ANNUAL REPORT 2023
CORPORATE INFORMATION
ABN 46 106 346 918
Share Register
Computershare Investor Services Pty Ltd
Level 17
221 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
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
CONTENTS
Chairman’s Letter
Review of Operations
Directors' Report
Financial Statements
• Approach to Corporate Governance
• 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
2
4
18
38
46
47
48
49
50
85
86
91
92
1
CHAIRMAN’S LETTER
Dear Shareholders,
It is with a great deal of pleasure that on behalf of the
team at Azure Minerals we deliver the Annual Report for
Financial Year 2023.
It has been a momentous year in which your company
was able to achieve outstanding value for shareholders,
courtesy of the relatively recent lithium exploration
success at the Andover project.
The discovery of numerous broad, high-grade lithium
intersections, such as 209.4m @ 1.42% Li2O in hole
ANRD0017 (post period-end), have firmly entrenched
Andover amongst the most significant lithium
exploration projects, globally. These expansive drill
hits position Azure to meet the strategic objective of
defining a +100Mt lithium resource at Andover.
Whilst much has been made of Azure’s success, it is
important to note that the story of discovery at Andover
is still very young. The maiden lithium pegmatite
mapping and sampling campaign first returned results
in October 2022 and drilling only commenced in March
2023, well inside the 12-month reporting period.
The relatively short lithium exploration timeframe
demonstrates that, despite a large-scale campaign
with multiple rigs on site, Andover remains
underexplored. Indeed, the Company has a host of
exciting targets which are yet to be drilled.
It is hard to quantify the extent of the value which
has been created, however one yardstick which all
companies measure themselves by, is share price
performance. Azure commenced the financial year
with shares in the Company valued at roughly $0.18
per share, rising by more than 730% over the 12-month
period to close 30 June 2023, at ~$1.50 per share. I am
pleased to see that, following year-end, considerably
more value has continued to be added on top of this
already impressive growth.
2
The benefits created by Azure’s discovery extend
well beyond returns to investors. Azure has always
been conscious of our social licence to operate and
has endeavoured to deliver ongoing value to the local
communities within which we operate. Wherever
possible, we employ local staff and actively encourage
our contractors to do the same. The discovery at
Andover has real potential to return long-lasting
benefits to the community of Roebourne and the West
Pilbara region. Azure would like to specifically mention
the support from the Ngarluma people, the traditional
owners of the land on which we are exploring, and the
Ngarluma Aboriginal Corporation, for without their
cooperation, exploration would not be possible.
Finally, I would like to extend my thanks on behalf of all
shareholders once again to our Managing Director Tony
Rovira and the exploration and development team who
have been able to successfully identify the potential
for lithium at the Andover Project, which was, and
continues to be, a highly attractive nickel project.
The 2024 Financial Year has already got off to a
flying start with the Company well capitalised and
considerable exploration activity on the agenda.
Management is very excited for the future and I
encourage all shareholders to share in this excitement.
Thank you again for your support for Azure Minerals.
Yours sincerely,
Brian Thomas
Chairman
Azure Minerals Limited Annual Report 2023 It is hard to quantify the extent of the value which has been created,
however one yardstick which all companies measure themselves by,
is share price performance.
Azure commenced the financial year
with shares in the Company valued
at roughly $0.18 per share, rising by
more than 730% over the 12-month
period to close 30 June 2023, at
~$1.50 per share.
3
Figure 1: Locations of Azure Minerals’ Projects
4
HobartSydneyPerthCanberraAdelaideBrisbaneDarwinCairnsMelbourneKalgoorlieBartonLavertonCoonganTurner RiverLeonoraMenziesPort HedlandKarrathaAndoverAzure Minerals Limited Annual Report 2023 REVIEW OF OPERATIONS
AUSTRALIA
Azure holds interests in four projects targeting
Azure also holds 70% interests in the Turner River and
commodities including lithium, nickel and gold
Coongan Lithium and Gold Projects in the northern and
located in the Pilbara and Eastern Goldfields
eastern Pilbara (see Figure 2 next page), with the Creasy
regions of Western Australia (see Figure 1).
Group holding the balance, and 100%-ownership of the
The Company’s flagship asset is its 60%-owned
Barton Gold Project.
Andover joint venture, with prominent mining
Barton comprises four granted Exploration Licences
entrepreneur Mr Mark Creasy (“Creasy Group”)
and four Exploration Licence Applications that in total
owning the remaining 40% of the project. Andover is
cover 888km². The Project is situated adjacent to
a globally significant lithium exploration project and
the historical gold mining town of Kookynie, located
is also host to two nickel-copper-cobalt deposits.
approximately 40km south of Leonora in the Eastern
Goldfields region of Western Australia.
Figure 2: Locations of the Company’s Pilbara-based projects and underlying geology
5
REVIEW OF OPERATIONS
ANDOVER PROJECT (AZURE 60% / CREASY GROUP 40%)
OVERVIEW
Azure Minerals has delivered company-making results at its flagship Andover Lithium Project throughout the
financial year, driven by the identification of lithium-rich pegmatites with an Exploration Target which places
Andover amongst the world’s top lithium exploration projects.
The Exploration Target for the Andover Lithium Project encompasses an estimated range of potential mineralisation
of: 100 - 240 million tonnes grading at 1.0 - 1.5% Li2O* (see Table 1 for details)
* The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a Mineral
Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Figure 3: Mapping of a large-scale pegmatite swarm located within the Andover Project
6
Azure Minerals Limited Annual Report 2023 LITHIUM-FOCUSED EXPLORATION ACTIVITIES ACCELERATING
The identification of pegmatite-hosted lithium
pre-existing structures that also controlled the earlier
mineralisation at Andover was first announced in
mineralising event responsible for the formation of the
October 2022, following the completion of a six month
Andover Ni-Cu-Co sulphide deposits.
on-ground mapping and sampling program1.
Assays from the reconnaissance pegmatite outcrop
The program comprised an extensive review assessing
sampling program delivered numerous highly
historical data, aerial photos and airborne radiometric
surveying, followed by wide-ranging reconnaissance
geological mapping, and surface geochemical sampling.
encouraging results, with multiple samples returning
lithium grades in the range of 2% Li2O up to 5% Li2O2
(see Figure 4).
Several hundred outcropping pegmatites that form a
The highly anomalous surface sampling results
large-scale swarm were identified within an area that
were further validated through the intersection of a
extends over 9km (east-west) and up to 5km (north-
pegmatite containing lithium mineralisation in diamond
south) (see Figure 3). The pegmatites typically trend in a
southwest to northeast orientation with a moderate dip
to the northwest. Surface exposures range in size up to
200 metres across and two kilometres in length.
drill hole ANDD01993. The hole returned a strong lithium-
rich intersection of 1.51% Li2O over 7.2m, including an
internal high-grade zone of 1.87% Li2O over 3.1m (see
Figure 5).
The orientation of the pegmatites is generally parallel
This provided the Company with confirmation that
with Azure’s richly endowed Nickel-Copper-Cobalt
spodumene-rich pegmatites observed at surface had
(Ni-Cu-Co) Southern Mineralised Corridor, with most
the potential to host significant lithium mineralisation
pegmatites lying within or adjacent to this mineralised
and provided the impetus for Azure to accelerate its
horizon. It is interpreted that at the time of their
lithium-focused exploration efforts by implementing a
emplacement, the pegmatites were likely utilising
maiden drill campaign.
1 See ASX announcement dated: 12 October 2022
2 See ASX announcements dated: 19 October 2022, 14 November 2022, 20 January 2023 & 21 March 2023
3 See ASX announcement dated: 13 February 2023
7
REVIEW OF OPERATIONS
RC AND DIAMOND DRILLING INTERSECTS ABUNDANT LITHIUM MINERALISATION
The maiden drilling program utilised four diamond core
Drilling has confirmed that these pegmatites contain
and two Reverse Circulation (RC) drill rigs and focused
very broad zones of impressively high-grade lithium
on testing Target Area 1 (refer to Figures 3 and 7), which
mineralisation (see Figure 6), many in excess of 100m
contains the AP0009, AP0010, AP0011 and AP0012
width, placing Andover as one of the world’s top
pegmatites. By financial year-end, the Company had
lithium exploration projects. Excellent continuity of
completed 33 diamond holes for 11,395m and 34 RC holes
mineralisation, both laterally along strike and up- and
for 6,363m at this prospect.
down-dip, has been demonstrated in the pegmatites,
particularly in AP0011 which is the largest of the
pegmatites.
Figure 4: Spodumene-rich pegmatite associated with samples APRK00867 (4.39% Li2O), APRK00870 (4.31% Li2O),
APRK00872 (4.28% Li2O) and APRK00874 (4.41% Li2O)
8
Azure Minerals Limited Annual Report 2023 Figure 5: Coarse-bladed spodumene in quartz in hole ANDD0199. This sample returned 1.0m @ 1.52% Li2O between 317m-318m
Figure 6: High-grade lithium samples from hole ANDD0208 within 22.8m @ 3.57% Li2O
9
REVIEW OF OPERATIONS
Broadest mineralised intersections returned from initial drill holes include456:
•
•
•
•
•
•
•
54.4m @ 1.07% Li2O from 310.5m in ANDD0206 (~44.6m True Width); including:
-
7.4m @ 1.93% Li2O from 357.5m (~6.1m True Width)
52.1m @ 0.91% Li2O from 22.3m in ANDD0208 (~46.0m True Width); including:
-
-
14.4m @ 1.59% Li2O from 22.3m (~12.7m True Width); and
8.6m @ 1.56% Li2O from 65.8m (~7.6m True Width)
105.0m @ 1.26% Li2O from 256.3m in ANDD0208 (~89.0m True Width); including:w
-
22.8m @ 3.57% Li2O (~19.3m True Width)
52.5m @ 1.36% Li2O from 14.1m in ANDD0210 (~49.9m True Width); including:
-
28.3m @ 1.83% Li2O from 14.8m (~26.9m True Width)
63.7m @ 1.15% Li2O from 218.8m in ANDD0210 (~53.4m True Width); including:
-
34.7m @ 1.59% Li2O from 220.2m (~29.1m True Width)
90.2m @ 1.23% Li2O from 172.1m in ANDD0214(~77.4m True Width); including:
-
25.8m @ 1.53% Li2O from 210.4m (~22.1m True Width)
112.4m @ 1.05% Li2O from 263.3m in ANDD0215 (~110.7m True Width); including:
-
-
13.5m @ 1.55% Li2O from 280.1m (~13.3m True Width); and
59.0m @ 1.24% Li2O from 316.7m(~58.2m True Width)
• 28.0m @ 1.12% Li2O from 224.6m in ANDD0216 (~27.6m True Width); including:
-
11.9m @ 1.57% Li2O from 240.7m (~11.7m True Width)
•
32.7m @ 1.32% Li2O from 255.6m in ANDD0217 (~32.3m True Width) including:
• 20.7m @ 1.67% Li2O from 256.0m (~20.5m True Width)
4 See ASX announcement dated: 13 June 2023
5 See ASX announcement dated: 20 June 2023
6 See ASX announcements dated: 30 June 2023
10
Azure Minerals Limited Annual Report 2023 Spodumene-rich
pegmatite with
very broad zones
of impressively
high-grade lithium
mineralisation
11
REVIEW OF OPERATIONS
Figure 7: Target Area 1 showing pegmatite outcrops and drill holes
12
Azure Minerals Limited Annual Report 2023 EXPLORATION POST YEAR-END CONFIRMS ANDOVER AS A MAJOR LITHIUM DISCOVERY
Following the end of the Financial Year, Azure has continued to experience outstanding success at the Andover
Lithium Project, with the Company reporting numerous more very broad zones of lithium mineralisation, including789.
• 209.4m @ 1.42% Li2O from 219.0m in ANRD0017 (~134.6m True Width), including:
-
126.2m @ 1.72% Li2O from 219.0m (~81.1m True Width) which includes:
-
56.1m @ 2.00% Li2O from 257.0m (~36.1m True Width); and
-
19.7m @ 1.54% Li2O from 401.6m (~12.7m True Width)
•
100.2m @ 1.24% Li2O from 101.5m in ANDD0221 (~92.0m True Width), including:
-
-
28.0m @ 1.86% Li2O from 126.9m (~26.0m True Width), and
31.7m @ 1.44% Li2O from 170.0m (~29.0m True Width)
•
•
101.3m @ 1.21% Li2O from 264.7m in ANDD0223 (~95.5m True Width), including:
-
64.1m @ 1.63% Li2O from 284.8m (~60.4m True Width)
183.1m @ 1.25% Li2O from 170.5m in ANDD0228 (~123.3m True Width), including:
-
-
-
58.9m @ 1.46% Li2O from 170.5m (~39.7m True Width); and
30.0m @ 1.55% Li2O from 284.0m (~20.2m True Width); and
11.2m @ 1.85% Li2O from 332.9m (~7.5m True Width)
•
167.7m @ 1.31% Li2O from 168.4m in ANDD0238 (~112.2m True Width), including:
-
89.1m @ 1.55% Li2O from 168.4m (~59.6m True Width) which includes:
-
30.5m @ 2.03% Li2O from 215.3m (~20.4m True Width)
-
12.5m @ 1.57% Li2O from 274.5m (~8.3m True Width)
•
100m @ 1.52% Li2O* from 194m in ANRC0011 (~57.4m True Width), (* hole ended in
mineralisation), including:
-
-
21m @ 1.67% Li2O from 210m (~12.0m True Width), and:
46m @ 1.77% Li2O from 248m (~26.4m True Width)
7 See ASX announcement dated: 14 July 2023
8 See ASX announcement dated: 4 August 2023
9 See ASX announcement dated: 21 August 2023
13
REVIEW OF OPERATIONS
These latest results confirm that the broad mineralised
zones extend for more than 2,000m along strike and
down-dip from surface to vertical depths in excess of
400m.
On the basis of the results received by financial year-
end, Azure released a maiden Exploration Target for the
Andover Lithium Project with an estimated range of
potential mineralisation (see Table 1) of:
100 - 240 million tonnes grading at 1.0 - 1.5% Li2O*
(see Table 1 for details)
Tonnes Range (Mt)
Li2O Range (%)
Area
Minimum Maximum Minimum Maximum
Target Area 1
(Includes
wireframed
AP011)
Target Area 2
Target Area 3
Total
Exploration
Target
55
20
25
105
60
75
100
240
1.0
1.0
1.0
1.0
1.5
1.5
1.5
1.5
Table 1: Exploration Target for Target Areas 1, 2 and 3 at the
Andover Lithium Project
* The potential quantity and grade of the Exploration Target is conceptual in nature. There has been insufficient exploration to estimate a
Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
10 See ASX announcement dated: 7 August 2023
14
Azure Minerals Limited Annual Report 2023 CONTINUING NICKEL DEVELOPMENTS
In addition to the lithium exploration activities at
Global Mineral Resources for the Project, including
Andover, Azure continued to undertake nickel-copper-
both the Andover Deposit12 and the Ridgeline Deposit,
cobalt exploration at the project, culminating in the
now stand at 6Mt @ 1.11% Ni, 0.47% Cu and 0.05% Co
successful discovery and delineation of the Ridgeline
for 66,400t of contained Nickel, 27,800t of contained
Deposit.
Copper and 3,100t of contained Cobalt at a cut-off grade
In February, Azure Minerals announced a maiden Mineral
of 0.5% Ni (JORC 2012).
Resource Estimate (MRE) for the Ridgeline Deposit11 – the
The Ridgeline MRE was completed by CSA Global Pty Ltd
second Mineral Resource to be defined at Andover.
(“CSA Global”) based on 58 Diamond Drill (DD) holes drilled
Ridgeline contains an MRE of 1.3Mt @ 1.11% Ni, 0.46% Cu
and 0.05% Co for 14,700t of contained nickel, 6,100t of
contained copper and 640t of contained cobalt at a cut-
off grade of 0.5% Ni (JORC 2012) (see Table 2).
during 2021 and 2022, for a total of 33,065.3m.
Tonnes
Mt
Ni
%
Cu
%
Co
%
S
%
NiEq.
Ni Metal
Cu Metal
Co Metal
%
kt
kt
kt
Classification
Andover Deposit
Indicated
Inferred
Total
Ridgeline Deposit
Indicated
Inferred
Total
Global Mineral Resources
Indicated
Inferred
Total
3.8
0.9
4.7
0.4
0.9
1.3
4.2
1.8
6.0
1.16
0.89
1.11
1.13
1.09
1.11
1.16
0.99
1.11
0.47
0.44
0.47
0.48
0.45
0.48
0.47
0.45
0.47
0.05
0.04
0.05
0.05
0.05
0.05
0.05
0.04
0.05
8.23
6.33
7.87
6.63
6.57
6.59
8.06
6.45
7.58
1.51
1.2
1.41
1.51
1.45
1.47
1.51
1.33
1.45
43.9
7.7
51.7
4.8
9.9
14.7
48.7
17.6
66.4
17.9
3.8
21.7
2.0
4.1
6.1
19.9
7.9
27.8
Table 2: MRE for the Andover nickel project by classification reported above a 0.5% Ni cut-off
11 See ASX announcement dated: 8 February 2023
12 See ASX announcement dated: 30 March 2022
2.1
0.4
2.4
0.2
0.4
0.6
2.3
0.8
3.1
15
REVIEW OF OPERATIONS
BARTON GOLD PROJECT (AZURE 100%)
The Barton gold project lies adjacent to the historical
mining town of Kookynie, approximately 40km south of
Drilling conducted by Azure during the year
the major gold mining hub of Leonora, in the Eastern
tested the Company’s Daisy Corner and
Goldfields region of Western Australia.
Trevan Well prospects, encountering strongly
Azure holds 100% ownership of a large, strategically
situated portfolio of tenements covering 888km2 over a
anomalous gold mineralisation, with better
intersections including13:
contiguous north-south strike length of approximately
• Trevan Well BTRC0030:
80km. The project comprises four granted Exploration
Licences and four Exploration Licence Applications,
where Azure is the sole applicant (Figure 8).
-
-
1.0m @ 1.18 g/t Au from 53.0m
1.0m @ 1.05 g/t Au from 57.0m
• Daisy Corner
• BTRC0034:
-
-
26.0m @ 0.63 g/t Au from 16.0m
including 10m @1.03 g/t Au from 31m
• BTRC0037:
-
16.0m @ 0.54 g/t Au from 32.0m (4m
composites)
• BTRC0039:
-
20.0m @ 0.41 g/t Au from 20.0m (4m
composites)
-
including 8m @ 0.71 g/t Au from 24m
• BTRC0040:
-
8.0m @ 1.62g/t Au from 84.0m (4m
composites)
• BTRC0056: 2.0m @ 2.62 g/t Au to EOH (2m
composite)
• Daisy West
• BTRC0050: 4.0m @ 0.53g/t Au from 48.0m
(4m composite)
Figure 8: Map of Azure Minerals’ Barton Gold Project
These encouraging results support the prospectivity
of the Barton Project to host significant gold
mineralisation and further exploration is warranted.
13 See ASX announcement dated: 27 April 2023
16
Azure Minerals Limited Annual Report 2023 CORPORATE
During the year, Azure Minerals’ highly successful
In addition to the investment from SQM, Azure’s
exploration and drilling activities coincided with
balance sheet was further strengthened by the
a bolstering of the Company’s balance sheet, with
completion of the sale of its Mexican precious and
Azure announcing global lithium company Sociedad
base metals projects to Bendito Resources Inc
Química y Minera de Chile S.A., via its wholly-owned
(“Bendito”) for a combination of cash and shares
subsidiary SQM Australia Pty Ltd (“SQM”), intended
valued at A$20 million (the “Transaction”).
to make a major cornerstone investment of up to
A$20 million to acquire a 19.99% interest in Azure14.
The key terms and conditions of the Transaction are
set out in Azure's announcement of 30 May 2022. In
In the first tranche of the Transaction, completed
connection with the Transaction, Azure will receive
in December 2022, SQM subscribed for 16,381,720
A$10 million in cash and A$10 million worth of fully
ordinary shares in Azure at a subscription price of
paid ordinary shares in Bendito ("Bendito Shares") in
A$0.2564 per share, raising A$4,200,00 for Azure
two tranches within an 18-month period. At closing
and giving SQM a 4.99% shareholding in Azure.
of the Transaction ("Closing"), Azure received an
In March 2023, completion of the second tranche
of the Transaction was announced with SQM
subscribing for an additional 61,626,471 ordinary
shares in Azure at the same subscription price of
A$0.2564 per share as for the first tranche, raising
a further A$15,800,000 for Azure.
immediate cash payment of A$4 million and was
issued 11,200,000 Bendito Shares. 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.
14 See ASX announcements dated: 11 January 2023 & 13 March 2023
17
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 2023.
DIRECTORS
PRINCIPAL ACTIVITIES
The following persons were directors of Azure
During the year the principal continuing activity of the
Minerals Limited during the whole of the financial
Group was exploration for precious and base metals in
year and up to the date of this report, unless
Western Australia.
otherwise stated.
Brian Thomas
Anthony Rovira
Annie Guo
Hansjörg Plaggemars
DIVIDENDS
No dividends were paid or declared since the start of
the financial year. No recommendation for payment of
dividends has been made.
18
Azure Minerals Limited Annual Report 2023 GROUP OVERVIEW
OPERATING RESULTS FOR THE YEAR
The operating loss from continuing operations after
Azure Minerals Limited was incorporated on 19
income tax of the Group for the year ended 30 June
September 2003. Up until early 2020 its principal
2023 was $29,081,472 (2022: $18,285,369). Included
focus was on exploration for gold, copper, silver
in this loss figure is $13,479,782 (2022: $15,112,330) of
and zinc in Mexico, but following the worldwide
exploration expenditure. While the total exploration
onset of COVID-19 during 2020 the company
expenditure amounts were similar for 2022 and
transitioned back to Western Australia with the
2023 years, expenditure in 2022 was principally
acquisition of a number of gold and base metal
focused towards nickel exploration activities while
projects.
Of those assets acquired, the Andover Lithium
and Nickel project has emerged as the most
promising with nickel resource estimation
completed on the Andover Nickel deposit in March
2022 and the Ridgeline Nickel deposit in January
2023 The discovery of Lithium rich pegmatites
during the 2022 was a significant event for the
Company and lead to global lithium company
Sociedad Química y Minera de Chile S.A.(SQM) to
make a significant cornerstone investment of
2023 expenditure was directed towards Lithium
exploration. Refer to notes 1(c) and 5 to the financial
statements.
Shareholder Returns
2023
2022
Basic loss per share from continuing
operations (cents)
(8.59)
(5.89)
Diluted loss per shares from
continuing operations (cents)
(8.59)
(5.89)
$20 million to acquire a 19.99% interest in Azure.
INVESTMENTS FOR FUTURE PERFORMANCE
The investment by SQM has enabled the Company
It is the Company’s current intention to continue to
to allocate significant financial resources to the
aggressively explore and develop the Andover Lithium
exploration for Lithium at the Andover project
project over the next 12 to 18 months with the future
and has been the principal focus of activities
performance of the group largely dependent upon
during 2023.
In July 2022 the Company sold its interests in
Mexico and is now solely focussed in Western
Australia.
exploration success from those activities. In addition,
it will progress development studies for both nickel and
lithium. To this end the group has budgeted to continue
exploration and development studies on its projects.
19
DIRECTORS' REPORT
REVIEW OF FINANCIAL CONDITION
Following the investment of $20 million from SQM,
together with $110 million received from a share
placement and Securities Purchase Plan subsequent
to year end, 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.
no guarantee that the Company will not be impacted
by these occurrences and climate change may cause
certain physical risks that cannot be predicted by the
Company, including events such as increased severity
of weather patterns and incidence of extreme weather
events and longer-term physical risks such as shifting
climate patterns which have the potential to delay the
Company's projects.
RISK MANAGEMENT
The future prospects of the Company is directly
related to the results of exploration and development
activities. There is no assurance that, exploration and
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.
development of the mineral interests currently held
The board has adopted a Risk Management Policy and
by the Company will result in an economic deposit.
performs the role of the Audit and Risk Management
Exploration and development activities may be affected
Committee.
by a range of factors including geological conditions,
limitations on activities due to seasonal weather
patterns, unanticipated operational and technical
difficulties, native title process, changing government
regulations and many other factors beyond the control
of the Company.
Climate change is a risk the Company has considered.
The climate change risks particularly attributable
to the Company include the emergence of new or
expanded regulations associated with the transitioning
to a lower carbon economy and market changes
related to climate change mitigation. The Company
may be impacted by changes to local or international
compliance regulations related to climate change
mitigation efforts, or by specific taxation or penalties
for carbon emissions or environmental damage. While
the Company will endeavour to manage these risks
and limit any consequential impacts, there can be
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.
20
Azure Minerals Limited Annual Report 2023 SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the year the Company issued a total of
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
OF OPERATIONS
79,500,351 fully paid ordinary shares (FPOS) raising a
The group expects to maintain the present status and
total of $20,306,973, being:
level of operations.
• The issue of 78,008,191 FPOS as consideration for
the SQM Subscription; and
ENVIRONMENTAL REGULATION AND
PERFORMANCE
• The issue of 1,492,160 FPOS as a result of the
exercise of 2,000,000 options;
There were no other significant changes in the state
of affairs of the Group during the financial year.
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
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
it is aware of and is in compliance with all environmental
On 28 August 2023 the Company completed a
placement of 41,639,663 shares at $2.40 per share
to raise $99,949,381 and on 15 September the
Company completed a Security Purchase Plan and
issued 4,166,803 shares at $2.40 per share to raise
$10,000,327.
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.
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.
21
DIRECTORS' REPORT
INFORMATION ON DIRECTORS
MR. BRIAN THOMAS
BSc MBA Grad Cert App Fin Inv
MAusIMM MAICD SAFin
MR. ANTHONY PAUL ROVIRA
BSc (Hons) Flinders University,
MAusIMM (Managing Director)
Mr Thomas is a very experienced Director and
Tony Rovira has over 30 years technical and
Corporate Executive with significant domestic and
management experience in the mining industry, as an
international resources management experience.
exploration and mining geologist, and as a company
In addition, Mr Thomas spent 15 years in the
executive at Board level. Since graduating from Flinders
financial services sector with executive roles in
University in South Australia in 1983, Tony has worked
corporate stockbroking, investment banking and
for companies both large and small, including BHP,
banking.
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
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 lithium, nickel and gold in Western
Australia. The company has had significant exploration
success at the Andover Project where a vast array of
lithium-rich pegmatites have been discovered, as well as
defining two nickel-copper-cobalt sulphide deposits.
Other Current Directorships
• Non-Executive Director Paterson Resources
Ltd (Resigned 11 December 2020)
• Nil
• Non-Executive Director Auris Resources Ltd
Former Directorships in the last 3 years
(Resigned 31 March 2020)
•
Ionic Rare Earths Limited (resigned 21 December
Interests in Shares and Options
•
2,000,000 options over ordinary shares in Azure
2020)
Interests in Shares and Options
Minerals Limited
•
3,209,669 ordinary shares in Azure Minerals Limited,
of which 109,669 are held indirectly
• 4,000,000 options over ordinary shares in Azure
Minerals Limited
22
Azure Minerals Limited Annual Report 2023 MS. ANNIE GUO
B.ECON, M.FIN
(Appointed 1 March 2021)
Ms. Guo, is 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.
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, Spartan Resources
Limited, GeoPacific Resources Ltd, Kin
Mining NL, PNX Metals Limited, Wiluna Mining
Corporation, Marna Beteiligungen AG, 2invest
AG and Altech Advanced Materials AG
Other Current Directorships
Former Directorships in the last 3 years
• Zuleika Gold Limited (since November 2013)
• The Grounds Real Estate Development AG,
• CZR Resources Limited (since February 2021)
CARUS AG, Biofrontera AG, South Harz Potash
Former Directorships in the last 3 years
• Nil
Interests in Shares and Options
Limited and 4basebio AG
Interests in Shares and Options
•
60,000 ordinary shares in Azure Minerals
Limited, which are held indirectly
•
1,000,000 options over ordinary shares in
•
1,000,000 options over ordinary shares in Azure
Azure Minerals Limited
Minerals Limited
23
DIRECTORS' REPORT
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:
Director
Directors' Meetings
Audit & Risk Management
Remuneration & Nomination
Mr Brian Thomas
Mr Anthony Rovira
Ms Annie Guo
Mr Hansjörg Plaggemars
A
11
11
11
11
B
11
11
11
11
A
–
–
–
–
B
–
–
–
–
A
–
–
–
–
B
–
–
–
–
Meetings of Committees
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.
24
Azure Minerals Limited Annual Report 2023 Exploration Post Year-End
Confirms Andover as a Major
Lithium Discovery
25
DIRECTORS' REPORT
REMUNERATION REPORT (AUDITED)
The remuneration report is set out under the
following main headings:
A. PRINCIPLES USED TO DETERMINE THE
NATURE AND AMOUNT OF REMUNERATION
The remuneration policy of Azure Minerals Limited
A. Principles used to determine the nature and
has been designed to align director and executive
amount of remuneration
B. Details of remuneration
C. Service agreements
D. Share-based compensation
E. Additional Information
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
Key management personnel (KMP)
incentives and as such the remuneration policy is
covered in this report
Name
Position
Term as KMP
Mr Brian Thomas
Non-Executive
Chair
Full financial
year
Mr Anthony Rovira
Executive
Managing Director
Full financial
year
Ms Annie Guo
Non-Executive
Director
Full financial
year
Mr Hansjörg Plaggemars
Non-Executive
Director
Full financial
year
Mr Brett Dickson
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.
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.
26
Azure Minerals Limited Annual Report 2023 Executives are also entitled to participate in the
to align directors’ interests with shareholder
employee share and option arrangements.
interests, the directors are encouraged to
The executive directors and executives receive a
superannuation guarantee contribution required
hold shares in the company and are able to
participate in employee option plans.
by the government, which is currently 11.0% of cash
The full board acts as the Remuneration
salary, and do not receive any other retirement
Committee under the Remuneration Committee
benefits. Some individuals, however, may choose to
Charter. It is primarily responsible for making
sacrifice part of their salary to increase payments
recommendations to the board on:
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
• 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
or executive; to date no shares have been awarded
Its objective is to ensure that remuneration
to directors or executives. Options are valued using
policies and structures are fair and competitive
either the Black Scholes or Binomial methodologies.
and aligned with the long-term interests of the
The board policy is to remunerate non executive
directors at market rates for comparable companies
for time, commitment and responsibilities. The
Group. The Corporate Governance Statement
provides further information on the role of this
committee.
board determines payments to the non executive
In the event of serious misconduct or a
directors and reviews their remuneration annually
material misstatement in the Group’s financial
based on market practice, duties and accountability.
statements, the Board can reduce, cancel
Independent external advice is sought when
or defer performance-based remuneration
required. The maximum aggregate amount of
and may also claw back performance-based
fees that can be paid to non executive directors is
remuneration paid in previous financial years.
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,
Remuneration consultants were not engaged
during the year.
There is no Retirement Benefit Policy for
directors, other than the payment of statutory
superannuation.
27
DIRECTORS' REPORT
REMUNERATION REPORT (AUDITED) (CONTINUED)
B. DETAILS OF REMUNERATION
Secretary, Mr B Dickson is an executive whose
Amount of remuneration
remuneration must be disclosed under the Corporations
Act 2001.
Details of the remuneration of the directors and key
management personnel (as defined in AASB 124 Related
Compensation options
Party Disclosures) of Azure Minerals Limited are set out
There were no alterations to the terms and conditions
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
of options granted as remuneration since their grant
date. During the year 10,000,000 options were granted
as remuneration and 1,700,000 options were exercised
(2022: 1,500,000) with a net value of $85,000 at the date
of exercise . During the year nil options lapsed or were
the exploration activities of the entity and the Company
forfeited (2022: 250,000).
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
2023
2022
98,250
103,720
Anthony Rovira – Managing Director
2023
2022
413,000
413,000
Annie Guo –Non Executive
2023
2022
45,000
45,000
Hansjörg Plaggemars– Non Executive
2023
2022
Executives
45,000
45,000
Brett Dickson – Company Secretary
188,600
218,900
789,850
825,620
2023
2022
Total
2023
2022
28
–
–
–
–
–
–
–
–
–
–
–
–
6,827
6,504
27,500
27,500
809,046
–
914,123
110,224
1,618,092
2,058,592
–
440,500
–
–
–
–
–
–
404,523
–
404,523
–
449,523
45,000
449,523
45,000
412,417
–
601,017
218,900
34,327
34,004
3,648,601
4,472,778
–
859,624
88%
–
79%
–
90%
–
90%
–
69%
–
82%
–
Azure Minerals Limited Annual Report 2023 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 (2022: Nil). Performance based
remuneration for executives is detailed later in
section E of this report.
C. SERVICE AGREEMENTS
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 2024.
• Fixed fee, $15,300 per month, with additional
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 12 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
• Term of agreement – to 31 December 2024.
are no standard vesting conditions to options awarded
• Base salary, exclusive of superannuation,
of $413,000 to be reviewed annually by the
with vesting conditions, if any, at the discretion of
Directors at the time of grant. Options are granted for nil
remuneration committee.
consideration.
• 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 12 months remuneration, whichever
is the greater.
During the year 10,000,000 options were awarded to or
vested with Directors and Executives (2022: nil). Refer
to Note 24 of the Notes to the Consolidated Financial
Statements for more information.
29
DIRECTORS' REPORT
REMUNERATION REPORT (AUDITED) (CONTINUED)
1,700,000 options held by directors or executives were
Typically included are measures such as contribution
exercised during the financial year and no options have
to exploration success, share price appreciation,
been exercised since the end of the financial year.
risk management and cash flow sustainability. These
During the year nil (2022: 250,000) options lapsed.
measures were chosen as they represent the key
The Company’s remuneration policy prohibits
executives from entering into transactions or
drivers for the short term success of the business and
provide a framework for delivering long term value.
arrangements which limit the “at risk” aspect of
The Board has predetermined benchmarks that must be
participating in unvested entitlements.
met in order to trigger payments under the STI scheme.
On an annual basis, after consideration of performance
E. ADDITIONAL INFORMATION
against KPI’s, the Remuneration Committee,
PERFORMANCE BASED REMUNERATION
Variable Remuneration – Short Term Incentive (“STI”)
Objective
The objective of the STI program is to link the
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 2022 and 2023 financial years
achievement of the Company’s operational targets
No STI payment was awarded for the 2022 and 2023
with the remuneration received by the executives
financial years.
charged with meeting those targets. The total
potential STI available is set at a level so as to provide
Variable Remuneration – Long Term Incentive (“LTI”)
sufficient incentive to the executive to achieve those
Objective
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
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.
LTI grants to executives are delivered in the form of
options.
Performance Indicators (KPI’s) covering both financial
The options, when issued to executives, will not be
and non-financial, corporate and individual measures
exercisable for a price less than the then current
of performance.
market price of the Company’s shares.
30
Azure Minerals Limited Annual Report 2023 The grant of LTI’s is reviewed annually, though LTI’s
performance hurdle on those options as the share price
may not be granted each year. Exercise price and
of the Company’s shares must increase significantly
performance hurdles, if any, are determined at the time
before there is any reward to the executive.
of grant of the LTI.
To date no performance hurdles have been set on
Shares issued on exercise of compensation options
options issued to executives. The Company believes that
1,192,160 shares were issued on exercise of
as options are issued at not less than the current market
compensation options during the year.
price of the Company’s shares there is an inherent
Option holdings of key management personnel
2023
Directors
Brian Thomas
Anthony Rovira
Annie Guo
Hansjörg Plaggemars
Executives
Brett Dickson
Total
Balance at
beginning
of year
Granted as
Remuneration
Options
Exercised
Options
Lapsed
Balance at
end of year
Vested &
Exercisable
Unvested
Vested at 30 June
–
2,000,000
–
1,000,000
4,000,000
(1,000,000)
–
–
1,000,000
1,000,000
–
–
700,000
2,000,000
(700,000)
1,700,000
10,000,000
(1,700,000)
–
–
–
–
–
–
2,000,000
2,000,000
4,000,000
4,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
10,000,000
10,000,000
–
–
–
–
–
–
Shareholdings of key management personnel
2023
Brian Thomas
Anthony Rovira
Annie Guo
Hansjörg Plaggemars
Executives
Brett Dickson**
Total
Balance 1 July
Ord
Granted
Ord
On Exercise
of Options
Ord
Purchased/
Sold
Ord
Balance 30
June*
Ord
Balance
Indirectly Held
Ord
-
2,209,669
–
60,000
375,000
2,644,669
–
–
–
–
–
–
–
1,000,000
–
–
192,160
1,192,160
–
–
–
–
–
–
–
3,209,669
109,669
–
–
60,000
60,000
567,160
3,836,829
471,080
640,749
*
**
Or date of retirement from the board
700,000 options were exercised utilising the Company’s cashless exercise facility, resulting in the issue of 192,160 ordinary shares.
31
DIRECTORS' REPORT
REMUNERATION REPORT (AUDITED) (CONTINUED)
Other Related Party Transactions
Directors and executive options
The Company has entered into a sub-lease agreement
Set out below are summaries of current Directors &
on normal commercial terms with Ionic Rare Earths
Executives options granted.
Limited (IonicRE), a company of which Brett Dickson is
an officer. During the year IonicRE paid sub-lease fees
totalling $12,000 (2022: $12,721).
The weighted average remaining contractual life of
share options outstanding at the end of the year was
2.75 years (2022: 0.42 years)
Total expenses arising from share-based payment
transactions recognised during the year were $1,915,993
nil (2022: Nil).
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Balance at
the start
of the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Lapsed
during
the year
Balance
at end of
the year
Number
Expiry
Date
Vested and
exercisable
at end of
the year
Number
Grant Date
2023
26 Nov ‘19
30 Nov ‘22
31 Mar ‘23
31 Mar ‘26
31 Mar ‘23
31 Mar ‘26
20.5
45.0
60.0
5.8
1,700,000
–
(1,700,000)
–
–
2,000,000
8,000,000
–
–
1,700,000
10,000,000
(1,700,000)
–
–
–
–
–
–
2,000,000
2,000,000
8,000,000
8,000,000
10,000,000
10,000,000
Weighted average exercise price
$0.205
$0.570
$0.205
$0.570
$0.570
32
Azure Minerals Limited Annual Report 2023 COMPANY’S PERFORMANCE
Loss per share
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’
Below is information on the Company’s loss per share
for the previous four financial years and for the current
year ended 30 June 2023.
2023
2022
2021
2020
2019
Basic loss per share
(6.26)
(6.45)
(6.28)
(3.75)
(8.77)
remuneration including short-term and long-term
Voting and comments made at the company’s 2022
incentives are indirectly linked to the Company’s
Annual General Meeting
share price performance.
Azure Minerals Limited received approximately 99.05%
The graph below shows the Company’s share price
of “yes” votes on its remuneration report for the 2022
performance during the financial year ended 30
June 2023.
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.
Company’s Share Price Performance
Loans to directors and executives
No loans have been provided to directors or executives.
$2.00
$1.50
$1.00
$0.50
$0.00
2
2
l
u
J
2
2
g
u
A
2
2
p
e
S
2
2
t
c
O
2
2
v
o
N
2
2
c
e
D
3
2
n
a
J
3
2
b
e
F
3
2
r
a
M
3
2
r
p
A
3
2
y
a
M
3
2
n
u
J
END OF AUDITED REMUNERATION REPORT
33
DIRECTORS' REPORT
SHARES UNDER OPTION
At the date of this report there are 16,800,000 unissued ordinary shares in respect of which options are outstanding.
Balance at the beginning of the year
Share option movements during the year
Options Issued
Options Exercised
Options Lapsed
13,800,000
(2,000,000)
–
Total options issued, exercised and lapsed in the year to 30 June 2023
Total number of options outstanding as at 30 June 2023 and at the date of this report
Total Number of options
5,000,000
13,800,000
(2,000,000)
–
11,800,000
16,800,000
The balance is comprised of the following
Date granted
22 Jun 2021
22 Jun 2021
22 Jun 2021
31 Mar 2023
31 Mar 2023
Expiry date
30 Jun 2024
30 Jun 2024
30 Jun 2024
31 Mar 2026
31 Mar 2026
Total number of options outstanding at the date of this report
Exercise price (cents)
Number of options
49.0
57.0
65.0
45.0
60.0
500,000
1,000,000
1,500,000
5,800,000
8,000,000
16,800,000
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.
34
Azure Minerals Limited Annual Report 2023 INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, Azure Minerals Limited
apportion the premium between amounts relating to
paid a premium of $55,500 (2022: $44,004) to insure
the insurance against legal costs and those relating
the directors and secretary of the company and its
to other liabilities.
Australian based controlled entities.
The liabilities insured include legal costs that may be
PROCEEDINGS ON BEHALF OF THE COMPANY
incurred in defending civil or criminal proceedings that
No person has applied to the Court under section
may be brought against the officers in their capacity
237 of the Corporations Act 2001 for leave to bring
as officers of entities in the Group, and any other
proceedings on behalf of the company, or to
payments arising from liabilities incurred by the officers
intervene in any proceedings to which the company
in connection with such proceedings. This does not
is a party, for the purpose of taking responsibility
include such liabilities that arise from conduct involving
on behalf of the company for all or part of those
a wilful breach of duty by the officers or the improper
proceedings.
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
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.
35
DIRECTORS' REPORT
NON AUDIT SERVICES
The Company may decide to employ the auditor on
assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the
company and/or the Group are important.
Details of the amount paid or payable to the auditor
(BDO Audit (WA) Pty Ltd) for audit and non-audit
services provided during the year are set out below.
The Board of directors has considered the position
and, in accordance with advice received from the
audit committee, is satisfied that the provisions of
the non-audit services is compatible with the general
standard of independence for auditors imposed by the
Corporations Act 2001.
Consolidated
2023
2022
$
$
1. Audit Services
BDO Audit (WA) Pty Ltd
Audit and review of financial reports
Total remuneration for audit services
65,951
65,951
70,561
70,561
2. Non audit Services
Taxation Services
BDO Corporate Tax (WA) Pty Ltd
Tax compliance services
20,445
63,780
Total remuneration for non-audit
services
20,445
63,780
The directors are satisfied that the provision of non-
audit services by the auditor, as set out below, did not
AUDITOR’S INDEPENDENCE
compromise the auditor independence requirements
A copy of the auditor’s independence declaration as
of the Corporations Act 2001 for the following reasons:
required under section 307c of the Corporations Act
• 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:
2001 is set out on page 91.
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, 28 September 2023
36
Azure Minerals Limited Annual Report 2023 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
CHARTERS
• Board
• Audit and Risk Committee
• Nomination and Remuneration Committee
ASX Corporate Governance Council's Corporate
POLICIES AND PROCEDURES
Governance Principles and Recommendations
4th edition. The Company has followed each
• Anti-Bribery and Corruption Policy
recommendation where the Board has considered
• Code of Conduct (summary)
the recommendation to be an appropriate
• Compliance Procedures (summary)
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
• 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)
where, after due consideration, the Company's
• Procedure for the Selection, Appointment and
corporate governance practices do not follow
Rotation of External Auditor
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:
https://www.azureminerals.com.au/corporate
corporate-governance/
• 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 2022/2023
financial year (Reporting Period). The information in
this statement is current at 28 September 2023. This
statement was approved by a resolution of the Board on
28 September 2023.
37
APPROACH TO CORPORATE GOVERNANCE
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
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, the Board
considers that it is not practical to set measurable
objectives for achieving gender diversity.
shareholders are set out in the Company’s Policy and
The respective proportions of men and women on
Procedure for the Selection and (Re)Appointment of
the Board, in senior executive positions and across
Directors, which is disclosed on the Company’s website.
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)
Senior executive positions
Proportion of women
7 out of 24 (29%)
0 out of 4 (0%)
1 out of 4 (25%)
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
Board
disclosure outlined in that rule).
38
Azure Minerals Limited Annual Report 2023 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
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
Board, its committees, and individual directors took
gained by maintaining or establishing a separate
place in accordance with the process disclosed in
Nomination Committee. Accordingly, the Board
the Company’s Process for Performance Evaluations.
performs the role of the Nomination Committee.
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.
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
The Chairman is responsible for evaluating the
meetings. The Board deals with any conflicts of
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.
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 24.
39
APPROACH TO CORPORATE GOVERNANCE
RECOMMENDATION 2.2
RECOMMENDATION 2.5
Significant geological experience, environmental
The independent Chair of the Board is Brian Thomas,
management experience and professional skills
who is not also Managing Director of the Company.
including leadership, governance and strategy are
the skills and diversity which the Board is looking to
RECOMMENDATION 2.6
achieve in its membership, and these are collectively
held by current members of the Board.
The Company has an induction program, coordinated
by the Company Secretary. The goal of the program is
While the Company is at exploration stage, it does not
to assist new directors to participate fully and actively
wish to increase the size of the Board and considers
in Board decision-making at the earliest opportunity,
that the current Board has the appropriate skills and
and to assist senior executives to participate fully
knowledge and is appropriate at this stage of the
and actively in management decision-making at the
Company’s development. The Board may bring in
earliest opportunity. All directors participated in the
external consultants with specialist knowledge as and
induction program.
when required to address any areas where the Board
does not collectively possess the relevant attribute.
RECOMMENDATION 2.3
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
The Board considers the independence of directors
required to fulfil their role on the Board and the Board
having regard to the relationships listed in Box 2.3 of
committees effectively using a Board skills matrix.
the Principles & Recommendations. The independent
Where any gaps are identified, the full board in its
director of the Company is Mr Brian Thomas, Chairman.
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.
The length of service of each director is set out in the
Directors’ Report on page 22.
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.
40
Azure Minerals Limited Annual Report 2023 PRINCIPLE 3
INSTIL A CULTURE OF ACTING
LAWFULLY, ETHICALLY AND
RESPONSIBLY
RECOMMENDATION 3.1
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.
The Company expects that its board and senior
executives will conduct themselves with integrity
RECOMMENDATION 3.4
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 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 Company has established a Code of Conduct for its
directors, senior executives and employees, a summary
The Board carries out those functions which are
of which is disclosed on the Company’s website. Any
delegated to it in the Company’s Audit and Risk
breach of that code is reported to the board at the next
Committee Charter. When matters that are within
board meeting.
the responsibility of the full Board in its capacity
as the Audit and Risk Committee are considered,
41
APPROACH TO CORPORATE GOVERNANCE
they are marked as separate agenda items at Board
RECOMMENDATION 4.3
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.
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
The Company has also established a Procedure
cash flow reports. Azure has adopted a Continuous
for the Selection, Appointment and Rotation of
Disclosure Policy which sets out how market
its External Auditor, which is an appendix to its
announcements are prepared and released and has
Audit and Risk Committee Charter disclosed on the
appointed the Company Secretary as the Continuous
Company’s website. The Board is responsible for
Disclosure officer who oversees the drafting of and
the initial appointment of the external auditor and
approves the final release of announcements. The
the appointment of a new external auditor when
Company Secretary is responsible for satisfying
any vacancy arises. Candidates for the position
him/herself that the content of any announcement
of external auditor must demonstrate complete
is accurate and not misleading and is supported by
independence from the Company through the
appropriate verification.
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
PRINCIPLE 5
MAKE TIMELY AND
BALANCED DISCLOSURE
RECOMMENDATION 5.1
The Company has established written policies
and procedures for complying with its continuous
Before the Board approved the Company financial
disclosure obligations under the ASX Listing Rules.
statements for the half year ended 31 December 2022
A summary of the Company’s Policy on Continuous
and the full-year ended 30 June 2023, it received
Disclosure and Compliance Procedures are
from the Managing Director and the Chief Financial
disclosed on the Company’s website.
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
RECOMMENDATION 5.2
The Company secretary circulates all material
market announcements to the board prior to release
to ASX.
RECOMMENDATION 5.3
been formed on the basis of a sound system of risk
All new presentations are released to ASX Markets
management and internal control which is operating
Platform ahead of any presentation to investors.
effectively (Declaration).
42
Azure Minerals Limited Annual Report 2023 PRINCIPLE 6
RESPECT THE RIGHTS OF
SECURITY HOLDERS
PRINCIPLE 7
RECOGNISE AND MANAGE
RISK
RECOMMENDATION 6.1
RECOMMENDATION 7.1
The Company provides information about itself
As noted above, the Board has not established a
and its governance to investors via its website at
combined Audit and Risk Committee. Please refer
www.azureminerals.com.au.
RECOMMENDATION 6.2
to the disclosure above under Recommendation
4.1 in relation to the Audit and Risk Committee.
The Company has designed and implemented an investor
relations program to facilitate effective two-way
communication with investors. The program is set out in
RECOMMENDATION 7.2
The Board reviews the Company’s risk
management framework annually to satisfy
the Company’s Shareholder Communication and Investor
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.
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
43
APPROACH TO CORPORATE GOVERNANCE
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.
PRINCIPLE 8
REMUNERATE FAIRLY
AND RESPONSIBLY
However, the Company does have a material exposure
RECOMMENDATION 8.1
to the following economic risks:
• Market risk – movements in commodity prices.
As noted above, the Board has not established a
Nomination or Remuneration Committee. Please
The Company manages its exposure to market
refer to the disclosure above under Recommendation
risk by monitoring market conditions, and making
2.1 in relation to the Nomination and Remuneration
decisions based on industry experience; and
Committee.
• 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 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
The Board has adopted a Risk Management Policy
Nomination and Remuneration committees.
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
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 26 of the Company’s Annual
register by management to identify the Company’s
Report for year ended 30 June 2023.
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
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
is disclosed on the Company’s website.
scheme.
44
Azure Minerals Limited Annual Report 2023 FINANCIAL STATEMENTS
45
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
YEAR ENDED 30 JUNE 2023
Continuing Operations
Income
Interest
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
Share based payment expense
Loss on tenement Sale
Provision for expected credit losses
Other expenses
Loss before income tax from continuing operations
Income tax expense
Loss for the year from continuing operations
Discontinued Operations
Profit/(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
2023
$
2022
$
5
5
5
24
9
8
6
7
69,482
1,646
(118,478)
(109,534)
(1,135,324)
(155,000)
(13,479,782)
(213,383)
(405,122)
(1,301,532)
(52,857)
(93,789)
(29,900)
(4,553,482)
(1,502,283)
(6,000,000)
(130,821)
(109,534)
(1,130,563)
(155,000)
(15,112,330)
(62,008)
(274,320)
(712,571)
(174,209)
(86,759)
(37,419)
(121,286)
–
–
(488)
(180,195)
(29,081,472)
(18,285,369)
–
–
(29,081,472)
(18,285,369)
7,878,320
(1,737,219)
(21,203,152)
(20,022,588)
1,553,860
1,553,860
273,789
273,789
(19,649,292)
(19,748,799)
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)
20
Loss per share from discontinued operations attributable to the ordinary equity holders of the company
Basic Profit/(loss) per share (cents per share)
Loss per share from attributable to the ordinary equity holders of the company
Basic loss per share (cents per share)
20
20
(8.59)
2.33
(6.26)
(5.89)
(0.56)
(6.45)
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.
46
Azure Minerals Limited Annual Report 2023 CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
AT 30 JUNE 2023
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
Notes
16
8
12
2023
$
2022
$
17,494,228
10,600,561
6,579,417
–
24,073,645
313,544
9,264,636
20,178,741
Financial assets at fair value through other comprehensive income
25
4,000,948
Security Deposit
Office right of use
Plant and equipment
Capitalised exploration expenditure
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Lease Liability
Provisions
Liabilities directly associated with assets classified as held for sale
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
9
11
12
13
14
14
24,500
273,836
546,509
5,955,899
10,801,692
948
4,500
383,370
244,117
7,458,182
8,091,117
34,875,337
28,269,858
3,185,634
1,626,303
110,607
132,456
–
115,490
245,554
51,887
3,428,697
2,039,234
156,694
292,078
448,772
3,877,469
30,997,868
267,302
136,144
403,446
2,442,680
25,827,178
163,322,985
143,016,012
10,323,617
4,256,748
(142,648,734)
(121,445,582)
30,997,868
25,827,178
The above Consolidated Statement of Financial Position is to be read in conjunction with the Notes to the Financial Statements
47
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
30 June 2023
Contributed
Equity
Share
Option
Reserve
Financial
Asset
Reserve
Foreign
Currency
Translation
Reserve
Accumulated
Losses
$
$
$
$
$
Total
$
Balance at 1 July 2022
143,016,012
5,850,604
(39,996)
(1,553,860)
(121,445,582)
25,827,178
Loss for year
Other comprehensive loss
Exchange differences on translation of
foreign operations
Total other comprehensive loss
Total comprehensive loss for the year
–
–
–
–
Transactions with owners in their capacity as owners:
Issue of shares net of transaction costs
(Note 13)
20,306,973
–
–
–
–
–
Share based payments (Note 24)
–
4,513,009
Total transactions with owners
20,306,973
4,513,009
–
–
–
–
–
–
–
Balance as at 30 June 2023
163,322,985
10,363,613
(39,996)
1,553,860
(21,203,152)
(19,649,292)
–
–
–
–
–
–
1,553,860
(21,203,152)
(19,649,292)
–
–
–
–
–
–
–
20,306,973
4,513,009
24,819,982
(142,648,734)
30,997,868
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 year
Other comprehensive loss
Exchange differences on translation of
foreign operations
Total other comprehensive loss
Total comprehensive loss for the year
–
–
–
–
Transactions with owners in their capacity as owners:
Issue of shares net of transaction costs
(Note 13)
Share based payments (Note 24)
Total transactions with owners
691,500
–
691,500
–
–
–
–
–
121,286
121,286
–
–
–
–
–
–
–
–
(20,022,588)
(20,022,588)
273,789
273,789
–
–
273,789
273,789
2739
(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
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
48
Azure Minerals Limited Annual Report 2023 CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Expenditure on mining interests
Notes
2023
$
2022
$
(3,375,750)
(3,483,276)
69,482
2,447
(12,898,055)
(16,179,962)
Net Cash Outflow from Operating Activities
16(b)
(16,204,323)
(19,660,791)
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 Inflow (Outflow) from Investing Activities
Cash Flows from Financing Activities
Proceeds from issue of ordinary shares
Proceeds from exercise of options
Interest expense
Lease payments
8
(420,901)
–
(20,000)
–
3,399,847
2,958,946
20,000,000
266,500
(29,900)
(115,491)
(47,239)
(330,623)
–
1,024
101,133
(275,705)
–
392,500
–
–
Net Cash Inflow from Financing Activities
20,121,109
392,500
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
Cash and Cash Equivalents at End Of Year
6,875,732
(19,543,996)
10,600,561
30,267,222
17,935
16(a)
17,494,228
(122,665)
10,600,561
The above Consolidated Statement of Cash Flows is to be read in conjunction with the Notes to the Financial Statements.
49
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the
A. PRINCIPLES OF CONSOLIDATION
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
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
This general purpose financial report has been
which control is transferred to the Group. They are
prepared in accordance with the Australian Accounting
deconsolidated from the date that control ceases.
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 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
The consolidated financial statements of Azure Minerals
to bring into line any dissimilar accounting policies
Limited and the separate financial statements of
which may exist.
Azure Minerals Limited also comply with International
Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
Historical cost convention
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.
These financial statements have been prepared under
Investments in subsidiaries are accounted for at cost
the historical cost convention except for financial
in the individual financial statements of Azure Minerals
assets and liabilities at fair value through other
Limited.
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
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.
to exercise its judgement in the process of applying
Plant and equipment
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.
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.
50
Azure Minerals Limited Annual Report 2023 Subsequent costs are included in the asset's
Where an area of interest is abandoned or the directors
carrying amount or recognised as a separate asset,
decide that it is not commercial, any accumulated
as appropriate, only when it is probable that future
acquisition costs in respect of that area are written off
economic benefits associated with the item will flow
in the financial period the decision is made. Each area of
to the Group and the cost of the item can be measured
interest is also reviewed at the end of each accounting
reliably. All other repairs and maintenance are charged
period and accumulated costs written off to the extent
to the income statement during the financial year in
that they will not be recoverable in the future.
which they are incurred.
Depreciation
D. LEASES
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.
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.
The assets' residual values and useful lives are
Lease liabilities are measured at the present value of the
reviewed, and adjusted if appropriate, at each reporting
contractual payments due to the lessor over the lease
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.
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
Gains and losses on disposals are determined by
included in the measurement of the lease liability if they
comparing proceeds with carrying amount. These
depend on an index or rate. In such cases, the initial
are included in the income statement. When revalued
measurement of the lease liability assumes the variable
assets are sold, it is group policy to transfer the
element will remain unchanged throughout the lease
amounts included in other reserves in respect of those
term. Other variable lease payments are expensed in the
assets to retained earnings.
period to which they relate.
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
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
exploitation of the area of interest or, where exploration
assess that option; and
and evaluation activities in the area of interest have not
•
any penalties payable for terminating the lease, if the
reached a stage that permits reasonable assessment of
term of the lease has been estimated on the basis of
the existence of economically recoverable reserves.
termination option being exercised.
51
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Right of use assets are initially measured at the amount
When the group renegotiates the contractual terms of
of the lease liability, reduced for any lease incentives
a lease with the lessor, the accounting depends on the
received, and increased for:
nature of the modification:
•
lease payments made at or before commencement of
•
if the renegotiation results in one or more additional
•
•
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
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
straight-line basis over the remaining term of the lease
amount.
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
•
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
guarantee. In both cases an unchanged discount rate is
lease.
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.
Lease incentives under operating leases are recognised
as a liability and amortised on a straight-line basis over the
lease term.
52
Azure Minerals Limited Annual Report 2023 E. INCOME TAX
of an item of the expense. Receivables and payables in
the statement of financial position are shown inclusive
The charge for current income tax expense is based on
the profit for the year adjusted for any non-assessable
of GST.
or disallowed items. It is calculated using the tax rates
Cash flows are presented in the cash flow statement
that have been enacted or are substantially enacted by
on a gross basis, except for the GST component of
the statement of financial position date.
investing and financing activities, which are disclosed
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
as operating cash flows.
G. FOREIGN CURRENCY TRANSLATION
and their carrying amounts in the financial statements.
Functional and presentation currency
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
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
expected to apply to the year when the asset is realised
functional and presentation currency. The functional
or liability is settled. Deferred tax is credited in the
currency of Australian subsidiary (Azure Mexico Pty Ltd)
income statement except where it relates to items that
is the Australian dollar. The functional currency of the
may be credited directly to equity, in which case the
Mexican overseas subsidiaries (Minera Piedra Azul CV
deferred tax is adjusted directly against equity.
de SA, Minera Azure CV de SA, Minera Capitana CV de SA
and Servicios AzuPerth CV de SA) is the Mexican Peso.
Deferred income tax assets are recognised to the extent
that it is probable that future tax profits will be available
Transactions and balances
against which deductible temporary differences can be
utilised.
Foreign currency transactions are translated into
functional currency using the exchange rates prevailing
The amount of benefits brought to account or which
at the date of the transaction. Foreign currency
may be realised in the future is based on the assumption
monetary items are translated at the year-end exchange
that no adverse change will occur in income taxation
rate. Non-monetary items measured at historical cost
legislation and the anticipation that the economic
continue to be carried at the exchange rate at the date
entity will derive sufficient future assessable income
of the transaction. Non-monetary items measured at
to enable the benefit to be realised and comply with the
fair value are reported at the exchange rate at the date
conditions of deductibility imposed by the law.
when fair values were determined.
F. GOODS AND SERVICES TAX (GST)
Exchange differences arising on the translation of
monetary items are recognised in the profit or loss,
Revenues, expenses and assets are recognised net of
except where deferred in equity as a qualifying cash
the amount of GST, except where the amount of GST
flow or net investment hedge.
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
53
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
Group companies
The financial results and position of foreign operations
whose functional currency is different from the group's
on national government bonds, which have terms to
maturity approximating the terms of the related liability,
are used.
presentation currency are translated as follows:
Share-based payments
•
assets and liabilities are translated at year-end
The Group provides benefits to employees (including
exchange rates prevailing at that reporting date; and
directors) of the Group in the form of share-based
•
income and expenses are translated at average
exchange rates for the year.
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 year in which the operation is
disposed.
H. RADE AND OTHER PAYABLES
Liabilities for trade creditors are recognised initially at
fair value and subsequently at amortised cost.
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 year in which the performance conditions
are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (‘vesting
Payables to related parties are carried at the principal
date’).
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
The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting year
has expired and (ii) the number of options that, in the
opinion of the directors of the Group, will ultimately
vest. This opinion is formed based on the best available
information at reporting date. No adjustment is made for
the likelihood of market performance conditions being
met as the effect of these conditions is included in the
determination of fair value at grant date.
No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is
conditional upon a market condition.
benefit liabilities are measured at the present value of
Where an equity-settled award is cancelled, it is treated
the estimated future cash outflow to be made in respect
as if it had vested on the date of cancellation, and any
of services provided by employees up to the reporting
expense not yet recognised for the award is recognised
date. In determining the present value of future cash
immediately. However, if a new award is substituted for
outflows, the market yield as at the reporting date
the cancelled award and designated as a replacement
54
Azure Minerals Limited Annual Report 2023 award on the date that it is granted, the cancelled and
months or less, and bank overdrafts. Bank overdrafts
new award are treated as if they were a modification of
are shown within short term borrowings in current
the original award.
liabilities on the statement of financial position.
J. REVENUE RECOGNITION
N. COMPARATIVE FIGURES
Interest revenue is recognised on a time proportionate
When required by Accounting Standards, comparative
basis that takes into account the effective yield on the
figures have been adjusted to conform to changes in
financial assets.
presentation for the current financial year.
K. CONTRIBUTED EQUITY
O. SEGMENT REPORTING
Ordinary shares are classified as equity.
Operating segments are reported in a manner consistent
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
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 Managing Director.
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
Diluted EPS adjusts the figures used in the
current bid price.
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,
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.
deposits held at call with banks, other short term highly
Other techniques, such as estimated discounted cash
liquid investments with original maturities of three
flow, are used to determined fair value for the remaining
financial instruments.
55
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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.
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
The carrying value less impairment provision of trade
than through continued use. They are measured at the
receivables and payables are assumed to approximate
lower of their carrying amount and fair value less costs
their fair values due to their short-term nature. The fair
of disposal. For non-current assets or assets of disposal
value of financial liabilities for disclosure purposes is
groups to be classified as held for sale, they must be
estimated by discounting the future contractual cash
available for immediate sale in their present condition
flows at the current market interest rate that is available
and their sale must be highly probable.
to the Group for similar financial instruments.
Q. CONVERTIBLE LOANS
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
Convertible notes were issued by the Group which
of disposal. A gain is recognised for any subsequent
include embedded derivatives (options to convert to
increases in fair value less costs of disposal of a non-
a variable number of shares). Convertible notes are
current assets and assets of disposal groups, but not
initially recognised as financial liabilities at fair value.
in excess of any cumulative impairment loss previously
On initial recognition the fair value of the convertible
recognised.
notes equates the proceeds received and subsequently
Non-current assets are not depreciated or amortised
the convertible note is measured at fair value. The
while they are classified as held for sale. Interest and
movements are recognised in profit or loss as a finance
other expenses attributable to the liabilities of assets
cost, except if the movement is attributable to changes
held for sale continue to be recognised.
in the Group’s own credit risk status in which case it is
recognised in other comprehensive income.
R. ASSET ACQUISITION
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
Acquisition costs for mineral projects are capitalised
disposal groups classified as held for sale are presented
to Exploration Expenditure at cost, or fair value if not
separately on the face of the statement of financial
acquired for cash consideration, and carried forward
position, in current liabilities.
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.
56
Azure Minerals Limited Annual Report 2023 T. DISCONTINUED OPERATIONS
A discontinued operation is a component of the
V. ADOPTION OF NEW AND AMENDED ACCOUNTING
STANDARDS
consolidated entity that has been disposed of or
The Company has adopted all of the new, revised or
is classified as held for sale and that represents a
amending Accounting Standards and Interpretations
separate major line of business or geographical area
issued by the Australian Accounting Standards Board
of operations, is part of a single co-ordinated plan to
(“AASB”) that are mandatory for the current reporting
dispose of such a line of business or area of operations,
year. There has been no material impact on the financial
or is a subsidiary acquired exclusively with a view to
statements by their adoption.
resale. The results of discontinued operations are
presented separately on the face of the statement of
profit or loss and other comprehensive income.
U. TRADE AND OTHER RECEIVABLES
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
Trade receivables, which generally have 30-90 day
in preparing these consolidated financial statements.
terms, are recognised initially at fair value and
subsequently measured at amortised cost using
the effective interest method, less an allowance for
impairment. Collectability of trade receivables is
reviewed on an ongoing basis.
Expected credit losses (ECL) represents the probability-
weighted amount that the company expects to be
impaired or not collectible. The measurement of ECL
considers both the historical credit loss experience
and reasonable and supportable forward-looking
information. Debts that are known to be uncollectible
are written off when identified. An impairment provision
is raised when there is objective evidence that the
group will not be able to collect the receivable. Financial
difficulties of the debtor, default payments or debts
more than 90 days overdue are considered objective
evidence of impairment. The amount of the impairment
loss is the receivable carrying amount compared to
the present value of estimated future cash flows,
discounted at the original effective interest rates.
57
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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:
Note
8
16
Consolidated
Carrying Amount
2023
$
2022
$
6,538,441
17,494,228
259,308
10,600,561
Trade and other receivables
Cash and cash equivalents
58
Azure Minerals Limited Annual Report 2023 Expected credit losses
None of the Company’s other receivables are past due (2022: nil).
Trade and other receivables due of $6,538,442 includes an amount of $12,000,000 due from Bendito Resources Inc
(“Bendito”) as a result of the sale of the Company’s Mexican assets to Bendito. The company completed the sale on
26 July 2022 for a combination of cash and shares valued at $20 million. At that time Azure received an immediate
cash payment of $4,000,000 and was issued 11,200,000 Bendito shares valued at $4,000,000. A second tranche of
$6,000,000 in cash and $6,000,000 worth of Bendito shares for a total of $12,000,000 is payable to Azure within 18
months of Closing. A provision of $6,000,000 has been made against the cash component.
Other than as stated above 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 2023 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 (2022: $94,475) to secure its office lease. Otherwise, the
Group only provides guarantees to wholly owned subsidiaries.
59
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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 2023
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
3,185,634
3,185,634
3,185,634
–
–
–
Lease Liability
30 June 2022
267,301
267,301
55,399
55,208
105,905
50,789
Trade and other payables
1,626,303
1,626,303
1,626,303
–
–
–
Lease Liability
382,792
382,792
57,838
57,651
110,608
156,695
–
–
–
–
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.
CURRENCY RISK
With the sale of the Company’s interests in Mexico the Group does not carry any significant currency risk. For the
2022 financial year, the Group was 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 were not hedged as those currency positions are considered to be long
term in nature.
60
Azure Minerals Limited Annual Report 2023 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
2023
2022
USD
MXD
USD
MXD
–
–
–
–
–
–
–
–
240,223
25,943
266,166
266,166
240,223
25,943
266,166
266,166
The following significant exchange rates applied during the year:
Average rate
Reporting date spot rate
2023
2022
2023
2022
–
–
1.3788
0.0679
–
–
1.4510
0.07200
USD/AUD
MXD/AUD
Sensitivity analysis
Over the previous reporting year 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 2022.
30 June 2023
USD
30 June 2022
USD
Consolidated
Profit or loss
–
26,616
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.
61
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
INTEREST RATE RISK
Interest rate risk is the risk that the Groups financial position will be adversely affected by movements in interest
rates that will increase the costs of floating rate debt or opportunity losses that may arise on fixed rate borrowings in
a falling interest rate environment. The Group does not have any borrowings therefore is not exposed to interest rate
risk in this area. Interest rate risk on cash and short-term deposits is not considered to be a material risk due to the
short-term nature of these financial instruments.
At the reporting date the interest rate profile of the Company’s and the Group’s interest-bearing financial
instruments was:
Variable rate instruments
Short term cash deposits
Consolidated
Carrying amount
2023
2022
17,494,228
10,558,726
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 2023 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 $174,942 higher /lower (2022 – change of 100 basis points
$106,005 higher/lower).
62
Azure Minerals Limited Annual Report 2023 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:
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.
Consolidated
USD
MXD
USD
MXD
2023
2022
Trade and other receivables
Cash and cash equivalents
Other financial assets
Trade and other payables
Lease liability
CAPITAL MANAGEMENT
6,579,417
17,494,228
4,000,948
(3,185,634)
(267,301)
6,579,417
17,494,228
4,000,948
(3,185,634)
(267,301)
313,544
10,600,561
948
(1,626,303)
(382,792)
313,544
10,600,561
948
(1,626,303)
(382,792)
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.
63
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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.
Investment in Bendito
The Group have classified the investment as a financial instrument held at fair value through other comprehensive
income. Significant influence is the power to participate in financial and operating policy decisions of the investee
but is not control or joint control of those policies. As at 31 December 2022, Azure held a 19% interest in Bendito
Resources, however, has the rights to a further $6 million in shares to be paid within 18 months from the agreement
date, which would result in an interest greater than 20%. As a result, Azure is assumed to have significant influence
under AASB 128 unless demonstrated otherwise.
Management have determined Azure do not have a significant influence over Bendito for the following reasons in
accordance with AASB 128:
• The Group does not have Board representation on the Bendito Board therefore does not participate in financial or
operational decisions made by Bendito
• There are no material transactions between Azure and Bendito
• There are no interchange of managerial personnel between Azure and Bendito
• There are no provision of essential technical information
Fair value of financial assets
Fair value reflects the price that would be received to sell an asset or paid to transfer a liability in orderly transaction
between market participants at the measurement date.
Quotes prices or rates are used to determine the fair value where an active market exists. If the market for a financial
instrument is not active or the instrument is unlisted, the fair values are estimated using present value or other
valuation techniques, using inputs based on market conditions prevailing on the measurement date, including recent
capital raisings.
The value derived from applying these techniques are affected by the choice of valuation model used and the
underlying assumptions made regarding inputs such as timing and amounts of future cash flows
64
Azure Minerals Limited Annual Report 2023 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 year 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.
Expected Credit Loss.
The provision for expected credit loss of receivables assessment requires a degree of estimation and judgment. The
level of provision is assessed by taking into account the credit risk of the counterparty and specific knowledge about
the individual debtors financial position and forward looking external industry information in line with the expected
credit loss model.
65
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
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 year the Company conducted its activities across two geographic
locations, being Australia and Mexico.
2023
Revenues
Gain/(Loss)
Non-current assets
Total assets
Total liabilities
2022
Revenues
Loss
Non-current assets
Total assets
Total liabilities
5. EXPENSES
Loss before income tax includes the following specific expenses
Depreciation of plant and equipment
Amortisation of right to use asset
Exploration expenditure
Provision for doubtful debt
Superannuation
66
Australia
$
Mexico
$
Total
$
69,482
(29,081,472)
10,801,692
34,875,337
3,877,469
1,646
(18,285,369)
8,091,117
19,005,222
(2,390,793)
Australia
$
Mexico
$
–
69,482
9,432,180
(19,649,292)
–
–
–
–
10,801,692
34,875,337
3,877,469
Total
$
1,646
(1,737,219)
(20,022,588)
–
9,264,636
(51,887)
8,091,117
28,269,858
(2,442,680)
30 June 2023
30 June 2022
$
$
118,478
109,534
13,479,782
6,000,000
234,574
130,821
109,534
15,112,330
–
203,600
Azure Minerals Limited Annual Report 2023 6. INCOME TAX
(a) Income tax expense
Current tax
Deferred tax
30 June 2023
30 June 2022
$
$
–
–
–
–
–
–
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2022: 27.5%)
(29,081,472)
(7,997,405)
(20,022,588)
(5,506,212)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Share-based payments
Provision for doubtful debt
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
1,252,207
1,650,000
109,728
33,354
–
67,508
(4,985,470)
(5,405,350)
(120,545)
5,106,015
(135,727)
5,541,077
–
–
11,268
(10,201)
116,747
19,503,905
–
600,100
20,221,819
14,915
(10,201)
104,967
16,755,424
10,547,505
600,100
28,012,710
Deferred Tax Liabilities (at 27.5%)
–
–
Deferred income tax assets have not been recognised as it is not probable that future profit will be available against
which deductible temporary differences can be utilised.
There are no franking credits available.
67
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
7. DISCONTINUTED OPERATIONS
i Description
During 2021 the Group announced that it was seeking to sell its Mexican based subsidiaries and the assets and
liabilities associated with the Mexican subsidiaries were presented as held for sale in the 2022 financial statements.
The subsidiaries were sold on 21 July 2022 and are reported in the current year as discontinued operations for the
year 1 July 2022 to 21 July 2022. Financial information relating to the discontinued operation for the period to 21 July
2022 (the date of disposal) is set out below.
ii. Financial performance information
The financial performance and cash flow information presented ore for the three week period ending 21 July 2022
and the year ended 30 June 2022.
Other Income
Expenditure
Depreciation
Salaries and employee benefits expense
Exploration expenses
Travel expenses
Administration expenses
Insurance expenses
Other expenses
Loss before income tax from discontinued operations
Income tax expense
Loss after income tax from discontinued operations
Gain on sale of the subsidiaries after income tax (see iii below)
Gain (loss) after income tax from discontinued operations
Exchange differences on translation of discontinued operations
Other comprehensive income from discontinued operations
Cash flow information
Net cash (outflow) from operating activities
Net cash inflow from investing activities includes an inflow from the sale of the
subsidiaries
30 June 2023
30 June 2022
$
$
–
7,229
(642)
–
(48,333)
–
–
–
(46,809)
(95,784)
–
(95,784)
7,974,104
7,878,320
1,553,860
1,553,860
(114,336)
3,399,847
(13,214)
(457,303)
(1,038,651)
(3,913)
(161,103)
(2,145)
(68,119)
(1,737,219)
–
(1,737,219)
–
(1,737,219)
273,789
279,789
(1,845,112)
236,777
Net cash inflow from financing activities
–
–
68
Azure Minerals Limited Annual Report 2023 iii. Details of the sale of the subsidiaries
Consideration received or receivable
Cash
Fair value of shares in acquirer
Total disposal consideration
Costs associated with sale
Carrying amount of net assets sold including foreign currency reclassification
Gain on sale before income tax and reclassification of foreign currency translation
reserve
Income tax expense on gain
Reclassification of foreign currency translation reserve
Gain on sale after income tax
The carrying amounts of assets and liabilities as at the date of sale (21 July 2022) were:
30 June 2023
30 June 2022
$
$
10,000,000
10,000,000
20,000,000
(1,258,143)
(9,213,893)
9,527,964
–
(1,553,860)
7,974,104
–
–
–
–
–
–
–
Cash
Trade receivables
Plant and equipment
Capitalised exploration expenditure
Total assets
Trade creditors
Total Liabilities
Net assets
30 June 2022
$
88,828
481,858
29,442
8,754,195
9,354,323
(140,430)
(140,430)
9,213,893
69
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
8. TRADE AND OTHER RECEIVABLE
Trade receivables
Prepayments
Receivable from Bendito Resources Inc.
Less provision for expected credit loss
2023
$
538,441
40,976
12,000,000
(6,000,000)
6,579,417
2022
$
259,309
54,235
–
–
313,544
A. The company completed the sale of its Mexican assets Bendito Resources Inc (“Bendito”) on 26 July 2022 for a
combination of cash and shares valued at $20 million. At that time Azure received an immediate cash payment of
A$4 million and was issued 11,200,000 Bendito shares valued at $4 million. A second tranche of $6 million in cash
and $6 million worth of Bendito shares for a total of A$12 million is payable to Azure within 18 months of Closing. A
provision of $6,000,000 has been made against the cash component as there is concern that this amount will not
be collected by its due date of 26 January 2024.
9. CAPITALISED EXPLORATION EXPENDITURE (NON-CURRENT)
At Cost
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
Transfer to assets of disposal group classified as held for sale
Foreign exchange translation adjustment
Closing net book amount
2023
$
2022
$
5,955,899
7,458,182
7,458,182
–
(1,502,283)
–
–
5,955,899
15,216,335
772,443
–
(8,643,892)
113,296
7,458,182
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.
70
Azure Minerals Limited Annual Report 2023 10. 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
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.
Country of
incorporation
Australia
Mexico
Mexico
Mexico
Mexico
Mexico
*Percentage of voting power is in proportion to ownership.
11. TRADE AND OTHER PAYABLES (CURRENT)
Trade payables
Class of shares
2023
Equity Holding*
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
–
–
–
–
–
–
2022
100%
100%
100%
100%
100%
100%
2023
$
2022
$
(3,185,634)
(3,185,634)
1,626,303
1,626,303
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.
12. 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
2023
$
2022
$
–
–
–
–
–
–
109,093
480,851
30,800
8,643,892
9,264,636
51,887
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 19 for
further information.
71
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
13. CONTRIBUTED EQUITY
a. Share capital
Ordinary shares fully paid
2023
2022
Number of shares
$
Number of shares
$
Total consolidated contributed equity
390,236,072
163,322,985
310,735,721
143,016,102
b. Movements in ordinary share capital
1 July opening balance
Issue at $0.2564 per share
Exercise of options at $0.205
Issue for projects (Note 9 and 16)
Exercise of options at $0.205
Exercise of options at $0.29
Share issue expenses
30 June closing balance
2023
2022
Number of shares
$
Number of shares
$
310,735,721
143,016,012
308,085,721
142,324,512
78,008,191
1,492,160
20,000,000
306,973
–
–
–
–
–
–
–
–
–
–
1,150,000
500,000
1,000,000
–
–
–
299,000
102,500
290,000
–
390,236,072
163,322,985
310,735,721
143,016,012
72
Azure Minerals Limited Annual Report 2023 c. Movements in unlisted options on issue
2023
Exercise Price
(cents)
Expiry
20.5
30 November 2022
49
57
65
45
60
30 June 2024
30 June 2024
30 June 2024
31 March 2026
31 March 2026
2022
Exercise Price
(cents)
Expiry
29
20.5
49
57
65
30 November 2021
30 November 2022
30 June 2024
30 June 2024
30 June 2024
Opening Balance
Issued
Exercised
Lapsed
2,000,000
500,000
1,000,000
1,500,000
–
–
–
–
–
–
5,800,000
8,000,000
(2,000,000)
–
–
–
–
–
5,000,000
13,800,000
(2,000,000)
Opening Balance
Issued
Exercised
Lapsed
–
–
–
–
–
–
–
Closing
Balance
–
500,000
1,000,000
1,500,000
5,800,000
8,000,000
16,800,000
Closing
Balance
1,250,000
2,500,000
500,000
1,000000
1,500,000
6,750,000
–
–
–
–
–
–
(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
Further information on options issued is set out in Note 24
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.
73
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
14. 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
2023
$
2022
$
(121,445,582)
(21,203,152)
(101,422,994)
(20,022,588)
(142,648,734)
(121,445,582)
5,850,604
4,513,009
10,363,613
(39,996)
–
(39,996)
(1,553,860)
1,553,860
–
5,729,318
121,286
5,850,604
(39,996)
–
(39,996)
(1,827,649)
273,789
(1,553,860)
Total Reserves
10,323,617
4,256,748
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.
74
Azure Minerals Limited Annual Report 2023 15. DIVIDENDS PAID OR PROVIDED FOR ON ORDINARY SHARES
No dividends were paid or declared since the start of the financial year. No recommendation for payment
of dividends has been made.
16. STATEMENT OF CASH FLOWS
a. Cash and cash equivalents
Cash and cash equivalents comprise:
cash at bank and in hand
short-term deposits
Closing cash and cash equivalents balance
2023
$
92,643
17,404,585
17,494,228
2022
$
41,835
10,558,726
10,600,561
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
Depreciation of non current assets
Amortisation on right to use asset
Provision for doubtful debt
Share based payment expense
Interest on right to use asset
Profit on sale of plant and equipment
Profit on sale of mineral concession
Re-classify right to use asset
Changes in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Net cash outflow from operating activities
c. Non-cash financing and investing activities
2023
$
2022
$
(29,081,472)
(20,022,588)
119,120
109,534
6,000,000
4,553,482
29,900
–
1,502,283
–
(291,840)
13,396
788,439
52,835
144,035
–
121,286
–
35,119
–
(11,023)
7,823
(2,248)
5,712
61,093
(16,204,323)
(19,660,791)
There have been no non-cash financing and investing activities during the 2023 year (2022: Nil).
75
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
17. 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
18. CONTINGENCIES
2023
$
332,000
2022
$
286,000
There are no other material contingent liabilities or contingent assets of the company at reporting date (2022: Nil).
19. EVENTS OCCURING AFTER REPORTING DATE
On 28 August 2023 the Company completed a placement of 41,639,663 shares at $2.40 per share to raise $99,949,381
and on 15 September the Company completed a Security Purchase Plan and issued 4,166,803 shares at $2.40 per
share to raise $10,000,327.
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.
76
Azure Minerals Limited Annual Report 2023 20. LOSS PER SHARE
a. Reconciliation of earnings to profit or loss
2023
$
2022
$
Loss used in calculating basic loss per share from continuing operations
(29,081,472)
(18,285,369)
Basic loss per share (cents per share)
(8.59)
(5.89)
Profit/(Loss) used in calculating basic loss per share from discontinued operations
Basic loss per share (cents per share)
7,878,320
2.33
(1,737,219)
(0.56)
Loss used in calculating basic loss per share attributable to owners of Azure
Minerals Limited
Basic loss per share (cents per share)
(21,203,152)
(20,022,588)
(6.26)
(6.45)
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
c. Effect of dilutive securities
Number Of Shares
2023
2022
338,486,820
310,204,899
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.
21. 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
2023
$
20,445
65,951
86,396
2022
$
63,780
70,561
134,341
77
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
22. KEY MANAGEMENT PERSONNEL DISCLOSURES
a. Compensation of key management personnel by compensation
Short-term
Post-employment
Share-based payment
2023
$
789,850
34,327
3,648,601
4,472,778
2022
$
825,620
34,004
–
859,624
For further information refer to the Remuneration Report included as part of the Directors’ Report.
23. RELATED PARTY DISCLOSURE
a. Parent entity
The ultimate parent entity within the Group is Azure Minerals Limited.
b. Subsidiaries
All subsidiaries were disposed of effective 21 July 2022. 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
Azure Mexico Pty Ltd
Minera Piedra Azul, S.A. de C.V.
Minera Capitana, S.A. de C.V.
Servicios AzuPerth, S.A. de C.V.
Mineral Azure S.A. de C.V.
Mineral Tlali SAPI. de C.V.
Country of
incorporation
Australia
Mexico
Mexico
Mexico
Mexico
Mexico
*Percentage of voting power is in proportion to ownership.
Class of shares
2023
Equity Holding*
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
–
–
–
–
–
–
2022
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
$12,000 (2022: $12,721).
78
Azure Minerals Limited Annual Report 2023 24. 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 15 November 2022. 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 5,800,000 options were issued
pursuant to the plan (2022: Nil).
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
2023
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
31 Mar ‘23
31 Mar ‘26
Weighted average exercise price
2022
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
8 Jun ‘21
30 Jun ‘24
Weighted average exercise price
49
57
65
45
49
57
65
15.9
15.2
14.6
20.62
500,000
1,000,000
1,500,000
–
–
–
–
5,800,000
3,000,000
5,800,000
$0.60
$0.45
15.9
15.2
14.6
500,000
1,000,000
1,500,000
3,000,000
$0.60
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
500,000
1,000,000
1,500,000
500,000
500,000
–
5,800,000
5,800,000
8,800,000
6,800,000
$0.50
$0.46
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 year was 2.15 years
(2022).
79
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
a. Employee and consultants option plan (Cont’d)
Fair value of options granted.
During the 2023 financial year the weighted average fair value of the options granted was 20.62 cents (2022: Nil).
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 (%)
2023
45.0
3.0
34.0
106
2.94
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:
Options issued pursuant to the Plan
2023
$
1,317,298
Consolidated
2022
$
121,286
80
Azure Minerals Limited Annual Report 2023 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
2023
26 Nov ‘19
30 Nov ‘22
31 Mar ‘23
31 Mar ‘26
20.5
60.0
5.8
2,000,000
–
(2,000,000)
40.45
– 8,000,000
–
2,000,000 8,000,000 (2,000,000)
–
–
–
–
–
8,000,000
8,000,000
8,000,000
8,000,000
Weighted average exercise price
$0.205
$0.60
$0.605
$0.60
$0.60
2022
19 Dec ‘18
30 Nov ‘21
26 Nov ‘19
30 Nov ‘22
29
20.5
10.3
1,250,000
5.8
2,500,000
Weighted average exercise price
3,750,000
$0.23
–
–
–
(1,000,000)
(250,000)
–
–
(500,000)
–
2,000,000
2,000,000
(1,500,000)
(250,000)
2,000,000
2,000,000
$0.26
$0.29
$0.205
$0.205
The weighted average remaining contractual life of share options outstanding at the end of the year was 2.75 years
(2022: 0.42 years).
Fair value of options granted.
During the 2023 financial year the weighted average fair value of the options granted was 18.79 cents (2022: Nil). 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 (%)
2023
60.0
3.0
62.5
106
3.82
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:
Options issued pursuant to the Plan
2023
$
3,236,184
Consolidated
2022
$
–
81
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
25. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPOREHENSIVE INCOME
i. Classification of financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income (FVOCI) comprise:
• Equity securities which are not held for trading in which the group has irrevocably elected at initial recognition
to recognise in this category. These are strategic investments and group considers this classification to be more
relevant.
• Debt securities where the contractual cash flows are solely principal and interest and the objective of the Group's
business model is achieved by both collecting contractual cash flows and selling financial assets
ii. equity investments through other comprehensive income
Equity investments at FVOCI comprise the following individual investments
Listed Security – Lexagene Holdings Limited
Unlisted Security – Bendito Resources Inc.a
2023
$
948
4,000,000
4,000,948
2022
$
948
–
948
a. Represents 11,2000 fully paid shares valued at US$0.25 being the share price of the most recent capital raising event held by Bendito resources Inc.
82
Azure Minerals Limited Annual Report 2023 26. FAIR VALUE MEASUREMENT
This note provides an update on the judgments and estimates made by the Group in determining the fair values of the
financial instruments since the last annual report.
Fair value hierarchy
To provide an indication about the reliability of inputs used in determining fair value, the Group classifieds its
financial instruments into three levels prescribed under the accounting standards. An explanation of each level
follows underneath the following table.
The following table presents the Group’s financial assets and financial liabilities measured and recognised at fair
value at 30 June 2023 on a recurring basis (30 June 2022: $948):
As at 30 June 2023
10,000 shares in Lexagen Holdings Limited (TSX-V: LXG.V)
11,200,000 shares in Bendito Resources Inc.
$
948
–
$
–
–
$
–
4,000,000
Level 1
Level 2
Level 3
There were no transactions between levels during the year. The Group’s policy is to recognise transfers into and
transfers out of fair value hierarchy levels at balance date.
The fair value of financial assets and liabilities held by the group must be estimated for recognition, measurement
and/or disclosure purposes. The group measures fair value by level, per the following fair value measurement
hierarchy:
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices); and
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Valuation techniques used to determine fair values
The Group did not have any financial instruments that are recognised in the financial statements where the carrying
value differed from the fair value. The fair value of the financial assets and liabilities are included at the amount at
which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or
liquidation sale. The carrying amounts of cash and short-term trade and other receivables, trade payables and other
current liabilities approximate their fair values largely due to the short-term maturities of these payments.
Financial assets at fair value through other comprehensive income-equity securities
The fair value of the equity holdings held in TSX-V listed companies are based on the quoted market prices from the
TSX-V on 30 June 2023, being the last traded price prior to year end.
The fair value of the equity holdings held in unlisted companies are based on the last transacted prices of that
company’s equity securities.
83
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
27. 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
2023
$
24,073,645
34,875,337
(3,428,697)
(3,877,469)
30,997,868
163,322,985
10,323,617
(142,648,734)
30,997,868
2022
$
10,914,105
34,992,689
1,987,347
(2,390,793)
32,601,896
143,016,012
5,810,608
(116,224,724)
32,601,896
b. Contingent liabilities of the parent entity
The parent entity did not have any contingent liabilities or guarantees as at 30 June 2023 or 30 June 2022.
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.
84
Azure Minerals Limited Annual Report 2023 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 2023 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:
Brian Thomas
Chairman
Perth, 28 September 2023
85
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 AUDITOR'S REPORT
To the members of Azure Minerals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Azure Minerals Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, 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 2023 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.
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.
86
Azure Minerals Limited Annual Report 2023
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. we have determined the matters described below to be the key
audit matters to be communicated in our report.
Recoverability of Capitalised Exploration Expenditure
Key audit matter
How the matter was addressed in our audit
At 30 June 2023 the carrying value of capitalised
Our procedures included, but were not limited to:
exploration expenditure was disclosed in Note 9.
As the carrying value of the exploration assets
represent a significant asset of the Group, we
considered it necessary to assess whether any facts or
circumstances exist to suggest that the carrying
amount of these assets may exceed its recoverable
amount.
Judgement is applied in determining the treatment of
exploration expenditure in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources. In particular, whether
facts and circumstances indicate that the exploration
and evaluation assets should be tested for impairment.
•
•
•
•
•
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
rights to tenure of the areas of interest
remained current at balance date;
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements and
director’s minutes;
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 9 to the
financial report.
87
INDEPENDENT AUDITOR’S REPORT
Disposal of Mexican Subsidiaries
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 7, during the year the Group
Our procedures included, but were not limited to:
•
•
•
•
•
Evaluating whether the classification of the
disposal as a Discontinued Operation is
appropriate and in line with the criteria of
AASB 5;
Considering the appropriateness of
management’s assessment of the classification
of the investment in line with the criteria of
AASB 128;
Reviewing the appropriateness of the fair value
of the investment in Bendito at year end;
Considering management’s assessment of the
recoverability of the receivable at year end,
including the appropriateness of the provision
for expected credit loss recorded; and
Assessing the adequacy of the related
disclosures in Note 3 and Note 7.
disposed of it’s Mexican subsidiaries to Bendito
Resources Inc (“Bendito”).
The Group received consideration in the form of both
cash and shares in Bendito, with part of the
consideration deferred, resulting in a receivable from
Bendito at year end.
This was determined to be a key audit matter due to:
•
The significance of the disposal to the Group,
including consideration around whether the
disposal should be accounted for as a
Discontinued Operation in accordance with AASB
5 Non-current Assets Held for Sale and
Discontinued Operations (“AASB 5”);
•
The judgement required in determining the
classification of the investment at either fair
value through other comprehensive income
(“FVTOCI”) in accordance with AASB 9 Financial
instruments or Investment in Associate as per
AASB 128 Investment in Associate and Joint
Ventures (“AASB 128”);
The judgment required to determine the fair
value of the investment in Bendito at year end;
and
The judgement to determine whether any
expected credit loss was required in relation to
the deferred consideration.
•
•
88
Azure Minerals Limited Annual Report 2023
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 2023, 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.
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 at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
89
INDEPENDENT AUDITOR’S REPORT
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 24 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Azure Minerals Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Jarrad Prue
Director
Perth,
28 September 2023
90
Azure Minerals Limited Annual Report 2023
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 2023, 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
28 September 2023
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 fi rms. Liability
limited by a scheme approved under Professional Standards Legislation.
91
ASX ADDITIONAL INFORMATION
The number of shareholders, by size of holding, in each class of share as at 1 September 2023 are:
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 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:
1
2
3
4
5
6
7
8
9
10
12
11
13
14
15
16
17
18
19
SQM AUSTRALIA PTY LTD
YANDAL INVESTMENTS PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES LIMITED
DELPHI UNTERNEHMENSBERATUNG AKTIENGESELLSCHAFT
DEUTSCHE BALATON AKTIENGESELLSCHAFT
BNP PARIBAS NOMS PTY LTD
NATIONAL NOMINEES LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
EQUITY TRUSTEES LIMITED
WARBONT NOMINEES PTY LTD
MR ANTHONY PAUL ROVIRA
MRS REBECCA SHALALA
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
MR WILLIAM BAMBLING + MRS JOYCE BAMBLING
MR YAOSHENG ZHANG
HARMANIS HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Totals: Top 20 holders of ORDINARY FULLY PAID SHARES (Total)
Total Remaining Holders Balance
92
Ordinary shares
Number of
holders
Number of
shares
1,998
2,435
1,083
1,880
265
7,661
381
955,280
6,722,973
8,493,571
61,594,346
354,359,565
432,125,735
16,464
Listed ordinary shares
Number of
shares
Percentage of
ordinary shares
86,320,433
52,200,000
21,766,048
20,426,181
19,959,970
19,698,017
15,643,007
6,917,261
5,493,172
4,453,295
3,600,000
3,589,939
3,100,000
3,008,813
2,777,000
2,700,000
2,028,000
2,000,000
1,978,104
1,867,694
19.98
12.08
5.04
4.73
4.62
4.56
3.62
1.60
1.27
1.03
0.83
0.83
0.72
0.70
0.64
0.62
0.47
0.46
0.46
0.43
279,526,934
152,598,801
64.69
25.31
Azure Minerals Limited Annual Report 2023 c. Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Yandal Investments Pty Ltd
Delphi Unternehmensberatung Aktiengesellschaft + Deutsche Balaton Aktiengesellschaft
SQM Australia Pty Ltd
d. Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
e. Schedule of interests in mining tenements
Project
Barton
Barton
Barton
Barton
Barton
Barton
Barton
Barton
Barton
Turner River
Turner River
Turner River
Turner River
Turner River
Coongan
Andover
Andover
Andover
Andover
Andover
Andover
Andover
Andover
Andover
Andover
Mineral
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
All Minerals
Search for Groundwater
Search for Groundwater
Search for Groundwater
Search for Groundwater
Tenement
E31/1278
E31/1280
E31/1337
E31/1338
E40/393
E40/432
E40/436
E40/437
E40/438
E45/2573
E45/2574
E45/6295
E45/6296
E45/6297
E46/1156
E47/2481
E47/4700
E47/4701
E47/4761
E47/4763
E47/4892
L47/1066
L47/1067
L47/1068
L47/1096
Status
Granted
Granted
Application
Application
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Number of Shares
52,200,000
46,710,817
78,008,191
Percentage Held
100
100
100
100
100
100
100
100
100
70
70
70
70
70
70
60
60
60
60
60
60
100
100
100
100
93
ASX ADDITIONAL INFORMATION
TABLES OF MINERALS RESOURCES
Mineral Resources Estimation Governance Statement
Governance of Azure’s mineral resources is a responsibility of the Executive Management of the Company.
On 21 July 2022 the Company concluded the sale of its Mexican assets, consequently it no longer has an interest in
the Oposura, Mesa de Plata, Loma Bonito, Cascada and Promontorio minerals resources.
A new mineral resource estimate has been made for the Andover nickel/copper/cobalt deposit.
Azure has ensured that its mineral resources estimates are subject to appropriate levels of governance and internal
controls. The mineral resources reported have been estimated by independent external consultants who are
experienced in best practices in modelling and estimation methods. The consultants have also undertaken reviews
of the quality and suitability of the underlying information used to generate the resource estimations. Additionally,
the Company carries out regular internal peer reviews of processes and contractors engaged.
Azure will report its Andover mineral resources on an annual basis in accordance with the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Resources (the JORC code) 2012 Edition.
Competent Persons named by Azure are members of the Australian Institute of Mining and Metallurgy and/or the
Australian Institute of Geoscientists and/or of a “Recognised Professional Organisation”, as included in a list on the
JORC and ASX websites.
Andover Mineral Resource Estimate by classification reported above a 0.5% Ni cut-off (ASX: 30 March 2022)
Classification
Indicated
Inferred
Total
Tonnes
Mt
Ni
%
3.8
0.9
4.6
1.16
0.89
1.11
Cu
%
0.47
0.44
0.47
Co
%
0.05
0.04
0.05
S
%
8.23
6.33
7.87
NiEq
Ni Metal
Cu Metal
Co Metal
%
kt
kt
kt
1.51
1.20
1.41
44.0
7.7
51.7
17.9
3.8
21.7
2.06
0.37
2.29
Notes:
•
•
Data is reported to significant figures and differences may occur due to rounding.
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.
94
Azure Minerals Limited Annual Report 2023 For reporting, a nickel cut-off grade of 0.5% was applied to the block model. The 0.5% Ni cut-off grade was based
on assessing global grade-tonnage plots for nickel and copper and based on similar peer underground nickel mines.
The tonnage and grade are not very sensitive to the nickel cut-off grade as the classified material is primarily
mineralisation that was modelled in domains above 0.5% Ni.
Nickel equivalence (NiEq) is reported for comparison purposes only. NiEq was calculated by a weighted average
of the three components of nickel, copper and cobalt (See Table below) using two-year average commodity price
predictions from Consensus Economics Report, dated 14 February 2022, and metallurgical recoveries as indicated
by testwork. The formula for the NiEq is:
• NiEq equation = Ni (%) + (Cu (%) x ((Cu $/t x Curecovery x 0.01) / (Ni $/t x Nirecovery)) + (Co (%) x ((Co $/t x Corecovery x
0.01) / (Ni $/t x Nirecovery))
• Simplifies to: NiEq equation = Ni (%) + Cu (%) x 0.42 + Co (%) x 2.78
NiEq Calculation Derivation
Element
Price (US$)
Realised price
per unit
Unit
Recovery % In situ unit price
Unit_1
NiEq factor
Ni
Cu
Co
19,366.6
9,089.8
63,107.9
153.8
64.0
427.2
$/t
$/t
$/t
0.79
0.70
0.68
153.8
64.0
427.2
$/t
$/t
$/t
1
0.42
2.78
Ridgeline Mineral Resource by classification reported above a 0.5% Ni cut-off (ASX: 23 January 2023)
Classification
Indicated
Inferred
Total
Tonnes
Mt
Ni
%
0.4
0.9
1.3
1.13
1.09
1.11
Cu
%
0.48
0.45
0.46
Co
%
0.05
0.05
0.05
S
%
6.63
6.57
6.59
NiEq
Ni Metal
Cu Metal
Co Metal
%
kt
kt
kt
1.51
1.45
1.47
4.8
9.9
14.7
2.0
4.1
6.1
0.21
0.43
0.64
Notes:
•
The NiEq calculation represents total metal value for each metal summed and expressed in equivalent nickel grade and
ounces. Commodity prices assumed in the calculation are US$: nickel $19,366.6/t; copper $9,089.8/t; cobalt $63,107.9/t.
The following metallurgical recovery assumptions are based on metallurgical testwork, and Azure considers they have a
reasonable potential to be recovered and sold: 80% nickel recovery; 77% copper recovery; 77% cobalt recovery.
NiEq formula = Ni (%) + (Cu (%) x (Cu $/t x Curecovery x 0.01) / (Ni (%) x Nirecovery x 0.01)) + (Co (%) x ((Co $/t x Corecovery x 0.01) /
(Ni $/t x Nirecovery x 0.01)).
•
•
95
ASX ADDITIONAL INFORMATION
For reporting, a nickel cut-off grade of 0.5% was applied to the block model. The 0.5% Ni cut-off grade was
based on assessing global grade-tonnage plots for nickel and copper and based on similar peer underground
nickel mines. The tonnage and grade are not very sensitive to the nickel cut-off grade as the classified material
is primarily mineralisation that was modelled in domains above 0.5% Ni.
Nickel equivalence (NiEq) is reported for comparison purposes only. NiEq was calculated by a weighted average
of the three components of nickel, copper and cobalt (See Table 3) using two-year average commodity price
predictions from Consensus Economics Report, dated 14 February 2022, which are consistent with those used
for the Andover Deposit, and metallurgical recoveries as indicated by testwork. The formula for the NiEq is:
NiEq equation = Ni (%) + (Cu (%) x ((Cu $/t x Curecovery x 0.01) / (Ni $/t x Nirecovery)) + (Co (%) x ((Co $/t x Corecovery x
0.01) / (Ni $/t x Nirecovery))
Simplifies to: NiEq equation = Ni (%) + Cu (%) x 0.45 + Co (%) x 3.15
Table 1: NiEq Calculation Derivation
Element
Price (US$)
Realised price
per unit
Unit
Recovery % In situ unit price
Unit_1
NiEq factor
Ni
Cu
Co
19,366.6
9,089.8
63,107.9
153.8
64.0
427.2
$/t
$/t
$/t
80%
77%
77%
154.9
70.0
488.5
$/t
$/t
$/t
1
0.45
3.15
Notes:
•
The NiEq calculation represents total metal value for each metal summed and expressed in equivalent nickel grade and ounces. Commodity prices
assumed in the calculation are US$: nickel $19,366.6/t; copper $9,089.8/t; cobalt $63,107.9/t.
The following metallurgical recovery assumptions are based on metallurgical testwork, and Azure considers they have a reasonable potential to be
recovered and sold: 80% nickel recovery; 77% copper recovery; 77% cobalt recovery.
NiEq formula = Ni (%) + (Cu (%) x (Cu $/t x Curecovery x 0.01) / (Ni (%) x Nirecovery x 0.01)) + (Co (%) x ((Co $/t x Corecovery x 0.01) / (Ni $/t x Nirecovery x
0.01)).
•
•
COMPETENT PERSON STATEMENT
Information in this report that relates to previously reported Exploration Results and Exploration Target
has been crossed-referenced in this report to the date that it was originally reported to ASX. Azure Minerals
Limited confirms that it is not aware of any new information or data that materially affects information
included in the relevant market announcements
The information in this report that relates to Mineral Resource Estimates for the Andover Deposit was first
released to the ASX on 30 March 2022 and for the Ridgeline Deposit it was first released to the ASX on 8
February 2023. Both are available to view on www.asx.com.au. Azure Minerals Limited confirms that it is
not aware of any new information or data that materially affects information included in the relevant market
announcement, and that all material assumptions and technical parameters underpinning the estimates in the
announcement continue to apply and have not materially changed.
96
Azure Minerals Limited Annual Report 2023 Level 1, 34 Colin Street
West Perth WA 6005
(08) 6187 7500
azureminerals.com.au