ACN 626 241 067
Annual Report
2022
Corporate
Directory
Directors
Mr Martin C Holland
Executive Chairman
and Managing Director
Mr Andrew Sissian
Non-Executive Director
Mr Michael Addison
Non-Executive Director
Mr Michael McNeilly
Non-Executive Director
Dr Ross McGowan
Non-Executive Director
Company secretary
Mr Justin Clyne
Registered office
Level 7, 151 Macquarie Street
Sydney NSW 2000
Tel: (02) 9048 8856
Email: info@cobre.com.au
Principal place
of business
Level 7, 151 Macquarie Street
Sydney NSW 2000
Tel: (02) 9048 8856
Email: info@cobre.com.au
Share registry
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Tel: +61 2 9290 9600
www.boardroomlimited.com.au
Auditor
Ernst & Young
The EY Centre
Level 34, 200 George Street
Sydney NSW 2000
Solicitors
HWL Ebsworth
Level 14, Australia Square
264–278 George Street
Sydney NSW 2000
Stock exchange
listing
Cobre Limited shares are listed on
the Australian Securities Exchange
(ASX code: CBE)
Website
www.cobre.com.au
Corporate
Governance
Statement
https://www.cobre.com.au/
corporate-governance/
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Contents
Chairman’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Directors’ report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Auditor’s independence declaration . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3. Financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Statement of profit or loss and other comprehensive income . . . . . . . 29
Statement of financial position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Statement of changes in equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
4. Notes to the financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5. Directors’ declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
6.
Independent auditor’s report to the members of Cobre Limited. . . . . . 67
7. ASX additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
General
information
The financial statements
cover Cobre Limited as a
consolidated entity consisting of
Cobre Limited and the entities
it controlled at the end of, or
during, the year. The financial
statements are presented in
Australian dollars, which is
Cobre Limited’s functional and
presentation currency.
Cobre Limited is a listed public
company limited by shares,
incorporated and domiciled
in Australia. Its registered
office and principal place
of business is:
Level 7, 151 Macquarie Street
Sydney NSW 2000
A description of the nature
of the consolidated entity’s
operations and its principal
activities are included in the
directors’ report, which is not
part of the financial statements.
The financial statements
were authorised for issue, in
accordance with a resolution
of directors, on 29 September
2022. The directors have the
power to amend and reissue
the financial statements.
ANNUAL REPORT 2022
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Chairman’s
letter
Dear Shareholder,
On behalf of the Board of Directors of Cobre Limited (Cobre or Company) it is with great pleasure that I present to you
Cobre’s Annual Report for the 2022 Financial Year (FY22). FY22 was a transformational year for the Company with our
new large scale copper discovery in Botswana, providing a clear pathway to unlocking a whole new copper district in
one of the most highly regarded, yet significantly underexplored, copper locations in the world, the Kalahari Copper
Belt (KCB).
Cobre’s Botswana Projects remains a key focus and the Company has achieved significant milestones over the last
financial year to advance its strategy in the KCB. In particular, Cobre secured the right to acquire 100% ownership of
Kalahari Metals Limited (KML), which owns the extensive ~5000km2 land package in Botswana (with 4,303km2 owned
100% and 723km2 held via joint venture arrangements), while aligning all the key elements of the Cobre technical and
operational teams in country. These strategic appointments included new in-country CEO of ML, Adam Wooldridge
and the appointment of Dr. Ross McGowan as a Non-Executive Director on the Board of Cobre, both immediately
post the end of FY22.
The Company also undertook a successful capital raise of A$7 million in August 2022 via a two-tranche placement.
The first tranche of A$5.5M was successfully completed, with the second tranche of A$1.5M still to be invested by the
Company’s largest shareholder, Metal Tiger plc (MTR) and also one of Cobre’s directors, Andrew Sissian, subject to
the approval of Cobre shareholders at the Company’s upcoming Extraordinary General Meeting (EGM) in October.
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As part of the capital raise, Cobre also aligned with its Botswana-based drilling company, Mitchells Drilling, who
has subscribed for US$300K into the placement for a drilling for equity swap, the details of which are outlined in
the Company’s ASX announcement of 4 August 2022.
Cobre’s vision is to explore and discover new copper deposits to fuel the decarbonisation revolution the world is
currently encountering. Without significant capital and new greenfield discoveries, the world would not be able to
keep up with the raw metals required to drive this significant and necessary paradigm shift. The Company has a
clear pathway to discovering critical new age metal deposits through its copper assets.
The new copper discovery in Botswana, together with the district scale opportunity that this extensive project
package presents, has significantly broadened our project portfolio and increased our global exposure to copper
– a metal with strong global demand fundamentals. As Cobre continues its advanced exploration and ongoing
drilling in Botswana, we hope to unlock our major discovery which we believe has the potential to generate significant
value to our shareholders.
I would like to take this opportunity to thank the Company’s loyal shareholders and key stakeholders for their ongoing
support, and who have all contributed to establishing and supporting Cobre on its path towards delivering success,
with the ultimate aim of making a major copper discovery. I would also like to thank my fellow directors, technical and
operations teams on the ground for their tremendous efforts during what has been Cobre’s most rewarding year to
date. We look forward to another year of continued exploration success.
Yours faithfully,
Martin Holland
Co-Founder, Executive Chairman, Managing Director
ANNUAL REPORT 2022
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DIRECTORs' REPORT
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Directors’
report
The Directors present their report, together with the financial statements, on the Consolidated Entity (referred to hereafter
as the ‘Consolidated Entity’) consisting of Cobre Limited (referred to hereafter as the ‘Company’ or ‘Parent Entity’) and
the entities it controlled at the end of, or during, the year ended 30 June 2022.
DIRECTORS
The following persons were directors of Cobre Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Martin Christopher Holland – Executive Chairman and Managing Director
Dr Ross McGowan – Non-Executive Director (appointed 22 June 2022)
Michael McNeilly - Non-Executive Director
Andrew Sissian – Non-Executive Director (Finance Director until 30 June 2022 and Non-Executive Director from 1 July 2022)
Michael Addison – Non-Executive Director
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial year included the exploration and evaluation of:
p the exploration tenement package in Botswana owned by Kalahari Metals Limited (KML), a private UK company
which controls approximately 5,027km2 of tenements within the Kalahari Copper Belt (KCB) in Botswana (with
4,304km2 owned, and 723km2 through Joint Venture arrangements). Cobre currently owns 51% of KML and is
moving towards 100%-ownership pending completion of the acquisition (refer ASX Announcement on 16 June 2022).
p the assets owned by Toucan Gold Pty Ltd (Toucan), in which Cobre owns a 100% shareholding, primarily comprising
the Perrinvale Project, which covers 327km2 of the Panhandle and Illaara Greenstone Belts in Western Australia; and
p the exploration tenement tenement in the name of GTTS Generations Pty Ltd and, in which the company acquired
an option to earn an interest pursuant to the Sandiman Farmin Agreement dated 13 November 2019. The Sandiman
Tenement is located in the Gascoyne Province, approximately 85km north of the town of Gascoyne Junction in
Western Australia and spans across 202km2 on the eastern edge of the Carnarvon Basin.
In addition to the exploration and evaluation of the above tenement portfolio, during the year Cobre increased its interest
in KML from 49.9% to a controlling interest of 51%, following receipt the change of control approval from the Ministry
of Mines Botswana (refer ASX announcement on 7 December 2021). The Company is now currently moving towards
100%-ownership of KML following the execution of a Share Purchase Deed with Metal Tiger plc (ASX: MTR, AIM: MTR,
Metal Tiger) to acquire the remaining 49% interest in KML.
During the year, Cobre acted as a cornerstone investor into Armada Metals Limited’s (ASX: AMM, Armada) Initial Public
Offer (IPO), investing A$1m into the IPO with Armada successfully listing on the ASX on 15 December 2021. Cobre owns
14.43% of Armada which holds two exploration licences prospective for magmatic Ni-Cu sulphides in Gabon. Covering a
total area of nearly 3,000km2, the licence holding presents a frontier exploration opportunity.
ANNUAL REPORT 2022
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DIRECTORs' REPORT
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DIVIDENDS
There were no dividends paid, recommended or
declared during the current or previous financial year.
REVIEW OF OPERATIONS
The loss for the consolidated entity after providing for
income tax amounted to $5,385,806 (30 June 2021:
$2,747,597).
Cobre has had a transformational year, successfully
delivering on a number of key strategic milestones.
During the year, the Company made a significant step-
change in its strategy and diversified its portfolio into
highly prospective regions in Africa through strategic
investments in Botswana and Gabon.
Cobre remains focused on establishing a strong presence
in Africa and has made significant progress in Botswana.
During the year, Cobre continued its maiden Joint Venture
(JV) drilling program in the KCB, delivering significant
drilling results at both the Endurance and Perseverance
Prospects, as well as announcing the start of an advanced
exploration program at the Ngami Copper Project (NCP or
Ngami) located on the northern margin of the KCB.
Exploration continued at the Company’s wholly owned
Perrinvale Volcanic Hosted Massive Sulphide (VHMS)
Project in Western Australia, with the 2021 field exploration
programme successfully adding multiple new drill ready
targets with potential to host VHMS mineralisation. Drill
targets are being assessed together with priority areas
for follow up field work In FY23.
During FY22, Cobre secured a controlling 51% interest
in KML, after receiving the change of control approval
from the Ministry of Mines Botswana. With this strategic
acquisition, Cobre has begun its plans to move towards
acquiring full 100% ownership of KML via acquisition of the
remaining 49% interest from Metal Tiger. This transaction
is expected to unlock considerable value for shareholders,
enabling Cobre to fully exploit the exploration potential
of the extensive KML license package in Botswana. The
acquisition of the remaining 49% of KML is subject to the
approval of Cobre shareholders at an Extraordinary General
Meeting (EGM) to be held in early November 2022.
After year end, Cobre announced significant copper
intersections at its Ngami Copper Project in Botswana.
These include intersecting significant chalcocite
mineralisation over a target strike length of 4km – which is
in line with the largest known copper deposits in the KCB.
This new copper discovery represents a transformational
threshold for Cobre, placing the Company on an exciting
path to potentially unlock a new copper district in the
KCB. Also, subsequent to the year end, and as a result
of early exploration success at Ngami, Cobre successfully
undertook a two-tranche placement of A$7 million
(before costs) at $0.15 per share to sophisticated and
institutional investors to fast-track advanced exploration
on the Botswana tenements (refer ASX announcement on
4 August 2022). The second tranche of the placement is
subject to the approval of Cobre shareholders at the EGM
scheduled for early November 2022.
WWW.COBRE.COM.AU Cobre has had an incredibly successful financial year, with a strong focus on exploration and strategic acquisitions.
These activities have formed the foundation upon which we are now able to work towards unlocking the next copper
district in the KCB.
Some of the key achievements are outlined in a selection of Cobre’s more significant ASX announcements across
FY22 as detailed below.
Date
Botswana
14 July 2021
13 October 2021
18 October 2021
7 December 2021
8 December 2021
Key Announcement
Kalahari Metals Limited – Kitlanya West Exploration Update
Kalahari Metals Limited – Results from the Endurance Drilling Programme
Kalahari Metals Limited – Commencement of Drilling at Endurance
Minister’s Change of Control Approval for Kalahari Metals
KML- Provisional Results from Endurance Drilling Programme
20 December 2021
Botswana Drilling Complete – Cu-Mineralisation Increases
12 April 2022
16 June 2022
22 June 2022
Gabon
Kalahari Metals – Botswana Exploration Update
Cobre Signs Share Purchase Deed to Acquire 100% of KML
Appointment of Dr Ross McGowan as non-Executive Director
29 November 2021
Investment in Armada Metals
Western Australia
28 January 2022
New Cu Targets Identified at Perrinvale – WA
Full details of each of these announcements and all exploration activities and results referred, including relevant
JORC information, can be accessed via the Company’s ASX releases which are available on both the ASX and on the
Company’s website.
ANNUAL REPORT 2022
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DIRECTORs' REPORT
Botswana
Cobre is moving towards 100% ownership of KML which holds an extensive land package of highly prospective copper
and silver exploration tenements in the KCB. The KCB is regarded as one of the world’s most prospective areas for
yet-to-be-discovered sediment-hosted copper deposits by the US Geological Survey and is emerging as a new copper
production belt. KML’s landholdings are along strike, and adjacent to, two major development projects: Cupric Canyon’s
high-grade Zone 5 Cu-Ag deposit and ASX listed Sandfire Resources Limited’s (ASX: SFR) T3 Motheo Cu-Ag deposit.
In December 2021, Cobre increased its interest in KML from 49.9% to a controlling interest of 51%, following receipt of
the change of control approval from the Ministry of Mines Botswana (refer ASX announcement on 7 December 2021).
Subsequently, in June 2022, Cobre signed a share purchase deed to acquire 100% ownership of KML to take full control of
the district-scale exploration opportunity in the KCB (refer ASX announcement on 16 June 2022).
Exploration in Botswana
During FY22, the maiden joint venture drilling program continued in the KCB in Botswana, with 1,701m of Reverse
Circulation (RC) drilling and 3,344.5m of diamond drilling completed at the Endurance Prospect located within the
Kitlanya East Project (KITE), as well as 900m of diamond drilling completed at the Trouvaille Prospect located within
the Kitlanya West Project (KITW). The Company reported the achievement of some significant progress at both the
KITW and KITE Projects, with initial diamond drill results confirming the existence of lower D’Kar Formation in the fold
structures mapped in the airborne electromagnetic modelling, typical host stratigraphy for known deposits in the KCB.
Subsequent to the end of FY22, Cobre announced the commencement of advanced exploration and the intersection
of significant copper mineralisation from its maiden drilling program on KML’s Ngami Copper Project (NCP) licenses
(refer ASX announcements on 27 July and 1, 3, 16, 30 August and 9 September 2022).
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WWW.COBRE.COM.AU Based on visual estimates, confirmed with pXRF readings, all four diamond holes (NCP07, NCP08, NCP09, NCP10)
intersected notable to significant chalcocite mineralisation, extending the footprint of copper mineralisation to over
4km long- in line with the other deposits in the KCB. In addition, recently completed holes, NCP11-B and NCP12,
also announced post the reporting period, confirmed the vertical continuity of mineralisation below NCP08 (refer ASX
announcements on 30 August and 9 September 2022).
Plan view illustrating drill
positions on airborne
magnetic data
ANNUAL REPORT 2022
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p NCP07 intersected a broad 59m (down hole) zone
of visual copper mineralisation which increases in
abundance in the lower 10m which includes a
significant chalcocite component along with
chrysocolla.
p NCP08 intersected chalcocite mineralisation over a
25m interval (down hole) with a significant increase
in mineralisation in the lower 12m.
p NCP09 intersected visible copper mineralisation
over a 15m interval (down hole) including
chrysocolla, malachite and fine-grained chalcocite.
p NCP10 intersected a broad zone of visible copper
mineralisation which extends over 69m (down hole)
with 13m of abundant chalcocite mineralisation.
p NCP11-B has intersected a broad zone of visible
copper mineralisation which extends 78m (down
hole) including 16m of abundant chalcocite and
bornite.
p NCP12 intersected an 18m zone of visible copper
mineralisation (down hole) which includes 9m of
notable visual chalcocite mineralisation confirmed
with pXRF.
The ongoing drilling program at the NCP represents
the first of 55 prospective targets across the KML
licenses, with 43 ranked targets located within the KITW
and NCP tenements. With an initial 1,200m diamond
drilling program complete at NCP, the Company is now
progressing an additional 2,500m of infill diamond drilling
at the project, with a second drill rig already mobilised to
site (refer ASX announcement on 30 August 2022).
DIRECTORs' REPORT
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WWW.COBRE.COM.AU Gabon
Armada holds 100%-ownership of two exploration licences prospective for magmatic Ni-Cu sulphides situated in Gabon.
Covering a total area of nearly 3,000km2, the licence holding presents a frontier district-scale exploration opportunity.
Location of the LMT and NYT within
the Company’s exploration licences
During the year, Cobre invested an additional AUD$1.0M as a cornerstone investor into Armada’s IPO, resulting in the
successful listing of Armada on the ASX on 15 December 2021.
Post-listing, Cobre holds a total of 15,000,000 Fully Paid Ordinary Shares (FPOS) in Armada (comprising 14.43% of
shares on issue) as well as an option to acquire an additional 3,330,000 FPOS in Armada, upon exercise of the option
and subject to payment of the exercise price of AUD$0.334 per share. In addition to owning 14.43% of Armada, Cobre
appointed Martin Holland as its elected nominee Non-Executive Director to the Board of Armada.
During FY22, Armada announced the renewal of permit G5-555 which was formally granted by His Excellency Vincent
de Paul Massassa, Minister of Oil, Gas, Hydrocarbons and Mines in Gabon, on 14 February 2022. The permit has
allowed Armada to immediately explore the southern extension of the 25km-long Libonga-Matchiti Trend (‘LMT’).
Exploration in Gabon
In early March 2022, Armada announced commencement of a Phase 1 Maiden Diamond Drill program over its highest
priority nickel-copper targets along the LMT at the Nyanga Project. The drill program, which comprised of ten diamond
holes totalling 3,240m, was successfully completed in June 2022 with Armada announcing the intersection of
disseminated to strongly disseminated and blebby magmatic sulphide mineralisation in all ten diamond drill holes.
The core is currently being processed and sections will be assayed for the normal magmatic suite of elements including
nickel, copper, cobalt, and the Platinum Group Elements (PGE) which will also aid the geological understanding and
future targeting.
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DIRECTORs' REPORT
Finally, Armada conducted laboratory analysis of surface hand grab samples collected from two advanced exploration
targets (Ngongo and Yoyo), both situated within permit G5-555. These samples, collected along the Ngono-Yoyo
Trend (‘NYT’), have confirmed the presence of outcropping ultramafic intrusions with observed magmatic sulphides for
a further 40km southeast of the LMT- extending the overall potential of the trend to over 60km.
Subsequent to the end of FY22, Armada announced that further laboratory analysis of the samples confirmed that the
source of magma in the NYT comprises a magmatic system that is the same as the LMT (refer ASX announcement,
4 July 2022).
The Cobre Board view the investment into Armada as a great opportunity to expand the Company’s reach in the copper
exploration space beyond Western Australian and Botswana. Given early signs of exploration success achieved in
FY22, and Armada’s highly experienced leadership team (who have a successful track record of involvement in major
discoveries like the world-class Kamoa deposit by Ivanhoe Mines), the Board is confident in the potential success of
this project.
Western Australia
Perrinvale Project
The Perrinvale Project is based on a large conterminous group of nine exploration licenses and one miscellaneous
license held by Toucan Gold Pty Ltd, a wholly owned subsidiary of Cobre. As at 30 June 2022, the Perrinvale tenements
totalled 345km2 in size and following recent renewals and relinquishments this has been reduced to 327km2.
During the year, the Company continued with a systematic application of the technical knowledge gained with the aim
of defining a significant VHMS resource base on the project. A field crew operated on the ground at Perrinvale with the
primary activities being soil sampling, rock chipping and local mapping aimed at validating the model and vectoring to
the definition of future drill targets.
The field work has covered the majority of the tenure (with the exception of the most recently granted E29/1106 tenement)
at a first pass sampling level. A total of 13,611 soil and 4,237 rock chip samples were collected over the course of FY22,
with 1,231 rock samples submitted for laboratory analysis.
Work to date is supportive of the model and supporting the concept that the iron formations in the area are related
to hydrothermal venting. Systematic sampling of these iron formations allows for geochemical vectoring towards
hydrothermal source. In the technical review completed by the Company in early 2021, of known VHMS deposit areas
within the Yilgran in particular (and globally in general), such iron formation rocks can be both hosts of, and caps on,
sulphide mineralisation.
On the basis of field observations, pXRF analysis of soils and rocks, lab assays, and remotely sensed datasets,
the technical team refined specific areas of indicated prospectivity for more detailed field assessment, which was
undertaken in the first half of FY22.
In December 2021, Cobre completed some ground electromagnetic (MLEM) surveys on higher priority areas of
indicated prospectivity. Four prospects were included in the surveys. In line with the goal of assessing prospectivity
across the entire tenement holding, all surveyed prospects are located outside the area covered by the 2019 Airborne
Electromagnetic (AEM) Survey.
Results have been utilised in the process of selecting priority drill targets with a combination of further MLEM surveys
and heritage surveys progressed post FY22.
Sandiman Project
The Sandiman Project is based on a single tenement (E09/2316) totalling 202km2 in size. Cobre has earnt a 51%
interest in the tenement via the farm-in agreement with GTTS Generations Pty Ltd dated 13 November 2019 (refer
farm-in agreement summary in section 10.8 of the Company’s Prospectus dated 6 December 2019). Having meet the
first earn-in obligations due to a lack of copper results, Cobre decided not to proceed with the second earn-in but to
operate in joint venture with GTTS Generation. The project has demonstrated significant potential for Mississippi Valley
style silver-lead-zinc and fieldwork is continuing to refine drill targets. completed.
Previous work has identified a significant number of areas of interest that require field follow up on the Sandiman
Project. In the last quarter of the financial year, and in conjunction with 49% project owner, GTTS Generations Pty Ltd,
a field team commenced a programme of field work aimed at ground truthing priority areas of interest generated from
the 2021 geophysical interpretation with work completed post financial year end.
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Investment – Metal Tiger
During FY22, Cobre invested $1.0m into a placement conducted by Metal Tiger which was undertaken to facilitate
additional liquidity to MTR’s ASX quotation and assist to establish an increased presence in the Australian market
and to be applied across MTR’s global resources investments. The raising was conducted at A$0.37 per CHESS
Depositary Interest (CDI) with Cobre issued 2,702,703 new CDIs (refer to ASX announcement 27 July 2021). The
Company’s conditional investment in Metal Tiger was subsequently approved by MTR shareholders at MTR’s EGM
held on 16 September 2021.
The Cobre Board believes this investment shows commercial alignment and gives Cobre shareholders additional
exposure to the royalties that Metal Tiger owns over the KCB district. Cobre has a high level of confidence in the Metal
Tiger Board and management team and believes this investment is one which will prove to be one of significant value
for Cobre’s shareholders.
Board and Management
On 22 June 2022, Dr. Ross McGowan was appointed as a Non-Executive Director on the Board of Cobre. Dr McGowan
is the Managing Director & CEO of Armada and founded the Resource Exploration & Development Group, which was
responsible for generating the Kitlanya East and West prospect areas held by KML, as well as having over 20 years of
academic, technical and corporate experience in mining exploration in Africa. Ross was a co- recipient of the 2015 PDAC
Thayer Lindsley Award for an international Mineral Discovery for Kamoa.
Subsequent to the end of FY22, Adam Wooldridge was appointed as the CEO of KML. Adam is a founding partner
of KML and has played an active role in developing the Company’s exploration projects over the last five years. An
experienced geophysicist and geologist with over 25 years’ experience in Africa, the Middle East and Europe, he has
worked in exploration management and consulting positions across a variety of deposit types including base and
precious metals.
In addition to Adam’s appointment as CEO, KML’s exploration programmes will be supported by a discovery focussed
team with extensive experience in Africa, including David Caterall, Thomas Rogers, Ross McGowan and Thomas
Krebbs (refer ASX announcement on 4 July 2022).
Finally, post financial year end, Andrew Sissian transitioned from Finance Director to NED, with Greg Hammond
appointed as the Company’s new Chief Financial Officer (CFO) (refer ASX announcement on 5 July 2022).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 16 June 2022, Cobre announced that it had entered into a Share Purchase Deed with Metal Tiger to acquire the
remaining 49% interest in KML (Transaction).
Cobre currently holds a 51% ownership interest in KML, via its wholly owned subsidiary, Cobre Kalahari Pty Ltd (Cobre
Kalahari). Under the terms of the Transaction:
p Cobre (or its nominee) will initially acquire 24.5% of the shares in KML from Metal Tiger (increasing its interest to
75.5%) for a total cash consideration of GBP £750,000 (Initial Acquisition); and
p Metal Tiger will grant Cobre a call option for it (or its nominee) to acquire the remaining 24.5% of shares in KML,
exercisable for either GBP £750,000 cash or the equivalent in Cobre shares, for a period of 12 months after
completion of the Initial Acquisition (Call Option), providing Cobre a pathway to 100% ownership of KML.
Metal Tiger is a substantial holder of the Company and currently holds approximately 17.20% of the issued shares in Cobre.
There were no other significant changes in the state of affairs of the consolidated entity during the financial year.
ANNUAL REPORT 2022
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DIRECTORs' REPORT
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 4 August 2022, the Company announced that it had successfully conducted a two-tranche placement of
A$7 million (before costs) at $0.15 per share to sophisticated and institutional investors with the funds raised
to be used to fast-track exploration on the tenement package held by KML in Botswana. Of this amount $1,496,211
was still to be received under the second tranche at the timing of signing.
On 31 August 2022, the company issued 1,610,500 fully paid shares upon the exercise of 975,000 options with an
exercise price of $0.30 each and 635,500 options with an exercise price of $0.20 each.
Cobre’s drilling service provider in Botswana, Mitchell’s Drilling, has also subscribed for US$300,000 worth of shares
in Cobre to be set-off against drilling services delivered.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly
affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in
future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Consolidated Entity will continue to focus on exploration, evaluation and development activities at the tenement
package held by KML in Botswana, as it embarks on an advanced 5000m infill diamond drilling program at the NCP.
Further soil sampling at the NCP and KITW Projects are underway with results expected in October and November.
Aircore and RC drilling is planned at KITW and is expected to commence in January 2023.
Cobre will also continue exploration at Perrinvale in Western Australia, with a planned drilling program on priority
targets aimed to commence in FY23. Future work is dependent on contractor and survey team availability. Both the
MLEM contractor and Heritage Survey team are expected to be available in the current quarter.
Samples collected during the Sandiman field programme will be assessed and selected samples are expected to be
dispatched for assay. Field observations will also be assessed to refine the previous interpretations.
Finally, the Company will continue ongoing support of its investment in Armada which is advancing its exploration
programs at the Nyanga Magmatic Ni-Cu Project in Gabon.
ENVIRONMENTAL REGULATION
The Consolidated Entity holds interests in a number of exploration tenements. The various authorities granting such
tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions given
to it under those terms of the tenement. There have been no known breaches of the tenement conditions and no such
breaches have been notified by any government agency during the year 30 June 2022.
14
| COBRE LIMITED
WWW.COBRE.COM.AU Cobre CEO and Chairman, Martin Holland, pictured with KML CEO, Adam Wooldridge, and the RES exploration team.
INFORMATION ON DIRECTORS
Name:
Title:
Experience
and expertise:
Other current
directorships:
Martin Holland
Executive Chairman and Managing Director
Mr Holland is a co-founder of Cobre. Mr Holland has over 12 years of M&A and corporate
finance experience focused on the mining sector. Mr Holland was the founder and CEO
of Lithium Power International (LPI:ASX) from 2015 to 2018. Mr Holland is the Chairman
of Sydney based investment company, Holland International Pty Ltd, which has strong
working relationships with leading institutions and banks across the globe.
OzAurum Resources Limited (ASX: OZM) and Armada Metals Limited (ASX: AMM)
Former directorships
(last 3 years):
Nil
Interests in shares:
11,616,931 fully paid ordinary shares
Interests in options:
13,175,000 options over ordinary shares
ANNUAL REPORT 2022
| 15
DIRECTORs' REPORT
Name:
Title:
Andrew Sissian
Non-Executive Director since 1 July 2022 (prior to that held role as Finance Director)
Qualifications:
Mr Sissian is a CPA and holds a Masters of Accounting and a Bachelor of Commerce.
Experience
and expertise:
Mr Sissian is a co-founder of Cobre. Mr Sissian has extensive experience in corporate
finance as a technology and finance executive, advisor and investor. Mr Sissian has
worked with Wilsons and the National Australia Bank, in both Australia and Shanghai,
focused on institutional banking and acquisition finance. Mr Sissian is the CEO of
‘Internet of Things’ company, Procon Telematics Pty Ltd.
Other current
directorships:
Former directorships
(last 3 years):
Nil
Nil
Interests in shares:
4,849,052 fully paid ordinary shares
Interests in options:
6,437,000 options over ordinary shares
Name:
Title:
Qualifications:
Experience
and expertise:
Michael Addison
Non-Executive Director
He is a former Rhodes Scholar and has an Oxford University postgraduate degree
in Management Studies.
Mr Addison has a long history of involvement in the Australian and international mining
industry, having been instrumental in the founding of two former ASX-listed Australian
mining exploration and development companies: Endocoal Limited (formerly as Atlas
Coal Limited) and Carabella Resources Limited. Mr Addison has also held previous
positions on the Boards of three other ASX-listed resource companies (Stratum Metals
Limited, Intra Energy Limited and Frontier Diamonds Limited) and two unlisted public
resource companies (Scott Creek Coal Limited and Northam Iron Limited). He was most
recently a founding director of ASX-listed Genex Power Limited, a company focused on
the origination and development of innovative clean energy generation and electricity
storage solutions across Australia. Mr Addison has deep expertise in the management
and running of listed companies and an intimate working knowledge of the regulatory,
legal and governance environments in which listed companies operate.
Other current
directorships:
Nil
Former directorships
(last 3 years):
Genex Power Limited (ASX: GNX)
Interests in shares:
1,062,500 fully paid ordinary shares
Interests in options:
1,000,000 options over ordinary shares
16
| COBRE LIMITED
WWW.COBRE.COM.AU Name:
Title:
Qualifications:
Experience
and expertise:
Michael McNeilly
Non-Executive Director
Mr McNeilly studied Biology at Imperial College London and has a BA in Economics from
the American University of Paris.
Michael is the Chief Executive Officer of Metal Tiger plc (AIM:MTR) and a nominee
Director of Cobre appointed by Metal Tiger. As a nominee non-executive director of
MOD Resources Limited (previously ASX:MOD), he was actively involved in the Sandfire
Resources NL (ASX:SFR) recommended scheme offer for MOD Resources which saw
Metal Tiger receive circa 6.3 million shares in SFR. Mr McNeilly resigned from the Board
of MOD as part of the scheme of arrangement. Mr McNeilly has formerly been a non-
executive director of Greatland Gold plc (AIM:GGP) and a non-executive director at
Arkle Resources plc (AIM:ARK). Mr McNeilly serves as a director on numerous of MTR’s
investment and subsidiary entities. Mr McNeilly previously worked as a corporate financier
with both Allenby Capital and Arden Partners Limited (AIM:ARDN) as well as a corporate
executive at Coinsilium (NEX:COIN) where he worked with early stage blockchain
focussed start-ups.
Other current
directorships:
Former directorships
(last 3 years):
Interests in shares:
Nil
Nil
Nil
Interests in options:
1,500,000 options over ordinary shares
Name:
Title:
Qualifications:
Experience
and expertise:
Other current
directorships:
Dr Ross McGowan
Non-Executive Director (appointed 22 June 2022)
Dr McGowan is a Fellow of the Geological Society of London and a Fellow of the Society
of Economic Geologists.
Dr McGowan founded the Resource Exploration & Development Group and has over
20 years of academic, technical and corporate experience in mining exploration in Africa.
Ross was a co-recipient of the 2015 PDAC Thayer Lindsley Award for an international
Mineral Discovery for Kamoa.
Armada Metals Limited (ASX: AMM)
Former directorships
(last 3 years):
Nil
Interests in shares:
4,000,000 fully paid ordinay shares
Interests in options:
Nil
‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships
of all other types of entities, unless otherwise stated.
ANNUAL REPORT 2022
| 17
DIRECTORs' REPORT
COMPANY SECRETARY
Justin Clyne is a qualified Chartered Company Secretary and Member of the Australian Institute of Company Directors.
Justin Clyne was admitted as a Solicitor of the Supreme Court of New South Wales and High Court of Australia in
1996 before gaining admission as a Barrister in 1998. He had 15 years of experience in the legal profession acting for
a number of the country’s largest corporations, initially in the areas of corporate and commercial law before dedicating
himself full-time to the provision of corporate advisory and company secretarial services. Justin has been a director
and/or secretary of a number of public listed and unlisted companies. He has significant experience and knowledge in
international law, the Corporations Act, the ASX Listing Rules and corporate regulatory requirements generally.
MEETINGS OF DIRECTORS
The number of meetings of the company’s Board of Directors (‘the Board’) held during the year ended 30 June 2022,
and the number of meetings attended by each director were:
Martin Holland
Andrew Sissian
Michael Addison
Michael McNeilly
Ross McGowan
Full Board
Attended
Held
7
7
7
7
–
7
7
7
7
–
Held: represents the number of meetings held during the time the director held office.
REMUNERATION REPORT (AUDITED)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity,
in accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
p Principles used to determine the nature and amount of remuneration
p Details of remuneration
p Service agreements
p Share-based compensation
p Additional information
p Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the consolidated entity’s and company’s executive reward framework is to ensure reward for
performance is competitive and appropriate for the results delivered. The framework aligns executive reward with the
achievement of strategic objectives and the creation of value for shareholders, and conforms with the market best
practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good
reward governance practices:
p competitiveness and reasonableness
p acceptability to shareholders
p alignment of executive compensation
p transparency
18
| COBRE LIMITED
WWW.COBRE.COM.AU The board is responsible for determining and reviewing remuneration arrangements for its directors and executives.
The performance of the consolidated entity and company depends on the quality of its directors and executives.
The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
The reward framework is designed to align executive reward to shareholders’ interests. The Board have considered
that it should seek to enhance shareholders’ interests by:
p having economic profit as a core component of plan design
p focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value
p attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives’ interests by:
p rewarding capability and experience
p reflecting competitive reward for contribution to growth in shareholder wealth
p providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors remuneration
Non-executive directors’ fees are paid within an aggregate limit which is approved by the shareholders from time
to time. Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the
Corporations Act at the time of the directors retirement or termination.
ASX listing rules requires that the aggregate non-executive directors’ remuneration shall be determined periodically by
a general meeting. The shareholders have approved an aggregate remuneration of $400,000.
Executive remuneration
In determining the level and make-up of executive remuneration, the Board negotiates a remuneration to reflect the
market salary for a position and individual of comparable responsibility and experience. Remuneration is regularly
compared with the external market by participation in industry salary surveys and during recruitment activities generally.
If required, the board may engage an external consultant to provide independent advice in the form of a written report
detailing market levels of remuneration for comparable executive roles.
p base pay and non-monetary benefits
p share-based payments
The combination of these comprises the executive’s total remuneration.
Use of remuneration consultants
The company has not made use of remuneration consultants during the current or prior year.
Share based remuneration
During the prior year key management personnel have received options as part of their remuneration. The options issued
during the current and prior year were approved by shareholders at a general meeting of the company. The company
does not have a formalised employee share option plan in place. The issuance of share based remuneration is at the full
discretion of the board and the board has decided not to issue the any in the current year.
Voting and comments made at the company’s 30 November 2021 Annual General Meeting (‘AGM’)
At the 30 November 2021 AGM, 88.38% of the votes received supported the adoption of the remuneration report
for the year ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its
remuneration practices.
ANNUAL REPORT 2022
| 19
DIRECTORs' REPORT
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash bonus
$
Non-
monetary
$
Super-
annuation
$
Long service
leave
$
Equity-
settled
$
2022
Non-Executive Directors:
Michael Addison
Michael McNeilly
Ross McGowan
Executive Directors:
Martin Holland
Andrew Sissian
2021
Non-Executive Directors:
Michael Addison
Michael McNeilly
Executive Directors:
Martin Holland
Andrew Sissian
72,000
72,000
1,250
288,000
177,999
611,249
72,000
72,000
288,000
156,999
588,999
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
28,800
–
28,800
–
–
27,360
-
27,360
–
–
–
–
–
–
–
–
–
–
–
Total
$
72,000
72,000
1,250
316,800
177,999
640,049
–
–
–
–
–
–
60,598
121,197
132,598
193,197
805,959
375,710
1,121,319
532,709
1,363,464
1,979,823
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
2022
2021
2022
2021
2022
2021
Fixed remuneration
At risk – STI
At risk – LTI
Non-Executive Directors:
Michael Addison
Michael McNeilly
Ross McGowan
Executive Directors:
Martin Holland
Andrew Sissian
100%
100%
100%
100%
100%
54%
37%
–
28%
29%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
46%
63%
–
72%
71%
20
| COBRE LIMITED
WWW.COBRE.COM.AU Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements.
Details of these agreements are as follows:
Name:
Title:
Martin Holland
Executive Chairman and Managing Director
Agreement commenced:
21 November 2019
Term of agreement:
Mr Holland’s annual remuneration package under the Executive Services Agreement is
$288,000 plus statutory superannuation. Unless terminated by either party at an earlier
date, the Executive Services Agreement will automatically terminate on the date that is
three years after the date of Admission.
With effect from 1 July 2022 remuneration has been reduced to $240,000 plus
statutory superannuation.
Name:
Title:
Andrew Sissian
Finance Director (Non-executive director effective 1 July 2022)
Agreement commenced:
21 November 2019
Term of agreement:
Under the Consultancy Agreement, a monthly fee of $12,000 (excluding GST) is
payable for the first 40 hours of work provided each month. Additional fees are
payable at $300 per hour (excluding GST) capped $22,000 per month.
With effect from 1 July 2022 Andrew became a Non-Executive Director is entitled to
remuneration of $50,000 (excluding GST).
Name:
Title:
Michael Addison
Non-Executive Director
Agreement commenced:
25 November 2019
Term of agreement:
The Non-Executive Director will be paid an annual director’s fee of $72,000 (plus GST
if applicable) under the agreement. No additional retirement or termination payment will
be made on termination of the agreement.
With effect from 1 July 2022 remuneration has been reduced to $50,000 (excluding GST).
Name:
Title:
Michael McNeilly
Non-Executive Director
Agreement commenced:
6 November 2019
Term of agreement:
The Non-Executive Director will be paid an annual Director’s fee of $72,000 (plus GST
if applicable) under the agreement. No additional retirement or termination payment will
be made on termination of the agreement.
With effect from 1 July 2022 remuneration has been reduced to $50,000 (excluding GST).
ANNUAL REPORT 2022
| 21
DIRECTORs' REPORT
Name:
Title:
Dr Ross McGowan
Non-Executive Director
Agreement commenced:
22 June 2022
Term of agreement:
The Non-Executive Director will be paid an annual director’s fee of $50,000 (plus GST if
applicable) under the agreement. No additional retirement or termination payment will be
made on termination of the agreement.
Key management personnel have no entitlement to termination payments in the event of removal for misconduct.
Prior to the service arrangements being in place KMPs were paid consultant fees during the prior year in respect of
services provided for the IPO and other services to the company.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the
year ended 30 June 2022.
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year, prior financial year or future reporting years are as follows:
Grant date
6 April 2021
Vesting date and
exercisable date
Expiry date
Exercise price
Fair value per
option at grant date
6 April 2021
6 April 2026
$0.3350
$0.121
Name
Number
of options
granted
Grant date
Vesting date and
exercisable date
Expiry date
Exercise price
Martin Holland
6,650,000
6 April 2021
6 April 2021
6 April 2026
Andrew Sissian
3,100,000
6 April 2021
6 April 2021
6 April 2026
Michael McNeilly
1,000,000
6 April 2021
6 April 2021
6 April 2026
Michael Addison
500,000
6 April 2021
6 April 2021
6 April 2026
$0.3350
$0.3350
$0.3350
$0.3350
Fair value
per option
at grant date
$0.121
$0.121
$0.121
$0.121
Options granted carry no dividend or voting rights.
22
| COBRE LIMITED
WWW.COBRE.COM.AU Additional information
The earnings of the consolidated entity for the four years to 30 June 2022 are summarised below:
2022
$
2021
$
2020
$
18 May 2018
to
30 June 2019
$
Loss after income tax
(5,385,806)
(2,747,597)
(1,988,417)
(150,210)
The factors that are considered to indicate management performance are summarised below:
Share price at financial year end ($)*
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
2022
$
0.03
(3.34)
(3.34)
2021
$
0.16
(2.40)
(2.40)
2020
$
0.18
(2.93)
(2.93)
18 May 2018
to
30 June 2019
$
–
(1.79)
(1.79)
*
On 29 January 2020, the company was admitted to the official list of the ASX with the trading of the Company’s shares
commencing on 31 January 2020.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the company held during the financial year by each director and other members of key
management personnel of the consolidated entity, including their personally related parties, is set out below:
Ordinary shares
Martin Holland
Andrew Sissian
Michael Addison
Ross McGowan
Balance at
the start of
the year
Held at
appointment
Additions
Disposals/
other
11,024,334
4,849,052
1,062,500
–
–
–
–
4,000,000
16,935,886
4,000,000
592,597
–
–
–
592,597
–
–
–
–
–
Balance at
the end of
the year
11,616,931
4,849,052
1,062,500
4,000,000
21,528,483
ANNUAL REPORT 2022
| 23
DIRECTORs' REPORT
Option holding
The number of options over ordinary shares in the company held during the financial year by each director and other
members of key management personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted as
remuneration
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Options over
ordinary shares
Martin Holland
Andrew Sissian
Michael Addison
Michael McNeilly
13,175,000
6,437,000
1,000,000
1,500,000
22,112,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,175,000
6,437,000
1,000,000
1,500,000
22,112,000
Loans to key management personnel and their related parties
There are no loans to key management personnel and their related parties.
This concludes the remuneration report, which has been audited.
SHARES UNDER OPTION
Unissued ordinary shares of Cobre Limited under option at the date of this report are as follows:
Grant date
Expiry date
Exercise price
Number under option
24 September 2019
29 November 2019
17 January 2020
6 April 2021
14 December 2021
24 September 2024
24 September 2024
31 January 2023
6 April 2026
30 November 2024
$0.2000
$0.2000
$0.3000
$0.3350
$0.3350
12,113,500
500,000
1,025,000
11,500,000
2,500,000
27,638,500
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue
of the company or of any other body corporate.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
The following ordinary shares of Cobre Limited were issued during the year ended 30 June 2022 and up to the date of
this report on the exercise of options granted:
Grant date
24 September 2019
17 January 2020
Exercise price
Number under option
$0.2000
$0.3000
635,500
975,000
1,610,500
INDEMNITY AND INSURANCE OF OFFICERS
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives
of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
24
| COBRE LIMITED
WWW.COBRE.COM.AU INDEMNITY AND INSURANCE OF AUDITOR
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms
of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young during or since the financial year.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the
auditor are outlined in note 21 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 21 to the financial statements do not
compromise the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
p all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
p none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board,
including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for
the company, acting as advocate for the company or jointly sharing economic risks and rewards.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS
OF ERNST & YOUNG
There are no officers of the company who are former partners of Ernst &Young.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors’ report.
AUDITOR
Ernst & Young continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Martin Holland
Executive Chairman, Managing Director
29 September 2022
ANNUAL REPORT 2022
| 25
2
26
| COBRE LIMITED
WWW.COBRE.COM.AU
2.
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Auditor’s
Independence
Declaration
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s independence declaration to the directors of Cobre Limited
As lead auditor for the audit of the financial report of Cobre Limited for the financial year ended 30
June 2022, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Cobre Limited and the entities it controlled during the financial year.
Auditor’s independence declaration to the directors of Cobre Limited
Ernst & Young
As lead auditor for the audit of the financial report of Cobre Limited for the financial year ended 30
June 2022, I declare to the best of my knowledge and belief, there have been:
relation to the audit;
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
Ryan Fisk
Partner
29 September 2022
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Cobre Limited and the entities it controlled during the financial year.
Ernst & Young
Ryan Fisk
Partner
29 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ANNUAL REPORT 2022
| 27
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
3
28
| COBRE LIMITED
WWW.COBRE.COM.AU
Statement of profit or loss and
other comprehensive income
For the year ended 30 June 2022
3.
Other income
Interest revenue calculated using the effective interest method
Expenses
Corporate and administration expenses
Tenement expenses
Employee benefits expense
Share based payment expense
Depreciation and amortisation expense
Fair value loss on derivative financial asset
Share of equity accounted for losses
Impairment loss on investment in joint venture
Other expenses
Loss before income tax (expense)/benefit
Income tax (expense)/benefit
Loss after income tax (expense)/benefit for the year
attributable to the owners of Cobre Limited
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Loss on the revaluation of financial assets at fair value through
other comprehensive income, net of tax
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable
to the owners of Cobre Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of Cobre Limited
Note
5
6
33
11
9
4
7
Consolidated
2022
$
249,886
783
(1,208,781)
–
(316,801)
–
(1,401)
(199,300)
(1,978,433)
(1,851,382)
–
2021
$
25,702
5,030
(978,711)
(238)
(315,360)
(1,393,764)
(1,525)
(10,437)
(64,668)
–
(25,031)
(5,305,429)
(2,759,002)
(80,377)
11,405
(5,385,806)
(2,747,597)
10
(241,129)
31,763
(209,366)
(4,676)
–
(4,676)
(5,595,172)
(2,752,273)
15,564
(5,610,736)
(5,595,172)
Cents
(3.34)
(3.34)
–
(2,752,273)
(2,752,273)
Cents
(2.40)
(2.40)
Basic earnings per share
Diluted earnings per share
32
32
The above statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
| 29
FINANCIAL sTATEMENTs
Statement of
financial position
As at 30 June 2022
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other
Total current assets
Non-current assets
Receivables and deposits
Investments accounted for using the equity method
Financial assets at fair value through other comprehensive income
Derivative financial instruments
Property, plant and equipment
Exploration and evaluation
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Total current liabilities
Non-current liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Cobre Limited
Non-controlling interest
Consolidated
Note
2022
$
2021
$
8
9
10
11
12
13
2,730,000
27,067
39,374
2,796,441
20,000
808,515
759,459
24,298
3,908
14,264,558
8,146,524
77,364
27,850
8,251,738
81,042
5,387,852
80,965
223,598
5,309
4,229,648
15,880,738
10,008,414
18,677,179
18,260,152
405,926
405,926
1,205,966
1,205,966
14
1,877,887
1,877,887
2,283,813
–
–
1,205,966
16,393,366
17,054,186
15
16
22,354,279
786,312
(10,255,858)
12,884,733
3,508,633
21,237,996
686,242
(4,870,052)
17,054,186
–
Total equity
16,393,366
17,054,186
The above statement of financial position should be read in conjunction with the accompanying notes.
30
| COBRE LIMITED
WWW.COBRE.COM.AU Statement of
changes in equity
For the year ended 30 June 2022
Consolidated
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total
equity
$
Balance at 1 July 2020
Loss after income tax benefit for the year
Other comprehensive income for the year, net of tax
11,932,725
–
–
(702,846)
–
(4,676)
(2,122,455)
(2,747,597)
–
9,107,424
(2,747,597)
(4,676)
Total comprehensive income for the year
–
(4,676)
(2,747,597)
(2,752,273)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 15)
Share based payments
Balance at 30 June 2021
9,305,271
–
–
1,393,764
–
–
9,305,271
1,393,764
21,237,996
686,242
(4,870,052)
17,054,186
Consolidated
Balance at 1 July 2021
Loss after income tax expense for the year
Other comprehensive income for the year,
net of tax
Total comprehensive income for the year
Non-controlling interest recognised on
acquisition of Kalahari Metals Limited
Transactions with owners in their
capacity as owners:
Contributions of equity, net of transaction
costs (note 15)
Options issued as share issuance costs
(note 33)
–
–
–
1,441,283
Issued
capital
$
Reserves
$
Accumulated
losses
$
Non-
controlling
interest
$
Total
equity
$
21,237,996
–
686,242
–
(4,870,052)
(5,385,806)
–
–
17,054,186
(5,385,806)
(224,930)
–
15,564
(209,366)
(224,930)
(5,385,806)
15,564
(5,595,172)
–
–
–
3,493,069
3,493,069
–
–
–
–
1,441,283
–
(325,000)
325,000
Balance at 30 June 2022
22,354,279
786,312
(10,255,858)
3,508,633
16,393,366
The above statement of changes in equity should be read in conjunction with the accompanying notes.
ANNUAL REPORT 2022
| 31
FINANCIAL sTATEMENTs
Statement of
cash flows
For the year ended 30 June 2022
Consolidated
Note
2022
$
2021
$
Cash flows from operating activities
Interest received
Other revenue
Payments to suppliers and employees (inclusive of GST)
783
87,843
(1,286,864)
5,030
–
(1,172,630)
Net cash used in operating activities
30
(1,198,238)
(1,167,600)
Cash flows from investing activities
Payments for property, plant and equipment
Payments for exploration and evaluation
R&D tax offset received relating to exploration activities
Payments for investments in joint venture and associates
Transaction costs paid in relation to investment in joint venture
Contribution paid to joint venture
Cash received on behalf of joint venture
Payments for investments in listed entity – Metal Tiger PLC
–
(1,157,181)
73,410
(1,532,057)
–
(2,009,003)
–
(1,000,000)
(2,682)
(2,295,970)
132,511
(437,237)
(622,415)
(61,042)
218,663
–
Net cash used in investing activities
(5,624,831)
(3,068,172)
Cash flows from financing activities
Proceeds from issue of shares
Share issue transaction costs
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
1,413,000
(6,455)
1,406,545
(5,416,524)
8,146,524
Cash and cash equivalents at the end of the financial year
8
2,730,000
5,602,096
(391,672)
5,210,424
974,652
7,171,872
8,146,524
The above statement of cash flows should be read in conjunction with the accompanying notes.
32
| COBRE LIMITED
WWW.COBRE.COM.AU ANNUAL REPORT 2022
| 33
4
34
| COBRE LIMITED
WWW.COBRE.COM.AU
4.
Notes to the
financial statements
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The impact
of their adoption has not been material.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.
The consolidated entity incurred a loss from ordinary activities of $5,385,806 (2021: $,2,747,597) for the year ended
30 June 2022, and had negative cash flows from operating activities of $1,198,238 (2021: $1,167,600).
p On 12 August 2022, the company issued 36,691,925 fully paid shares at an issue price of $0.15 per share raising
$5,503,788 before costs;
p The company expects to raise a further $1,496,211 on the issue of 9,974,743 fully paid shares at an issue price
of $0.15. This will be under the second tranche of the raise announced on 4 August 2022; and
p Since 30 June 2022, the company has received $419,500 upon the conversion of 1,610,500 options.
Accordingly, the directors believe that the consolidated entity will be able to continue as a going concern and that it is
appropriate to adopt the going concern basis in the preparation of the financial report.
The financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that might be necessarily incurred should the company not
continue as a going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’).
ANNUAL REPORT 2022
| 35
NOTEs TO ThE FINANCIAL sTATEMENTs
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable,
the revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value
through other comprehensive income and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the consolidated entity’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 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated
entity only. Supplementary information about the parent entity is disclosed in note 25.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Cobre Limited
(‘company’ or ‘parent entity’) as at 30 June 2022 and the results of all subsidiaries for the year then ended.
Cobre Limited and its subsidiaries together are referred to in these financial statements as the ‘consolidated entity’.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an
entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with
the policies adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership
interest, without the loss of control, is accounted for as an equity transaction, where the difference between the
consideration transferred and the book value of the share of the non-controlling interest acquired is recognised
directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or
loss and other comprehensive income, statement of financial position and statement of changes in equity of the
consolidated entity. Losses incurred by the subsidiary are attributed to the non-controlling interest in full, even if
that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities
and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity.
The consolidated entity recognises the fair value of the consideration received and the fair value of any investment
retained together with any gain or loss in profit or loss.
Asset acquisition accounting
The acquisition of Kalahari Metals Limited has been accounted for an asset acquisition because it was not deemed to
have been carrying on a business as the time that control was gained. The key principles applied in asset acquisition
accounting are:
p the carrying value of the equity accounted for investment was deemed to be the cost of previously held interest
in investment in joint venture at the time that control was gained, and was allocated to the assets and liabilities
acquired;
p The non-controlling interest at the time that control was gained was calculated with reference to the carrying value
of the equity accounted for investment at the time that control was gained.
36
| COBRE LIMITED
WWW.COBRE.COM.AU Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The CODM is responsible for
the allocation of resources to operating segments and assessing their performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Cobre Limited’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Revenue recognition
The consolidated entity recognises revenue as follows:
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable
to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied
when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively
enacted, except for:
p When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither the
accounting nor taxable profits; or
p When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures,
and the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be
available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the
extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
ANNUAL REPORT 2022
| 37
NOTEs TO ThE FINANCIAL sTATEMENTs
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged
or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity’s normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All
other liabilities are classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term,
highly liquid investments with original maturities of three months or less that are readily convertible to known amounts
of cash and which are subject to an insignificant risk of changes in value.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement
within 30 days.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Derivative financial instruments
Derivatives are initially recognised at fair value and are subsequently remeasured to their fair value through the profit
and loss at each reporting date.
Derivatives are classified as current or non-current depending on the expected period of realisation.
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits
or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-
acquisition changes in the consolidated entity’s share of net assets of the associate. Goodwill relating to the associate
is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
Dividends received or receivable from associates reduce the carrying amount of the investment.
When the consolidated entity’s share of losses in an associate equals or exceeds its interest in the associate, including
any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over the
associate and recognises any retained investment at its fair value. Any difference between the associate’s carrying
amount, fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the arrangement. Investments in joint ventures are accounted for using the equity method. Under the
equity method, the share of the profits or losses of the joint venture is recognised in profit or loss and the share of the
movements in equity is recognised in other comprehensive income. Investments in joint ventures are carried in the
statement of financial position at cost plus post-acquisition changes in the consolidated entity’s share of net assets
of the joint venture. Goodwill relating to the joint venture is included in the carrying amount of the investment and is
neither amortised nor individually tested for impairment. Income earned from joint venture entities reduce the carrying
amount of the investment.
38
| COBRE LIMITED
WWW.COBRE.COM.AU Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of
the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined based
on both the business model within which such assets are held and the contractual cash flow characteristics of the
financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable
expectation of recovering part or all of a financial asset, it’s carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a
business model whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual
terms of the financial asset represent contractual cash flows that are solely payments of principal and interest.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated
entity intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial
recognition.
Property, plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
(excluding land) over their expected useful lives as follows:
Plant and equipment
5 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the
assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Exploration and evaluation assets
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current
is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be
recovered through the successful development and exploitation of an area of interest, or by its sale; or exploration
activities are continuing in an area and activities have not reached a stage which permits a reasonable estimate of
the existence or otherwise of economically recoverable reserves. Where a project or an area of interest has been
abandoned, the expenditure incurred thereon is written off in the year in which the decision is made.
Research and development grants received in relation exploration and evaluation assets are offset against the carrying
value of the asset.
Impairment of non-financial assets
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-use
is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to
the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are
grouped together to form a cash-generating unit.
ANNUAL REPORT 2022
| 39
NOTEs TO ThE FINANCIAL sTATEMENTs
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs.
They are subsequently measured at amortised cost using the effective interest method.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed
in the period in which they are incurred.
Employee benefits
Share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange
for the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of
the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions
that do not determine whether the consolidated entity receives the services that entitle the employees to receive
payment. No account is taken of any other vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts
already recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market
conditions are considered to vest irrespective of whether or not that market condition has been met, provided all
other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been
made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the
total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the
condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or employee
and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled
and new award is treated as if they were a modification.
40
| COBRE LIMITED
WWW.COBRE.COM.AU Fair value measurement
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the
fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is
either not available or when the valuation is deemed to be significant. External valuers are selected based on market
knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to
another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a
comparison, where applicable, with external sources of data.
Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Cobre Limited, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after 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.
Goods and Services Tax (‘GST’) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as
part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax
authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June
2022. Management have reviewed the accounting standards that are yet mandatory and do not believe that they
apply to the consolidated entity and therefore they are expected to have a material impact on the financial statements.
ANNUAL REPORT 2022
| 41
NOTEs TO ThE FINANCIAL sTATEMENTs
NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts in the financial statements. Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements,
estimates and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates
will seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the
next financial year are discussed below.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity considers it is
probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax
assets have not been recognised because their realisation is not considered probable.
Exploration and evaluation costs
Exploration and evaluation costs have been capitalised on the basis that the consolidated entity will commence
commercial production in the future, from which time the costs will be amortised in proportion to the depletion of the
mineral resources. Key judgements are applied in considering costs to be capitalised which includes determining
expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised.
In addition, costs are only capitalised that are expected to be recovered either through successful development or sale
of the relevant mining interest. Factors that could impact the future commercial production at the mine include the level
of reserves and resources, future technology changes, which could impact the cost of mining, future legal changes and
changes in commodity prices. To the extent that capitalised costs are determined not to be recoverable in the future, they
will be written off in the period in which this determination is made.
At each reporting date management review exploration assets for indicators of impairment in line with AASB 6 Exploration
for and Evaluation of Mineral Resources. Management have concluded that there were no indicators of impairment.
Investment in Kalahari Metals Limited (KML)
0n 14 December 2021, the company issued 445,368 fully paid ordinary share to increase its ownership interest from
49.99% to 51%. Management reviewed the arrangement and determined that the company still had joint control of
KML with its joint venture partner, and the investment had been accounted for using the equity method, refer to note 9.
On 16 June 2022, the company announced that it had entered into an agreement to acquire the remaining 49% of KML,
At 30 June 2022 however, the company’s stake in KML remained at 51% at 30 June 2022. The 49% will be acquired in
two equal tranches of £750,000 cash for the initial acquisition of 24.5% and £750,000 in cash or shares of the company
at the company’s election for the remaining 24.5% to be exercised within 12 months of the initial acquisition.
However, in connection with the transaction, the parties have agreed to temporarily amend the terms of the existing
Shareholders’ Deed in respect of KML, for a period of 12 months following completion of the initial acquisition providing,
among other things, consolidated entity with sole control over KML’s business plan and budget and allowing it to be
solely responsible for any capital and funding requirements during that time giving Cobre the practical ability to exercise
it’s power over KML.
In addition, Metal Tiger has agreed to waive its right to appoint directors to the Board of KML (with limited rights to
certain KML board matters) until expiry of the call option.
For the above reason the consolidated entity was deemed to have taken control of KML with effect from 16 June 2022,
and it has been consolidated with effect from that date.
A derivative arises in connection with the option to acquire the remaining 49% interest in KML. The fair value of the
derivative has been determined by reference to the strike price and is remeasured to fair value at each reporting period
through profit & loss.
42
| COBRE LIMITED
WWW.COBRE.COM.AU NOTE 3. OPERATING SEGMENTS
Identification of reportable operating segments
The consolidated entity is organised into one operating segment: exploration for precious metals. This operating segment
is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief
Operating Decision Makers (‘CODM’)) in assessing performance and in determining the allocation of resources.
NOTE 4. IMPAIRMENT OF INVESTMENT IN JOINT VENTURE
Prior to taking control on 15 June 2022 (note 2), the consolidated entity contributed cash to the KML joint venture.
This loan was required to be recognise at fair value on initial recognition. Any difference between the cash contributed
and the fair value of the loan at initial recognition is recognised as investment in joint venture. This addition to the
investment in joint venture has been subsequently impaired in its entirety due to its inherent uncertainty in recoverability.
NOTE 5. OTHER INCOME
Net foreign exchange gain
Management fee
Other income
NOTE 6. EXPENSES
Loss before income tax includes the following specific expenses:
Corporate and administration expenses
Directors fees
Consultants and advisors
Other administration expenses
Consolidated
2022
$
187,745
62,141
249,886
Consolidated
2022
$
289,250
603,714
315,817
1,208,781
2021
$
–
25,702
25,702
2021
$
291,000
355,319
332,392
978,711
ANNUAL REPORT 2022
| 43
NOTEs TO ThE FINANCIAL sTATEMENTs
NOTE 7. INCOME TAX EXPENSE/(BENEFIT)
Numerical reconciliation of income tax expense/(benefit)
and tax at the statutory rate
Loss before income tax (expense)/benefit
Consolidated
2022
$
2021
$
(5,305,429)
(2,759,002)
Tax at the statutory tax rate of 25% (2021: 26%)
(1,326,357)
(717,341)
Tax effect amounts which are not deductible/(taxable)
in calculating taxable income:
Share based payments
Other non-deductible items
Deductible exploration expenditure
Other temporary difference
Tax on revaluations financial assets at fair value
through other comprehensive income
Equity accounted losses
Impairment loss on investment in joint venture
Current year tax losses not recognised
Income tax expense/(benefit)
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 25%
–
5,716
(246,070)
(94,296)
80,377
494,608
462,846
(623,176)
703,553
80,377
362,379
21,727
(425,046)
29,750
(11,405)
16,813
–
(723,123)
711,718
(11,405)
Consolidated
2022
$
2021
$
8,990,301
2,247,575
6,175,809
1,543,952
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business
test is passed.
The company’s UK subsidiary Kalahari Metal Limited also has £3,173,442 ($5,432,964) of unused losses. The corporate
tax rate in the UK is 19%, resulting in unrecognised tax losses of £602,954 ($1,032,263).
44
| COBRE LIMITED
WWW.COBRE.COM.AU NOTE 8. CURRENT ASSETS – CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
Consolidated
2022
$
100
2,729,900
2,730,000
2021
$
100
8,146,424
8,146,524
The prior year cash balance includes $218,663 of funds held on behalf of Kalahari Metals Limited which the company
has invested in and carried as investments accounted for using the equity method. This cash was restricted for use by
the consolidated entity until 15 June 2022. From 15 June 2022, the Group controls Kalahari Metals Limited and the
cash balance is therefore no longer restricted. Refer to note 13.
NOTE 9. NON-CURRENT ASSETS – INVESTMENTS ACCOUNTED FOR
USING THE EQUITY METHOD
Investment in associate – Armada Metals Limited
Investment in joint venture – Kalahari Metals Limited
Consolidated
2022
$
808,515
–
808,515
2021
$
698,773
4,689,079
5,387,852
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous financial year are set out below:
Opening carrying amount
Additions
Impairment of investment in joint venture (note 4)
Derecognised upon gaining control of KML (note 2) and (note 12)
Share of equity accounted for losses
Closing carrying amount
5,387,852
2,886,121
(1,851,382)
(3,635,643)
(1,978,433)
808,515
–
5,452,520
–
–
(64,668)
5,387,852
Refer to note 27 for further information on interests in associates.
Refer to note 28 for further information on interests in joint ventures.
Refer to note 2 for information on the key judgements made in relation to the accounting treatment of above investments.
ANNUAL REPORT 2022
| 45
NOTEs TO ThE FINANCIAL sTATEMENTs
NOTE 10. NON-CURRENT ASSETS – FINANCIAL ASSETS AT FAIR VALUE
THROUGH OTHER COMPREHENSIVE INCOME
Shares in listed entity – Metal Tiger PLC
Reconciliation
Consolidated
2022
$
2021
$
759,459
80,965
Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below:
Opening fair value
Additions
Revaluations
Closing fair value
80,965
1,000,000
(321,506)
759,459
74,236
–
6,729
80,965
Refer to note 19 for further information on fair value measurement.
NOTE 11. NON-CURRENT ASSETS – DERIVATIVE FINANCIAL INSTRUMENTS
Options over listed equity securities
Refer to note 19 for further information on fair value measurement.
Consolidated
2022
$
2021
$
24,298
223,598
As part of its investment in Armada Metals Limited the company received 3,333,333 options exercisable at US$0.225
with a 3 year term.
Reconciliation
Reconciliation of the fair values at the beginning and end of the current and previous financial year are set out below:
Opening balance
Additions
Fair value movement loss
Closing Balance
223,598
–
(199,300)
24,298
–
234,035
(10,437)
223,598
46
| COBRE LIMITED
WWW.COBRE.COM.AU NOTE 12. NON-CURRENT ASSETS – EXPLORATION AND EVALUATION
Consolidated
2022
$
2021
$
Exploration and evaluation – at cost
14,264,558
4,229,648
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set
out below:
Consolidated
Balance at 1 July 2020
Additions
R&D tax incentive
Balance at 30 June 2021
Additions
KML acquisition (note 2)
R&D tax incentive
Exchange differences
Balance at 30 June 2022
Exploration
& Evaluation
$
2,505,440
1,856,719
(132,511)
4,229,648
976,640
9,000,529
(73,410)
131,151
14,264,558
As disclosed in note 2, the company obtained control of Kalahari Metals during the year. Below is a reconciliation of the
exploration and evaluation asset recognised at the time that control was gained:
Value of equity accounted for asset when control gained
Fair value of KML loan
Foreign exchange gain recycled through profit and loss upon gain control
Non-controlling interest recognised
Other assets and liabilities acquired
Note 13. Current liabilities – trade and other payables
Trade payables
Directors' fee accrual
Promissory note – Armada Metals Limited
Funds held on behalf of joint venture – Kalahari Metals Limited
Other payables
Refer to note 18 for further information on financial instruments.
3,635,643
1,859,443
21,355
3,493,069
(8,981)
9,000,529
Consolidated
2022
$
141,078
108,250
–
–
156,598
405,926
2021
$
176,268
113,000
532,056
218,663
165,979
1,205,966
ANNUAL REPORT 2022
| 47
NOTEs TO ThE FINANCIAL sTATEMENTs
NOTE 14. NON-CURRENT LIABILITIES – BORROWINGS
Consolidated
2022
$
2021
$
Payable to Metal Tiger PLC
1,877,887
–
Refer to note 18 for further information on financial instruments.
Interest is payable on the loan upon the company completing the acquisition of the next 24.5% of KML, however is
calculated with effect from 15 June 2022. Refer to note 26, for details of what is required to complete this acquisition.
The loan is repayable at the at the earlier of either an exit event or after 5 years. An exit event is defined as:
p An asset sale;
p Initial public offering;
p Production occurring; or
p The company disposing of 75% or more of its holding in Kalahari Metals Limited
NOTE 15. EQUITY – ISSUED CAPITAL
Consolidated
2022
Shares
2021
Shares
2022
$
2021
$
Ordinary shares – fully paid
165,407,010
156,649,877
22,354,279
21,237,996
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Issue of shares
Issue of shares
– KML acquisition*
Issue of shares
Cost of capital raised
Balance
Share issued to increase
stake in KML to 51%
Issue of shares
Options issued as share
issuance costs (note 33)
Cost of capital raised
1 July 2020
18 December 2020
102,970,688
1,550,000
12 April 2021
23 April 2021
20,999,214
31,129,975
–
30 June 2021
156,649,877
$0.2000
$0.1950
$0.1700
14 December 2021
17 December 2021
445,368
8,311,765
$0.0780
$0.1700
–
–
Balance
30 June 2022
165,407,010
11,932,725
310,000
4,094,847
5,292,096
(391,672)
21,237,996
34,738
1,413,000
(325,000)
(6,455)
22,354,279
*
The above shares were valued based on the market value of the company’s shares on the date of issue because it was not
possible to reasonably estimate KML’s fair value at time that the investment was made.
48
| COBRE LIMITED
WWW.COBRE.COM.AU Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in
proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and
the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The consolidated entity’s objectives when managing capital is to safeguard its ability to continue as a going concern,
so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen
as value adding relative to the current company’s share price at the time of the investment. The consolidated entity
is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing
businesses in order to maximise synergies.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
NOTE 16. EQUITY – RESERVES
Financial assets at fair value through other comprehensive income reserve
Foreign currency reserve
Share-based payments reserve
Acquisition reserve
Consolidated
2022
$
(214,518)
16,199
2,490,588
(1,505,957)
2021
$
26,611
–
2,165,588
(1,505,957)
786,312
686,242
Financial assets at fair value through other comprehensive income reserve
The reserve is used to recognise increments and decrements in the fair value of financial assets at fair value through
other comprehensive income.
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and directors as part of their
remuneration, and other parties as part of their compensation for services.
ANNUAL REPORT 2022
| 49
NOTEs TO ThE FINANCIAL sTATEMENTs
Acquisition reserve
Transactions involving non-controlling interests that do not result in the loss of control for the company are recorded in
the acquisition reserve. The acquisition reserve records the difference between the value of the non-controlling interest
and the consideration given or received.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Revaluation – net of tax
Share based payments
Balance at 30 June 2021
Revaluation – net of tax
Foreign currency translation
Share based payments
Foreign
currency
$
Acquisition
reserve
$
Financial
assets
$
Share based
payments
$
–
–
–
–
–
16,199
–
(1,505,957)
–
–
(1,505,957)
–
–
–
31,287
(4,676)
–
26,611
(241,129)
–
–
771,824
–
1,393,764
2,165,588
–
–
325,000
Total
$
(702,846)
(4,676)
1,393,764
686,242
(241,129)
16,199
325,000
Balance at 30 June 2022
16,199
(1,505,957)
(214,518)
2,490,588
786,312
NOTE 17. EQUITY – DIVIDENDS
There were no dividends paid, recommended or declared during the current or previous financial year.
NOTE 18. FINANCIAL INSTRUMENTS
Financial risk management objectives
The consolidated entity’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The
consolidated entity’s overall risk management program focuses on the unpredictability of financial markets and seeks
to minimise potential adverse effects on the financial performance of the consolidated entity.
Risk management is carried out by the board.
Market risk
Foreign currency risk
The consolidated entity is not exposed to any significant foreign currency risk.
The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at
the reporting date were as follows:
Consolidated
US dollars
Pound Sterling
Assets
Liabilities
2022
$
1,317,997
759,459
2,077,456
2021
$
2,827,226
80,965
2,908,191
2022
$
1,877,887
–
1,877,887
2021
$
532,056
–
532,056
50
| COBRE LIMITED
WWW.COBRE.COM.AU AUD strengthened
AUD weakened
Effect
on profit
before tax
55,989
(75,946)
Effect on
equity
55,989
(75,946)
% change
10%
10%
Effect
on profit
before tax
(55,989)
75,946
Effect on
equity
(55,989)
75,946
(19,957)
(19,957)
19,957
19,957
AUD strengthened
AUD weakened
Effect
on profit
before tax
(229,517)
(8,097)
Effect on
equity
(229,517)
(8,097)
Effect
on profit
before tax
% change
10%
10%
229,517
8,097
Effect on
equity
229,517
8,097
(237,614)
(237,614)
237,614
237,614
Consolidated – 2022 % change
US Dollars
Pound Sterling
10%
10%
Consolidated – 2021 % change
US Dollars
Pound Sterling
10%
10%
Price risk
The consolidated entity is exposed to price risk in relation to the investment that it holds in a listed entity.
Average price increase
Average price decrease
Consolidated – 2022 % change
Effect
on profit
before tax
Effect on
equity
% change
Effect
on profit
before tax
Effect on
equity
Shares in listed entity
20%
–
151,891
20%
–
(151,891)
Average price increase
Average price decrease
Consolidated – 2021 % change
Effect
on profit
before tax
Effect on
equity
% change
Effect
on profit
before tax
Effect on
equity
Shares in listed entity
20%
–
16,193
20%
–
(16,193)
Interest rate risk
The consolidated entity is not exposed to significant interest rate risk.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity’s receivable balances relate to GST receivable and security deposits. The
overall credit risk in relation to these is not material. The consolidated entity’s cash and cash equivalents are held with
highly creditworthy financial institutions and represent a low credit risk.
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and
cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves by continuously monitoring
actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
ANNUAL REPORT 2022
| 51
Remaining
contractual
maturities
$
141,078
228,899
2,633,833
3,003,810
Remaining
contractual
maturities
$
NOTEs TO ThE FINANCIAL sTATEMENTs
Remaining contractual maturities
The following tables detail the consolidated entity’s remaining contractual maturity for its financial liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated – 2022
Non-interest bearing
Trade payables
Other payables
Weighted
average
interest rate
%
–
–
Interest-bearing – fixed rate
Payable to Metal Tigers
7.00%
Total non-derivatives
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
141,078
264,848
–
405,926
–
–
–
–
–
–
2,633,833
2,633,833
–
–
–
–
Consolidated – 2021
Non-interest bearing
Trade payables
Other payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
–
–
176,268
1,029,698
1,205,966
–
–
–
–
–
–
–
–
–
176,268
1,029,698
1,205,966
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
52
| COBRE LIMITED
WWW.COBRE.COM.AU NOTE 19. FAIR VALUE MEASUREMENT
Fair value hierarchy
The following tables detail the consolidated entity’s assets and liabilities, measured or disclosed at fair value, using a
three level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at
the measurement date
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly
Level 3: Unobservable inputs for the asset or liability
Consolidated – 2022
Assets
Ordinary shares
Options over listed
equity securities
Total assets
Consolidated – 2021
Assets
Ordinary shares
Options over unlisted
equity securities
Total assets
Level 1
$
759,459
–
759,459
Level 1
$
80,965
–
80,965
Level 2
$
–
24,298
24,298
Level 2
$
–
–
–
Level 3
$
–
–
–
Level 3
$
–
223,598
223,598
Total
$
759,459
24,298
783,757
Total
$
80,965
223,598
304,563
Valuation techniques for fair value measurements categorised within
level 2 and level 3
The options over listed and unlisted equity securities were valued using the Black Scholes method. The fair value of
the equity security used in the valuation model has been estimated with reference to value of investments made in the
investee company at the same time that the related options were issued.
The company held 3,333,333 options in Armada Metals Limited. The below inputs have inputs were used in the Black
Scholes valuation performed at 30 June 2022:
p Volatility – 95%
p Duration – 1.73 years
p Risk free rate – 2.73%
p Spot price – $0.06
p Exercise price – $0.299
During the year the investee company listed on the Australian Securities Exchange and for this reason the investment
has been transferred to Level 2.
ANNUAL REPORT 2022
| 53
NOTEs TO ThE FINANCIAL sTATEMENTs
Level 3 assets
Movements in level 3 assets during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2020
Additions
Fair value movement recognised in profit and loss
Balance at 30 June 2021
Transfers out level 3 (due to investee becoming a listed entity)
Balance at 30 June 2022
Options over
unlisted securities
$
–
234,035
(10,437)
223,598
(223,598)
–
NOTE 20. KEY MANAGEMENT PERSONNEL DISCLOSURES
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated
entity is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2022
$
611,249
28,800
–
640,049
2021
$
588,999
27,360
1,363,464
1,979,823
NOTE 21. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by Ernst &Young, the auditor of
the company, and its network firms:
Audit services – Ernst &Young
Audit or review of the financial statements
Other assurance services – Ernst &Young
Review of exploration tenement expenditure
Other services – Ernst and Young
Due diligence
Share-based payments
54
| COBRE LIMITED
Consolidated
2022
$
2021
$
90,000
75,000
8,000
98,000
–
53,293
53,293
–
75,000
44,000
24,497
68,497
WWW.COBRE.COM.AU NOTE 22. CONTINGENT LIABILITIES
Under the Metal Tiger subscription letter dated 19 November 2019, the company will fully indemnify Metal Tiger for
any capital gains tax (or other tax) charge that it incurs on the disposal of the Pre-IPO Shares following the offer, up
to a capped aggregate amount of $30,000.
FMG Resources Pty Ltd retains a 2% net smelter royalty on any future metal production from tenements E29/929,
938 and 946.
Kalahari Metals Limited’s (KML) Kalahari Copper Project (KCP) licence holding comprises 11 prospecting licences,
of which six are held by KML (including its 100% owned subsidiary Kitlanya (Pty) Ltd) (which are subject to a 2% Net
Smelter Royalty held by Metal Tiger PLC) and five held by Triprop Holdings (Pty) Ltd (Triprop), with whom KML hold
contractual rights to a 51% interest.
There are no additional commitments or contingent liabilities held by the consolidated entity.
NOTE 23. COMMITMENTS
Consolidated
2022
$
2021
$
Joint venture funding
Committed at the reporting date but not recognised as liabilities, payable:
Funding of joint venture
–
1,723,957
Under the KML joint venture agreement, entered into on 12 April 2021, the company had agreed to fund the above
amount over the first 24 months of the investment. On 15 June 2022, the company has gained control of KML.
NOTE 24. RELATED PARTY TRANSACTIONS
Parent entity
Cobre Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 26.
Associates
Interests in associates are set out in note 27.
Joint ventures
Interests in joint ventures are set out in note 28.
Key management personnel
Disclosures relating to key management personnel are set out in note 20 and the remuneration report included in the
directors’ report.
ANNUAL REPORT 2022
| 55
NOTEs TO ThE FINANCIAL sTATEMENTs
Transactions with related parties
The following transactions occurred with related parties:
Other income:
Management fee charged to joint venture – Kalahari Metals Limited
Payment for goods and services:
Payment for services from those related to key management personnel
Other transactions:
Impairment of investment in joint venture*
Consolidated
2022
$
2021
$
62,141
25,702
24,000
22,200
1,851,382
–
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
Current receivables:
Trade receivables from joint venture – Kalahari Metals Limited
Current payables:
Trade payables to related to key management personnel
Fees payable to key management personnel
Funds held on behalf of joint venture – Kalahari Metals Limited
Consolidated
2022
$
2021
$
–
25,702
2,000
13,250
–
2,200
27,999
218,663
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Non–current receivables:
Contribution to joint venture – Kalahari Metals Limited*
Non–current borrowings:
Payable to Metal Tiger PLC (note 14)
*
Refer to note 4, for further details.
Consolidated
2022
$
2021
$
–
61,043
1,877,887
–
56
| COBRE LIMITED
WWW.COBRE.COM.AU NOTE 25. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Parent
2022
$
2021
$
(5,388,109)
(4,719,591)
(5,388,109)
(4,719,591)
Parent
2022
$
2021
$
2,697,550
7,991,913
12,763,201
17,482,081
291,060
291,060
821,984
821,984
Issued capital
Financial assets at fair value through other comprehensive income reserve
Share-based payments reserve
Accumulated losses
22,354,279
(214,518)
2,490,588
(12,158,208)
21,237,996
26,611
2,165,588
(6,770,098)
Total equity
12,472,141
16,660,097
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
Cobre Limited has provided a guarantee in relation to the loan with Metals Tiger PLC, held by the company’s subsidiary
Kalahari Metals Limited. Refer to note 14.
Contingent liabilities
The parent entity had no contingent liabilities other than that disclosed in note 22.
Capital commitments – Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1,
except for the following:
p Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
ANNUAL REPORT 2022
| 57
NOTEs TO ThE FINANCIAL sTATEMENTs
NOTE 26. INTERESTS IN 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:
Name
Toucan Gold Pty Ltd
Cobre Kalahari Pty Ltd
Kalahari Metals Limited
Kitlanya (Pty) Ltd
Ownership interest
Principal place of business/
Country of incorporation
Australia
Australia
United Kingdom
Botswana
2022
%
100.00%
100.00%
51.00%
51.00%
2021
%
100.00%
100.00%
–
–
With effect from 15 June 2022, the company was deemed to have taken control of Kalahari Metals Limited.
Refer to note 2.
Cobre currently holds a 51% ownership interest in KML, via its wholly owned subsidiary, Cobre Kalahari Pty Ltd
(Cobre Kalahari). Under the terms of the Transaction:
p Cobre (or its nominee) will initially acquire 24.5% of the shares in KML from Metal Tiger (increasing its interest to
75.5%) for a total cash consideration of GBP £750,000 (Initial Acquisition); and
p Metal Tiger will grant Cobre a call option for it (or its nominee) to acquire the remaining 24.5% of shares in KML,
exercisable for either GBP.
£750,000 cash or the equivalent in Cobre shares, for a period of 12 months after completion of the Initial Acquisition
(Call Option), providing Cobre a pathway to 100% ownership of KML.
NOTE 27. INTERESTS IN ASSOCIATES
Interests in associates are accounted for using the equity method of accounting. Information relating to associates that
are material to the consolidated entity are set out below:
Armada Metals Limited
Australia
Principal place of business/
Country of incorporation
Ownership interest
2022
14.42%
2021
18.50%
58
| COBRE LIMITED
WWW.COBRE.COM.AU Summarised financial information
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other comprehensive income
Revenue
Expenses
Loss before income tax
Other comprehensive income
Total comprehensive income
Commitments
2022
$
6,888,501
9,500,716
16,389,217
7,789,109
5,171
7,794,280
8,594,937
94
(3,211,650)
(3,211,556)
–
(3,211,556)
2021
$
2,158,361
5,814,577
7,972,938
3,255,198
–
3,255,198
4,717,740
–
(197,217)
(197,217)
–
(197,217)
Under the share purchase agreement, the consolidated entity assumed a liability in relation to a discovery bonus.
Upon initial recognition this was deemed to have a nominal value and will be reviewed at each reporting period.
NOTE 28. INTERESTS IN JOINT VENTURES
Interests in joint ventures are accounted for using the equity method of accounting. Information relating to joint
ventures that are material to the consolidated entity are set out below:
Principal place of business/
Country of incorporation
Kalahari Metals Ltd*
UK
*
During the current year, the company gained control of KML, refer to note 2.
Ownership interest
2022
–
2021
49.99%
ANNUAL REPORT 2022
| 59
NOTEs TO ThE FINANCIAL sTATEMENTs
Summarised financial information
Summarised statement of financial position
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other comprehensive income
Impairment of exploration and evaluation assets
Other expenses
Expenses
Loss before income tax
Other comprehensive income
Total comprehensive income
2022
$
–
–
–
–
–
–
(1,588,974)
(544,698)
–
(2,133,672)
–
(2,133,672)
2021
$
2,989,202
2,989,202
571,893
417,235
989,128
2,000,074
–
–
(57,516)
(57,516)
–
(57,516)
NOTE 29. EVENTS AFTER THE REPORTING PERIOD
On 4 August 2022, the Company announced that it had successfully conducted a two-tranche placement of A$7 million
(before costs) at $0.15 per share to sophisticated and institutional investors with the funds raised to be used to fast-track
exploration on the tenement package held by KML in Botswana. Of this amount $1,496,211 was still to be received
under the second tranche at the timing of signing.
On 31 August 2022, the company issued 1,610,500 fully paid shares upon the exercise of 975,000 options with an
exercise price of $0.30 each and 635,500 options with an exercise price of $0.20 each.
Cobre’s drilling service provider in Botswana, Mitchell’s Drilling, has also subscribed for US$300,000 worth of shares in
Cobre to be set-off against drilling services delivered.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly
affect the consolidated entity’s operations, the results of those operations, or the consolidated entity’s state of affairs in
future financial years.
60
| COBRE LIMITED
WWW.COBRE.COM.AU NOTE 30. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH
USED IN OPERATING ACTIVITIES
Loss after income tax (expense)/benefit for the year
(5,385,806)
(2,747,597)
Consolidated
2022
$
2021
$
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign exchange differences
Income tax benefit /(loss) on investments
Net fair value loss on derivative financial assets
Share of losses – associates and joint ventures
Impairment of investment in joint venture
Change in operating assets and liabilities:
Decrease in trade and other receivables
Increase in other operating assets
Increase in trade and other payables
1,401
–
620
80,377
199,300
1,978,433
1,851,382
50,297
(11,524)
37,282
1,525
1,393,764
–
(11,405)
10,437
64,668
–
85,213
(27,850)
63,645
Net cash used in operating activities
(1,198,238)
(1,167,600)
NOTE 31. NON-CASH INVESTING AND FINANCING ACTIVITIES
Consolidated
2022
$
2021
$
Shares issued for investment in Kalahari Metals Limited
34,738
4,094,847
In the current year, the company issued 445,368 fully paid ordinary shares to acquire an additional 1.01% of Kalahari
Metals Limited. The shares were valued at $0.078 a share totalling $34,738.
In the prior year, the company issued 20,999,214 fully paid ordinary shares to acquire a 49.99% holding in Kalahari
Metals Limited. The shares were valued at $0.195 cents a share totalling $4,094,847.
ANNUAL REPORT 2022
| 61
NOTEs TO ThE FINANCIAL sTATEMENTs
NOTE 32. EARNINGS PER SHARE
Consolidated
2022
$
2021
$
Loss after income tax attributable to the owners of Cobre Limited
(5,385,806)
(2,747,597)
Weighted average number of ordinary shares used in calculating
basic earnings per share
Weighted average number of ordinary shares used in calculating
diluted earnings per share
Basic earnings per share
Diluted earnings per share
Number
Number
161,356,008
114,286,182
161,356,008
114,286,182
Cents
(3.34)
(3.34)
Cents
(2.40)
(2.40)
At 30 June 2022, the company has 29,249,000 (2021: 26,749,000) options over ordinary shares on issue that there
were excluded in the calculations of diluted earnings per share because there were anti-dilutive.
NOTE 33. SHARE-BASED PAYMENTS
The company has issued unlisted options to the directors (or their nominee entities), the company secretary and lead
manager during the current and prior years. Set out below are summaries of options granted:
Consolidated
Outstanding at the beginning of the financial year
Granted
Outstanding at the end of the financial year
Exercisable at the end of the financial year
Number of
options
2022
26,749,000
2,500,000
29,249,000
29,429,000
Weighted
average
exercise price
2022
$0.2655
$0.3350
$0.2715
$0.2694
Number of
options
2021
15,249,000
11,500,000
26,749,000
24,749,000
Weighted
average
exercise price
2021
$0.2259
$0.3350
$0.2655
$0.2655
2022
Grant date
Expiry date
24/09/2019
29/11/2019
17/01/2020
06/04/2021
14/12/2021
23/09/2024
23/09/2024
16/01/2023
06/04/2026
30/11/2024
Exercise
price
$0.0000
$0.0000
$0.0000
$0.0000
$0.3350
Balance at the
start of the
year
12,749,000
500,000
2,000,000
11,500,000
–
–
–
–
–
2,500,000
26,749,000
2,500,000
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of the
year
–
–
–
–
–
–
–
–
–
–
–
–
12,749,000
500,000
2,000,000
11,500,000
2,500,000
29,249,000
Weighted average exercise price
$0.2655
$0.3000
$0.0000
$0.0000
$0.2715
62
| COBRE LIMITED
WWW.COBRE.COM.AU 2021
Grant date
Expiry date
24/09/2019
29/11/2019
17/01/2020
06/04/2021
24/09/2024
24/09/2024
31/01/2023
06/04/2026
Exercise
price
$0.2000
$0.2000
$0.3000
$0.3350
Balance at the
start of the
year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of the
year
12,749,000
500,000
2,000,000
–
–
–
–
11,500,000
15,249,000
11,500,000
–
–
–
–
–
–
–
–
–
–
12,749,000
500,000
2,000,000
11,500,000
26,749,000
Weighted average exercise price
$0.2259
$0.3350
$0.0000
$0.0000
$0.2655
The weighted average remaining contractual life of options outstanding at the end of the financial year was 2.74 years
(2021: 3.76 years)
For the options granted during the current and prior financial year, the valuation model inputs used to determine the fair
value at the grant date, are as follows:
Grant date
Expiry date
Share price at
grant date
Exercise price
24/09/2019
29/11/2019
17/01/2020
06/04/2021
14/12/2021
24/09/2024
24/09/2024
31/01/2023
06/04/2026
30/11/2024
$0.0758
$0.1500
$0.1500
$0.2350
$0.2200
$0.2000
$0.2000
$0.3000
$0.3350
$0.3350
Expected
volatility
100.00%
100.00%
100.00%
95.00%
115.00%
Dividend yield
Risk-free
interest rate
Fair value at
grant date
–
–
–
–
–
0.75%
0.74%
1.10%
0.67%
0.10%
$0.045
$0.104
$0.070
$0.121
$0.130
A total share-based payment expense of $1,393,764 has been recognised during the prior financial year. In addition
options valued at $325,000 (2021: $140,000) have been included as a cost of capital raised.
ANNUAL REPORT 2022
| 63
5
64
| COBRE LIMITED
WWW.COBRE.COM.AU
5.
Directors’
declaration
In the directors’ opinion:
p the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards,
the Corporations Regulations 2001 and other mandatory professional reporting requirements;
p the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as described in note 1 to the financial statements;
p the attached financial statements and notes give a true and fair view of the consolidated entity’s financial position
as at 30 June 2022 and of its performance for the financial year ended on that date; and
p there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Martin Holland
Executive Chairman and Managing Director
29 September 2022
ANNUAL REPORT 2022
| 65
6
66
| COBRE LIMITED
WWW.COBRE.COM.AU
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
6.
Independent
auditor’s report
Independent auditor’s report to the members of Cobre Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Cobre Limited (the Company) and its subsidiaries (collectively
the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors’ declaration.
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Independent auditor’s report to the members of Cobre Limited
Basis for opinion
Report on the audit of the financial report
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
Opinion
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
We have audited the financial report of Cobre Limited (the Company) and its subsidiaries (collectively
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
consolidated statement of cash flows for the year then ended, notes to the financial statements,
the Code.
including a summary of significant accounting policies, and the directors’ declaration.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
for our opinion.
Act 2001, including:
and of its consolidated financial performance for the year ended on that date; and
Key audit matters
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. This matter was addressed in the context of our
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
separate opinion on this matter. For the matter below, our description of how our audit addressed the
Basis for opinion
matter is provided in that context.
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
those standards are further described in the Auditor’s responsibilities for the audit of the financial
financial report section of our report, including in relation to this matter. Accordingly, our audit
report section of our report. We are independent of the Group in accordance with the auditor
included the performance of procedures designed to respond to our assessment of the risks of
independence requirements of the Corporations Act 2001 and the ethical requirements of the
material misstatement of the financial report. The results of our audit procedures, including the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
procedures performed to address the matter below, provide the basis for our audit opinion on the
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
accompanying financial report.
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. This matter was addressed in the context of our
A member firm of Ernst & Young Global Limited
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
Liability limited by a scheme approved under Professional Standards Legislation
separate opinion on this matter. For the matter below, our description of how our audit addressed the
matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to this matter. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matter below, provide the basis for our audit opinion on the
accompanying financial report.
ANNUAL REPORT 2022
| 67
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
200 George Street
Sydney NSW 2000 Australia
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
GPO Box 2646 Sydney NSW 2001
ey.com/au
Independent auditor’s report to the members of Cobre Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Cobre Limited (the Company) and its subsidiaries (collectively
the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
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:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022
and of its consolidated financial performance for the year ended on that date; and
INDEPENDENT AUDITOR's REPORT
b. 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 auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (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.
Page 2
Page 2
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Carrying Value of Exploration and Evaluation Assets
Page 2
How our audit addressed the key audit matter
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Carrying Value of Exploration and Evaluation Assets
Our procedures to address the Group’s
assessment of impairment indicators for
exploration assets included:
Why significant
Key audit matters
Our procedures to address the Group’s
Carrying Value of Exploration and Evaluation Assets
Key audit matters are those matters that, in our professional judgment, were of most significance in
The Group’s exploration assets of $14.3m as at
assessment of impairment indicators for
our audit of the financial report of the current year. This matter was addressed in the context of our
30 June 2022 represent 74% of the total assets
How our audit addressed the key audit matter
Why significant
exploration assets included:
audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a
of the Group as disclosed in Note 12.
Our procedures to address the Group’s
The Group’s exploration assets of $14.3m as at
separate opinion on this matter. For the matter below, our description of how our audit addressed the
assessment of impairment indicators for
Obtaining an understanding of the current
30 June 2022 represent 74% of the total assets
matter is provided in that context.
Exploration assets are initially recognised at
exploration assets included:
exploration program and any associated
of the Group as disclosed in Note 12.
cost and any additional expenditure is
risks.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
capitalised to the exploration asset in
Obtaining an understanding of the current
financial report section of our report, including in relation to this matter. Accordingly, our audit
Confirming the Group’s right to explore in
Exploration assets are initially recognised at
accordance with the Group’s accounting policy
exploration program and any associated
included the performance of procedures designed to respond to our assessment of the risks of
the relevant exploration area, which
cost and any additional expenditure is
as disclosed in Note 1.
risks.
material misstatement of the financial report. The results of our audit procedures, including the
included obtaining and assessing
capitalised to the exploration asset in
procedures performed to address the matter below, provide the basis for our audit opinion on the
Confirming the Group’s right to explore in
supporting documentation such as license
accordance with the Group’s accounting policy
accompanying financial report.
At each reporting date the Directors assess the
the relevant exploration area, which
agreements.
as disclosed in Note 1.
Group’s exploration assets for indicators of
included obtaining and assessing
Assessing the Group’s intention to carry
impairment. The decision as to whether there
supporting documentation such as license
out significant exploration and evaluation
At each reporting date the Directors assess the
are indicators that require the Group’s
agreements.
activity in the relevant areas of interest.
Group’s exploration assets for indicators of
exploration assets to be assessed for
How our audit addressed the key audit matter
Why significant
Assessing the Group’s intention to carry
impairment. The decision as to whether there
This included an assessment of the Group’s
impairment in accordance with Australian
out significant exploration and evaluation
are indicators that require the Group’s
Accounting Standards involved significant
cash-flow forecast models, discussions with
The Group’s exploration assets of $14.3m as at
activity in the relevant areas of interest.
exploration assets to be assessed for
judgment, including whether, the rights to
senior management and Directors as to the
30 June 2022 represent 74% of the total assets
This included an assessment of the Group’s
impairment in accordance with Australian
tenure for the areas of interest are current, the
intentions and strategy of the Group.
of the Group as disclosed in Note 12.
Accounting Standards involved significant
cash-flow forecast models, discussions with
Group’s ability and intention to continue to
Agreeing a sample of costs capitalised for
judgment, including whether, the rights to
Obtaining an understanding of the current
evaluate and develop the area of interest and
senior management and Directors as to the
the period to supporting documentation
Exploration assets are initially recognised at
tenure for the areas of interest are current, the
whether the results of the Group’s exploration
exploration program and any associated
intentions and strategy of the Group.
and assessing whether these costs meet
cost and any additional expenditure is
Group’s ability and intention to continue to
and evaluation work to date are sufficiently
risks.
Agreeing a sample of costs capitalised for
the requirements of Australian Accounting
capitalised to the exploration asset in
evaluate and develop the area of interest and
progressed for a decision to be made as to the
Confirming the Group’s right to explore in
the period to supporting documentation
Standards and the Group’s accounting
accordance with the Group’s accounting policy
whether the results of the Group’s exploration
commercial viability or otherwise of the area of
the relevant exploration area, which
and assessing whether these costs meet
as disclosed in Note 1.
policy.
and evaluation work to date are sufficiently
interest.
included obtaining and assessing
the requirements of Australian Accounting
progressed for a decision to be made as to the
Assessing whether the methodology used
supporting documentation such as license
Standards and the Group’s accounting
commercial viability or otherwise of the area of
by the Group to identify indicators of
At each reporting date the Directors assess the
We assessed this to be a key audit matter due to
agreements.
policy.
interest.
impairment met the requirements of
Group’s exploration assets for indicators of
the value of the exploration assets relative to
Assessing the Group’s intention to carry
Assessing whether the methodology used
impairment. The decision as to whether there
Australian Accounting Standards.
total assets and the significant judgments
out significant exploration and evaluation
by the Group to identify indicators of
are indicators that require the Group’s
We assessed this to be a key audit matter due to
involved in the assessment of indicators of
Evaluating the adequacy of the related
activity in the relevant areas of interest.
impairment met the requirements of
exploration assets to be assessed for
the value of the exploration assets relative to
impairment.
disclosures in the Notes to the financial
This included an assessment of the Group’s
Australian Accounting Standards.
impairment in accordance with Australian
total assets and the significant judgments
.
statements.
Accounting Standards involved significant
cash-flow forecast models, discussions with
involved in the assessment of indicators of
Evaluating the adequacy of the related
judgment, including whether, the rights to
senior management and Directors as to the
impairment.
disclosures in the Notes to the financial
tenure for the areas of interest are current, the
intentions and strategy of the Group.
statements.
Information other than the financial report and auditor’s report thereon
Group’s ability and intention to continue to
evaluate and develop the area of interest and
The directors are responsible for the other information. The other information comprises the
whether the results of the Group’s exploration
information included in the Company’s 2022 annual report but does not include the financial report
Information other than the financial report and auditor’s report thereon
and evaluation work to date are sufficiently
and our auditor’s report thereon.
progressed for a decision to be made as to the
The directors are responsible for the other information. The other information comprises the
commercial viability or otherwise of the area of
information included in the Company’s 2022 annual report but does not include the financial report
Our opinion on the financial report does not cover the other information and accordingly we do not
interest.
and our auditor’s report thereon.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
Assessing whether the methodology used
and our related assurance opinion.
by the Group to identify indicators of
Our opinion on the financial report does not cover the other information and accordingly we do not
We assessed this to be a key audit matter due to
impairment met the requirements of
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
In connection with our audit of the financial report, our responsibility is to read the other information
the value of the exploration assets relative to
and our related assurance opinion.
and, in doing so, consider whether the other information is materially inconsistent with the financial
Australian Accounting Standards.
total assets and the significant judgments
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
involved in the assessment of indicators of
Evaluating the adequacy of the related
In connection with our audit of the financial report, our responsibility is to read the other information
impairment.
disclosures in the Notes to the financial
and, in doing so, consider whether the other information is materially inconsistent with the financial
.
statements.
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Agreeing a sample of costs capitalised for
the period to supporting documentation
and assessing whether these costs meet
the requirements of Australian Accounting
Standards and the Group’s accounting
policy.
.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Information other than the financial report and auditor’s report thereon
A member firm of Ernst & Young Global Limited
The directors are responsible for the other information. The other information comprises the
Liability limited by a scheme approved under Professional Standards Legislation
information included in the Company’s 2022 annual report but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
68
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
| COBRE LIMITED
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
WWW.COBRE.COM.AU
Page 2
Carrying Value of Exploration and Evaluation Assets
Why significant
How our audit addressed the key audit matter
The Group’s exploration assets of $14.3m as at
30 June 2022 represent 74% of the total assets
of the Group as disclosed in Note 12.
Our procedures to address the Group’s
assessment of impairment indicators for
exploration assets included:
Exploration assets are initially recognised at
cost and any additional expenditure is
capitalised to the exploration asset in
accordance with the Group’s accounting policy
as disclosed in Note 1.
At each reporting date the Directors assess the
Group’s exploration assets for indicators of
impairment. The decision as to whether there
are indicators that require the Group’s
exploration assets to be assessed for
impairment in accordance with Australian
Accounting Standards involved significant
judgment, including whether, the rights to
tenure for the areas of interest are current, the
Group’s ability and intention to continue to
evaluate and develop the area of interest and
whether the results of the Group’s exploration
and evaluation work to date are sufficiently
progressed for a decision to be made as to the
commercial viability or otherwise of the area of
interest.
We assessed this to be a key audit matter due to
the value of the exploration assets relative to
total assets and the significant judgments
involved in the assessment of indicators of
impairment.
.
Obtaining an understanding of the current
exploration program and any associated
risks.
Confirming the Group’s right to explore in
the relevant exploration area, which
included obtaining and assessing
supporting documentation such as license
agreements.
Assessing the Group’s intention to carry
out significant exploration and evaluation
activity in the relevant areas of interest.
This included an assessment of the Group’s
cash-flow forecast models, discussions with
senior management and Directors as to the
intentions and strategy of the Group.
Agreeing a sample of costs capitalised for
the period to supporting documentation
and assessing whether these costs meet
the requirements of Australian Accounting
Standards and the Group’s accounting
policy.
Assessing whether the methodology used
by the Group to identify indicators of
impairment met the requirements of
Australian Accounting Standards.
Page 2
Evaluating the adequacy of the related
disclosures in the Notes to the financial
statements.
Page 2
Carrying Value of Exploration and Evaluation Assets
Page 3
How our audit addressed the key audit matter
Why significant
Information other than the financial report and auditor’s report thereon
Our procedures to address the Group’s
Carrying Value of Exploration and Evaluation Assets
The directors are responsible for the other information. The other information comprises the
The Group’s exploration assets of $14.3m as at
assessment of impairment indicators for
information included in the Company’s 2022 annual report but does not include the financial report
30 June 2022 represent 74% of the total assets
How our audit addressed the key audit matter
Why significant
exploration assets included:
and our auditor’s report thereon.
of the Group as disclosed in Note 12.
Our procedures to address the Group’s
The Group’s exploration assets of $14.3m as at
assessment of impairment indicators for
Obtaining an understanding of the current
Our opinion on the financial report does not cover the other information and accordingly we do not
30 June 2022 represent 74% of the total assets
Exploration assets are initially recognised at
exploration assets included:
exploration program and any associated
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
of the Group as disclosed in Note 12.
cost and any additional expenditure is
and our related assurance opinion.
risks.
capitalised to the exploration asset in
Obtaining an understanding of the current
Confirming the Group’s right to explore in
Exploration assets are initially recognised at
accordance with the Group’s accounting policy
exploration program and any associated
In connection with our audit of the financial report, our responsibility is to read the other information
the relevant exploration area, which
cost and any additional expenditure is
as disclosed in Note 1.
risks.
and, in doing so, consider whether the other information is materially inconsistent with the financial
included obtaining and assessing
capitalised to the exploration asset in
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Confirming the Group’s right to explore in
supporting documentation such as license
accordance with the Group’s accounting policy
At each reporting date the Directors assess the
the relevant exploration area, which
agreements.
as disclosed in Note 1.
If, based on the work we have performed, we conclude that there is a material misstatement of this
Group’s exploration assets for indicators of
included obtaining and assessing
Assessing the Group’s intention to carry
other information, we are required to report that fact. We have nothing to report in this regard.
impairment. The decision as to whether there
supporting documentation such as license
A member firm of Ernst & Young Global Limited
out significant exploration and evaluation
At each reporting date the Directors assess the
are indicators that require the Group’s
agreements.
Liability limited by a scheme approved under Professional Standards Legislation
activity in the relevant areas of interest.
Responsibilities of the directors for the financial report
Group’s exploration assets for indicators of
exploration assets to be assessed for
Assessing the Group’s intention to carry
impairment. The decision as to whether there
This included an assessment of the Group’s
impairment in accordance with Australian
The directors of the Company are responsible for the preparation of the financial report that gives a
out significant exploration and evaluation
are indicators that require the Group’s
Accounting Standards involved significant
cash-flow forecast models, discussions with
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
activity in the relevant areas of interest.
exploration assets to be assessed for
judgment, including whether, the rights to
senior management and Directors as to the
and for such internal control as the directors determine is necessary to enable the preparation of the
This included an assessment of the Group’s
impairment in accordance with Australian
tenure for the areas of interest are current, the
intentions and strategy of the Group.
financial report that gives a true and fair view and is free from material misstatement, whether due to
Accounting Standards involved significant
cash-flow forecast models, discussions with
Group’s ability and intention to continue to
fraud or error.
Agreeing a sample of costs capitalised for
judgment, including whether, the rights to
evaluate and develop the area of interest and
senior management and Directors as to the
the period to supporting documentation
tenure for the areas of interest are current, the
whether the results of the Group’s exploration
intentions and strategy of the Group.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
and assessing whether these costs meet
Group’s ability and intention to continue to
and evaluation work to date are sufficiently
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
Agreeing a sample of costs capitalised for
the requirements of Australian Accounting
evaluate and develop the area of interest and
progressed for a decision to be made as to the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
the period to supporting documentation
Standards and the Group’s accounting
whether the results of the Group’s exploration
commercial viability or otherwise of the area of
operations, or have no realistic alternative but to do so.
and assessing whether these costs meet
policy.
and evaluation work to date are sufficiently
interest.
the requirements of Australian Accounting
progressed for a decision to be made as to the
Assessing whether the methodology used
Auditor’s responsibilities for the audit of the financial report
Standards and the Group’s accounting
commercial viability or otherwise of the area of
by the Group to identify indicators of
We assessed this to be a key audit matter due to
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
policy.
interest.
impairment met the requirements of
the value of the exploration assets relative to
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
Assessing whether the methodology used
Australian Accounting Standards.
total assets and the significant judgments
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
by the Group to identify indicators of
We assessed this to be a key audit matter due to
involved in the assessment of indicators of
audit conducted in accordance with the Australian Auditing Standards will always detect a material
Evaluating the adequacy of the related
impairment met the requirements of
the value of the exploration assets relative to
impairment.
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
disclosures in the Notes to the financial
Australian Accounting Standards.
total assets and the significant judgments
if, individually or in the aggregate, they could reasonably be expected to influence the economic
.
statements.
involved in the assessment of indicators of
Evaluating the adequacy of the related
decisions of users taken on the basis of this financial report.
impairment.
disclosures in the Notes to the financial
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
statements.
Information other than the financial report and auditor’s report thereon
judgment and maintain professional scepticism throughout the audit. We also:
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 annual report but does not include the financial report
Identify and assess the risks of material misstatement of the financial report, whether due to
►
Information other than the financial report and auditor’s report thereon
and our auditor’s report thereon.
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
The directors are responsible for the other information. The other information comprises the
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
information included in the Company’s 2022 annual report but does not include the financial report
Our opinion on the financial report does not cover the other information and accordingly we do not
detecting a material misstatement resulting from fraud is higher than for one resulting from
and our auditor’s report thereon.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
and our related assurance opinion.
override of internal control.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
In connection with our audit of the financial report, our responsibility is to read the other information
► Obtain an understanding of internal control relevant to the audit in order to design audit
and our related assurance opinion.
and, in doing so, consider whether the other information is materially inconsistent with the financial
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
opinion on the effectiveness of the Group’s internal control.
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
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
estimates and related disclosures made by the directors.
.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
ANNUAL REPORT 2022
| 69
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 3
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 Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating 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 have 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.
INDEPENDENT AUDITOR's REPORT
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
Page 2
► Obtain an understanding of internal control relevant to the audit in order to design audit
Page 2
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
Carrying Value of Exploration and Evaluation Assets
Page 4
Why significant
estimates and related disclosures made by the directors.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
How our audit addressed the key audit matter
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
Our procedures to address the Group’s
Carrying Value of Exploration and Evaluation Assets
The Group’s exploration assets of $14.3m as at
assessment of impairment indicators for
30 June 2022 represent 74% of the total assets
Why significant
How our audit addressed the key audit matter
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
exploration assets included:
of the Group as disclosed in Note 12.
and, based on the audit evidence obtained, whether a material uncertainty exists related to
Our procedures to address the Group’s
The Group’s exploration assets of $14.3m as at
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
assessment of impairment indicators for
Obtaining an understanding of the current
30 June 2022 represent 74% of the total assets
Exploration assets are initially recognised at
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
exploration assets included:
exploration program and any associated
of the Group as disclosed in Note 12.
cost and any additional expenditure is
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
risks.
capitalised to the exploration asset in
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
Obtaining an understanding of the current
Confirming the Group’s right to explore in
Exploration assets are initially recognised at
accordance with the Group’s accounting policy
to the date of our auditor’s report. However, future events or conditions may cause the Group to
exploration program and any associated
the relevant exploration area, which
cost and any additional expenditure is
as disclosed in Note 1.
cease to continue as a going concern.
risks.
included obtaining and assessing
capitalised to the exploration asset in
Confirming the Group’s right to explore in
supporting documentation such as license
accordance with the Group’s accounting policy
At each reporting date the Directors assess the
the relevant exploration area, which
agreements.
as disclosed in Note 1.
Group’s exploration assets for indicators of
included obtaining and assessing
Assessing the Group’s intention to carry
impairment. The decision as to whether there
supporting documentation such as license
out significant exploration and evaluation
At each reporting date the Directors assess the
are indicators that require the Group’s
agreements.
activity in the relevant areas of interest.
Group’s exploration assets for indicators of
exploration assets to be assessed for
business activities within the Group to express an opinion on the financial report. We are
Assessing the Group’s intention to carry
impairment. The decision as to whether there
This included an assessment of the Group’s
impairment in accordance with Australian
responsible for the direction, supervision and performance of the Group audit. We remain solely
out significant exploration and evaluation
are indicators that require the Group’s
Accounting Standards involved significant
cash-flow forecast models, discussions with
responsible for our audit opinion.
activity in the relevant areas of interest.
exploration assets to be assessed for
judgment, including whether, the rights to
senior management and Directors as to the
This included an assessment of the Group’s
impairment in accordance with Australian
tenure for the areas of interest are current, the
intentions and strategy of the Group.
We communicate with the directors regarding, among other matters, the planned scope and timing of
Accounting Standards involved significant
cash-flow forecast models, discussions with
Group’s ability and intention to continue to
Agreeing a sample of costs capitalised for
the audit and significant audit findings, including any significant deficiencies in internal control that we
judgment, including whether, the rights to
evaluate and develop the area of interest and
senior management and Directors as to the
the period to supporting documentation
identify during our audit.
tenure for the areas of interest are current, the
whether the results of the Group’s exploration
intentions and strategy of the Group.
and assessing whether these costs meet
Group’s ability and intention to continue to
and evaluation work to date are sufficiently
Agreeing a sample of costs capitalised for
We also provide the directors with a statement that we have complied with relevant ethical
the requirements of Australian Accounting
evaluate and develop the area of interest and
progressed for a decision to be made as to the
the period to supporting documentation
requirements regarding independence, and to communicate with them all relationships and other
Standards and the Group’s accounting
whether the results of the Group’s exploration
commercial viability or otherwise of the area of
and assessing whether these costs meet
matters that may reasonably be thought to bear on our independence, and where applicable, actions
policy.
and evaluation work to date are sufficiently
interest.
taken to eliminate threats or safeguards applied.
the requirements of Australian Accounting
progressed for a decision to be made as to the
Assessing whether the methodology used
Standards and the Group’s accounting
commercial viability or otherwise of the area of
by the Group to identify indicators of
We assessed this to be a key audit matter due to
From the matters communicated to the directors, we determine those matters that were of most
policy.
interest.
impairment met the requirements of
the value of the exploration assets relative to
significance in the audit of the financial report of the current year and are therefore the key audit
Assessing whether the methodology used
Australian Accounting Standards.
total assets and the significant judgments
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
by the Group to identify indicators of
We assessed this to be a key audit matter due to
involved in the assessment of indicators of
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
Evaluating the adequacy of the related
impairment met the requirements of
the value of the exploration assets relative to
impairment.
should not be communicated in our report because the adverse consequences of doing so would
disclosures in the Notes to the financial
Australian Accounting Standards.
total assets and the significant judgments
reasonably be expected to outweigh the public interest benefits of such communication.
.
statements.
involved in the assessment of indicators of
impairment.
Report on the audit of the Remuneration Report
Information other than the financial report and auditor’s report thereon
Opinion on the Remuneration Report
The directors are responsible for the other information. The other information comprises the
We have audited the Remuneration Report included in pages 18 to 24 of the directors’ report for the
information included in the Company’s 2022 annual report but does not include the financial report
Information other than the financial report and auditor’s report thereon
year ended 30 June 2022.
and our auditor’s report thereon.
The directors are responsible for the other information. The other information comprises the
In our opinion, the Remuneration Report of Cobre Limited for the year ended 30 June 2022, complies
information included in the Company’s 2022 annual report but does not include the financial report
Our opinion on the financial report does not cover the other information and accordingly we do not
with section 300A of the Corporations Act 2001.
and our auditor’s report thereon.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
Responsibilities
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
In connection with our audit of the financial report, our responsibility is to read the other information
The directors of the Company are responsible for the preparation and presentation of the
and our related assurance opinion.
and, in doing so, consider whether the other information is materially inconsistent with the financial
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
In connection with our audit of the financial report, our responsibility is to read the other information
accordance with Australian Auditing Standards.
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.
Evaluating the adequacy of the related
disclosures in the Notes to the financial
statements.
.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Ernst & Young
Liability limited by a scheme approved under Professional Standards Legislation
| COBRE LIMITED
Ryan Fisk
70
Partner
Sydney
29 September 2022
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
WWW.COBRE.COM.AU
Page 4
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 18 to 24 of the directors’ report for the
year ended 30 June 2022.
Page 2
Page 2
In our opinion, the Remuneration Report of Cobre Limited for the year ended 30 June 2022, complies
with section 300A of the Corporations Act 2001.
Carrying Value of Exploration and Evaluation Assets
Ernst & Young
How our audit addressed the key audit matter
Ryan Fisk
Partner
Sydney
29 September 2022
Why significant
Responsibilities
Our procedures to address the Group’s
Carrying Value of Exploration and Evaluation Assets
The directors of the Company are responsible for the preparation and presentation of the
The Group’s exploration assets of $14.3m as at
assessment of impairment indicators for
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
30 June 2022 represent 74% of the total assets
How our audit addressed the key audit matter
Why significant
exploration assets included:
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
of the Group as disclosed in Note 12.
Our procedures to address the Group’s
accordance with Australian Auditing Standards.
The Group’s exploration assets of $14.3m as at
assessment of impairment indicators for
Obtaining an understanding of the current
30 June 2022 represent 74% of the total assets
Exploration assets are initially recognised at
exploration assets included:
exploration program and any associated
of the Group as disclosed in Note 12.
cost and any additional expenditure is
risks.
capitalised to the exploration asset in
Exploration assets are initially recognised at
accordance with the Group’s accounting policy
cost and any additional expenditure is
as disclosed in Note 1.
capitalised to the exploration asset in
accordance with the Group’s accounting policy
At each reporting date the Directors assess the
as disclosed in Note 1.
Group’s exploration assets for indicators of
impairment. The decision as to whether there
At each reporting date the Directors assess the
are indicators that require the Group’s
Group’s exploration assets for indicators of
exploration assets to be assessed for
impairment. The decision as to whether there
impairment in accordance with Australian
are indicators that require the Group’s
Accounting Standards involved significant
exploration assets to be assessed for
judgment, including whether, the rights to
impairment in accordance with Australian
tenure for the areas of interest are current, the
Accounting Standards involved significant
Group’s ability and intention to continue to
judgment, including whether, the rights to
evaluate and develop the area of interest and
tenure for the areas of interest are current, the
whether the results of the Group’s exploration
Group’s ability and intention to continue to
and evaluation work to date are sufficiently
evaluate and develop the area of interest and
progressed for a decision to be made as to the
whether the results of the Group’s exploration
commercial viability or otherwise of the area of
and evaluation work to date are sufficiently
interest.
progressed for a decision to be made as to the
commercial viability or otherwise of the area of
We assessed this to be a key audit matter due to
interest.
the value of the exploration assets relative to
total assets and the significant judgments
We assessed this to be a key audit matter due to
involved in the assessment of indicators of
the value of the exploration assets relative to
impairment.
total assets and the significant judgments
.
involved in the assessment of indicators of
impairment.
Obtaining an understanding of the current
Confirming the Group’s right to explore in
exploration program and any associated
the relevant exploration area, which
risks.
included obtaining and assessing
Confirming the Group’s right to explore in
supporting documentation such as license
the relevant exploration area, which
agreements.
included obtaining and assessing
Assessing the Group’s intention to carry
supporting documentation such as license
out significant exploration and evaluation
agreements.
activity in the relevant areas of interest.
Assessing the Group’s intention to carry
This included an assessment of the Group’s
out significant exploration and evaluation
cash-flow forecast models, discussions with
activity in the relevant areas of interest.
senior management and Directors as to the
This included an assessment of the Group’s
intentions and strategy of the Group.
cash-flow forecast models, discussions with
Agreeing a sample of costs capitalised for
senior management and Directors as to the
the period to supporting documentation
intentions and strategy of the Group.
and assessing whether these costs meet
Agreeing a sample of costs capitalised for
the requirements of Australian Accounting
the period to supporting documentation
Standards and the Group’s accounting
and assessing whether these costs meet
policy.
the requirements of Australian Accounting
Assessing whether the methodology used
Standards and the Group’s accounting
by the Group to identify indicators of
policy.
impairment met the requirements of
Assessing whether the methodology used
Australian Accounting Standards.
by the Group to identify indicators of
Evaluating the adequacy of the related
impairment met the requirements of
disclosures in the Notes to the financial
Australian Accounting Standards.
statements.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Evaluating the adequacy of the related
disclosures in the Notes to the financial
statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 annual report but does not include the financial report
Information other than the financial report and auditor’s report thereon
and our auditor’s report thereon.
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2022 annual report but does not include the financial report
Our opinion on the financial report does not cover the other information and accordingly we do not
and our auditor’s report thereon.
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
In connection with our audit of the financial report, our responsibility is to read the other information
and our related assurance opinion.
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.
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.
.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
ANNUAL REPORT 2022
| 71
7
72
| COBRE LIMITED
WWW.COBRE.COM.AU
7.
ASX Additional
Information
Additional information required pursuant to ASX Listing Rule 4.10 and not disclosed elsewhere in this report is set out
below. The information is effective as at 13 September, 2022.
INFORMATION PURSUANT TO LISTING RULE 5.20
Perrinvale Project
The Perrinvale Project is based on a large conterminous group of nine exploration licenses (and one miscellaneous license)
held by Toucan Gold Pty Ltd, a wholly owned subsidiary of Cobre. The Perrinvale tenements total 327km2 in size.
Applications to renew/extend the tenure on E29/989, E29/987 and E29/990 were lodged in mid-September 2022 along
with some partial surrenders lodged at the same time which will reduce the number of blocks on E29/987 & 990 as
shown on the table below. Tenement E29/988, which was held at 30 June 2022, comprising a single block tenement,
was also surrendered in mid-September.
The intended surrenders will reduce the tenure area by 6BL = 18 sqkm from 345 to 327 sqkm. That said we will still be
awaiting the Ministers decision on our requests to extend tenure on E29/987, 989 and 990. That decision could take
months and while in the decision process the tenure remains current/valid.
Tenement/
Application
E29/1017
E29/929-I
E29/938-I
E29/946-I
E29/986
E29/987
E29/989
E29/990
E29/1106
L29/0155
Holder/ Applicant
Shares
Grant Date
Expiry Date
Area1
Toucan Gold Pty Ltd
100/100
4 Jan2018
3 Jan 2023
Toucan Gold Pty Ltd
100/100
25 Aug 2015
24 Aug 2025
Toucan Gold Pty Ltd
100/100
8 Jul 2015
7 Jul 2025
Toucan Gold Pty Ltd
100/100
18 Aug 2015
17 Aug 2025
Toucan Gold Pty Ltd
100/100
11 Oct 2017
10 Oct 2022
Toucan Gold Pty Ltd
100/100
19 Sep 2017
18 Sep 2022
Toucan Gold Pty Ltd
100/100
19 Sep 2017
18 Sep 2022
Toucan Gold Pty Ltd
100/100
19 Sep 2017
18 Sep 2022
Toucan Gold Pty Ltd
100/100
14 May 2021
13 May 2026
Toucan Gold Pty Ltd
100/100
18 Jan 2022
17 Jan 2043
18BL
19BL
13BL
5BL
20BL
4BL
3BL
7BL
20BL
59HA
1 BL = Blocks. HA = Hectares.
The above table is the tenement schedule for Toucan Gold Pty Ltd. All Perrinvale tenements are 100% owned by
Toucan Gold, however FMG Resources Pty Ltd retains a 2% net smelter royalty on any future metal production from
3 tenements E29/929, 938 and 946.
ANNUAL REPORT 2022
| 73
AsX ADDITIONAL INFORMATION
Mt Sandiman Project
The Mt Sandiman Project is based on a single tenement (E09/2316) totalling 202km2 in size. Cobre does not hold a direct
interest in the tenement which is subject to a farm-in agreement with GTTS Generations Pty Ltd dated 13 November 2019
(refer farm-in agreement summary in section 10.8 of the Company’s Prospectus dated 6 December 2019).
Tenement/
Application
Holder/ Applicant
Shares
Grant Date
Expiry Date
E09/2316
GTTS Generations Pty Ltd
100/100
9 Aug 2019
8 Aug 2024
Area1
65BL
1 BL = Blocks
Sandiman Project tenement schedule representing the tenement ownership as detailed in the Department of Mines Industry Regulation
and Safety records. Cobre’s 51% earned interest in E09/2316 was lodged with the department 22/06/2022, after OSR assessment,
and is currently awaiting processing.
Kalahari Copper Project
Kalahari Metals Limited’s (KML) Kalahari Copper Project (KCP) licence holding comprises 11 prospecting licences, of
which six are held by KML (including its 100% owned subsidiary Kitlanya (Pty) Ltd) (which are subject to a 2% Net Smelter
Royalty held by Metal Tiger PLC) and five held by Triprop Holdings (Pty) Ltd (Triprop), with whom KML hold contractual
rights to a 51% interest. The table below provides a summary of the licence holdings that comprise the individual projects.
License
Expiry
Size (km2)
Royalty
Company
Kitlanya Ltd
Kitlanya Ltd
Kitlanya Ltd
Kitlanya Ltd
Kitlanya Ltd
PL342/2016
PL343/2016
PL070/2017
PL071/2017
PL072/2017
31-Mar-24
31-Mar-24
30-Jun-24
30-Jun-24
30-Jun-24
Kalahari Metals Ltd
PL149/2017
30-Sep-24
Triprop Holdings (Pty) Ltd
PL035/2012
30-Sep-24
Triprop Holdings (Pty) Ltd
PL036/2012
30-Sep-24
Triprop Holdings (Pty) Ltd
PL041/2012
30-Sep-24
Triprop Holdings (Pty) Ltd
PL042/2012
30-Sep-24
Triprop Holdings (Pty) Ltd
PL043/2012
30-Sep-24
Total
950
995
826.4
295
238
999.5
309
51
9
272
82
5026.9
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
No
CORPORATE GOVERNANCE:
The Company’s Corporate Governance Statement for the financial year ended 30 June 2022 can be found at:
https://www.cobre.com.au/corporate-governance/
74
| COBRE LIMITED
WWW.COBRE.COM.AU SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders in Cobre Ltd and the number of equity securities to which each substantial
shareholder and their associates have a relevant interest, as disclosed in substantial shareholder notices given to
Cobre Ltd, are set out below.
Name of Substantial Holder within the meaning
of section 671B of the Corporations Act
Date
Number of Shares in which
the substantial holder
holds a relevant interest
% of total
shares on
issue
Metal Tiger PLC
12 August 2022
34,764,096
Holland International Pty Ltd
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