More annual reports from Azure Minerals:
2023 ReportANNUAL
REPORT AND
FINANCIAL
STATEMENTS
For The Year Ended
30 June 2022
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) 6187 7500
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
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
Internet Address
www.azureminerals.com.au
ASX Code
Shares AZS
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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4
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48
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52
80
82
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87
CHAIRMAN’S LETTER
Dear Shareholders,
Financial Year 2022 has been very successful for
Azure Minerals with the continued development
of our flagship Andover Nickel-Copper-Cobalt
Project. Since 2020, we have made four discoveries
comprising the Andover and Ridgeline deposits,
the Seaview and Skyline prospects, with an exciting
pipeline of potential discoveries yet to be drill tested.
Underpinning our exploration results and the
exciting potential for further discoveries, we have
established and are successfully executing a dual-
pathway strategy focused on resource growth
together with a program of project development
studies. Through progression and execution of
this strategy, we have a significant opportunity to
continue to grow the Andover Project into a major
operation and define a new nickel province in the
Pilbara region of Western Australia.
The major highlight of the Andover Project this
year was the release of a Maiden Mineral Resource
Estimate for the Andover Deposit of 4.6Mt @ 1.11%
Ni, 0.47% Cu and 0.05% Co (1.41% NiEq), containing
51,700t of Ni, 21,700t of Cu and 2,290t of Co. Across
the broader Andover Project, we are only starting to
scratch the surface, actively drilling and developing
the other discoveries with an objective of growing
and defining additional nickel-copper-cobalt
sulphide deposits.
team
The Azure Board and management
long-
importance of creating
understands the
term relationships across all stakeholder groups.
As we continue to develop Andover, we endeavour
to deliver ongoing value to the Roebourne and
West Pilbara communities. Wherever possible, we
employ local staff and actively encourage our major
contractors to do the same. We also expect the
infrastructure for Andover to be established within
or near Roebourne providing long-lasting benefit to
the community.
Most importantly, we are committed to developing
our projects the right way. We have adopted best
practice ESG principles to ensure Andover grows
sustainably and meets the highest environmental
standards, social credentials and governance
practices expected of a modern-day mining project.
low-carbon
When
in operation, we expect Andover will
be producing high-purity nickel and copper
concentrates, with a
intensity that
is traceable from the mine to the end-product.
It will be truly exciting to develop an operation
that is contributing to a cleaner future. Timing
could not be better as the global shift towards
decarbonisation and electrification continues
at a rapid pace.
2
Moving on from Andover, we have also completed
our maiden drill program at the Barton Gold Project
located
initially
in the Kookynie Gold District,
focussing on the Daisy Corner prospect, some
300m north of Genesis Minerals’ Puzzle North gold
deposit. Initial results were encouraging and the
team will continue to systematically explore and
drill other key targets at Barton.
We have completed the sale of our Mexican precious
and base metals projects to Bendito Resources
Inc for a combination of cash and shares valued at
A$20 million. This is an excellent result for Azure as
we received an immediate cash injection of A$4
million with an additional A$6 million due within the
next 18 months. We also retain exposure to upside
growth and value of the Mexican assets through
our substantial shareholding in Bendito, which
is working towards a listing on the Toronto Stock
Exchange.
I am extremely proud of the performance and
achievements of the Azure team
lead by our
Managing Director Tony Rovira at Andover in the
past 12 months. I would like to take this moment
to personally thank Tony for his hard-work and
leadership. Through Tony’s guidance combined with
the commitment and determination of all Azure
staff, the Company has enjoyed a stellar 12 months
and is very well-positioned for further growth and
value uplift.
I also want to thank our shareholders for their
support and investment in Azure. We look forward
to keeping you updated on the Company’s progress
and delivering returns well into the future.
Thank you to my fellow directors, our management
team, staff and contractors for their hard work,
dedication and focus on building the Company to
this position it finds itself in today.
The future is very exciting for Azure and the Andover
Project. We have the right project, right team and
right commodity exposure to build a bright future
in the Pilbara and deliver ongoing value to all our
stakeholders.
Yours sincerely,
Brian Thomas
Chairman
Azure Minerals Limited Annual Report 2022 THE FUTURE IS VERY EXCITING FOR
AZURE AND THE ANDOVER PROJECT.
WE HAVE THE RIGHT
PROJECT, RIGHT TEAM
AND RIGHT COMMODITY
EXPOSURE TO BUILD A
BRIGHT FUTURE
3
REVIEW OF OPERATIONS
AUSTRALIA
Azure holds interests in five nickel and gold
projects, all of which are located in the Pilbara
and Eastern Goldfields regions of Western
Australia (see Figure 1).
In
joint venture with prominent mining
entrepreneur Mr Mark Creasy (“Creasy Group”),
Azure has a 60% interest in the Andover Nickel-
Copper-Cobalt Project in the western Pilbara
and 70% interests in the Turner River, Coongan
and Meentheena Gold Projects in the northern
and eastern Pilbara (see Figure 2).
Darwin
Cairns
Port Hedland
Karratha
Andover
Turner River
Meentheena
Coongan
Leonora
Menzies
Laverton
Barton
Kalgoorlie
Perth
Adelaide
Brisbane
Sydney
Canberra
Figure 1: Azure’s projects
in Western Australia
Melbourne
Hobart
Figure 2: Locations of Azure’s Pilbara projects overlying geology
Azure also holds 100%-ownership of the Barton Gold Project, which consists of two granted Exploration
Licences and seven Exploration Licence Applications that in total cover 888km2 (see Figure 3). The Project is
situated adjacent to the historical gold mining town of Kookynie, located approximately 40km south of Leonora
in the Eastern Goldfields region of Western Australia.
4
Azure Minerals Limited Annual Report 2022 Figure 3: Location of Azure’s Barton Gold Project overlying Google Earth image
5
ANDOVER NICKEL-COPPER-COBALT (Ni-Cu-Co) PROJECT
(AZURE 60% / CREASY GROUP 40%)
Azure has enjoyed a transformative 12 months at its flagship Andover Ni-Cu-Co Project through the
successful execution of the Company’s dual pathway strategy, focused on combining exploration success
and resource growth together with advancing studies into developing a stand-alone nickel, copper and
cobalt mining and processing operation.
Covering 70km2, the Andover Project is located 35km southeast of Karratha and immediately south of the
town of Roebourne (see Figure 4). Excellent infrastructure, including airport, seaport, gas and water supply,
grid electrical power, sealed highway and support services and labour are available in the local district.
Figure 4: Andover Project location map
6
Azure Minerals Limited Annual Report 2022 Since acquiring Andover in July 2020, Azure has undertaken a continuous intensive exploration program on
the Project, with more than 180 diamond drill holes for approximately 81,000m delivering excellent results.
Four nickel-copper sulphide discoveries have been made to date – the Andover and Ridgeline Deposits and
the Seaview and Skyline prospects.
The Andover Deposit is the most advanced of the four discoveries, with Azure completing a Maiden Mineral
Resource Estimate (“MRE”) comprising 4.6Mt @ 1.11% Ni, 0.47% Cu and 0.05% Co (1.41% NiEq) for more
than 75,000 tonnes of combined contained metal, with more than 80% of the total resource classified in the
higher confidence Indicated category.
The total Andover Project resource base is expected to continue growing with strong drilling results
from Ridgeline leading towards an MRE for this deposit. Meanwhile drilling continues to return positive
mineralised intersections from Seaview and Skyline.
Importantly, Azure also has an exciting pipeline of undrilled targets defined by the regional exploration
program of geological mapping, geochemical sampling and geophysical surveying. This provides a strong
platform for further exploration success and expansion in the size and scale of the Andover Project.
Development studies on the closely located Andover and Ridgeline Deposits are progressing well with
positive outcomes being delivered in all study components.
Azure has a clear focus and strategy tailored to defining a new nickel-producing province in the Pilbara. The
results and growth delivered over the past 12 months place the Company in a strong position for further
success in FY2023 and beyond.
7
ANDOVER DEPOSIT – MAIDEN MINERAL RESOURCE ESTIMATE
Azure completed a major milestone in FY2022 with the release of a maiden MRE for the Andover Deposit, the
first prospect drilled within the greater Andover Project.
The MRE (JORC 2012) is 4.6Mt @ 1.11% Ni, 0.47% Cu and 0.05% Co (1.41% NiEq) for 51,700t of contained
Nickel, 21,700t of contained Copper and 2,290t of contained Cobalt at a cut-off grade of 0.5% Ni (see Table
1) (refer ASX: 30 March 2022 for full details).
This includes a high-grade resource component of 2.0Mt @ 1.41% Ni, 0.49% Cu and 0.06% Co (1.78% NiEq)
at a cut-off grade of 0.9% Ni.
The MRE was completed by CSA Global Pty Ltd (“CSA Global”) based on 104 holes, consisting of 102 diamond
(DD) and two reverse circulation (RC) holes for 44,267m (see Figure 5,) and is reported by classification in
Table 1.
Table 1: Andover Deposit Mineral Resource Estimate by classification
(current at 30 March 2022) (reported above a 0.5% Ni cut-off)
Classification
Tonnes
Indicated
Inferred
Total
Mt
3.8
0.9
4.6
Ni
%
Cu
%
Co
%
1.16
0.47
0.05
0.89
0.44
0.04
1.11
0.47
0.05
S
%
8.23
6.33
7.87
NiEq
Ni Metal Cu Metal Co Metal
%
1.51
1.20
1.41
kt
44.0
7.7
51.7
kt
17.9
3.8
21.7
kt
2.06
0.37
2.29
High-grade resource component reported above a 0.9% Ni cut-off
High Grade
2.0
1.41
0.49
0.06
9.85
1.78
28.8
10.0
1.28
Notes:
• Mineral Resources are reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves (The Joint Ore Reserves Committee Code –JORC 2012 Edition).
• Data is reported to significant figures and differences may occur due to rounding.
• Mineral Resources have been reported above a cut-off grade of 0.5 % nickel.
• The NiEq calculation represents total metal value for each metal summed and expressed in equivalent nickel grade and
tonnes. Commodity prices assumed in the calculation are US$: nickel $19,366.6/t; copper $9,089.8/t; cobalt $63,107.9/t.
The following metallurgical recovery assumptions are based on metallurgical test work and Azure considers they have
a reasonable prospect to be achieved: 79% nickel recovery; 70% copper recovery; 68% cobalt recovery.
• NiEq equation = Ni (%) + (Cu (%) x ((Cu $/t x Cu recovery x 0.01) / (Ni $/t x Ni recovery)) + (Co (%) x ((Co $/t x Co recovery x
0.01) / (Ni $/t x Ni recovery))
8
Azure Minerals Limited Annual Report 2022 Figure 5: Andover Deposit surface expression
The Andover Deposit demonstrates excellent internal continuity of mineralised widths and grades within well-
defined geological constraints. Drill holes were located at a nominal spacing of 50m by 50m, which is sufficient
to allow the geology and mineralisation zones to be modelled into coherent wireframed domains (see Figures
6 and 7).
9
Figure 6: Andover Resource Classification – Long Section
A-AA looking North (Indicated shown as red blocks and
Inferred shown as orange blocks)
Figure 7: Andover Block Model – Long Section A-AA
looking North showing nickel grade distribution
10
Azure Minerals Limited Annual Report 2022 Grade tonnage tables were generated for the Andover Deposit according to resource classification.
The grade tonnage table for the Mineral Resource is shown in Table 2 and the grade tonnage curves
are shown in Figure 8.
Table 2: Andover Deposit – Grade Tonnage Table
Total Resources
Indicated Resources
Inferred Resources
Ni cut-off % Tonnes
Ni
%
Cu
%
Co
Tonnes
%
000’t
000’t
Cu
%
Co
Tonnes
%
000’t
Ni
%
Cu
%
Co
%
4,846
1.08
0.46
0.05
3,891
4,846
1.08
0.46
0.05
3,907
4,846
1.08
0.46
0.05
3,907
4,846
1.08
0.46
0.05
3,907
4,814
1.09
0.46
0.05
3,880
4,647
4,309
1.11
1.16
0.47
0.05
3,787
0.47
0.05
3,523
Ni
%
1.14
1.14
1.14
1.14
1.14
1.16
1.21
0.47
0.05
0.47
0.05
0.47
0.05
0.47
0.05
0.47
0.05
0.47
0.05
0.48
0.06
3,739
1.23
0.49
0.05
3,053
1.29
0.49
0.06
3,084
1.34
0.50
0.06
2,579
1.39
0.51
0.06
2,401
1.48
0.52
0.06
2,054
1.53
0.52
0.07
954
954
954
954
932
859
784
685
503
346
0.85
0.43
0.04
0.85
0.43
0.04
0.85
0.43
0.04
0.85
0.43
0.04
0.86
0.43
0.04
0.89
0.44
0.04
0.92
0.45
0.04
0.96
0.46
0.05
1.04
0.46
0.05
1.13
0.48
0.05
1,739
1.68
0.53
0.07
1,538
1.73
0.53
0.08
198
1.28
0.51
0.06
%
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Figure 8: Andover Deposit – Grade Tonnage Curve
11
PROJECT DEVELOPMENT – SCOPING STUDY
As part of the Company’s dual-pathway strategy, Azure has successfully advanced key development
workstreams for a stand-alone mining and processing operation at Andover. The following subsections provide
a summary of the technical areas which are being progressed.
Mineral Resources
CSA Global completed the maiden Mineral Resource Estimate (MRE) for the Andover Ni-Cu-Co Deposit with
results being released to the ASX on 30 March 2022 (see Table 1).
Geotechnical
The geotechnical assessment of the Andover Deposit has been completed to a Scoping Study level and has
demonstrated that the deposit sits within a competent host rock.
Mining
Mine engineering studies for the Andover Deposit comprise the following components:
• Review of potential surface infrastructure locations, portal locations and other support infrastructure.
• Preliminary underground infrastructure designs have been completed.
• Preliminary Mineable Stope Optimisation completed and will continue to be refined as final parameters
are received for processing and off-take arrangements.
Processing
Studies into evaluating processing options include the following components:
• Metallurgical variability testwork program on the three ore types defined within the Andover Deposit
completed.
• Process Design Criteria (including mass balance), Process Flow Diagrams, and Process Description
progressing.
The Tailings Storage Facility (TSF) scope of work includes the following modules:
• Site selection for a TSF(s).
•
Tailings deposition methodology.
• Construction design and methodology.
• Water balance and proposed operating protocol.
ENVIRONMENTAL MONITORING AND ASSESSMENT
Key environmental consultants are undertaking a broad evaluation of the Andover Project area to assist
Azure with selection of disturbance areas for major infrastructure and provide a baseline for the design of the
environmental monitoring program, which will be undertaken as part of the Environmental Assessment to
support an application to mine. This currently includes the following monitoring programs:
•
Terrestrial flora and vegetation;
• Vertebrate terrestrial fauna and habitat;
• Aquatic fauna and habitat;
•
Invertebrate terrestrial fauna; and
• Subterranean fauna.
12
Azure Minerals Limited Annual Report 2022 RIDGELINE DEPOSIT
Located 200m from the Andover Deposit, Ridgeline consists of two mineralised horizons (see Figure 9)
that have been intersected by drilling over an east-west strike length of more than 500m and to depths
between 200m and 500m below surface.
Azure has completed an initial drill-out of the Ridgeline Deposit and the estimation of a mineral resource
will commence upon receipt of final assays.
Figure 9: Andover and Ridgeline Ni-Cu-Co deposits and Ridgeline drill holes
13
Drilling has identified two northwest-plunging shoots of semi-massive to massive sulphides containing high
grade nickel mineralisation in the southern horizon and a third mineralised shoot has been intersected in the
northern horizon. These shoots host thick central cores of sulphide mineralisation that represent structurally
controlled depositional sites.
Some of the better high grade intersections are listed in Table 3 and Figure 10 shows the consistent nature of
the high grade nickel mineralisation in hole ANDD0134. These high grade shoots are hosted within broader
zones of disseminated nickel and copper sulphides which remain open both up and down dip and along strike.
Additional drilling will be required in the future to define the full extent of the Ridgeline mineralised system.
Table 3: Significant high-grade nickel drill intersections from the Ridgeline Ni-Cu-Co deposit
Hole No
ANDD0045
ANDD0128
ANDD0134
ANDD0138
ANDD0139
ANDD0159
Depth (m)
From
486.6
537.0
459.2
418.0
517.0
509.7
To
491.1
541.9
465.5
421.3
520.2
517.3
Intercept
Length (m)
Growth
Ni (%)
Cu (%)
Co (%)
4.5
4.9
6.3
3.3
3.2
7.6
3.95
3.50
3.59
2.80
2.53
2.08
0.08
1.34
0.21
0.55
1.75
0.78
0.16
0.17
0.17
0.13
0.12
0.08
Mineralised intersections calculated using a 1.0% Ni grade cut-off.
ANDD0134: 6.3m @ 3.59% Ni
Figure 10: Andover and Ridgeline Ni-Cu-Co deposits and Ridgeline drill holes
14
Azure Minerals Limited Annual Report 2022 REGIONAL EXPLORATION – SOUTHERN MINERALISED CORRIDOR
Geological mapping, surface geochemical sampling, geophysical surveying and diamond drilling have defined
a greater than four kilometre long, strongly mineralised fairway between the Ridgeline Deposit in the west and
the Seaview prospect in the east (see Figures 11 and 12). Azure has named this mineralised system, the Southern
Mineralised Corridor (“SMC”).
Exploration has already confirmed that the SMC hosts multiple Ni-Cu-Co sulphide deposits with diamond
drilling intersecting significant mineralisation at four prospects – the Ridgeline Deposit (resource pending), the
Andover Deposit (refer ASX: 30 March 2022 for details of the Mineral Resource), and the Skyline and Seaview
prospects.
Geological mapping and sampling have also identified outcropping nickel and copper-rich gossans at Atrium,
Woodbrook and several other locations along the SMC which warrant further follow-up exploration. Even
though these gossans outcrop prominently at surface, they are mostly undisturbed, indicating that they were
not identified and tested by previous explorers.
The SMC demonstrates the large scale of the nickel deposit-forming system within the Andover Project, and
there is excellent potential for further resource growth with the discovery of additional deposits.
Figure 11: Andover Ni-Cu-Co deposits, prospects and geology
15
Figure 12: Detailed geological map of the Southern Mineralised Corridor
16
Azure Minerals Limited Annual Report 2022 BARTON GOLD PROJECT (AZURE 100%)
The Barton Project lies adjacent to the historical gold mining town of Kookynie, approximately 40km
south of another gold mining town, Leonora, in the Eastern Goldfields region of Western Australia.
Azure holds 100% ownership of a large (888km2), strategically situated portfolio of nine tenements.
This sizeable land package covers a contiguous north-south strike length of 88km of the highly
prospective Kookynie greenstone sequence (see Figure 13).
The landholding comprises:
•
Two granted Exploration Licences (totalling 231km2); and
• Seven Exploration Licence Applications (totalling 657km2) where Azure is the sole applicant, and
the tenements are in the granting process.
Within the Kookynie district, many historical gold mines, large and still-growing gold deposits, and
significant gold development projects are located close to Azure’s tenements, including:
• Genesis Minerals Ltd (ASX: GMD): Leonora Gold Project (2,017,000oz gold resource), including
the recently discovered Puzzle North gold deposit (232,000oz gold resource) which adjoins the
southern boundary of Azure’s granted E40/393;
• Saturn Metals Ltd (ASX: STN): Apollo Hill Gold Project (1,469,000oz gold resource); and
• High-grade gold discoveries by Metalicity Ltd (ASX:MCT) and other companies.
Azure’s landholding covers multiple under-explored mineralised trends including greenstone belts,
adjacent granite margins and favourable structural settings that are considered prospective for
hosting both gold and base metals mineralisation.
MAIDEN DRILL PROGRAM
Azure’s first drilling program at Barton comprised 21 Reverse Circulation (RC) holes for 3,473m. The
target was Daisy Corner, situated 300m north of Genesis Minerals’ Puzzle North gold deposit (maiden
mineral resource estimate of 232,000oz Au; ASX: 29 March 2022).
The Company’s drilling tested 800m of the prospective granite-greenstone contact to the northwest
of the Azure-Genesis tenement boundary, intersecting granite and greenstone rocks with shearing,
quartz-veining, iron oxides and disseminated pyrite present in most holes.
Assay results indicate that the mineralised system identified by Genesis at Puzzle North continues
into Azure’s tenement with anomalous gold mineralisation intersected in most holes, and a best
intersection of 24m @ 1.07g/t Au from 35m in hole BTRC0009 (ASX: 17 May 2022).
LOOKING AHEAD AT BARTON
The Company is encouraged by the results of the maiden drill program at Daisy Corner, with most
holes intersecting anomalous gold mineralisation.
The significant shearing and quartz-veining observed in both the granites and the greenstones at
Daisy Corner indicates the gold mineralisation is likely to be structurally controlled and not limited
to just the granite-greenstone contact. This structural complexity is considered likely to enhance the
size potential of the mineralising system and allows Azure to broaden the exploration search area.
Surface exploration continues, utilising geological mapping, soil sampling and structural interpretation
of the airborne magnetic data to refine the model of the mineralised system and assist planning of
the next phase of drilling.
17
Figure 13: Location of Azure’s Barton Gold Project overlying geology
18
Azure Minerals Limited Annual Report 2022 TURNER RIVER GOLD PROJECT (AZURE 70% / CREASY GROUP 30%)
Turner River comprises two unexplored Exploration Licence applications covering 450km2 located
just south of Port Hedland (see Figure 14) in the northern Pilbara region.
Widespread sand cover conceals basement rocks comprising sedimentary units of the Mallina
Formation, granite intrusions and the Louden Volcanics, an Archean-age greenstone belt. There are
no indications of drilling or other historical exploration activities within the project area.
Figure 14: Turner River Gold Project showing geology, structural setting & gold deposits/occurrences
At the closest point, Turner River is situated within seven kilometres of De Grey Mining’s (ASX:DEG) Mallina Gold
Project, which contains 10.6Moz of gold resources hosted in multiple deposits, including the 8.5Moz Hemi gold
deposit. Hemi and the nearby Mt Berghaus and Cookes Hill gold deposits are associated with the regionally
extensive Berghaus Shear Zone, demonstrating that substantial gold deposits can form with the confluence of
a favourable structural setting together with granites intruding into Mallina Formation sediments.
The Berghaus Shear Zone trends northeast from De Grey’s gold deposits and is present for approximately 12
strike kilometres within the south-eastern part of Turner River, where it passes through Mallina sediments and
granite intrusions, making this area a high-priority exploration target for intrusion-related gold mineralisation.
Given the extensive sand cover and minimal outcrop, little historical exploration and favourable rock types in
a fertile structural setting and proximity to De Grey’s gold deposits, Azure considers there is good potential for
Turner River to host gold mineralisation. To date, Azure has not undertaken any field work, however surface
exploration, geophysical surveys and drilling are being planned for as soon as the tenements are granted.
19
MEXICO
SALE OF MEXICAN ASSETS
Azure completed the sale of its Mexican precious and base metals projects to Bendito Resources Inc
(“Bendito”) for a combination of cash and shares valued at A$20 million.
At the closing of the Transaction (“Closing”), Azure received an immediate cash payment of A$4 million
and was issued 11,200,000 Bendito shares (valued at A$4 million and equivalent to approximately 20%
of the issued capital of Bendito at Closing). A second tranche of A$6 million in cash and A$6 million
worth of Bendito shares is payable to Azure within 18 months of Closing.
Bendito is planning to advance both the Alacrán and Oposura projects through intensive drilling,
ahead of its intention to list on the Toronto Stock Exchange within 18 months of completion of the
Transaction (“Listing”), with the Alacrán and Oposura projects forming the core assets of the Company.
It is anticipated that the issue of the second tranche of shares by Bendito to Azure will result in Azure
owning approximately 20% of the issued capital of Bendito post the Listing.
Bendito is a mineral acquisition and development company focused on progressing late-stage
exploration and development projects through the feasibility stages to production. The founders and
principals of Bendito have experience in both the financing and technical development of projects
and have external partners looking to support suitable projects. The Bendito Board is headed by
experienced geological engineer Mr John Antwi as President and Chief Executive Officer. Also on the
Bendito Board, as Lead Director, is mining engineer Mr Paul Huet, current Chairman and CEO of TSX-
listed Australian-focused gold and nickel miner Karora Resources Inc.
20
Azure Minerals Limited Annual Report 2022 21
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 2022.
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
Anthony Rovira
Hansjörg Plaggemars
Annie Guo
PRINCIPAL ACTIVITIES
During the year the principal continuing activity of the Group was exploration for precious and base
metals principally in Australia with exploration activities in Mexico on care and maintenance.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No recommendation for
payment of dividends has been made.
22
Azure Minerals Limited Annual Report 2022 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 2022 was $20,022,588
(2021: $16,900,178). Included in this loss figure is $15,112,330 (2021: $8,238,416) of exploration
expenditure. Refer to notes 1(c) and 5 to the financial statements.
Shareholder Returns
Basic loss per share from continuing operations (cents)
2022
(5.89)
(5.89)
2021
(5.93)
(5.93)
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.
23
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the year the Company issued a total of 2,650,000 fully paid ordinary shares (FPOS) being:
•
•
The issue of 1,150,000 FPOS as consideration for the acquisition of minerals exploration projects
in Western Australia; and
The issue of 1,500,000 FPOS as a result of the exercise of 1,500,000 options raising $392,500;
There were no other significant changes in the state of affairs of the Group during the financial year.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 30 May 2022 the Group reported that it had reached agreement with Bendito Resources Inc
(“Bendito”) for the sale of its Mexican base and precious metals projects. This sale closed on 21 July
2022 for a combination of cash and shares valued at A$20 million (the “Transaction”).
In connection with the Transaction, Azure will receive A$10 million in cash and A$10 million worth of
fully paid ordinary shares in Bendito ("Bendito Shares") in two tranches within an 18 month period. At
closing of the Transaction ("Closing"), Azure received an immediate cash payment of A$4 million and
was issued 11,200,000 Bendito Shares (approximately 20% of the issued capital of Bendito and valued at
A$4 million). A second tranche of A$6 million in cash and A$6 million worth of Bendito Shares is payable
to Azure within 18 months of Closing.
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 2023 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.
24
Azure Minerals Limited Annual Report 2022 INFORMATION ON DIRECTORS
MR. BRIAN THOMAS, CHAIRMAN BSC MBA GRAD CERT APP FIN INV MAUSIMM MAICD SAFIN
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
Non-Executive Chairman Peregrine Gold Limited (Appointed 15 February 2022)
Non-Executive Director Lanthanein Resources Limited (Appointed 22 October 2021)
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)
INTERESTS IN SHARES AND OPTIONS
Nil
MR. ANTHONY PAUL ROVIRA, MANAGING DIRECTOR BSC (HONS) FLINDERS UNIVERSITY, MAUSIMM
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.
OTHER CURRENT DIRECTORSHIPS
Nil
FORMER DIRECTORSHIPS IN THE LAST 3 YEARS
Ionic Rare Earths Limited (resigned 21 December 2020)
INTERESTS IN SHARES AND OPTIONS
2,209,669 ordinary shares in Azure Minerals Limited, of which 109,669 are held indirectly
1,000,000 options over ordinary shares in Azure Minerals Limited
25
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
Altech Chemicals Limited, Gascoyne Resources Limited, GeoPacific Resources Ltd, Kin Mining NL, PNX Metals
Limited, South Harz Potash Limited, Wiluna Mining Corporation and 4basebio plc.
FORMER DIRECTORSHIPS IN THE LAST 3 YEARS
The Grounds Real Estate Development AG, CARUS AG, Biofrontera AG.
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
INTERESTS IN SHARES AND OPTIONS
Nil
26
Azure Minerals Limited Annual Report 2022 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:
Meetings of Committees
Meetings
Audit & Risk
Management
Remuneration &
Nomination
Directors’
Mr Brian Thomas
Mr Anthony Rovira
Mr Hansjörg Plaggemars
Ms Annie Guo
A
11
11
11
10
B
11
11
11
11
A
2
2
2
2
B
2
2
2
2
A
–
–
–
–
B
–
–
–
–
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.
27
28
Azure Minerals Limited Annual Report 2022 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
Position
Term as KMP
Non-Executive Chair
Full financial year
Executive Managing Director
Full financial year
Mr Hansjörg Plaggemars
Non-Executive Director
Full financial year
Ms Annie Guo
Mr Brett Dickson
Non-Executive Director
Full financial year
Company Secretary
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.
29
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
Its 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.
There is no Retirement Benefit Policy for directors, other than the payment of statutory superannuation.
30
Azure Minerals Limited Annual Report 2022 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, Mr B Dickson is an executive whose remuneration must be
disclosed under the Corporations Act 2001.
Key management personnel of the Group
Short-Term
Post-
Employment
Share-based
Payments
Total
Share Based
Payment %
Cash, salary
& fees
Cash Bonus
Non-
monetary
Benefits
Superannuation
Options
Name
Directors
Brian Thomas – Chairman (appointed 1 March 2021)
2022
2021
103,720
21,666
Anthony Rovira – Managing Director
2022
2021
413,000
384,750
Hansjörg Plaggemars –Non Executive
2022
2021
45,000
48,750
–
–
–
–
–
–
Annie Guo – Non Executive (appointed 1 March 2021)
2022
2021
45,000
15,000
–
–
Peter Ingram – Non Executive (resigned 30 June 2021)
2022
2021
–
52,500
–
–
–
–
–
–
–
–
–
–
–
–
Wolf Martinick – Non Executive (resigned 27 November 2020)
2022
2021
–
21,726
–
–
–
–
6,504
2,058
27,500
25,000
–
–
–
356
–
4,988
–
2,064
–
–
–
–
–
–
–
–
–
–
–
–
Wayne Bramwell - Non Executive (appointed 14 October 2020, resigned 18 February 2021)
2022
2021
Executives
–
17,160
Brett Dickson – Company Secretary
2022
2021
Total
2022
2021
218,900
172,125
825,620
733,677
–
–
–
–
–
–
–
–
–
–
–
–
–
1,274
–
–
34,004
35,740
–
–
–
–
–
–
110,224
23,724
440,500
409,750
45,000
48,750
–
–
–
57,488
–
23,790
–
18,434
218,900
172,125
859,624
769,417
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
31
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 and 1,500,000 options were exercised (2021:
2,100,000). During the year 250,000 options lapsed or were forfeited (2021: nil).
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 (2021: Nil). Performance based remuneration for executives is
detailed later in section E of this report.
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.
•
Term of agreement – to 31 December 2022.
• Base salary, exclusive of superannuation,
• Fixed fee, $15,300 per month, with additional
of $413,000 to be reviewed annually by the
remuneration committee.
• 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.
amounts payable for changes to scope of works.
• 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 (2021: nil). Refer to Note 23
of the Notes to the Consolidated Financial Statements for more information.
1,350,000 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 250,000 (2021: Nil) 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.
32
Azure Minerals Limited Annual Report 2022 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 2021 and 2022 financial years
No STI payment was awarded for the 2021 and 2022 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.
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
No shares were issued on exercise of compensation options during the year.
33
Option holdings of key management personnel
2022
Directors
Balance at
beginning
of year
Granted as
Remuneration
Options
Exercised
Options
Lapsed
Balance at
end of year
Vested at 30 June
Vested &
Exercisable
Unvested
Brian Thomas
–
Anthony Rovira
1,500,000
Hansjörg Plaggemars
Annie Guo
–
–
Peter Ingram 1
750,000
Executives
Brett Dickson
1,050,000
Total
3,300,000
–
–
–
–
–
–
–
–
(500,000)
–
–
–
–
–
–
(500,0000)
(250,000)
–
–
1,000,000
1,000,000
–
–
–
–
–
–
(350,000)
–
700,000
700,000
(1,350,000)
(250,000)
1,700,000
1,700,000
Shareholdings of key management personnel
Balance
1 July
Granted
On Exercise
of Options
Purchased /
Sold
Balance
30 June*
Balance
Indirectly
Held
Ord
Ord
Ord
Ord
Ord
Ord
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
500,000
203,667
2,209,669
109,669
–
–
500,000
–
–
–
–
–
60,000
60,000
–
–
1,500,055
1,500,055
1,265,000
215,000
350,000
(350,000)
375,000
375,000
1,350,000
(146,333)
5,409,724
2,259,724
2022
Directors
Brian Thomas
Anthony Rovira
1,506,002
Hansjörg Plaggemars
60,000
Annie Guo
Peter Ingram 1
Wolf Martinick 2
Executives
Brett Dickson
Total
–
1,000,055
1,265,000
375,000
4,206,057
* Or date of retirement from the board.
1. Peter Ingram resigned on 30 June 2021 and exercised 500,000 options on 24 September 2021,
in accordance with the rules of the Company’s Employee Share Option Plan.
2. Wolf Martinick retired from the board on 24 November 2020.
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 an officer. During the year IonicRE paid sub-lease
fees totalling $12,721 (2021: $9,255).
34
Azure Minerals Limited Annual Report 2022 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
Number
Balance
at end of
the year
Number
Vested and
exercisable
at end of
the year
Number
2022
19 Dec ‘18
30 Nov ‘21
26 Nov ‘19
30 Nov ‘22
29
20.5
10.3
5.8
Weighted average exercise price
1,100,000
2,200,000
3,300,000
$0.23
–
–
–
–
(850,000)
(250,000)
–
–
(500,000)
–
1,700,000
1,700,000
(1,350,000)
(250,000)
1,700,000
1,700,000
$0.26
–
$0.205
$0.205
The weighted average remaining contractual life of share options outstanding at the end of the period was 0.42 years
(2021: 1.7 years)
Total expenses arising from share-based payment transactions recognised during the year were nil (2021: Nil).
35
COMPANY’S PERFORMANCE
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 2022.
Company’s Share Price Performance
$0.50
$0.45
$0.40
$0.35
$0.30
$0.25
$0.20
$0.15
$0.10
$0.05
$0.00
1
2
l
u
J
1
2
g
u
A
1
2
p
e
S
1
2
t
c
O
1
2
v
o
N
1
2
c
e
D
2
2
n
a
J
2
2
b
e
F
2
2
r
a
M
2
2
r
p
A
2
2
y
a
M
2
2
n
u
J
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 2022.
Basic loss per share
* After 1:20 share consolidation
2022
(6.45)
2021
(6.28)
2020
(3.75)
2019
(8.77)
2018
(10.06) *
VOTING AND COMMENTS MADE AT THE COMPANY’S 2021 ANNUAL GENERAL MEETING
Azure Minerals Limited received approximately 97.25% of “yes” votes on its remuneration report for the 2021
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 AND EXECUTIVES
No loans have been provided to directors or executives.
END OF AUDITED REMUNERATION REPORT
36
Azure Minerals Limited Annual Report 2022
SHARES UNDER OPTION
At the date of this report there are 5,000,000 unissued ordinary shares in respect of which options are
outstanding.
Balance at the beginning of the year
Total
number of
options
6,750,000
Share option movements during the year
Issued
Other
Options Exercised
Options Lapsed
–
–
(1,500,000)
(1,500,000)
(250,000)
(250 ,000)
Total options issued, exercised and lapsed in the year to 30 June 2022
(1,750,000)
Total number of options outstanding as at 30 June 2022 and at the date of this report
5,000,000
The balance is comprised of the following:
Date granted
26 Nov 2019
22 Jun 2021
22 Jun 2021
22 Jun 2021
Expiry date
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)
Number of options
20.5
49.0
57.0
65.0
2,000,000
500,000
1,000,000
1,500,000
5,000,000
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 $44,004 (2021: $39,051) 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.
37
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
70,561
44,545
Consolidated
2022 $
2021 $
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
AUDITOR’S INDEPENDENCE
–
70,561
42,887
87,432
63,780
63,780
17,252
17,252
A copy of the auditor’s independence declaration as required under section 307c of the Corporations Act 2001
is set out on page 86.
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, 29 September 2022
38
Azure Minerals Limited Annual Report 2022 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 2021/2022
financial year (Reporting Period). The information in this statement is current at 28 September 2022. This
statement was approved by a resolution of the Board on 28 September 2022.
39
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.
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).
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.
Whole organisation (including Board members)
6 out of 17 (35%)
Senior executive positions
Board
0 out of 4 (0%)
1 out of 4 (25%)
Proportion of women
40
Azure Minerals Limited Financial Statements 2022 RECOMMENDATION 1.6
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 not established a separate Nomination and Remuneration Committee. 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 27.
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 with specialist knowledge as and when required to
address any areas where the Board does not collectively possess the relevant attribute.
41
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 25.
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
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 in its capacity as the Nomination Committee, 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 full board in its capacity as the Nomination Committee, 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.
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.
42
Azure Minerals Limited Financial Statements 2022 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 has not established a separate Audit and Risk Committee. The Board believed that there would be no
efficiencies or other benefits gained by establishing a separate 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.
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 2021 and
the full-year ended 30 June 2022, 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.
43
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
44
Azure Minerals Limited Financial Statements 2022 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.
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.
45
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 29 of the Company’s Annual Report for year ended 30 June 2022.
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.
46
Azure Minerals Limited Financial Statements 2022 FINANCIAL STATEMENTS
47
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
YEAR ENDED 30 JUNE 2022
Continuing Operations
Other Income
Expenditure
Depreciation
Lease Amortisation
Salaries and employee benefits expense
Director’s fees
Exploration expenses
Travel expenses
Promotion expenses
Administration expenses
Consulting expenses
Insurance expenses
Lease Interest
Convertible Note Interest
Fair Value adjustments of convertible notes
Share based payment expense
Other expenses
Loss before income tax from continuing operations
Income tax expense
Loss for the year from continuing operations
Discontinued Operations
Loss after income tax from discontinued operations
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
Other comprehensive income/(loss) for the year net of tax
Total comprehensive loss for the Year
Notes
Consolidated
2022
$
2021
(Restated)
$
1,646
40,871
5
5
5
23
6
7
(130,821)
(109,534)
(1,130,563)
(155,000)
(40,020)
(122,422)
(695,079)
(156,476)
(15,112,330)
(8,238,416)
(62,008)
(274,320)
(712,571)
(174,209)
(86,759)
(37,419)
–
–
(121,286)
(180,195)
(20,660)
(183,844)
(513,396)
(85,153)
(53,207)
(23,323)
(120,512)
(5,517,242)
(86,607)
(121,197)
(18,285,369)
(15,936,683)
–
–
(18,285,369)
(15,936,683)
(1,737,219)
(963,495)
(20,022,588)
(16,900,178)
273,789
273,789
520,359
520,359
(19,748,799)
(16,379,819)
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)
(5.89)
(5.92)
Loss per share from discontinued operations attributable to the ordinary equity holders of the company
Basic loss per share (cents per share)
19
(0.56)
(0.36)
Loss per share from attributable to the ordinary equity holders of the company
Basic loss per share (cents per share)
19
(6.45)
(6.28)
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.
48
Azure Minerals Limited Financial Statements 2022 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Assets of disposal groups classified as held for sale
Total Current Assets
Non-Current Assets
Investments
Security Deposit
Office right of use
Plant and equipment
Notes
Consolidated
2022
$
2021
$
15
11
10,600,561
30,267,222
313,544
876,900
9,264,636
–
20,178,741
31,144,122
948
4,500
383,370
244,117
948
4,500
492,904
369,594
Capitalised exploration expenditure
8
7,458,182
15,216,335
Liabilities directly associated with assets classified as held for sale
11
8,091,117
16,084,281
28,269,858
47,228,403
10
1,626,303
1,641,257
115,490
245,554
51,887
120,558
198,983
–
2,039,234
1,960,798
267,302
136,144
403,446
382,791
121,623
504,414
2,442,680
2,465,212
25,827,178
44,763,191
12
13
13
143,016,012
142,324,512
4,256,748
3,861,673
(121,445,582)
(101,422,994)
25,827,178
44,763,191
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Lease Liability
Provisions
Total Current Liabilities
Non-Current Liabilities
Lease Liability
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Total Equity
The above Consolidated Statement of Financial Position is to be read in conjunction with the Notes
to the Financial Statements.
49
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
AS AT 30 JUNE 2022
30 June 2022
Contributed
Equity
Share
Option
Reserve
Financial
Asset
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
$
$
$
$
$
$
Balance at 1 July 2021
142,324,512
5,729,318
(39,996)
(1,827,649)
(101,422,994)
44,763,191
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 (Note 12)
691,500
Share based payments (Note 23)
–
Total transactions with owners
691,500
–
–
–
–
–
121,286
121,286
–
–
–
–
–
–
–
–
(20,022,588)
(20,022,588)
273,789
273,789
–
–
273,789
273,789
273,789
(20,022,588)
(19,748,799)
–
–
–
–
–
–
691,500
121,286
812,786
Balance as at 30 June 2022
143,016,012
5,850,604
(39,996)
(1,553,860)
(121,445,582)
25,827,178
30 June 2021
Contributed
Equity
Share
Option
Reserve
Financial
Asset
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
Total
$
$
$
$
$
$
Balance at 1 July 2020
87,760,331
5,642,711
(39,996)
(2,348,008)
(84,522,816)
6,492,222
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 23)
–
Total transactions with owners
54,564,181
86,607
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
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
50
Azure Minerals Limited Financial Statements 2022 CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
For the Year Ended 30 June 2022
Notes
Consolidated
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Other income
Expenditure on mining interests
2022
$
2021
$
(3,483,276)
(1,980,637)
2,447
–
3,721
52,580
(16,179,962)
(8,249,544)
Net Cash Outflow from Operating Activities
15(b)
(19,660,791)
(10,173,880)
Cash Flows from Investing Activities
Payments for plant and equipment
Acquisition Payments for projects
Security Deposit
Proceeds from sale of plant and equipment
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
Interest expense
Lease payments
8
(47,239)
(330,623)
–
1,024
101,133
(275,705)
(322,934)
(228,559)
(4,500)
–
104,260
(451,733)
–
–
392,500
–
–
41,000,000
(1,511,062)
958,000
(232,534)
(132,858)
Net Cash Inflow from Financing Activities
392,500
40,081,546
Net Increase/Decrease 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
(19,543,996)
29,455,933
30,267,222
(122,665)
849,549
(38,260)
Cash and Cash Equivalents at End of Year
15(a)
10,600,561
30,267,222
The above Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
51
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.
52
Azure Minerals Limited Financial Statements 2022 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.
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
53
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.
54
Azure Minerals Limited Financial Statements 2022 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.
55
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.
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.
56
Azure Minerals Limited Financial Statements 2022 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.
57
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.
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.
58
Azure Minerals Limited Financial Statements 2022 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. Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount
will be recovered principally through a sale transaction rather than through continued use. They are
measured at the lower of their carrying amount and fair value less costs of disposal. For non-current
assets or assets of disposal groups to be classified as held for sale, they must be available for immediate
sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and
assets of disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent
increases in fair value less costs of disposal of a non-current assets and assets of disposal groups, but not
in excess of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest
and other expenses attributable to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale
are presented separately on the face of the statement of financial position, in current assets. The liabilities
of disposal groups classified as held for sale are presented separately on the face of the statement of
financial position, in current liabilities.
t. Discontinued operations
A discontinued operation is a component of the consolidated entity that has been disposed of or is
classified as held for sale and that represents a separate major line of business or geographical area of
operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations,
or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are
presented separately on the face of the statement of profit or loss and other comprehensive income.
u. 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.
59
2. Financial Risk Management
OVERVIEW
The Company and Group have exposure to the following risks from their use of financial instruments:
•
•
credit risk
liquidity 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.
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:
Consolidated Carrying Amount
Trade and other receivables
Cash and cash equivalents
Note
2022
$
2021
$
259,308
332,445
15
10,600,561
30,267,222
60
Azure Minerals Limited Financial Statements 2022 Expected credit losses
None of the Company’s other receivables are past due (2021: 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 2022 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 (2021: $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 2022
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
2-5 years
More than
5 years
Trade and other payables
1,626,303
1,626,303
1,626,303
–
–
–
Lease Liability
30 June 2021
382,792
382,792
57,838
57,651
110,608
156,695
Trade and other payables
1,641,257
1,641,257
1,641,257
–
–
–
Lease Liability
503,349
603,954
61,784
64,108
130,610
347,452
–
–
–
–
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.
61
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
Net exposure
2022
2021
USD
MXD
240,223
240,223
25,943
266,166
266,166
25,943
266,166
266,166
USD
246,056
56,878
302,934
302,934
MXD
246,056
56,878
302,934
302,934
The following significant exchange rates applied during the year:
USD/AUD
MXD/AUD
Sensitivity analysis
Average rate
Reporting date spot rate
2022
2021
1.3788
0.0679
1.3406
0.0646
2022
1.4510
0.07200
2021
1.3321
0.0671
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 2021.
Consolidated
30 June 2022
USD
30 June 2022
USD
Profit or loss
26,616
30,293
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.
62
Azure Minerals Limited Financial Statements 2022 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:
Consolidated Carrying Amount
Variable rate instruments
Short term cash deposits
2022
2021
10,558,726
30,206,279
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 2022 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 $107,097 higher /lower (2021 – change of 100 basis
points $302,672 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
Trade and other receivables
Cash and cash equivalents
Other financial assets
Trade and other payables
Lease liability
2022
2021
Carrying
amount
Fair value
Carrying
amount
Fair value
313,544
313,544
876,900
876,900
10,600,561
10,600,561
30,267,222
30,267,222
948
948
948
948
(1,626,303)
(1,626,303)
(1,641,257)
(1,641,257)
(382,792)
(382,792)
(503,349)
(503,349)
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.
63
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:
Discontinued Operations
The Mexican subsidiaries of the Group have been reclassified as discontinued operations during the year as the
Group have discontinued all operations in the geographical location of Mexico.
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.
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. No options were issued in this financial year.
Asset acquisition
The Group has determined that the acquisition of the Andover, Turner River, Meentheena and Coongan
projects from the Creasy Group in the 2020/21 financial year together with the acquisition of the Barton and
Christmas Well projects in the 2021/22 financial year from other parties are 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 assets 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.
64
Azure Minerals Limited Financial Statements 2022 4. Segment Information
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.
2022
Revenues
Loss
Non-current assets
Total assets
Total liabilities
2022
Revenues
Loss
Non-current assets
Total assets
Total liabilities
Australia
$
Mexico
$
Total
$
1,646
-
1,646
(18,285,369)
(1,737,219)
(20,022,588)
8,091,117
19,005,222
(2,390,793)
–
8,091,117
9,264,636
28,269,858
(51,887)
(2,442,680)
Australia
$
Mexico
$
40,871
(15,936,683)
7,656,700
38,281,288
(2,351,457)
210,938
(963,495)
8,427,581
8,947,115
Total
$
251,809
(16,900,178)
16,084,281
47,228,403
(113,755)
(2,465,212)
65
5. Expenses
Loss before income tax includes the following specific expenses
Depreciation of plant and equipment
Amortisation of right to use asset
Exploration expenditure
Superannuation
6. Income Tax
(a) Income tax expense
Current tax
Deferred tax
2022
$
2021 (Restated)
$
130,821
109,534
15,112,330
203,600
40,020
122,422
8,238,416
87,882
30 June 2022
30 June 2021
$
$
–
–
–
–
–
–
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
(20,022,588)
(16,900,179)
Tax at the Australian tax rate of 27.5% (2021: 27.5%)
(5,506,212)
(4,647,549)
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
33,354
67,508
23,817
1,079
(5,405,350)
(4,622,653)
(135,727)
(113,217)
5,541,077
4,735,870
–
–
14,915
(10,201)
104,967
16,755,424
10,547,505
600,100
14,324
(10,201)
87,617
12,842,410
10,261,875
600,100
28,012,710
23,796,125
Deferred Tax Liabilities (at 27.5%)
–
–
66
Azure Minerals Limited Financial Statements 2022 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.
7. Discontinuted Operations
On 30 May 2022 the Group reported that it had reached agreement with Bendito Resources Inc (“Bendito”) for
the sale of its Mexican base and precious metals projects. This sale closed on 21 July 2022, after the reporting
period, for a combination of cash and shares valued at A$20 million (the “Transaction”).
Financial performance information
Other Income
Expenditure
Depreciation
Salaries and employee benefits expense
Exploration expenses
Travel expenses
Administration expenses
Insurance expenses
Other expenses
30 June 2022
30 June 2021
$
$
7,229
210,938
(13,214)
(457,303)
(16,616)
–
(1,038,651)
(858,082)
(3,913)
(161,103)
(2,145)
(68,119)
–
(278,862)
–
(20,873)
Loss before income tax from discontinued operations
(1,737,219)
(963,495)
Income tax expense
Loss for the year from discontinued operations
–
–
(1,737,219)
(963,495)
Cash flow information
Net cash used in operating activities
Net cash from investing activities
Net decrease in cash and cash equivalents from discontinued
operations
(1,845,112)
(1,319,043)
236,777
108,824
(1,608,335)
(1,210,219)
67
8. Capitalised Exploration Expenditure (Non-Current)
At Cost
Reconciliations
30 June 2022
30 June 2021
$
$
7,458,182
15,216,335
Movement in the carrying amounts of capitalised exploration expenditure between the beginning and end
of the current financial year
Opening net book amount
Additions(a)
Disposals
15,216,335
772,443
7,889,184
6,828,559
–
(43,321)
Transfer to assets of disposal group classified as held for sale
(8,643,892)
–
Foreign exchange translation adjustment
Closing net book amount
113,296
541,913
7,458,182
15,216,335
a. During the 2022 financial year the company issued 1,150,000 fully paid ordinary shares with a fair value of
$299,000 and $20,000 cash as consideration to acquire E40/393, part of the Barton exploration project in
Western Australia. An additional $10,623 Western Australian stamp duty was assessed and paid. A further
$300,000 was paid as consideration to acquire applications for E40/414 and E40/425, also part of the
Barton exploration project in Western Australia.
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.
Recovery of the capitalised amount is dependent upon successful development and commercial exploitation,
or alternatively, sale.
9. 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
Equity Holding*
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.
100%
Mexico
Mexico
Mexico
Mexico
Mexico
Australia
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2022
Ordinary
100%
100%
100%
100%
100%
2021
100%
100%
100%
100%
100%
100%
*Percentage of voting power is in proportion to ownership.
68
Azure Minerals Limited Financial Statements 2022 10. Trade and Other Payables (Current)
Trade payables
2022
$
2021
$
(1,626,303)
(1,626,303)
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.
11. Assets and Liabilities of Disposal Group Classified as Held for Sale
Assets
Cash and cash equivalents
Trade and other receivables
Plant and equipment
Capitalised exploration expenditure
Liabilities
Trade and other payables
2022
$
109,093
480,851
30,800
8,643,892
9,264,636
51,887
2021
$
–
–
–
–
–
–
The assets and liabilities identified above represents the assets and liabilities of the Group’s operations in
Mexico which were sold on 21 July 2022 for a combination of cash and shares valued at A$20 million. Refer to
note 18 for further information.
69
12. Contributed Equity
a. Share capital
Ordinary shares fully paid
2022
2021
Number of
shares
$
Number of
shares
$
Total consolidated contributed equity
310,735,721
143,016,102
308,085,721
142,324,512
b. Movements in ordinary share capital
1 July opening balance
Issue at $0.10 per share
Issue at $0.74 per share
308,085,721
142,324,512
162,192,617
87,760,331
-
-
-
-
40,000,000
4,000,000
50,000,000
37,000,000
Issue for projects (Note 8 and 15)
1,150,000
299,000
40,000,000
6,600,000
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
500,000
1,000,000
102,500
290,000
-
-
-
-
-
-
500,000
250,000
1,350,000
102,500
72,500
783,000
13,793,104
7,517,242
-
(1,511,061)
310,735,721
143,016,012
308,085,721
142,324,512
Funds raised from the exercise of options during the 2022 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.
70
Azure Minerals Limited Financial Statements 2022 c. Movements in unlisted options on issue
Exercise Price
(cents)
Expiry
Opening
Balance
Issued
Exercised
Lapsed
Closing
Balance
2022
30 November 2021
1,250,000
30 November 2022
2,500,000
29
20.5
49
57
65
30 June 2024
30 June 2024
30 June 2024
Exercise Price
(cents)
Expiry
58
29
30 November 2020
30 November 2021
20.5
30 November 2022
4,400,000
500,000
1,000000
1,500,000
6,750,000
Opening
Balance
2,050,000
2,200,000
–
–
–
–
–
–
(1,000,000)
(250,000)
–
(500,000)
–
–
–
–
–
–
–
2,000,000
500,000
1,000,000
1,500,000
(1,500,000)
(250,000)
5,000,000
2022
Issued
Exercised
Lapsed
Closing
Balance
–
–
–
(1,350,000)
(700,000)
–
(250,000)
(700,000)
1,250,000
(500,000)
(1,400,000)
2,500,000
49
57
65
30 June 2024
30 June 2024
30 June 2024
–
–
–
500,000
1,000000
1,500,000
–
–
–
–
–
–
500,000
1,000000
1,500,000
8,650,000
3,000,000
(2,100,000)
(2,800,000)
6,750,000
Further information on options issued is set out in Note 23
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.
71
13. 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
2022
$
2021
$
(101,422,994)
(84,522,816)
(20,022,588)
(16,900,178)
(121,445,582)
(101,422,994)
5,729,318
121,286
5,642,711
86,607
5,850,604
5,729,318
(39,996)
(39,996)
–
–
(39,996)
(39,996)
(1,827,649)
(2,348,008)
273,789
520,359
(1,553,860)
(1,827,649)
Total Reserves
4,256,748
3,861,673
a. Nature and purpose of reserves
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. Reserves and Accumulated Losses
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
72
Azure Minerals Limited Financial Statements 2022 15. Statement of Cash Flows
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
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
2022
$
2021
$
41,835
10,558,726
10,600,561
60,944
30,206,278
30,267,222
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.
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
Profit on sale of plant and equipment
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
(20,022,588)
(16,900,178)
-
144,035
121,286
-
35,119
-
(11,023)
-
7,823
(2,248)
5,712
61,093
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
Net cash outflow from operating activities
(19,660,791)
(10,173,880)
(c) Non-cash financing and investing activities
During the 2022 period:
•
1,150,000 shares were issued as part consideration to acquire E40/393, part of the Barton exploration project.
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.
There have been no other non-cash financing and investing activities during the 2022 year (2021: Nil).
73
16. Commitments
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
17. Contingencies
2022
$
2021
$
286,000
85,957
There are no other material contingent liabilities or contingent assets of the company at reporting date
(2021: Nil).
18. Events Occuring After Reporting Date
On 30 May 2022 the Group reported that it had reached agreement with Bendito Resources Inc (“Bendito”) for
the sale of its Mexican base and precious metals projects. This sale closed on 21 July 2022 for a combination of
cash and shares valued at A$20 million (the “Transaction”).
In connection with the Transaction, Azure will receive A$10 million in cash and A$10 million worth of fully paid
ordinary shares in Bendito (“Bendito Shares”) in two tranches within an 18 month period. At closing of the
Transaction (“Closing”), Azure received an immediate cash payment of A$4 million and was issued 11,200,000
Bendito Shares (approximately 20% of the issued capital of Bendito and valued at A$4 million). A second tranche
of A$6 million in cash and A$6 million worth of Bendito Shares is payable to Azure within 18 months of Closing.
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.
74
Azure Minerals Limited Financial Statements 2022
19. Loss Per Share
a. Reconciliation of earnings to profit or loss
Loss used in calculating basic loss per share from continuing
operations
Basic loss per share (cents per share)
Loss used in calculating basic loss per share from discontinued
operations
Basic loss per share (cents per share)
Loss used in calculating basic loss per share attributable to
owners of IonicRE
2022
$
2021
$
(18,285,369)
(15,936,683)
(5.89)
(5.92)
(1,737,219)
(963,495)
(0.56)
(0.36)
(20,022,588)
(16,900,178)
Basic loss per share (cents per share)
(6.45)
(6.28)
Number of shares Number of shares
2022
2021
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
310,204,899
268,954,233
(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.
20. 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
2022
$
2021
$
63,780
70,561
134,341
(0.56)
17,252
44,545
61,797
(0.36)
–
42,887
75
21. Key Management Personnel Disclosures
(a) Compensation of key management personnel by
compensation
Short-term
Post-employment
Share-based payment
2022
$
2021
$
825,620
34,004
–
859,624
733,677
35,740
–
769,417
For further information refer to the Remuneration Report included as part of the Directors’ Report.
22. Related Party Disclosure
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
Equity Holding*
Azure Mexico Pty Ltd
Australia
Minera Piedra Azul, S.A. de C.V. Mexico
Minera Capitana, S.A. de C.V.
Mexico
Servicios AzuPerth, S.A. de C.V. Mexico
Mineral Azure S.A. de C.V.
Mineral Tlali SAPI. de C.V.
Mexico
Mexico
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
*Percentage of voting power is in proportion to ownership.
2022
%
100
100
100
100
100
100
2021
%
100
100
100
100
100
100
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 $12,721 (2021: $9,255).
76
Azure Minerals Limited Financial Statements 2022 23. 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 no options were
issued pursuant to the plan (2021: 3,000,000).
Set out below are summaries of options issued under the Employee Share Plan.
Grant
Date
Expiry
Date
Exercise
Price
Value per
option at
grant date
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
(cents)
(cents)
Number
Number
Number
Number
Number
Number
2022
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
49
57
65
15.9 a
15.2 b
14.6 c
Weighted average exercise price
500,000
1,000,000
1,500,000
3,000,000
$0.60
–
–
–
–
2021
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
49
57
65
15.9 a
15.2 b
14.6 c
Weighted average exercise price
–
–
–
–
500,000
1,000,000
1,500,000
3,000,000
$0.60
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
500,000
500,000
1,000,000
1,500,000
–
–
3,000,000
500,000
$0.60
$0.49
500,000
500,000
1,000,000
1,500,000
–
–
3,000,000
500,000
$0.60
$0.49
The weighted average remaining contractual life of share options outstanding at the end of the period was 2.0
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:
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 (%)
2021
2021
2021
Trench a
Trench b
Trench c
49.0
3.0
27.0
124
0.21
57.0
3.0
27.0
124
0.21
65.0
3.0
27.0
124
0.21
77
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.
The total expenses arising from the employee and consultants share-based payment transactions recognised
during the year were as follows:
Consolidated
2022
$
2021
$
Options issued pursuant to the Plan
121,286
86,607
b. Director, executive and employee options
Set out below are summaries of current directors, executives & employees options granted.
Grant
Date
Expiry
Date
Exercise
Price
Value per
option at
grant date
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
(cents)
(cents)
Number
Number
Number
Number
Number
Number
2022
9 Dec ‘18
30 Nov ‘21
29
26 Nov ‘19 30 Nov ‘22
20.5
10.3
5.8
1,250,000
2,500,000
3,750,000
–
–
–
(1,000,000)
(250,000)
–
–
(500,000)
–
2,000,000
2,000,000
(1,500,000)
(250,000)
2,000,000
2,000,000
Weighted average exercise price
$0.23
$0.26
$0.29
$0.205
$0.205
$0.49
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
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
1,250,000
(500,000)
(1,400,000)
2,500,000
2,500,000
(2,100,000)
(2,800,000)
3,750,000
3,750,000
$0.46
$0.32
$0.23
$0.23
The weighted average remaining contractual life of share options outstanding at the end of the period was 0.42
years (2021: 1.09 years).
Fair value of options granted
No options were issued to directors and executives during the 2022 or 2021 financial years.
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 total expenses arising from share-based payment transactions recognised during the year were as follows:
Consolidated
Options issued to directors and executives
–
–
2022
$
2021
$
78
Azure Minerals Limited Financial Statements 2022 24. 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
2022
$
2021
$
10,914,105
34,992,689
(1,987,347)
(2,390,793)
32,601,896
39,988,655
47,114,589
(1,847,043)
(2,351,456)
44,763,133
143,016,012
5,810,608
142,324,512
6,053,510
(116,224,724)
(103,614,889)
32,601,896
44,763,133
b. Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities or guarantees as at 30 June 2022 or 30 June 2021.
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.
79
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. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
b. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its
performance for the year ended on that date.
2. There are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable.
3. 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.
4. 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:
Yours sincerely,
Brian Thomas
Chairman
Perth, 29 September 2022
80
Azure Minerals Limited Financial Statements 2022 INDEPENDENT AUDITOR’S REPORT
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITORS 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 2022, 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)
(ii)
Giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its
financial performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the 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.
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.
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.
1
82
Azure Minerals Limited Financial Statements 2022
Recoverability of Capitalised Exploration Expenditure
Key audit matter
How the matter was addressed in our audit
At 30 June 2022 the carrying value of capitalised
Our procedures included, but were not limited to:
exploration expenditure was disclosed in Note 8.
•
Obtaining a schedule of the area of interest
As the carrying value of the exploration assets
held by the Group and assessing whether the
represent a significant asset of the Group, we
rights to tenure of the area of interest
considered it necessary to assess whether any facts or
remained current at balance date;
circumstances exist to suggest that the carrying
amount of these assets may exceed its recoverable
amount.
•
Considering the status of the ongoing
exploration programmes in the respective
area of interest by holding discussions with
Judgement is applied in determining the treatment of
management, and reviewing the Group’s
exploration expenditure in accordance with Australian
exploration budgets, ASX announcements and
Accounting Standard AASB 6 Exploration for and
director’s minutes;
Evaluation of Mineral Resources. In particular, whether
facts and circumstances indicate that the exploration
and evaluation assets should be tested for impairment.
•
Considering whether any area of interest had
reached a stage where a reasonable
assessment of economically recoverable
reserves existed;
•
Considering whether any facts or
circumstances existed to suggest impairment
testing was required; and
•
Assessing the adequacy of the related
disclosures in Note 1 and Note 8 to the
financial report.
83
Disposal of Mexican Assets
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 7 and Note 11, in June 2022, the
Our procedures included, but were not limited to:
directors of Azure Minerals Limited resolved to sell the
Group’s Mexican subsidiaries, with a settlement date in
July 2022. The associated asset and liabilities have
been recognised as ‘held for sale’ in the 30 June 2022
statement of financial position.
•
Examining the underlying documentation to
support the transaction to consider if the
classification as ‘held for sale’ is
appropriate and in line with the criteria in
AASB 5 Non-current Assets Held for Sale and
This was determined to be a key audit matter because
Discontinued Operations (“AASB 5”);
the sale of Mexican Assets represents a significant
unique transaction to the Group.
•
Evaluating whether the disposal meets the
criteria of ‘Discontinued Operations’ given
the disposal represents a separate
geographical area of operation;
•
Considering whether the reclassification
indicates impairment testing is required
under AASB 5; and
•
Assessing the adequacy of the related
disclosures in Note 7 and Note 11 to the
financial report including the restatement of
comparatives for the discontinued
operations.
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 2022, 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.
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.
84
Azure Minerals Limited Financial Statements 2022
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 25 of the directors’ report for the
year ended 30 June 2022.
In our opinion, the Remuneration Report of Azure Minerals Limited, for the year ended 30 June 2022,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth, 29 September 2022
85
DECLARATION OF INDEPENDENCE
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
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 2022, 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
Perth, 29 September 2022
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.
1
86
Azure Minerals Limited Financial Statements 2022
ASX ADDITIONAL INFORMATION
The number of shareholders, by size of holding, in each class of share as at 13 September 2022 are:
1
1,001
5,001
10,001
100,001
–
–
–
–
–
1,000
5,000
10,000
100,000
and over
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:
Ordinary shares
Number of holders Number of shares
1,150
1,688
882
1,866
283
5,869
2,128
502,880
4,784,960
6,897,297
64,741,375
233,809,209
310,735,721
1,538,165
Listed ordinary shares
Number of shares
Percentage of
ordinary shares
46,200,000
14.87
HARMANIS HOLDINGS PTY LTD
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