Prepayments
Depreciation of plant and equipment
Provisions
Carry forward tax losses
Carry forward tax losses – foreign
Other – tenement
30 June 2021
$
30 June 2020
$
-
-
-
-
-
-
(16,900,179)
(5,671,296)
(4,647,549)
(1,559,607)
23,817
1,079
(4,622,653)
(113,217)
4,735,870
-
69,960
60,354
(1,429,293)
(96,457)
1,525,750
-
14,324
(10,201)
87,617
12,842,410
10,261,875
600,100
23,796,125
4,710
(10,201)
76,662
9,104,509
10,025,903
600,100
19,801,683
Deferred Tax Liabilities (at 27.5%)
-
-
Deferred income tax assets have not been recognised as it is not probable that future profit will be available against which deductible
temporary differences can be utilised.
In addition to the above Australian estimated future income tax benefits the consolidated entity has incurred significant expenditure in
Mexico, some of which should give rise to taxable deductions. At this stage, the company is unable to reliably estimate the quantity of such
future tax benefits.
There are no franking credits available.
47
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
2021
$
2020
$
CAPITALISED EXPLORATION EXPENDITURE (NON-CURRENT)
7.
At Cost
Reconciliations
Movement in the carrying amounts of capitalised exploration expenditure between the beginning and end of the current financial year
15,216,335
7,889,184
Opening net book amount
Additions(a)
Disposals
Foreign exchange translation adjustment
Closing net book amount
7,889,184
6,828,559
(43,321)
541,913
15,216,335
5,567,921
3,241,716
-
(920,453)
7,889,184
(a) During the 2021 financial year the company issued 40,000,000 fully paid ordinary shares with a fair value of $6,600,000 to acquire
the Andover, Turner River, Meentheena and Coongan mineral exploration projects in Western Australia. An additional $228,559
Western Australian stamp duty was assessed and paid.
During the 2020 financial year $31,506 was paid to acquire additional concessions for the Oposura Project; $122,585 to obtain an
additional concession for the Sara Alicia project and $3,087,624 to move to 100% ownership of the Alacrán project. All acquisitions
were by cash payments, except for the $3,087,624 to move to 100% ownership of the Alacrán project. This was met by the issue of
27,545,566 fully paid shares in the capital of the Company on 27 August 2019, which at the time of issue had a fair value of $3,305,468.
Recovery of the capitalised amount is dependent upon successful development and commercial exploitation, or alternatively, sale.
SUBSIDIARIES
8.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in Note 1(a):
Name
Country of incorporation
Class of shares
Equity Holding*
2020
100%
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
Azure Mexico Pty Ltd
Minera Piedra Azul, S.A. de C.V.
Minera Capitana S.A. de C.V.
Azu-Perth S.A. de C.V.
Minera Azure, S.A. de C.V.
Minera Tlali SAPI. de C.V.
*Percentage of voting power is in proportion to ownership.
Australia
Mexico
Mexico
Mexico
Mexico
Mexico
TRADE AND OTHER PAYABLES (CURRENT)
9.
Trade payables
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2021
$
1,641,257
1,641,257
Information about the Group’s financial risk management policies is disclosed in Note 2.
The carrying amount of trade and other payables are assumed to approximate their fair values due to their short-term nature
10. BORROWINGS
Face Value of Convertible Notes issued
Finance Costs
Total Borrowings
Balance included in Non-current Borrowings
Balance included in Current Trade and other Payables
2021
$
-
-
-
-
-
2020
$
393,846
393,846
2020
$
2,000,000
112,022
2,112,022
2,000,000
112,022
On 19 July 2019, the company issued convertible notes for $2,000,000, as part of a capital raising exercise. On 23 December 2020 the
Convertible Note was repaid through the issue of 13,793,104 fully paid ordinary shares. Refer to Note 11 for further details.
48
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
11. CONTRIBUTED EQUITY
(a) Share capital
Ordinary shares fully paid
Total consolidated contributed equity
(b) Movements in ordinary share capital
1 July opening balance
Issued to Teck Resources Ltd (Note 14)
Issue at $0.17 per share
Issue at $0.10 per share
Issue at $0.74 per share
Issue for projects (Note 14)
Exercise of options at $0.205
Exercise of options at $0.29
Exercise of options at $0.58
Conversion of convertible note (b)(i)
Share issue expenses
30 June closing balance
Consolidated
2021
Number of shares
$
2020
Number of shares
$
308,085,721
142,324,512
162,192,617
87,760,331
2021
Number of shares
162,192,617
-
-
40,000,000
50,000,000
40,000,000
500,000
250,000
1,350,000
13,793,104
-
308,085,721
$
87,760,331
-
-
4,000,000
37,000,000
6,600,000
102,500
72,500
783,000
7,517,242
(1,511,061)
142,324,512
2020
Number of shares
110,999,992
27,545,566
23,647,059
-
-
-
-
-
-
-
-
162,192,617
$
80,732,475
3,308,468
4,020,000
-
-
-
-
-
-
-
(300,612)
87,760,331
Funds raised from the share issues during the 2021 year were used to progress the company’s exploration activities.
(i) The convertible notes were issued with a face value of $2,000,000. Given the notes converted to 13,793,104 shares at a price of
$0.545 per share, $5,517,241 was recognised as a finance cost in the statement of profit or loss and other comprehensive income,
being the difference between the face value and the fair value at the time of conversion.
(c) Movements in unlisted options on issue
Exercise Price
(cents)
58
29
20.5
49
57
65
Expiry
30 November 2020
30 November 2021
30 November 2022
30 June 2024
30 June 2024
30 June 2024
Exercise
Price (cents)
120
94
58
29
110
45
Expiry
30 November 2018
30 November 2019
30 November 2020
30 November 2021
11 September 2019
30 April 2020
Opening
Balance
2,050,000
2,200,000
4,400,000
-
-
-
8,650,000
Opening
Balance
2,050,000
2,050,000
2,200,000
-
9,725,511
13,683,339
29,708,850
2021
Issued
-
-
-
500,000
1,000000
1,500,000
3,000,000
2020
Issued
-
-
-
4,400,000
-
-
4,400,000
Exercised
(1,350,000)
(250,000)
(500,000)
-
-
-
(2,100,000)
Lapsed
Closing Balance
(700,000)
(700,000)
(1,400,000)
-
-
-
(2,800,000)
-
1,250,000
2,500,000
500,000
1,000000
1,500,000
6,750,000
Exercised
Lapsed
Closing Balance
-
-
-
-
-
-
-
(2,050,000)
-
-
-
(9,725,511)
(13,683,339)
(25,458,850)
-
2,050,000
2,200,000
4,400,000
-
-
8,650,000
Further information on options issued is set out in Note 22
(d) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number
of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy,
is entitled to one vote, and upon a poll each share is entitled to one vote. For further information on Capital Management refer to Note 2.
49
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
12. RESERVES AND ACCUMULATED LOSSES
Accumulated losses
Balance at beginning of year
Loss for the year
Balance at end of year
Share-based payments reserve
Balance at beginning of year
Movement during the year
Balance at end of year
Financial asset reserve
Balance at beginning of year
Revaluation
Balance at end of year
Foreign currency translation reserve
Balance at beginning of year
Movement during the year
Balance at end of year
Total Reserves
(a) Nature and purpose of reserves
2021
$
2020
$
(84,522,816)
(17,264,366)
(101,787,182)
(78,851,520)
(5,671,296)
(84,522,816)
5,642,711
86,607
5,729,318
(39,996)
-
(39,996)
5,388,311
254,400
5,642,711
(39,996)
-
(39,996)
(2,348,008)
520,359
(1,827,649)
(972,346)
(1,375,662)
(2,348,008)
3,861,673
3,254,707
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of options issued but not exercised.
Financial asset reserve
This reserve records fair value changes on investments held at Fair Value through Other Comprehensive Income. Amounts are recognised
in profit or loss when the associated assets are sold or impaired.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the statements of foreign
subsidiaries.
13. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
No dividends were paid or declared since the start of the financial year. No recommendation for payment of dividends has been made.
14. STATEMENT OF CASH FLOWS
(a) Cash and cash equivalents
Cash and cash equivalents comprise:
− cash at bank and in hand
− short-term deposits
Closing cash and cash equivalents balance
60,944
30,206,278
30,267,222
25,965
823,584
849,549
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of
the Group and earn interest at the respective short-term deposit rates.
50
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
14.
STATEMENT OF CASH FLOWS (cont’d)
2021
$
2020
$
(b) Reconciliation of the net loss after income tax to the net cash outflows from operating
activities
Net loss
Convertible Note Interest
Depreciation of non-current assets
Share based payment expense
Fair Value adjustment on convertible notes
Plant and Equipment written off
Profit on sale of mineral concession
Re-classify right to use asset
Operating lease payments
Changes in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash outflow from operating activities
(16,900,178)
232,534
56,636
86,607
5,517,242
649
(83,647)
7,050
132,857
(494,375)
(31,242)
1,240,153
61,834
(10,173,880)
(5,671,296)
237,022
48,264
254,400
-
863
(35,435)
3,395
150,872
45,302
(4,392)
87,093
-
(4,883,912)
(c) Non-cash financing and investing activities
During the 2021 period:
•
•
•
40,000,000 shares were issued to acquire the Andover, Turner River. Meentheena and Coongan exploration projects in
Western Australia.
13,793,104 were issued to redeem convertible notes with a face value of $2,000,000.
The Company entered into an office lease agreement for a period of five years on commercial terms and conditions, which are
confidential.
During 2020 period 27,545,566 shares were issued to Teck Resources Limited to move to 100% ownership of the Alacrán project.
There have been no other non-cash financing and investing activities during the 2021 year (2020: Nil).
15. COMMITMENTS
As a result of the acquisition of the additional interest in the Alacrán Project, during the 2020 financial year the Group issued to Teck a
0.5% Net Smelter Return Royalty on the Project, and a participation right on the proceeds of any sale of the project within a five-year
period.
In addition, the company has certain commitments to meet minimum expenditure requirements on the mineral exploration assets it has
an interest in. Outstanding exploration commitments which are expected to be met in the normal course of business are as follows:
Not later than one year
16. CONTINGENCIES
85,957
74,305
The Company has entered into an agreement with 30 Well Pty Ltd to acquire the Barton Gold Project (EL 40/393) with consideration of
1,150,000 fully paid ordinary shares and $20,000 cash payable upon the grant of the exploration licence. The licence was granted after the
reporting period on 1 July 2021.
There are no other material contingent liabilities or contingent assets of the company at reporting date (2020: Nil).
17. EVENTS OCCURING AFTER REPORTING DATE
On 1 July 2021 the Barton tenement (EL 40/393) was granted. As a result, the Company issued 1,150,000 fully paid ordinary shares and
$20,000 to the vendor.
On 31 January 2020, the World Health Organisation (WHO) announced a global health emergency because of a new strain of coronavirus
originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community as the virus spreads globally beyond its
point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a
pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. The Group is therefore uncertain as to the full
impact that the pandemic will have on its financial condition, liquidity, and future results of operations during FY2022.
Management is actively monitoring the global situation and its impact on the Group's financial condition, liquidity, operations, suppliers,
industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Group is not
able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for the 2021 financial year.
No other matter or circumstance has arisen since the end of the financial year which significantly affected or may significantly affect the
operations of the group, the results of those operations, or the state of affairs of the group in future financial years.
51
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
18. LOSS PER SHARE
(a) Reconciliation of earnings to profit or loss
Net loss
Loss used in calculating basic loss per share
Basic loss per share (cents per share)
2021
$
2020
$
(16,900,178)
(16,900,178)
(5,671,296)
(5,671,296)
(6.28)
(3.75)
Number of shares
2021
Number of shares
2020
(b) Weighted average number of ordinary shares outstanding during the year used in
calculating basic loss per share
Weighted average number of ordinary shares used in calculating basic loss per share
268,954,233
151,398,370
(c) Effect of dilutive securities
Options on issue at reporting date could potentially dilute basic earnings per share in the future. The effect in the current year is to decrease the
loss per share hence they are considered antidilutive. Accordingly, diluted loss per share has not been disclosed.
19. AUDITOR’S REMUNERATION
Amounts received or due and receivable by BDO Audit (WA) Pty Ltd or associated entities for:
Tax compliance services
An audit or review of the financial report of the entity
Remuneration of other auditors of subsidiaries
Audit or review of financial report of subsidiaries
20. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of key management personnel by compensation
Short-term
Post-employment
Share-based payment
For further information refer to the Remuneration Report included as part of the Directors’ Report.
21. RELATED PARTY DISCLOSURES
2021
$
17,252
44,545
61,797
42,887
733,677
35,740
-
769,417
2020
$
4,202
41,882
46,084
26,430
646,438
31,768
156,109
834,315
(a) Parent entity
The ultimate parent entity within the Group is Azure Minerals Limited.
(b) 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(a):
Name
Country of incorporation
Class of shares
Azure Mexico Pty Ltd
Minera Piedra Azul, S.A. de C.V.
Minera Capitana, S.A. de C.V.
Servicios AzuPerth, S.A. de C.V.
Mineral Azure S.A. de C.V.
Mineral Tlali SAPI. de C.V.
Australia
Mexico
Mexico
Mexico
Mexico
Mexico
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2021
%
100
100
100
100
100
100
Equity Holding*
2020
%
100
100
100
100
100
100
*Percentage of voting power is in proportion to ownership.
No other provision for doubtful debts has been raised in relation other outstanding balances, and no other expense has been recognised in
respect of bad or doubtful debts due from related parties.
(c) Other Related Transactions
The Company has entered into a sub-lease agreement on normal commercial terms with Ionic Rare Earths Limited (IonicRE), a company of
which Brett Dickson is an officer. During the year IonicRE paid sub-lease fees totalling $9,255 (2020: $17,872).
The Company has also entered into a sub-lease agreement, which expired on 31 March 2021, on normal commercial terms with Rox Resources
Limited, a company of which Brett Dickson is a director. During the year Rox Resources Limited paid sub-lease fees totalling $104,457 (2020:
$110,399). In addition, the Company paid fees of $36,819 (2020: $45,990) to Rox Resources Limited for the provision of office secretarial
support.
52
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
22. SHARE-BASED PAYMENTS
No options have been issued pursuant to an Employee Share plan.
(a) Employee and consultants option plan
The establishment of the Azure Minerals Limited – Employees and Contractors Option Incentive Plan (“Plan”) was approved by shareholders at
the Annual General Meeting held on 26 November 2019. The plan is designed to provide long-term incentives for employees and certain contractors
to deliver long term shareholder returns. Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate
in the plan or to receive guaranteed benefits. In addition, under the Plan, the Board determines the terms of the options including exercise price,
expiry date and vesting conditions, if any.
Options granted under the plan carry no dividend or voting rights. When exercised, each option is convertible into an ordinary share of the company
with full dividend and voting rights. During the year 3,000,000 options were issued pursuant to the plan (2020: Nil)
Set out below are summaries of options issued under the Employee Share Plan.
Grant Date
Expiry Date
Exercise
Price
(cents)
Value per
option at
grant
date
(cents)
Balance at
the start of
the year
Granted
during
the year
Exercised
during the
year
Lapsed
during the
year
Balance at
end of the
year
Vested and
exercisable at
end of the year
Number
Number
Number
Number
Number
2021
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
49
57
65
15.9ª
15.2ᵇ
14.6ᶜ
Weighted average exercise price
-
-
-
-
500,000
1,000,000
1,500,000
3,000,000
$0.60
-
-
-
-
-
-
-
-
-
-
500,000
1,000,000
1,500,000
3,000,000
$0.60
500,000
-
-
500,000
$0.49
The weighted average remaining contractual life of share options outstanding at the end of the period was 2.98 years.
Fair value of options granted.
During the 2021 financial year the weighted average fair value of the options granted was 15.0 cents. The price was calculated by using the
Binominal Option valuation methodology applying the following inputs:
2021
Trench a
2021
Trench b
57.0
2021
Trench c
65.0
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility (%)
Risk free interest rate (%)
49.0
3.0
27.0
124
0.21
3.0
27.0
124
0.21
3.0
27.0
124
0.21
Historical volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future trends, which
may not eventuate.
Tranche a options vested immediately; tranche b and tranche c options vest upon certain operational milestones which are expected to be met
over the life of the option
53
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
22. SHARE-BASED PAYMENTS (Cont’d)
(b) Director, executive and employee options
Set out below are summaries of current directors, executives & employees options granted.
Grant Date
Expiry Date
Exercise
Price
(cents)
Value per
option at
grant
date
(cents)
Balance at
the start of
the year
Granted
during
the year
Exercised
during the
year
Lapsed
during the
year
Balance at
end of the
year
Vested and
exercisable at
end of the year
Number
Number
Number
Number
Number
2021
20 Nov ‘17
30 Nov ‘20
19 Dec ‘18
30 Nov ‘21
58
29
26 Nov ‘19
30 Nov ‘22
20.5
1.6
10.3
5.8
Weighted average exercise price
2020
2,050,000
2,200,000
4,400,000
8,650,000
$0.32
-
-
-
-
-
(1,350,000)
(700,000)
-
(250,000)
(700,000)
1,250,000
(500,000)
(1,400,000)
2,500,000
(2,100,000)
(2,800,000)
3,750,000
$0.46
$0.32
$0.23
1,250,000
2,500,000
3,750,000
$0.23
94
58
29
20.5
30 Nov ‘19
30 Nov ‘20
30 Nov ‘21
30 Nov ‘22
7 Dec ‘16
20 Nov ‘17
19 Dec ‘18
26 Nov ‘19
-
2,050,000
2,200,000
4,400,000
8,650,000
Weighted average exercise price
$0.315
The weighted average remaining contractual life of share options outstanding at the end of the period was 1.09 years (2020: 1.7 years).
(2,050,000)
-
-
-
(2,050,000)
$0.94
-
2,050,000
2,200,000
4,400,000
8,650,000
$0.315
2,050,000
2,050,000
2,200,000
-
6,300,000
$0.60
-
-
-
4,400,000
4,400,000
$0.205
1.4
1.6
10.3
5.8
-
-
-
-
-
-
Fair value of options granted.
No options were issued to directors and executives during the 2021 financial year. During the 2020 financial year the weighted average fair value
of the options granted was 5.8 cents. The price was calculated by using the Binominal Option valuation methodology applying the following inputs:
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility (%)
Risk free interest rate (%)
2020
20.5
3.0
11.5
100
0.73
Historical volatility has been the basis for determining expected share price volatility as it assumed that this is indicative of future trends, which
may not eventuate.
The options vested immediately and the total expenses arising from share-based payment transactions recognised during the year were as follows:
Options issued to directors and executives
Consolidated
2021
$
-
2020
$
254,400
54
Azure Minerals Limited – Financial Statements
Notes to the Consolidated Financial Statements
23. PARENT ENTITY FINANCIAL INFORMATION
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Statement of Financial Position
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Shareholder’s equity
Issued capital
Reserves
Accumulated loses
2021
$
2020
$
39,988,655
47,114,589
(1,847,043)
(2,351,456)
8,921,871
9,044,696
(437,793)
(2,552,480)
44,763,133
6,492,216
142,324,512
6,053,510
(103,614,889)
87,760,331
5,602,715
(86,870,830)
44,763,133
6,492,216
(b) Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities or guarantees as at 30 June 2021 or 30 June 2020.
(c) Contracted commitments for the acquisition of property, plants or equipment
The parent entity did not have any commitments for the acquisition of property, plants or equipment.
55
Azure Minerals Limited – Financial Statements
Directors’ Declaration
The directors of the company declare that:
(1)
The financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(a)
(b)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance for the
year ended on that date.
(2)
(3)
(4)
There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
The directors have been given the declaration by the chief executive officer and chief financial officer as required by section 295A
of the Corporations Act 2001.
The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance with
International Financial Reporting Standards.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by:
Brian Thomas
Chairman
Perth, 22 September 2021
56
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Azure Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Azure Minerals Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
57
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Recoverability of Capitalised Exploration Expenditure
Key audit matter
How the matter was addressed in our audit
At 30 June 2021 the carrying value of capitalised
Our procedures included, but were not limited to:
exploration expenditure was disclosed in Note 7.
(cid:127) Obtaining a schedule of the areas of interest held
As the carrying value of the exploration assets
by the Group and assessing whether the rights to
represent a significant asset of the Group, we
tenure of the areas of interest remained current at
considered it necessary to assess whether any facts or
balance date;
circumstances exist to suggest that the carrying
amount of these assets may exceed its recoverable
amount.
(cid:127)
Considering the status of the ongoing exploration
programmes in the respective areas of interest by
holding discussions with management, and
Judgement is applied in determining the treatment of
reviewing the Group’s exploration budgets, ASX
exploration expenditure in accordance with Australian
announcements and director’s minutes;
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular,
whether facts and circumstances indicate that the
exploration and evaluation assets should be tested for
impairment.
(cid:127)
Considering whether any area of interest had
reached a stage where a reasonable assessment of
economically recoverable reserves existed;
(cid:127)
Considering whether any facts or circumstances
existed to suggest impairment testing was
required; and
(cid:127)
Assessing the adequacy of the related disclosures
in Note 1 and Note 7 to the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
58
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 preparing the financial report, the directors are responsible for assessing the ability of the group 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 Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 26 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Azure Minerals Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
59
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 22 September 2021
60
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY JARRAD PRUE TO THE DIRECTORS OF AZURE MINERALS LIMITED
As lead auditor of Azure Minerals Limited for the year ended 30 June 2021, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Azure Minerals Limited and the entities it controlled during the period.
Jarrad Prue
Director
BDO Audit (WA) Pty Ltd
22 September 2021
61
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Azure Minerals Limited – Financial Statements
ASX Additional Information
The number of shareholders, by size of holding, in each class of share as at 31 August 2021 are:
1
1,001
5,001
10,001
100,001
-
-
-
-
1,000
5,000
10,000
100,000
and over
Rounding Total
The number of shareholders holding less than a marketable parcel of shares are:
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
1
2
3
4
5
6
7
8
9
10
11
YANDAL INVESTMENTS PTY LTD
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
HSBC CUSTODY NOMINEES LIMITED
DEUTSCHE BALATON AKTIENGESELLSCHAFT
HARMANIS HOLDINGS PTY LTD
RCF OPPORTUNITIES FUND LP
CITICORP NOMINEES PTY LIMITED
RUBI HOLDINGS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
12 MRS REBECCA SHALALA
13 MR JAY EVAN DALE HUGHES
14
J & B SMITH SUPERANNUATION PTY LTD
15 MR NEIL JAMES WADDINGTON
16 MR ANTHONY PAUL ROVIRA
17
COMSEC NOMINEES PTY LIMITED
18 MR SIMON (SUI HEE) LEE
19
DR LYNDSAY GEORGE MCDONALD GORDON
20 MR WILLIAM BAMBLING + MRS JOYCE BAMBLING
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
Ordinary shares
Number of holders Number of shares
1,192
1,639
832
1,702
287
5,652
1,388
540,014
4,670,593
6,559,333
59,706,123
237,759,658
309,235,721
774,194
Listed ordinary shares
Number of shares
46,200,000
29,499,077
26,295,692
25,698,017
4,803,378
4,054,055
3,562,145
3,000,000
2,945,589
2,724,463
2,551,351
1,512,921
1,500,000
1,450,000
1,410,000
1,396,333
1,298,627
1,207,242
1,132,481
1,110,000
163,351,371
145,884,350
Percentage of
ordinary shares
14.94
9.54
8.50
8.31
1.55
1.31
1.15
0.97
0.95
0.88
0.83
0.49
0.49
0.47
0.46
0.45
0.42
0.39
0.37
0.36
52.82
47.18
62
Azure Minerals Limited – Financial Statements
ASX Additional Information
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act 2001
are:
Yandal Investments Pty Ltd
Teck Resources Limited
Delphi Unternehmensberatung Aktiengesellschaft
Deutsche Balaton Aktiengesellschaft
(d) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
Number of Shares
46,200,000
27,570,566
56,249,924
56,249,924
63
Azure Minerals Limited – Financial Statements
ASX Additional Information
(e) Schedule of interests in mining tenements
TABLES OF MINERALS RESOURCES
MINERAL RESOURCES ESTIMATION GOVERNANCE STATEMENT
Governance of Azure’s mineral resources is a responsibility of the Executive Management of the Company.
64
Azure Minerals Limited – Financial Statements
ASX Additional Information
All mineral resources have not changed since last year.
Azure has ensured that its mineral resources estimates are subject to appropriate levels of governance and internal
controls. The mineral resources reported have been estimated by independent external consultants who are experienced
in best practices in modelling and estimation methods. The consultants have also undertaken reviews of the quality and
suitability of the underlying information used to generate the resource estimations. Additionally, the Company carries
out regular internal peer reviews of processes and contractors engaged.
Azure has reported its Promontorio mineral resources on an annual basis in accordance with the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Resources (the JORC code) 2004 Edition.
Azure has reported its Oposura, Cascada, Mesa de Plata and Loma Bonita mineral resources on an annual basis in
accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Resources
(the JORC code) 2012 Edition.
Competent Persons named by Azure are members of the Australian Institute of Mining and Metallurgy and/or the
Australian Institute of Geoscientists and/or of a “Recognised Professional Organisation”, as included in a list on the
JORC and ASX websites.
OPOSURA PROJECT
Table 1: Oposura Resource Estimate - June 2018 - using a 1.5% Zinc Equivalent Cut-Off Grade
(First released to ASX on 4 July 2018)
Indicated Mineral Resource
Inferred Mineral Resource
Total Mineral Resource
Tonnes
Grade
Tonnes
Grade
ZONE
(Mt)
East
West
TOTAL
0.5
1.6
2.1
Zn
(%)
Pb
(%)
5.0
5.4
5.3
3.7
2.6
2.9
Ag
(g/t)
19.4
16.5
17.2
(Mt)
Zn
(%)
Pb
(%)
0.5
0.3
0.8
4.8
3.3
4.3
2.7
2.1
2.5
Ag
(g/t)
16.7
14.3
16.5
Tonnes
(Mt)
Grade
Zn
(%)
Pb
(%)
1.0
1.9
2.9
4.9
5.0
5.0
3.2
2.6
2.8
Ag
(g/t)
18.5
16.2
17.0
ALACRÁN PROJECT
Table 2: Mesa de Plata JORC Code Measured and Indicated Mineral Resource
(First released to ASX on 1 December 2016)
Zone
Measured Mineral Resource
Tonnes
(Mt)
(g/t Ag)
Silver
(Moz)
Indicated Mineral Resource
Tonnes
(Mt)
(g/t Ag)
Silver
(Moz)
Total Mineral Resource
Tonnes
(Mt)
Silver
(g/t Ag)
(Moz)
High
Grade
Mid-Grade
Total
1.21
8.43
9.64
307.4
43.0
76.2
12.0
11.7
23.6
0.54
0.28
0.82
201.7
36.2
145.4
3.5
0.3
3.8
1.75
274.7
15.5
8.71
10.46
42.8
81.6
12.0
27.4
Table 3: Loma Bonita JORC Code Indicated and Inferred Mineral Resource
(First released to ASX on 21 December 2016)
Cut-Off
Grade
(g/t Au)
≥ 0.5
≥ 0.21
JORC Code
Classification
Tonnes
(Mt)
Indicated Mineral Resource
Inferred Mineral Resource
Total
Indicated Mineral Resource
Inferred Mineral Resource
Total
2.87
0.5
3.4
4.20
1.2
5.4
65
Gold
Silver
(g/t)
1.25
1.0
1.2
0.95
0.6
0.9
(kOz)
115.7
15
131
128.5
22
150
(g/t)
33.9
18
32.0
30.1
18
28
(Moz)
3.14
0.3
3.4
4.07
0.7
4.8
Azure Minerals Limited – Financial Statements
ASX Additional Information
PROMONTORIO PROJECT
Table 4: Cascada Mineral Resource above a 0.5% Cu Equivalent Cut-off within the Resource Constraining
Shell
(First released to ASX on 7 May 2015)
Within Constraining Shell
Cut off > 0.5% CuEq
Grade
Contained Metal
Classification
Tonnage
(tonnes)
Cu
(%)
Au
(g/t)
Ag
(g/t)
CuEq
(%)
Cu
(tonnes)
Au
(oz)
Ag
(oz)
CuEq
(tonnes)
Indicated
810,000
Inferred
1,140,000
Total
1,950,000
1.1
0.7
0.9
1.4
1.7
1.6
28
26
27
2.0
1.8
1.8
9,000
36,000
720,000
15,900
8,400
63,200
960,000
20,000
17,400
99,200
1,680,000
35,900
Table 5: Cascada Mineral Resource above a 1.0% Cu Equivalent Cut-off below the Resource Constraining
Shell
Below Constraining Shell
Cut off > 1.0% CuEq
Grade
Contained Metal
Classification
Tonnage
(tonnes)
Cu
(%)
Au
(g/t)
Ag
(g/t)
CuEq
(%)
Cu
(tonnes)
Indicated
Inferred
30,000
80,000
Total
110,000
1.0
1.3
1.2
0.8
2.7
2.3
17
22
21
1.5
2.7
2.4
Au
(oz)
700
Ag
(oz)
CuEq
(tonnes)
20,000
400
300
1,100
7,300
60,000
2,300
1,400
8,000
80,000
2,700
Table 6: Cascada Mineral Resource Total within and below the Resource Constraining Shell
Total Resource
Grade
Contained Metal
Classification
Tonnage
(tonnes)
Cu
(%)
Au
(g/t)
Ag
(g/t)
CuEq
(%)
Cu
(tonnes)
Au
(oz)
Ag
(oz)
CuEq
(tonnes)
Indicated
840,000
1.1
Inferred
1,230,000
0.8
Total
2,070,000
0.9
1.4
1.8
1.6
27
26
27
1.9
1.8
1.9
9,200
9,500
36,700
740,000
16,300
70,500
1,020,000
22,300
18,700
107,200
1,760,000
38,600
(First released to ASX on 10 May 2013)
Table 7: Promontorio Project Mineral Resource
Total Resource
Grade
Contained Metal
Deposit
Tonnage
(tonnes)
Cu
(%)
Au
(g/t)
Ag
(g/t)
CuEq
(%)
Cu
(tonnes)
Au
(oz)
Ag
(oz)
CuEq
(tonnes)
Indicated
610,000
Inferred
230,000
Total
840,000
2.7
1.8
2.5
1.7
1.5
1.6
56
56
56
4.4
3.3
4.1
16,700
32,500
1,090,000
26,700
4,100
11,300
410,000
7,500
20,800
43,800
1,500,000
34,200
66
Azure Minerals Limited – Financial Statements
ASX Additional Information
COMPETENT PERSON STATEMENT:
Information in this report that relates to previously reported Exploration Results has been crossed-
referenced in this report to the date that it was reported to ASX.
The information in this report that relates to the Mineral Resource for the Promontorio deposit was
prepared and first disclosed to the ASX on 10 May 2013 under the JORC Code 2004. It has not been
updated since to comply with the JORC Code 2012 on the basis that the information has not materially
changed since it was last reported.
The information in this report that relates to Mineral Resources for the Cascada deposit is extracted from
the report “Cascada Mineral Resource Estimate” created and released to ASX on 7 May 2015 and is
available to view on www.asx.com.
The information in this report that relates to Mineral Resources for the Mesa de Plata deposit is extracted
from the report “Mesa de Plata Mineral Resource” created and released to ASX on 1 December 2016 and
is available to view on www.asx.com.
The information in this report that relates to Mineral Resources for the Loma Bonita deposit is extracted
from the report “Loma Bonita Mineral Resource” created and released to ASX on 21 December 2016 and
is available to view on www.asx.com.
The information in this report that relates to Mineral Resources for the Oposura deposit is extracted from
the report “Oposura Mineral Resource” created and released on the ASX on 4 July 2018 and is available
to view on www.asx.com.
The Company confirms that it is not aware of any new information or data that materially affects the
information included in the original market announcements and that all material assumptions and technical
parameters underpinning the estimates in the relevant market announcements continue to apply and have
not materially changed. The Company confirms that the form and context in which the Competent Person’s
findings are presented have not been materially modified from the original market announcements.
COPPER EQUIVALENCY STATEMENTS:
Promontorio:
Copper Equivalent (CuEq) was based on the following assumed metal prices that were guided by the
three-year averages at the data cut-off date 2 April 2013: US$3.25/lb for Cu, US$1,450/oz for Au and
US$27.50/oz for Ag.
The CuEq grade accounts for the following metal recoveries: 97.9% for Cu, 93.4% for Au, and 97.0%
for Ag.
It is Azure’s belief that all elements included in the metal equivalent calculation have a reasonable
potential to be recovered.
The following formula was used to calculate the Copper Equivalent grade: CuEq (%) = (Cu% x 0.979) +
(Au (g/t) x 0.6077) + (Ag (g/t) x 0.0120).
Cascada:
Copper Equivalent (CuEq) was based on the following assumed metal prices that were guided by the
three-year averages at the data cut-off date of 30 October 2014: US$3.40/lb for Cu, US$1,470/oz for Au
and US$25.00/oz for Ag.
The CuEq grade accounts for the following metal recoveries: 95.0% for Cu, 75.0% for Au, and 85.0%
for Ag.
It is Azure’s belief that all elements included in the metal equivalent calculation have a reasonable
potential to be recovered.
The following formula was used to calculate the Copper Equivalent grade: CuEq (%) = (Cu% x 0.95) +
(Au (g/t) x 0.4729) + (Ag (g/t) x 0.0091).
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Azure Minerals Limited – Financial Statements
ASX Additional Information
ZINC EQUIVALENCY STATEMENT:
Oposura:
Zinc Equivalency % US$:
Zinc equivalent values in US$ are determined by the following factors:
Zn Eq = ((%Zn x 0.875 x 0.85)+(%Pb x 0.85 x 0.95)+(g/t Ag x 0.67 x 0.70))/(%Zn x 0.875 x 0.85)
Commodity prices used in this MRE:
Zinc $3,107.50/t, Lead $2,411/t (spot price, LME, 2018. www.lme.com, cited 0:00 GMT
20/06/2018)
Silver $16.20/oz (spot price, NYSE, 2018. www.kitco.com, cited 0:00 GMT 20/06/2018)
Concentrate recoveries used in this MRE: Zn 87.5%, Pb 85%, Ag 67% (Locked Cycle and Batch
Flotation tests: Azure Minerals Ltd, 2018.)
Smelter recoveries used in this MRE: Zn 85%, Pb 95%, Ag 70% (International Benchmarks: Azure
Minerals Ltd, 2018)
It is the opinion of Azure Minerals Ltd that all the elements included in the calculation have a reasonable
potential to be recovered and sold
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