Annual Report
31 December 2020
ABN 48 002 678 640
cypriummetals.com
arcexploration.com.au
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CONTENTS
Corporate Directory
Chairman’s Letter
Strategy
Review of Operations
Directors’ Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
ASX Additional Information
About Cyprium Metals Limited and Schedule of Tenements
CORPORATE DIRECTORY
Directors
Gary Comb (Chairman, Non-Executive Director)
Barry Cahill (Executive Director)
Nicholas Rowley (Non-Executive Director)
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Company Secretary
Wayne Apted
Registered Office & Principal Place of Business
Level 2, 38 Rowland Street
Subiaco WA 6008
Telephone: +61 8 6169 3050
Website
www.cypriummetals.com
Share Registry
Advanced Share Registry Limited
PO Box 1156
Nedlands WA 6909
Telephone: +61 8 9389 8033
Stock Exchange
Australian Securities Exchange
ASX Code: CYM
Cyprium Metals Limited
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CHAIRMAN’S LETTER
On behalf of the Board of Directors, I am pleased to present the 2020 Annual Report for Cyprium Metals Limited
(“CYM” or “the Company”).
When the current Directors became involved with Cyprium in 2019, the intention was to focus on mid to late stage
local copper projects which had the potential to be fast-tracked into production of copper metal. In order to
achieve this objective, the Board planned to firstly capitalise on the Directors’ and management’s collective
experience gained from establishing, operating and contracting to various mining companies in Australia, secondly
use the Directors’ knowledge gained in setting up and operating Australian base metal projects, and thirdly and
most importantly, to leverage our collective experience and involvement in building and very successfully
operating a sulphide copper heap leach project in remote Indonesia. This sulphide heap leach project provided
unique knowledge and capability of the correct methodology required to produce low cost/premium value copper
metal on site, which is then directly saleable into the global copper metal market.
The outstanding ultimate success of the Indonesian sulphide copper heap leach project strongly motivated the
Directors to endeavour to build a mid-tier copper mining company in Australia, based as far as possible on the
significant premium value that heap leach production of copper metal would bring to Cyprium. The first step in
establishing such an Australian copper production company was to develop a prioritised list of prospective copper
projects in Australia which have mineralogy conducive to our sulphide copper heap leach experience and
capability. Over the past two years we have acquired two of those prospective targets, and we are now in the
process of acquiring the third and fourth copper project on that original target list.
The Cue Project was the first of the target projects acquired. This year, exploration and development activities have
continued at the Cue Copper-Gold project, which included producing a JORC 2012 compliant Mineral Resource
for the Hollandaire deposits, completion of metallurgical test-work which produced high quality copper metal
plate, meeting the earn-in requirements and formation of an 80/20 joint venture with Musgrave Minerals Limited,
commencement of a scoping study, and the granting of a mining licence which paves the way for project
development.
The second target project, which was acquired during 2020, was the nearby highly prospective Nanadie Well
Copper-Gold project which contains a significant JORC 2004 compliant mineral resource. The Nanadie Well
Copper-Gold project complements the Cue Copper-Gold project perfectly. This project is being rapidly advanced,
commencing with diamond and reverse circulation drilling programmes, for inclusion in the Murchison Copper-
Gold scoping study.
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The Company has also participated in a number of due diligence reviews of Copper projects across Australia during
the year and we were very pleased to announce the potential third and fourth copper project acquisitions by
entering into agreement to acquire Metals X Limited’s Copper Assets in February 2021, which are located in the
Paterson Province of Western Australia. The Paterson Copper Assets comprises firstly the Nifty Copper project,
which has been on care and maintenance since November 2019, secondly the Maroochydore Copper Project, plus
it also includes Metals X’s vast Paterson Exploration Project.
The acquisition of Metals X Copper Assets is a transformational acquisition for Cyprium as the Nifty Copper Project
has a JORC 2012 compliant mineral resource of over 650,000 contained tonnes of copper, with onsite infrastructure
which will enable the production of copper metal cathode on site in the near term. The nearby Maroochydore
copper project has a JORC 2012 mineral resource of almost 500,000 tonnes of contained copper which is an
excellent addition to our pipeline of projects, all of which are at differing stages of development.
The Paterson Exploration Project includes an extensive suite of tenements surrounding the Nifty and
Maroochydore copper projects, which is subject to a $32 million farm-in that is sole funded by IGO Limited for a
70% interest over 6.5 years, with a minimum spend of $11 million over 3.5 years.
The acquisition of the Paterson Copper Assets is perfectly aligned with our experience and management expertise
which fast tracks our strategy of building a mid-tier Australian copper business whilst still allowing the flexibility
to pursue other growth opportunities. There are still a number of other potential targets on our list.
Despite the turbulent year globally driven by COVID-19, the copper markets have performed strongly and the
medium to longer term outlook for copper remains very positive, underpinned by stimulus packages and an
increasing world-wide demand for clean energy sources whilst copper supply remains constrained.
We are looking forward to another exciting and productive year ahead as we progress toward establishing Cyprium
as a significant mid-tier copper producer.
Gary Comb
Chairman
Cyprium Metals Limited
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STRATEGY
1. Strategy Overview
Core Purpose
Growing value by developing and operating mines to produce copper efficiently and sustainably.
Who we are
We are an ASX listed company and have a highly credentialed management team that is experienced in successfully
developing and operating sulphide heap leach copper projects in challenging locations.
What we do
To acquire, develop and operate mineral resource projects in Australia which are optimised by innovative processing
solutions to produce copper metal cathode onsite to maximise value.
How we do business
We conduct our activities with integrity, balancing the economic, environmental and social considerations to create
value for the mutual benefit of all of our stakeholders.
What we aim to achieve
We are focused on building a mid-tier ASX listed copper mining business which manages a portfolio of Australian
projects to deliver strong shareholder returns and sustainable value for all stakeholders.
Business Model
Accountability
Our Values
Asset
Base
Safety
Growth
Copper
Integrity
Core Purpose
Efficient
Sustainable
Responsibility
Professional
Our
People
Financially
Balanced
Cyprium Metals Limited
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2. Core Purpose
At the centre of our strategy is the generation of value through acquisitions, growth and asset improvements to
produce LME Grade A copper cathode metal onsite to build a sustainable business.
Growth
Typical Mineral Project Life Cycle
Acquisitions
To acquire, advance and develop a portfolio of Australian copper projects, taking these through to operations,
utilising innovative solutions to produce final metal plates onsite to maximise value.
Organic Growth
To develop a range of organic growth copper projects through disciplined resource allocation to increase
production volumes and mine lives whilst reducing average operating costs.
Operational Excellence
Continually focus on improving the value by optimising operations, positioning them in the lower half of their cost
curves with mine lives of at least 10 years, unlocking value that others are not able to.
Copper
Copper, which is also known as the red metal or red gold, is used globally to manufacture a wide variety of goods
that are critical for maintaining and improving the standard of living across society, particularly for the BRICS group
of major emerging economies. Copper is a key input for widely used consumer goods including motor vehicles,
appliances, electronics, and residential housing. Copper is also a critical raw material for many industrial sectors,
including telecommunications, utilities, construction, and industrial machinery.
The price of copper is often regarded as a proxy for the strength of the global economy given it is required in a
vast array of industrial and technological uses so when economies are strong and production levels are rising,
demand increases for the red metal which drives demand and copper prices higher. Many other industrial metals
are very specialized in their use so the drivers of their prices are narrower whilst for precious metals, the prices are
driven by investor sentiment.
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Copper End Uses for Society
Copper is very efficient and nearly as conductive as silver, which is the most conductive metal, but is a fraction of
the cost of silver, whilst temperature does not affect copper’s conductivity, which makes the red metal ideal for
automobiles and infrastructure in all climates. Copper can easily be shaped into wire, an important factor in the
efficient use in most electrical applications and it can be recycled.
Copper’s key properties of conductivity, ductility, efficiency and recyclability, make it a key commodity for the
transition to clean energy. It is these properties that make copper the critical material required for wind and solar
technology, energy storage, and electric vehicles, all of which will significantly increase the demand for copper. To
put this into perspective:
Solar and wind power generation uses 4 to 6 times more copper than other sources of power
Copper wiring and cabling connects renewable power generation with energy storage, whilst the copper in
transformer switches allows power to be delivered at the required voltage
4 to 6 times more copper is needed for electric vehicles than traditionally powered vehicles mainly due to
the power motor coil and copper is also required for the recharging stations
Healthcare industry demand is rising due to its unique anti-microbial properties where copper alloy surfaces
rapidly kill many forms of potentially lethal bacteria
Copper projects typically have been large-scale in size however large deposits are becoming scarcer and the copper
head grades of existing operations are falling. This is compounded by a lack of development of new projects that
will bring forward the long-anticipated supply crunch which will drive prices higher over the foreseeable medium
to long term timeframes.
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Efficiency
We have developed unique intellectual property that can optimise the development or restart of copper projects
by utilising sulphide heap leach processing methodology, which is ideal for stranded projects, problematic
mineralogy, lack of scale, lower average head grade mineral deposits and/or challenging locations.
The advantages of sulphide heap leach processing methodology include the minimisation of environmental
impacts, production of a final LME Grade A cathode onsite, no further downstream processing, higher realised sales
proceeds, lower capital and operating costs.
Sulphide Heap Leach Process
Conceptually, sulphide heap leach is a straight forward process that has many competitive advantages over the
traditional onsite copper in concentrate production methods, including:
Sulphide leaching is exothermic, generating its own heat to facilitate leaching of copper
Air, ground water, acid and electricity are the primary inputs, together with a limited number of other
reagents required in the process, which reduces production and maintenance costs
Acid that leaches the copper is self-generated in the sulphide heaps, reducing operating costs
Closed circuit process cycle with the raffinate solution, after the extraction of copper, being returned to the
heap leach pads to resume the leaching copper into solution
Reduced size for processing plant and no requirement for tailings dams to store waste materials from a
concentrator, decreasing development costs and environmental impacts
Transport costs are reduced due to less materials being shipped to and from the mine site
No downstream treatment and refining charge deductions from sales revenue
Government royalty rates levied on copper in concentrate being up to double than for cathode
The leached copper in solution is then processed by solvent extraction-electrowinning (SX-EW) to produce LME
grade A cathode, which has a copper purity of more than 99.99%. All of the LME grade A copper cathode produced
onsite is sold at a premium in liquid global markets whereas for concentrate, sales proceeds are normally based on
96.5% of the copper contained in the concentrate, downstream treatment and refining charges are also deducted
along with penalty charges for other contaminates contained in the concentrate.
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Cyprium’s Leached Copper in Solution and Crushed Copper Sulphide Heap Leach Pad Ore
SX-EW Process and Copper Metal Plate from the Hollandaire deposit
Raffinate
solution
Sustainable
We operate our business with integrity and high standards to balance economic, social and environmental
considerations over the longer term.
Our activities create lasting social and economic benefits for our regional communities and the broader society
which extends beyond providing employment opportunities and taxes to improving skills, health, local business
development, social activities, sponsorships and improved infrastructure.
Sulphide heap leach methodology reduces the environmental impacts at copper mine sites. The production of LME
Grade A copper cathode onsite eliminates the need for offsite downstream processing associated with concentrate
production and also reduces transportation requirements.
We maintain high standards when approaching occupational health, safety and environmental practices, working
with our stakeholders for the mutual benefit of everyone.
We encourage best practices and a value add culture throughout our organisation, with appropriate remuneration
rewards to include cost savings targets, that underpin the delivery of our strategy and grow value over the longer
term in a responsible manner for the benefit of all of our stakeholders.
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3. Our Values
How we implement our strategy is very important to us, influencing our ability to maximise the delivery of benefits
to our stakeholders in a sustainable manner. Our values, supported by a code of conduct and robust governance
framework, define what we believe and how we conduct ourselves in the pursuit of our strategy.
Safety
The safety of our employees, contractors, consultants and visitors is paramount. Our target is to achieve zero injuries
in the workplace by having a culture of safe behaviour inside and outside of the workplace.
Integrity
Integrity and trust are paramount throughout our organisation. We trust our people to make the right decisions,
no matter how difficult, and we value the trust that our stakeholders give us when working together. We earn their
trust by being straight forward, open and transparent with all of our stakeholders. Our actions must be congruent
with what we say we do.
Professional
We strive for the highest levels of professionalism, to be innovative and encourage a value add approach that
inspires our people to conduct themselves responsibly in the best interests our business and stakeholders whilst
continuously making improvements that make a difference every day.
Responsibility
We hold ourselves accountable, recognising that our activities will impact the environment and a wide range of
stakeholders. We take all of our responsibilities and obligations very seriously to ensure we meet our broad range
of commitments.
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4. Business Model
We minimise bureaucracy and corporate overheads with responsibility to a project level, where people are best
placed to make decisions in a timely manner about their operations, reinforcing accountability across the
organisation. We focus on maximising shareholder returns and generating value for our stakeholders in a
sustainable manner in accordance with our values and business model.
Accountability
Operations are accountable for all aspects of their business and are required to continuously improve the projects
value in a sustainable manner. This structure allows decisions to be made where the best information exists, creating
a strong sense of responsibility at the project level.
Our operational management is empowered to take pro-active and prompt decisions at all levels to make lasting
value-added initiatives. This provides our workforce with a strong sense of purpose, knowing that they are making
a difference and to conduct our business activities with integrity.
Our disciplined approach to making continuous improvements in a responsible manner for the mutual benefit of
all stakeholders is underpinned by a robust governance framework across our business.
Asset Base
We develop copper projects in Australia, minimising sovereign risk, that are optimised with our unique sulphide
heap leach processing method to produce copper metal onsite which is readily sold into established global markets
for maximum value whilst minimising the impact on the environment.
We are focused on growing and rapidly advancing a portfolio of advanced stage projects with significant mineral
resources. We develop projects cost effectively and correctly from the outset with a long-term focus to optimise
their performance with a low cost-base over the life of the mine.
We aim to continuously improve operations through better improve safety performance and environmental
management, increase production volumes and mine lives whilst reducing operating costs, to be positioned in the
lower half of the industry cost curve with mine lives of at least 10 years.
Financially Balanced
Commodities are priced in US dollars, as are many of the capital and operating raw material costs required to
produce base metals. An appropriate mix of US$ and AUD denominated borrowings will be used to act as a natural
hedge of AUD/US$ currency movements.
We are focused on producing copper metal cathode efficiently onsite, increasing the sales proceeds whilst lowering
selling costs and without incurring downstream treatment and refining costs.
Our competitiveness and maximisation of shareholder returns also relies on reducing our cost base and maintaining
efficient operations. Cost control is a measure of the quality of our management, consequently and we seek to
continuously make long lasting cost base improvements.
Our People
The right people with the right skills at all levels is essential to the successful implementation of our strategy. We
focus on continuously increasing the value and quality of operations, providing a safe, non-discriminatory
workplace with a fair and competitive remuneration that rewards high performance, within a lean, non-bureaucratic
structure.
The achievement of sustained high performance is driven by a culture of value add, reinforced by cost savings
targets within our remuneration structure and meaningful employee equity ownership, to responsibly grow the
value of our projects for the benefit of all stakeholders.
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5. Sustainable Benefits
Shareholders
Well governed business
Innovative & experienced
management team
Principled & socially responsible
Generation of superior returns
Copper Markets
Widely used in a range of Industrial
& consumer goods
Improves living standards
Critical for the transition to clean
energy
Our Values
Core Purpose
Business Model
Government
Minimise environmental impacts
Rates, royalties & taxes payable
Secure tenure & investment
Complying with consistent
regulations
Suppliers
Business development &
procurement
Indigenous business opportunities
Interacting with integrity
Mutually beneficial outcomes
Communities
Employment & business
development
Responsible OHS&E
Infrastructure investment
Providing social license to operate
We are building a sustainable business in accordance with our values, which balances economic, environmental and
social considerations. Responsible environmental management and community engagement enables us to maintain
our social licence to operate, attract and retain skilled employees, access various sources of capital, identify business
opportunities and optimise operations to add value for all stakeholders. The inter-dependency between our
stakeholders includes:
Providing a safe workplace, creating job opportunities and the development of skills for our employees,
together with the employees of suppliers and contractors
Generating rates, royalties and a range of taxes that are payable to the Local, State and Federal government
by Cyprium, our employees and suppliers
Business development and procurement opportunities for suppliers and local businesses
Creation of shareholder value through increasing returns from our long-term investments
Comply with the stable, transparent regulatory regimes that Australian governments provide
Cyprium Metals Limited
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REVIEW OF OPERATIONS
Murchison Copper-Gold Projects
The Company has projects in the Murchison region of Western Australia, that is host to a number of base metals
deposits with copper and gold mineralisation. The Cue and Nanadie Well Copper-Gold projects are included in an
ongoing scoping study, to determine the parameters required to develop a copper project in the region, which
provides direction for resource expansion work.
Cue Copper-Gold Project
Figure 1 | Location of Cue and Nanadie Well Copper-Gold Projects
Cyprium has a joint venture with Musgrave Minerals Limited (ASX: MGV) at the Cue Copper-Gold Project, which is
located ~20km to the east of Cue, in the Murchison region of Western Australia. Cyprium has an 80% attributable
joint venture interest in the project’s copper, gold and silver mineralisation whilst MGV has a 100% interest in
primary gold deposits that are not associated with a copper-gold deposit.
The Hollandaire Copper-Gold Mineral Resource forms part of Cyprium’s Cue Copper-Gold Project (refer Figure 1).
During the year, mining lease M20/526 was granted which replaced the Hollandaire exploration tenement E20/699
and a portion of the Rapier exploration tenement E20/629 (refer Figure 4).
Exploration Drilling and Field Activities
During the year, Cyprium completed 4,902 metres of Reverse Circulation (“RC”) drilling at the Cue Copper-Gold
Project. RC drilling at the Eelya South prospect returned an intersection of 3.0m @ 3.78% Cu in drill hole 20ESRC014
which also included 6.68 g/t Au and 81.0 g/t Ag from 59m (refer to Figure 2).
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3.0m @ 3.78% Cu, 6.68g/t Au
81.0g/t Ag
Figure 2 / Eelya South RC drill hole collar locations
This high-grade copper-gold southern Eelya South intersection in drill hole 20ESRC014 was drilled to test a
structure, previously identified at Eelya South in the 1990’s which returned an intersection of 2.0m @ 10.12% Cu,
3.19 g/t Au and 92.0 g/t Ag from 40m in drillhole ERC19. There was a continuation of the sulphide rich zone in this
RC drilling programme however significant copper grades were not intersected.
An RC drilling programme at Hollandaire was conducted around the margins of the existing deposit to test
extensions of the mineralisation. The results show continuation of the mineralisation and the intersections are being
taken into consideration in the planning for testing of further depth extensions through geophysical and drilling
programmes.
Cyprium completed a regional field mapping and surface sampling campaign at the Rapier West and Mt Eelya
prospects, to the north-west of the Hollandaire deposits. A review and field inspection has been conducted on the
regional prospects to prioritise targets for the next phases of drilling as part of Cyprium’s strategy to increase its
copper resource base at the Cue Copper-Gold Project. Samples were taken of mineralised quartz/iron gossans at
the Rapier West and at Mt Eelya (refer to Figure 1) which included the following assay results:
12.3% Copper in Rapier West north costean surface sample
13.0% Copper in Mt Eelya Gossan 1 surface sample
10.6% Copper in Mt Eelya Gossan 3 surface sample
10.2% Copper in Mt Eelya Gossan 8 surface sample
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Metallurgical Test-work
Metallurgical column test-work continued during 2020 on the massive and semi-massive sulphides samples from
the Hollandaire and Hollandaire West prospects at the Cue Copper-Gold Project. This test-work has been
undertaken to determine the optimal copper extraction process for our unique methodology, which has leached
copper rapidly into solution.
The primary leach solution (“PLS”) produced from the metallurgical column test-work has been processed in an
electrowinning (“EW”) cell (refer to Image 1) to produce cathode copper metal plates (refer to Image 2), which
were then stripped from the cathodes to complete the processing cycle through to its final product of high purity
copper metal plate (refer to Image 3).
Image 1 / EW Cell
Image 2 / Cathode Copper
Image 3 / Copper Metal Plate
A full metallurgical processing cycle has been completed starting from drilling the mineralisation, to crushing and
leaching through to plating copper as a proof of concept of our low-cost treatment methodology. The Hollandaire
material is very suitable for our methodology and it has outperformed the initial expectations.
The metallurgical diamond drill programme that was completed in 2019 consisted of three holes for 320 metres
into the mineralised envelope of the Hollandaire Prospect at the Cue Copper-Gold Project to provide
representative samples for test-work to be undertaken.
The first hole in the metallurgical diamond drilling programme, 19HOMET001, was drilled into the Hollandaire
West deposit and returned disseminated copper sulphide mineralisation. The second and third diamond drill holes
in the programme, 19HOMET002 and 19HOMET003, targeted representative sections of the Hollandaire deposit
and returned semi-massive to massive sulphide mineralisation.
The results from the metallurgical diamond drill holes included:
10.4m @ 14.9% Cu in drill hole 19HOMET003 from 84.5m downhole including:
4.5m @ 21.9% Cu from 90.4m;
19.1m @ 1.3% Cu in drill hole 19HOMET002 from 85.9m downhole including:
6.4m @ 2.1% Cu from 98.6m;
27.9m @ 1.1% Cu in drill hole 19HOMET001 from 45.7m downhole including:
9.0m @ 1.6% Cu from 63.2m.
At the completion of drilling, core samples from the Cue Copper-Gold Project were received at the metallurgical
laboratory which was crushed, split and assayed for multi-element grades. Composites were then created for the
Hollandaire deposit and the Hollandaire West deposit.
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Hollandaire samples were composited from holes 19HOMET002 and 19HOMET003 to create two column samples,
Columns A and B, with copper grades of 5.10% and 5.24% respectively.
Separately, the drill core from Hollandaire West, obtained from drill hole 19HOMET001, was composited for testing
in a third column, Column C, with an average grade of 0.76% copper.
Diagnostic testing and mineralogical analysis were undertaken on the samples to determine the optimal
parameters to use to undertake the column test-work.
The composites were then leached in separate columns with the resultant copper recovery over time under leach
are presented in Graph 1.
The results to date demonstrate an accelerated leach time for the extraction of copper metal into solution. The
test-work on Column C, in particular, has demonstrated an even more rapid leach than Columns A and B.
The effect of the very short leach times on a potential Cue Copper-Gold Project is significant as it decreases the
size of the heap leach pads, and consequently reduces the capital and operating cost requirements over the life
of the operation.
The completion of the plating of copper from the PLS solution in an EW cell completes the process flow sheet for
the extraction method of copper from the Hollandaire mineralisation. This is a very important milestone in the
Company’s aspirations to build a project at Cue. The proof of concept on the treatment of the mineralisation of
Cue Copper-Gold Project to produce copper metal on site has now been completed.
Cumulative Copper Extraction Vs Time
100
90
80
70
%
u
C
,
n
o
i
t
c
a
r
t
x
E
60
50
40
30
20
10
0
0
5
10
15
20
Column A
30
25
Days
Column B
35
40
45
50
Column C
Graph 1 / Copper Extraction
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Mineral Resource
Cyprium has completed an update of the Hollandaire Mineral Resource to the JORC 2012 standard, as detailed in
Table 1 below and as illustrated in Figure 3.
Table 1 / Hollandaire JORC 2012 Mineral Resource Estimate (values are rounded)
Notes:
Differences in sum totals of tonnages and grades may occur due to rounding
Nominal cut-off at 0.3% Cu
Cyprium has an 80% attributable interest in the copper, gold and silver
Gold mineralisation not associated with the copper resource that is 100% attributable to MGV, has not
been modelled or reported in the Hollandaire 2012 JORC Mineral Resource estimate
The Hollandaire Mineral Resource estimate has been based on data compiled from previous drilling, together with
the drilling campaigns conducted by Cyprium since mid-2019. The Hollandaire JORC 2012 Mineral Resource
estimate was completed by specialist consultants and Cyprium staff, and is included in the ongoing Murchison
Copper-Gold scoping study.
The JORC 2012 Mineral Resource, as illustrated in Figure 3, is contained in two shallow deposits, which are adjacent
to each other, being the Hollandaire and Hollandaire West deposits, whereby the mineralisation begins from only
20 metres below the surface and extends to a depth of 180 metres at Hollandaire west, and 310 metres at
Hollandaire, from surface, where the mineralisation remains open. The Hollandaire Copper-Gold Mineral Resources
are located on mining lease M20/526 (refer to Figure 4), which was granted during the year, providing a clear
pathway to develop the project.
Over 80% of the mineralisation is less than 160 metres below surface, making it very accessible by conventional
open pit mining methods. Furthermore, the mineralogy of the deposits are ideal for our unique low-cost heap
leach sulphide treatment methodology, as demonstrated in the metallurgical test-work that was conducted on the
deposits, which rapidly achieved copper recoveries in excess of 90%.
The increased size and reporting of a JORC 2012 Mineral Resource together with the grant of a mining lease, are
significant milestones in Cyprium’s advancement of the project from mid-2019. Cyprium is continuing to advance
the Cue Copper-Gold project through the ongoing Murchison Copper-Gold scoping study, which now also
includes the 100% Cyprium owned Nanadie Well Copper-Gold Project, on the path towards viable economic
extraction.
Geophysical Programmes
Cyprium completed several geophysical programmes at the Cue Copper-Gold Project following the results of the
drilling undertaken in late 2019 and early 2020, as well as taking into consideration the characteristics of the
mineralisation in the Hollandaire resource, to determine the optimal methods to target further mineralisation in
the system.
The completed Eelya South gravity survey will extend the 2019 gravity survey conducted over identified bedrock
anomalies, adjacent to the Hollandaire West deposit and the Rapier prospect. The survey was designed to outline
bedrock responses that are associated with mineralising events. Cyprium is awaiting the processing of the data
and anomalies identified from the survey, which will then be drill tested during 2021.
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Figure 3 | Hollandaire Block Model
Figure 4 | Cue Copper-Gold Project Tenements
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Nanadie Well Copper-Gold Project
During the second half of the year, Cyprium completed the acquisition of tenements E51/1040 and M51/887 from
Horizon Minerals Limited (ASX: HRZ, “Horizon”), which includes the Nanadie Well Copper-Gold Project, which is
located ~75km to the east-northeast of Cyprium’s Hollandaire copper deposits and ~75 km south east of
Meekatharra in the Murchison District of Western Australia. Cyprium has applied for exploration tenements
E51/1986 and E51/1987 to the west and east of the project (refer to Figure 1), to expand our regional presence in
the area and increase the projects exploration prospectivity. The project also has the Stark Cu-Ni-PGE prospect
along with a number of drill ready targets that offer excellent exploration upside.
Copper-gold sulphide mineralisation has been identified below the shallow and broad supergene mineralisation
at the Nanadie Well Copper-Gold project, which is open along strike and at depth. The layered mafic magmatic
hosted disseminated/stringer sulphide mineralisation consists of pyrrhotite, pyrite and chalcopyrite as the
dominant copper sulphide. It has previously been drilled in a wide-spaced pattern of 1 diamond and 88 reverse
circulation (“RC”) drillholes over a strike length of 750 metres, to a maximum depth of 234 metres and an average
depth of 100 metres, with numerous drill holes finishing in mineralisation.
Cyprium has observed that higher grade mineralisation occurs as fractionated layers in the host metagabbros and
metanorites, as is normally the case with magmatic copper deposits. Drilling to date has intersected
disseminated/stringer sulphide layers. A massive sulphide basal contact, which may be a feature of magmatic
copper deposits should it have remained in-situ, is a high priority exploration target for Cyprium.
The orientation of the disseminated/stringer sulphide fractionated layers is flat lying to shallow east dipping in the
northern section of the deposit up to 30° east dipping in the southern section of the deposit.
Nanadie Well Sulphide Diamond Drilling Programme
Cyprium is targeting two separate, but interrelated, styles of mineralization at Nanadie Well, both of which provide
very attractive copper mineralised targets. Firstly, the shallow sulphide copper-gold system, is open to the north
and south (refer to Figure 5). Whilst clearly defined by east and west dipping RC drillholes, Cyprium has conducted
a diamond drilling programme to provide further information regarding the orientation and extent of the layered
disseminated/stringer sulphide mineralisation.
The diamond drilling programme was commenced in December 2020 to better define the geology of the
mineralisation and to obtain metallurgical samples. The Phase 1 diamond drilling programme is serving a number
of purposes in the definition of the Nanadie Well Copper-Gold mineralisation:
Provide core for geological logging and mapping, in both supergene and sulphide material, to gain a
better understanding of the mineralisation;
To assay for a broad range of payable metals in the mineralisation, including copper, gold, silver, nickel,
cobalt and PGE’s, that are normally associated with magmatic deposits;
Test the geological model of the flat fractionated layers and the higher-grade sections of the layers;
Provide metallurgical sample material to commence test work for the optimal extraction method in both
the supergene and sulphide mineralisation; and
Enable downhole geophysics to be performed to target the orebodies higher grade zones, together with
extensions along strike and below the currently defined mineralisation.
This diamond drill programme will assist in the definition of a mineral resource to a JORC 2012 standard and test
depth extensions of the mineralisation, as it is open at depth and along strike.
All of the drill holes into the Nanadie Well have been consistently intersecting disseminated sulphide mineralisation
at shallow depths ranging from 45m up to 290m, including chalcopyrite and pyrrhotite, as illustrated in Images 4
– 9.
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Image 4 | NWD2001 drill core 278.2m to 279.3m downhole showing chalcopyrite and pyrrhotite mineralisation
NWD2001 has been collared at 693,050 E, 6,994,950 N 476.4Mrl (MGA Zone 50) and has a drilling orientation of -
60° to 270 from true north. Refer to designed drill hole NWGDES001 (NWD2001) in Figure 5 below.
Image 5 | NWD2002 (drill core 107.5m to 108.0m downhole showing chalcopyrite and pyrrhotite mineralisation
Image 6 | NWD2002 drill core 108.0m to 108.8m downhole showing chalcopyrite and pyrrhotite mineralisation
NWD2002 has been collared 693,100 E: 6,994,740 N 475.4 mRL (MGA Zone 50) and has a drilling orientation of -
80° to 270 from true north. Refer to designed drill hole NWGDES005 (NWD2002) in Figure 5 below.
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Image 7 | NWD2003 drill core 95.5m to 99.0m downhole showing chalcopyrite and pyrrhotite mineralisation
NWD2003 has been collared 693,040 E: 6,994,680 N 475.3 mRL (MGA Zone 50) and has a drilling orientation of -
60° to 090 from true north. Refer to designed drill hole NWGDES004 (NWD2003) in Figure 5 below.
Image 8 | NWD2004 drill core 92.5m to 96.3m downhole showing chalcopyrite copper sulphide mineralisation
NWD2004 has been collared 693,050 E: 6,994,630 N 475.2 mRL (MGA Zone 50) and has a drilling orientation of -
60° to 090 from true north. Refer to designed drill hole NWGDES003 (NWD2004) in Figure 5 below.
Image 9 | NWD2101 drill core 75.3m to 78.3m downhole showing chalcopyrite and pyrrhotite mineralisation
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NWD2101 has been collared 693,010 E: 6,994,530 N 475.0 mRL (MGA Zone 50) and has a drilling orientation of -
60° to 090 from true north. Refer to designed drill hole NWGDES002 (NWD2101) in Figure 5 below.
Figure 5 | Nanadie Well Sulphide Drill Hole Location Plan
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Nanadie Well Supergene RC Drilling Programme
Cyprium is also targeting the near surface supergene copper-gold system, which is open in three directions, north,
south and west (refer to Figure 6). Delineation of the supergene has been the target of the RC drilling program, as
outlined below.
The supergene mineralisation does not outcrop and is covered by 1m to 25m of transported and unconsolidated
sediments in the project area. Preliminary investigations of the Nanadie Well deposit data indicates potential for
supergene mineralisation over the full 750 metres of strike that is currently defined. The supergene has mineralised
intersections for copper, gold and silver, with RC drilling rock chips containing oxide copper minerals such as
malachite, which is rapidly leachable when treated with sulphuric acid.
The Company’s initial 3,500 metre Nanadie Well Phase 1 RC drilling programme has been designed to test the
supergene mineralisation of the deposit. The planned drill hole locations are detailed in Figure 6 and have
intersected strong oxide mineralisation as illustrated in Images 10 to 13. Several drillholes have also intersected
sulphide mineralisation, including NWRC21018 from 26m in Image 11. The initial assay results for NWEC21018 are
45.0m @ 0.9% Cu & 0.2g/t Au from 2m, including 11.0m @ 1.8% Cu & 0.4g/t Au from 16m.
The supergene mineralisation is also trending north-west, as tested by NWRC21031. Strong visual copper oxide
mineralisation was intersected between 9m to 11m (refer to image 13) and 20m to 21m.
The data from the January 2021 RC drilling programme and subsequent programmes, will be used to prepare a
JORC 2012 compliant mineral resource for the Nanadie Well deposit, which is expected to be released during the
second half of 2021.
The mineral resource delineated by these programmes will be included in the ongoing Murchison Copper-Gold
Project scoping study. The results will also be used in the planning of follow up drilling programmes, targeting
mineralisation extensions as it remains open at shallow depths, to the north, south and west.
Image 10 | Nanadie Well RC Drilling Rock Chips: NWRC21011 (NWDES152) 25-30m
Image 11 | Nanadie Well RC Drilling Rock Chips: NWRC21018 (NWDES148) 15-20m
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Image 12 | Nanadie Well RC Drilling Rock Chips: NWRC21018 (NWDES148) 21-26m
Image 13 | Nanadie Well RC Drilling Rock Chips: 8-13m NWRC21031
Geophysical Programmes and Preparation for Stark RC Drilling Programme
Cyprium’s geological team have been active on the ground at the adjacent Stark deposit (refer to Figure 1) to mark
up the RC drill holes that are targeting the potential for supergene copper above the Nickel-Copper-PGE
mineralisation at depth.
Multiple copper rich gossan samples were taken from oxidised copper samples that were obtained from surface
expressions. The RC drilling at Stark will follow the RC drilling of the supergene mineralisation at Nanadie Well.
Geophysical programmes were also undertaken to assist in the definition of further copper mineralisation at
Cyprium’s Murchison Copper-Gold project areas.
Airborne magnetics were flown at Nanadie Well during the last quarter of 2020. The areas surveyed historically
were wide spaced, having coarse lithology and structure resolution. The interpretation of the data from this
aeromagnetic survey will assist in identifying drill targets to be undertaken during 2021.
Cyprium will conduct downhole geophysics to assist in locating the high grade zones of the Nanadie Well
mineralisation and to refine drilling targets, once the phase 1 diamond drilling programmes have been completed.
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Figure 6 | Nanadie Well Supergene Drill Hole Location Plan
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Significant Events After The Reporting Date
On 10 February 2021, Cyprium announced it had entered into a Share Sale Agreement with Metals X Limited
(ASX:MLX) (“Metals X”) to acquire its 100% owned entity Paterson Copper Pty Ltd, the owner of the Nifty Copper
Mine, Maroochydore Copper Project and the Paterson Exploration Project, which includes the farm-in agreement
with IGO Limited (“IGO”) (together “Copper Assets”) (the “Transaction”).
This portfolio of copper projects is located in the highly prospective Paterson Province of Western Australia.
Figure 7 | Location of Nifty Copper Mine and Maroochydore Project
Cyprium has agreed to pay Metals X a total $60 million upon completion of the Transaction (“Completion”),
comprising:
cash payment of $24 million (inclusive of the $1 million deposit already paid) (“Upfront Amount”); and
convertible notes with a face value totalling $36 million ("Convertible Notes”).
Cyprium will also replace the financial assurances relating to Nifty which equate to ~$6.5 million, with effect from
Completion.
Cyprium has received binding commitments to fund the Transaction through a $90 million placement to professional
and sophisticated investors (“Placement”).
Completion of the Transaction and Placement is subject to shareholder approval at the general meeting which is to
be held on 23 March 2021 with Transaction Completion to occur on 30 March 2021.
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Overview of the Copper Assets
The Nifty Copper Mine, Maroochydore Copper Project and the Paterson Exploration Project (which includes the
farm-in agreement with IGO), are located in the northeast Pilbara region of Western Australia, approximately
330km east-southeast of Port Hedland.
Nifty Copper Mine
Figure 8 | Location of Nifty Copper Mine and Maroochydore Project
The Nifty Copper Mine (“Nifty”) is located on the western edge of the Great Sandy Desert in the north-eastern
Pilbara region of Western Australia, approximately 350 km southeast of Port Hedland. Nifty was initially discovered
by WMC and commenced operation in 1993 as an open pit oxide copper mine with processing via heap leaching
and solvent extraction-electrowinning (“SX/EW”) recovery to produce copper cathodes. From 2006, it transitioned
to an underground sulphide mine with processing via standard flotation to produce a copper concentrate at rates
of over 50,000 tonnes of contained copper per year. Between commencement of the oxide operation and 26
November 2019, when the mine was placed onto care and maintenance (“C&M), Nifty has produced more than
700,000 tonnes of copper metal.
The deposit is still ranked in the top twenty copper resources by copper tonnes in Australia, with considerable
potential to increase further.
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Nifty retains a JORC 2012 compliant Mineral Resources of 658,500 tonnes contained copper, via an open pit and
underground mine, with substantial infrastructure including:
2.8 Mtpa sulphide concentrator (in care and maintenance since November 2019).
25 ktpa copper cathode heap leach SX/EW facility.
21 MW gas turbine power station.
Water supply and reticulation systems including bore field operation.
Mine village with capacity exceeding 400 persons.
Jet-capable all-weather airstrip.
During the C&M and the Metals X strategic review process, surface infrastructure including the power station,
processing plant and camp have been maintained in a production-ready status.
On 11 June 2020, Metals X prepared and released to ASX a scoping study (“Scoping Study”) on Nifty that returned
positive results on mining the large copper sulphide resource through an expansion to the historical oxide open pit,
using the existing processing plant and site infrastructure. The Scoping Study supported further reviews to be
conducted for the recommencement of mining of the oxide open pit and processing via heap leaching and SX/EW
recovery, to produce copper cathodes.
Several opportunities were identified by Metals X for future studies including assessing the impact of the additional
mineralisation defined by the 31 December 2019 Mineral Resource estimate. Preliminary analysis suggests this may
materially extend mine life and improve project economics. Several resource definition targets were identified that
have the potential to grow the Mineral Resource base, and to further optimise the mining schedule.
Cyprium intends to immediately prioritise completing its development plans, which takes into consideration the
work completed in the Scoping Study, with an aim of establishing an efficient long-term producing copper mine.
Initially, this will involve a drill out of near surface mineralisation, completion of design and refurbishment estimates
for onsite infrastructure, including the required approvals to recommence operations.
Cyprium will commence with a heap leach SX-EW operation to retreat the current heap leach pads as well as open
pit oxide and transitional material and then follow with the restart of the copper concentrator to treat open pit
sulphide material.
Concurrently with the recommencement of SX-EW operations, Cyprium will be undertaking comprehensive
metallurgical test work to optimise the processing of the open pit sulphide mineral resource.
Maroochydore Copper Project
The nearby Maroochydore deposit is located ~85km south east of Nifty, includes a shallow JORC 2012 compliant
Mineral Resources of 486,000 tonnes contained Copper, consisting of a significant oxide Mineral Resource of 43.5
Mt at 0.91% Copper and a primary sulphide Mineral Resource of 5.43 Mt at 1.66% Copper. The resource is in the
top thirty copper resources by copper tonnes in Australia.
A number of drilling and geophysical programmes have been completed at Maroochydore, together with
metallurgical test work programmes, whilst the primary copper sulphide mineralisation remains open along-strike
and down-dip.
Cyprium intends to commence drilling and a metallurgical test work program with the emphasis to unlock the over
400,000 tonnes of copper potential. Whilst the initial development focus will be to support a heap leach SX-EW
option, the Company’s test work program will be used to optimise the processing flowsheet, unlocking the project’s
full potential.
Paterson Exploration Project
The Paterson Exploration Project covers over ~2,800km2 which is highly prospective and is host to a number of
substantial gold, gold-copper, copper and tungsten mines and deposits, including the Telfer gold-copper mine.
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Recently, new significant discoveries were made by Rio Tinto at the Winu project, and by the Newcrest-Greatland
Gold JV at the Havieron project, which has re-established the Paterson Province as one of the premier copper and
gold exploration destinations in Australia and globally.
In mid-2020, Metals X announced an exploration joint venture with IGO on ~2,400km2 of the Paterson Exploration
Project. Under the agreement:
IGO is to sole fund $32 million of exploration activities over 6.5 years to earn a 70% interest in the Paterson
Exploration Project, including a minimum expenditure before withdrawal of $11 million over 3.5 years.
Upon earning a 70% interest, the Joint Venture will form and IGO will free-carry Paterson Copper to the
completion of a Pre-feasibility Study (PFS) on a new mineral discovery.
IGO has significant exploration experience in the Paterson Province and has developed innovative targeting
techniques, using large scale magneto-telluric (“MT”) geophysical and proprietary geochemical survey techniques,
which will be applied to the highly prospective and underexplored Paterson Exploration Project tenements.
Cyprium looks forward to partnering with IGO in this exciting joint venture during the initial expenditure stages.
Acquisition Funding
Figure 9 | Paterson Exploration Project
The Transaction and development of the Copper Assets is to be funded from existing cash reserves and a $90
million Placement. The Company has received binding commitments for the Placement from professional and
sophisticated investors in Australia and eligible investors in certain overseas jurisdictions.
The Placement will result in the issue of 450 million fully paid ordinary shares in the Company (“New Shares”) at
an offer price of $0.20 per Share (“Offer Price”).
The Placement is being made subject to approval by the Company’s shareholders (“Shareholders”).
The New Shares issued under the Placement will rank equally with existing Cyprium shares.
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DIRECTORS’ REPORT
The Directors present their report for Cyprium Metals Limited (“CYM” or “the Company”) and its subsidiaries (“the
Group”) for the year ended 31 December 2020.
All amounts are expressed in Australian dollars unless otherwise stated.
DIRECTORS
The following persons were directors of CYM during the year and up to the date of this report:
Gary Comb (Chairman, Non-Executive Director)
Barry Cahill (Executive Director)
Nicholas Rowley (Non-Executive Director)
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
DIRECTORS’ INFORMATION
Gary Comb
Non-Executive Chairman
Mr Comb is an engineer with over 30 years’ experience in the Australian mining industry, with a strong track record
in successfully commissioning and operating base metal mines. He was Chairman of Finders Resources Limited
from 2013 until its takeover in 2018. Mr Comb was previously the Managing Director of Jabiru Metals Limited and
the CEO of BGC Contracting Pty Ltd.
Barry Cahill
Executive Director
Mr Cahill is a mining engineer with over 30 years’ experience in exploration, operational mining and management.
In particular his experience covers management of project development and construction from exploration drilling
through project funding, commissioning and development. He was the Managing Director of Finders Resources
Limited from 2013 until its takeover in 2018. Mr Cahill has previously been executive director of a number of public
companies including operations director at Perilya Limited and Managing Director of Australian Mines Limited and
Norseman Gold Plc.
Nicholas Rowley
Non-Executive Director
Mr Rowley is an experienced corporate executive with a strong financial background with over 15 years’
specialising in corporate advisory, M&A transactions and equities markets. He has advised on the equity financings
of numerous ASX and TSX listed companies predominantly in the mining and resources sector. Mr Rowley currently
serves as an executive at Galaxy Resources Ltd and as a Non-Executive Director of Titan Minerals and Oro X Mining
Corp.
DIRECTORSHIPS OF OTHER LISTED COMPANIES
Directorships of other listed companies held by current directors in the 3 years immediately before the end of the
financial year are as follows:
Director
Company
Period of Directorship
Gary Comb
Barry Cahill
Nicholas Rowley
Finders Resources Limited
Ironbark Zinc Limited
Boab Metals Limited
Finders Resources Limited
Titan Minerals Limited
Director from June 2013 to April 2018
Director from January 2012 to November 2019
Director from March 2020
Director from August 2013 to April 2018
Director since August 2016
Cyprium Metals Limited
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COMPANY SECRETARY
Wayne Apted
Mr Apted is a Chartered Accountant with over 25 years’ experience in the mining industry. He was the Chief
Financial Officer of Finders Resources Limited until its takeover in 2018. Mr Apted has previously worked in senior
finance roles for Masan Resources Limited, Glencore plc, Xstrata plc, Normandy Mining Limited and Aurora Gold
Limited.
INTERESTS IN THE SECURITIES OF THE COMPANY
As at the date of this report, the interests of the Directors in the securities of Cyprium Metals Limited are:
Director
Gary Comb
Barry Cahill
Nicholas Rowley
Ordinary Shares
2,994,940
2,466,370
1,300,000
RESULTS OF OPERATIONS
The Group’s net loss after taxation attributable to the members of Cyprium Metals Limited for the year ended 31
December 2020 was $997,366 (2019: $2,354,202). The 2019 result included a loss of $1,073,067 from discontinued
operations being the Group’s Manitou and Trenggalek projects.
DIVIDENDS
No dividends were paid or declared. The directors do not recommend the payment of a dividend.
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
The principal activity of the Group during the year was identifying and evaluating projects and conducting
exploration activities in the resources and mineral exploration sector as outlined in the Review of Operations.
CORPORATE STRUCTURE
Cyprium Metals Limited is a company limited by shares, which is incorporated and domiciled in Australia.
During the year, CYM issued 2.5 million ordinary shares to Horizon Minerals Limited for the acquisition of the
Nanadie Well Copper-Gold Project tenements. The up-front consideration that was payable by Cyprium to Horizon
was as follows:
$250,000 cash; and
$400,000 of CYM shares based on a 20-day VWAP.
The following deferred consideration will be payable by Cyprium to Horizon:
$350,000 of CYM shares based on a 20-day VWAP and issued in 12 months;
$300,000 of CYM shares based on a 20-day VWAP and issued in 24 months; and
$200,000 of CYM shares based on a 20-day VWAP upon a decision to mine.
Also during the year, 33.3 million fully paid ordinary shares in the Company were issued to institutional and
sophisticated investors to raise $5.0 million and 6.7 million fully paid ordinary shares in the Company were issued
to existing shareholders to raise $1.0 million.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 10 February 2021, the Company announced it had entered into a Share Sale Agreement with Metals X Limited
(ASX: MLX) (“Metals X”) to acquire its 100% owned entity Paterson Copper Pty Ltd, the owner of the Nifty Copper
Mine, Maroochydore Copper Project and the Paterson Exploration Project, which includes the farm-in agreement
with IGO Limited (together “Copper Assets”) (the “Transaction”).
Cyprium Metals Limited
30
The Transaction and development of the Copper Assets is to be funded from existing cash reserves and a $90
million Placement. The Company has received binding commitments for the Placement from professional and
sophisticated investors in Australia and eligible investors in certain overseas jurisdictions.
The Placement will result in the issue of 450 million fully paid ordinary shares in the Company at an offer price of
$0.20 per Share.
The Placement is being made subject to approval by the Company’s shareholders.
There are no other significant events subsequent to the end of the financial year to the date of this report that are
required to be disclosed.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue developing, identifying and evaluating projects together with conducting exploration
activities in the Australian resources and mineral exploration sector.
ENVIRONMENTAL REGULATIONS AND PERFORMANCE
The operations of the Group are subject to environmental regulation under the laws of Australia. The Group is, to
the best of its knowledge, at all times in full environmental compliance with the conditions of its licences.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
In accordance with the Constitution of the Company, to the extent permitted by law, the Company indemnifies
every director, officer and employee of the Company and each officer of a related body Corporate of the Company
against any liability incurred by that person:
a)
b)
in his or her capacity as a director, officer or employee of the Company; and
to a person other than the Company or a related body corporate of the Company.
During the financial year, Cyprium Metals Limited paid an insurance premium in respect of a policy for the benefit
of the Directors of the Company, Company Secretary, executive officers and employees of the Company and any
subsidiary bodies corporate as defined in the insurance policy, against a liability incurred as such a director,
company secretary, executive officer or employee to the extent permitted by the Corporations Act 2001. In
accordance with commercial practice, the insurance policy prohibits disclosure of the terms of the policy including
the nature of the liability insured against and the amount of the premium.
INDEMNIFICATION OF THE AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor. During the financial year, the
Company has not paid a premium in respect of a contract to insure the auditor of the company or any related
entity.
SHARE OPTIONS
During the year, 6,000,000 options exercisable at $0.30 each, with an exercise period to December 2022 were
issued to Westar Capital and Foster Brokering for services rendered for the capital placement to institutional and
sophisticated investors of 33.3 million shares.
PERFORMANCE SHARES
The remaining Manitou Gold Project tenements of 5 km2 in North-western Ontario Canada were relinquished
during 2020, consequently 1,030,000 performance shares lapsed.
PERFORMANCE RIGHTS
The Company issued 2.5 million performance rights to Directors and 7.1 million performance rights to employees
during 2020.
Cyprium Metals Limited
31
As at the date of this report there were 22,000,000 performance rights on issue, expiring in June and July 2024,
and May 2025. The details of the performance conditions relating to the performance rights are as follows:
Performance Condition
Completion of a transaction to acquire or earn into majority ownership interests in projects with
exploration and mining tenements
Announcement of the delineation of 80,000t of contained copper (within any Mineral Resource
category) upon the Projects
Each Performance Right will vest upon the earlier of:
Announcement of a Scoping Study that confirms the positive economics of the
Projects; or
The volume weighted average price of the Shares equals or exceeds $0.35 per Share
for 5 consecutive trading days
Number
3,775,000
2,875,000
2,875,000
Each Performance Right will vest upon the earlier of:
Board approval to Proceed with a Project Definitive Feasibility Study; or
The volume weighted average price of the Shares equals or exceeds $0.40 per Share
2,875,000
for 5 consecutive trading days
Total expiring in June and July 2024
Performance Condition
Completion of a transaction to acquire or earn into majority ownership interests in projects with
exploration and mining tenements
Announcement of the delineation of 125,000t of contained copper (within any Mineral Resource
category) upon the Projects
Each Performance Right will vest upon the earlier of:
Announcement of a Scoping Study that confirms the positive economics of the
12,400,000
Number
2,925,000
2,225,000
Projects; or
The volume weighted average price of the Shares equals or exceeds $0.26 per Share
for 20 consecutive trading days
2,225,000
Each Performance Right will vest upon the earlier of:
Board approval to Proceed with a Project Definitive Feasibility Study; or
The volume weighted average price of the Shares equals or exceeds $0.30 per Share
for 20 consecutive trading days
Total expiring in May 2025
DIRECTORS’ MEETINGS
2,225,000
9,600,000
The number of meetings of Directors (including meetings of committees of Directors) held during the year and
the number of meetings attended by each Director were as follows:
Gary Comb
Barry Cahill
Nicholas Rowley
Directors’ Meetings
Audit Committee
Meetings
Eligible to
attend
4
4
4
Attended
4
4
4
Eligible to
attend
2
-
2
Attended
2
-
2
As at the date of this report, the Company had an Audit Committee of the Board of Directors. The Audit Committee
is comprised of non-executive Directors and Nicholas Rowley is the Chairman of the Audit Committee.
Cyprium Metals Limited
32
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company
for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
Cyprium Metals Limited support and adhere to the principles of sound corporate governance. The Board
recognises the recommendations of the Australian Securities Exchange Corporate Governance Council, and
considers that Cyprium Metals Limited complies to the extent possible with those guidelines, which are of
importance and add value to the commercial operation of an ASX listed resources company. The Company has
established a set of corporate governance policies and procedures and these can be found on the Company’s
website: cypriummetals.com.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Company’s auditors to provide the Directors of Cyprium
Metals Limited with an Independence Declaration in relation to the audit of the financial report. A copy of that
declaration is included within the annual report, and forms part of this directors’ report.
During the year the Company's auditors did not perform any other services in addition to their statutory audit
duties. The Board considers any non-audit services provided by the auditor and satisfies itself that the provision
of those non-audit services is compatible with, and do not compromise, the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
all non-audit services are subject to the corporate governance procedures adopted by the Company and are
reviewed to ensure they do not impact upon the impartiality and objectivity of the auditor.
the non-audit services do not undermine the general principles relating to auditor independence as set out in
APES 110 code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the auditor's
own work, acting in a management or decision-making capacity for the Company, acting as an advocate for
the Company or jointly sharing risks and rewards. Details of the amounts paid to the auditors of the Company,
and its related practices for audit and non-audit services provided during the year are set out in note 17 to the
financial statements.
AUDITED REMUNERATION REPORT
This report, which forms part of the Directors’ report, outlines the remuneration arrangements in place for the key
management personnel of Cyprium Metals Limited for the financial year ended 31 December 2020. The
information provided in this remuneration report has been audited as required by Section 308(3C) of the
Corporations Act 2001.
The remuneration report details the remuneration arrangements for Key Management Personnel (“KMP“) who are
defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Group.
Details of KMP
Gary Comb (appointed 14 June 2019)
Barry Cahill (appointed 14 June 2019)
Nicholas Rowley (appointed 31 May 2018)
Remuneration Policy
The remuneration policy of Cyprium Metals Limited has been designed by the Board taking into consideration the
stage of development of the Group and the activities undertaken. The Board of Cyprium Metals Limited believes
the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and
directors to run and manage the Group.
Cyprium Metals Limited
33
The remuneration policy aims to attract, retain and motivate the high-performing individuals that will deliver the
business strategy and create long-term value. Performance-related pay to incentivise high performance and
rewards are to be linked to and commensurate with performance. As a result, performance-related pay represents
a meaningful portion of total remuneration for all KMP and employees that have the ability to influence
shareholder value. Shareholder value is created by project acquisition, analysis, expansion, financing, development
and operations.
During the pre-decision to construct mine phase, KMP and employees are incentivised deliver the business strategy
to acquire and grow our project base.
Fixed remuneration
Fixed remuneration consists of total Directors’ fees, salaries, bonus, consulting fees and employer contributions to
superannuation funds, excluding performance pay (cash, shares and options). Fixed remuneration levels are
reviewed annually by the Board.
Executive remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework has the following components:
Base salary (which is based on factors such as length of service, performance and experience) and (where
applicable) employer contributions to superannuation;
Consulting fees for executives providing services under a services contract; and
Long-term incentives through participation in the Performance Rights Plan of Cyprium Metals Limited and as
approved by the Board.
Cash base salary or service fees are based on daily rates of pay prior to entering into a Definitive Feasibility Study
stage, in order to conserve cash by remunerating employees based on days worked. Upon entering the Definitive
Feasibility Study stage, personnel will be employed on a full-time basis.
Non-executive Directors’ remuneration
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The board determines payments to the non-executive directors and reviews their
remuneration annually, based on market practice, duties and accountability.
Fees for non-executive directors are not linked to the performance of the Group. However, to align Directors’
interests with shareholder interests, directors may receive long-term performance incentives via the Performance
Rights Plan of Cyprium Metals Limited.
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders at the Annual General Meeting and is currently $450,000.
The annual remuneration for each non-executive director was set in the range of $36,000 - $60,000 per annum.
These fees have been determined by the Board of the Company, taking into consideration factors such as the
market rates of industry peer companies and the current level of activity. Where there is a significant change in
the size and scale of Company activities these annual fees will be reviewed. Where approved and at the request of
the Board, any of the Non-Executive Directors may from time to time be required to fulfil certain executive
functions.
Use of remuneration consultants
The Board may (from time to time) engage the services of external consultants to advise on the remuneration
policy and to benchmark director and key management personnel remuneration against comparable entities so
as to ensure that remuneration packages are consistent with the market and are appropriate for the organisation.
The Group did not employ the services of any remuneration consultants during the year.
Cyprium Metals Limited
34
Performance Rights Plan
The Performance Rights Plan of Cyprium Metals Limited was last approved by Shareholders at the 2019 Annual
General Meeting.
Directors, full and part time employees and contractors of Cyprium Metals Limited are eligible to participate in the
Performance Rights Plan. Any issue of Performance Rights to Directors is subject to Shareholder approval pursuant
to the provisions of the ASX Listing Rules and the Corporations Act 2001. The Directors consider that the Cyprium
Metals Limited Performance Rights Plan represents an appropriate method to:
Reward Directors, KMP and employees for their performance;
Provide long-term incentives for participation in the Company’s future growth;
Motivate and retain Directors, KMP and employees;
Establish a sense of ownership in the Company for Directors and employees;
Enhance the relationship between the Company and its employees for the long-term mutual benefit of all
parties; and
Enable the Company to attract high calibre individuals who can bring specific expertise to the Company.
Voting on the Remuneration Report - 2020 Annual General Meeting
The Company received approximately 99.9% of “yes” votes on its remuneration report for the year ended 31
December 2019 (2018: 97.9%).
Loans to Directors and Executives
There were no loans to Directors and KMP during the financial year ended 31 December 2020.
Details of Remuneration
Details of the nature and amount of each element of the remuneration of each Director of the Company for the
year ended 31 December 2020 are as follows:
2020
Directors
Gary Comb
Barry Cahill
Nicholas Rowley
Salary or
Consulting
Fees
$
Share Based
Payments 6
$
Other
Benefits5
$
60,000
310,820
36,000
406,820
95,509
146,416
73,802
315,727
5,700
29,528
-
35,228
Total
$
161,209
486,764
109,802
757,775
Performance
related
%
59%
30%
67%
42%
Details of the nature and amount of each element of the remuneration of each Director of the Company for the
year ended 31 December 2019 are as follows:
2019
Directors
Gary Comb1
Barry Cahill2
Nicholas Rowley
Marcello Cardaci 3
Simon Taylor 4
Salary or
Consulting
Fees
$
32,500
147,366
33,000
14,460
12,329
239,655
Share Based
Payments
$
Other
Benefits5
$
Total
$
Performance
related
%
12,115
14,538
9,692
-
-
36,345
3,087
14,000
-
1,373
1,171
19,631
47,702
175,904
42,692
15,833
13,500
295,631
25%
8%
23%
-
-
12%
1 Gary Comb appointed on 14 June 2019 and the remuneration is from the date appointed.
2 Barry Cahill appointed on 14 June 2019 and the remuneration is from the date appointed.
Cyprium Metals Limited
35
3 Marcello Cardaci resigned on 10 July 2019.
4 Simon Taylor resigned on 14 June 2019.
5 Other benefit payments related to statutory superannuation.
6 These values relate to performance rights issued during the 2019 and 2020 years and have been derived using
valuation techniques and inputs as set out in Note 12(d).
Shareholdings of Directors
The number of shares in the Company held during the year by Directors of the Company, either directly or
indirectly, is set out below. There were no shares granted during the reporting year as compensation.
2020
Gary Comb
Barry Cahill
Nicholas Rowley
Balance at the
start of the year
or appointment
2,194,940
2,066,370
1,100,000
Granted during
the year as
compensation
On vesting of
performance
rights
Other changes
during the year
Balance at the
end of the year
-
-
-
-
-
-
200,000
400,000
200,000
2,394,940
2,466,370
1,300,000
All equity transactions with Directors have been entered into under terms and conditions no more favourable
than those the Company would have adopted if dealing at arm’s length.
Performance Rights of Directors
The number of performance rights in the Company issued during the year to Directors of the Company, and
outstanding at balance date, is set out below.
Vesting Conditions
2020
Barry Cahill
Total
1
700,000
700,000
2
600,000
600,000
3
600,000
600,000
4
600,000
600,000
Total
2,500,000
2,500,000
Vesting conditions
1. Completion of a transaction to acquire or earn into majority ownership interests in projects
2. Release of a Copper mineral resource of at least 125,000 tonnes
3. Announcement of a Scoping Study or the average share price of $0.26 per share for 20 consecutive days
4. Board resolves to proceed with a Definitive Feasibility Study or the average share price of $0.30 per share for
20 consecutive days
Vesting Conditions
2019
Nicholas Rowley
Barry Cahill
Gary Comb
Total
1
500,000
700,000
700,000
1,900,000
2
400,000
600,000
500,000
1,500,000
3
400,000
600,000
500,000
1,500,000
4
400,000
600,000
500,000
1,500,000
Total
1,700,000
2,500,000
2,200,000
6,400,000
Vesting conditions
1. Completion of a transaction to acquire or earn into majority ownership interests in projects
2. Release of a Copper mineral resource of at least 80,000 tonnes
3. Announcement of a Scoping Study or the average share price of $0.35 per share for 5 consecutive days
4. Board resolves to proceed with a Definitive Feasibility Study or the average share price of $0.40 per share for
5 consecutive days
Options Affecting Remuneration
There were no options affecting remuneration in the current reporting year.
Cyprium Metals Limited
36
Other transactions with key management personnel
Gilbert + Tobin Lawyers, of which Marcello Cardaci is a partner received professional service fees of $nil
during the year ended 31 December 2020 (2019: $34,621).
Transactions with key management personnel were made at arm’s length at normal market prices and normal
commercial terms.
Additional Information
The factors that are considered to affect total shareholders’ return are summarised below:
Loss attributable to owners of
the company ($)
Dividends paid ($)
Share price at financial year
end ($)
2020
2019
2018
2017
2016
(997,366)
(2,354,202)
(5,892,371)
(894,116)
(722,652)
-
-
-
-
-
0.2050
0.2450
0.1850
0.2650
0.2683
Total shareholders’ return is not used to determine the nature and amount of remuneration as the Board does not
consider that this indicator is particularly relevant in the junior resource sector which is generally speculative in
nature and where exploration success cannot be assured.
While the Group’s main activities relate to early stage exploration the nature and amount of remuneration cannot
be related to traditional financial measures or to share price performance and shareholder value. If the Group does
in due course have exploration success and proves up an economic resource and ultimately develops an
economically viable mining project then it is likely that some component of the remuneration of key management
personnel would relate to financial performance measures that would be expected to enhance share performance
and shareholder wealth.
END OF AUDITED REMUNERATION REPORT
Signed on behalf of the Board in accordance with a resolution of the Directors.
Gary Comb
Chairman, Non-executive Director
Perth, WA
22 March 2021
Cyprium Metals Limited
37
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2020
Continuing Operations
Interest income
Other Income
Employee expenses
Management and administrative expenses
Depreciation
Share-based payments – shares issued to corporate advisor
Share-based payments – performance rights
Interest expense on lease liabilities
Unrealised foreign exchange loss
Loss before income tax
Income tax benefit
Net loss for the year from continuing operations
Discontinued Operations
Loss after tax from discontinued operations
Net loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive (loss)/income for the year net of tax
Total comprehensive loss for the year
Loss per share
Basic loss per share (cents per share)
from continuing operations and discontinued operations
Basic loss per share (cents per share)
from continuing operations
Diluted loss per share (cents per share)
from continuing operations and discontinued operations
DD
Diluted loss per share (cents per share)
from continuing operations
Note
31 December
2020
$
31 December
2019
$
22,136
100,000
(733,911)
(447,855)
(40,353)
-
(547,371)
(3,981)
-
(1,651,335)
653,969
(997,366)
16,781
-
(518,232)
(398,662)
(24,280)
(283,500)
(69,662)
(3,263)
(317)
(1,281,135)
-
(1,281,135)
-
(997,366)
(1,073,067)
(2,354,202)
(559)
(559)
(997,925)
13,879
13,879
(2,340,323)
(1.65)
(1.65)
(1.65)
(1.65)
(6.40)
(3.48)
(6.40)
(3.48)
3
9
18
18
18
18
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
Cyprium Metals Limited
38
Consolidated Statement of Financial Position
as at 31 December 2020
Current Assets
Cash and cash equivalents
Receivables
Current tax assets
Other assets
Total Current Assets
Non-Current Assets
Right-of-use asset
Deferred exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Lease liabilities
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Lease liabilities
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Note
31 December
2020
$
31 December
2019
$
4
5
3
6
7
8
10
11
10
11
12
13
14
5,373,820
199,915
653,969
53,532
6,281,236
57,830
7,106,927
7,164,757
13,445,993
1,013,844
42,409
1,056,253
300,000
18,613
318,613
1,374,866
3,466,183
187,266
-
87,207
3,740,656
100,587
3,164,517
3,265,104
7,005,760
525,717
40,011
565,728
-
62,853
62,853
628,581
12,071,127
6,377,179
164,980,087
3,307,678
159,599,915
1,996,536
(156,216,638)
(155,219,272)
12,071,127
6,377,179
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
39
Consolidated Statement of Changes in Equity
for the year ended 31 December 2020
Issued capital
$
Accumulated
losses
$
Share-based
payment
reserve
$
Foreign
exchange
translation
reserve
$
Total
$
153,680,857
(152,865,070)
1,148,755
764,240
2,728,782
-
- - - 13,879
- -
(2,354,202)
(2,354,202)
13,879
-
(2,354,202)
- 13,879
(2,340,323)
4,560,000
285,000
- - - 4,560,000
- - - 285,000
1,342,500
(268,442)
- - - 1,342,500
(268,442)
- - -
- 69,662
- - 69,662
Balance at 1 January 2019
Total comprehensive loss for
the year
Loss for the year
Foreign currency translation
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued – placements
Shares issued to advisor
Shares issued as consideration
for acquisition
Costs of issue
Share based payments
Balance at 31 December 2019
159,599,915
(155,219,272)
1,218,417
778,119
6,377,179
Balance at 1 January 2020
Total comprehensive loss for
the year
Loss for the year
Foreign currency translation
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued – placements
Shares issued as consideration
for acquisition
Costs of issue
Share based payments
Balance at 31 December 2020
159,599,915 (155,219,272)
1,218,417
778,119
6,377,179
-
- - -
- -
(559)
(997,366)
(997,366)
(559)
-
(997,366)
-
(559)
(997,925)
6,000,000
- - -
6,000,000
400,000
(1,019,828)
- - -
627,908 -
-
683,793
- -
-
2,530,118
(156,216,638)
400,000
(391,920)
683,793
777,560 12,071,127
164,980,087
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
40
Consolidated Statement of Cash Flows
for the year ended 31 December 2020
31 December
2020
$
31 December
2019
$
Note
Cash flows from operating activities
Payments to suppliers and employees – continuing operations
Interest paid on lease liabilities
Interest received
Receipts from Government incentives
Net cash used in operating activities 4
(1,086,888)
(3,981)
22,136
100,000
(968,733)
(858,913)
(3,263)
16,781
-
(845,395)
Cash flows from investing activities
Cash acquired on acquisition of subsidiary
Payments for exploration expenditure – continuing operations
Payments for exploration expenditure – discontinued operations
Investment in term deposit
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Payment of lease liabilities
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
4
-
(2,687,727)
4,017
(1,633,004)
- (127,354)
(100,000)
-
(1,856,341)
(2,687,727)
6,000,000
(396,465)
(39,438)
5,564,097
1,907,637
3,466,183
5,373,820
4,561,500
(282,476)
(22,002)
4,257,022
1,555,286
1,910,897
3,466,183
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
41
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
1. Corporate Information
The financial report of Cyprium Metals Limited (“Cyprium Metals” or “the Company”) for the year ended 31
December 2020 was authorised for issue in accordance with a resolution of the Directors on 22 March 2021.
Cyprium Metals is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange. The nature of the operations and the principal activities of the Company are
described in the Directors’ Report and Review of Operations.
2. Summary of Significant Accounting Policies
Basis of Preparation
(a)
The financial statements are general purpose financial statements, which have been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial statements have also been prepared
on a historical cost basis. The presentation currency is Australian dollars.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 20.
Compliance Statement
(b)
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).
Basis of Consolidation
(c)
The consolidated financial statements comprise the financial statements of Cyprium Metals Limited (‘the Company’)
and its subsidiaries as at 31 December each year (‘the Group’). 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.
The existence and effect of potential voting rights that are currently exercisable or convertible are considered when
assessing whether a Company controls another entity.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profits and losses resulting from intra-company transactions have been eliminated in full. Unrealised
losses are also eliminated unless costs cannot be recovered. Non-controlling interests in the results and equity of
subsidiaries are shown separately in the Statement of Profit or Loss and Other Comprehensive Income and
Statement of Financial Position respectively.
Changes in accounting policies and disclosures
(d)
The Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are
relevant to the Group’s operations and effective for future reporting years. It has been determined by the Directors
that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group
and therefore, no change will be necessary to Group accounting policies.
Cyprium Metals Limited
42
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
New standards, interpretations and amendments
(e)
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board that are mandatory for the current reporting period. Any new, revised or
amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The
Directors have determined that there was no material impact on adoption of these new or amended Accounting
Standards and Interpretations.
Foreign Currency Translation
Functional and presentation currency
(f)
(i)
Items included in the financial statements of each of the Company’s controlled entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’). The
functional and presentation currency of Cyprium Metals is Australian dollars. The functional currency of the
Indonesian subsidiary is the US Dollar.
Transactions and balances
(ii)
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the Statement of Profit or Loss and Other Comprehensive Income.
Group entities
(iii)
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
assets and liabilities are translated at the closing rate at balance date;
income and expenses are translated at average exchange rates (unless this is not a reasonable approximation
of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions); and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are
taken to shareholders’ equity. When a foreign operation is sold or any borrowings forming part of the net
investment are repaid, a proportionate share of such exchange differences are recognised in the Statement of Profit
or Loss and Other Comprehensive Income, as part of the gain or loss on sale where applicable.
Segment Reporting
(g)
The Group determines and presents operating segments based on the information that is internally provided to the
Board of Directors who are the Group’s chief operating decision makers. An operating segment is a component of
the Group that engages in business activities whose operating results are reviewed regularly by the Board and for
which discrete financial information is available.
The Group has been involved in exploration activities in Indonesia, Canada and Australia and has three geographical
operating segments, that its Board reviews to make decisions about resources to be allocated to the segment and
to assess its performance. Segment capital expenditure is the total cost incurred during the year to acquire property,
plant and equipment, and exploration and evaluation expenditure.
Cyprium Metals Limited
43
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Exploration and evaluation expenditure
(h)
Exploration for and evaluation of mineral resources is the search for mineral resources after the entity has obtained
legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial
viability of extracting the mineral resource. Accordingly, exploration and evaluation expenditures are those
expenditures incurred by the Group in connection with the exploration for and evaluation of minerals resources
before the technical feasibility and commercial viability of extracting mineral resources are demonstrable.
Accounting for exploration and evaluation expenditures is assessed separately for each 'area of interest'. An 'area
of interest' is an individual geological area which is considered to constitute a favourable environment for the
presence of a mineral deposit or has been proved to contain such a deposit.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all
expenditure incurred prior to securing legal rights to explore an area, is expensed as incurred. For each area of
interest, the expenditure is recognised as an exploration and evaluation asset when the following is satisfied:
(i)
(ii) at least one of the following conditions is also met:
the rights to tenure of the area of interest are current; and
(a) the exploration and evaluation expenditures are expected to be recouped through successful development
and exploration of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the balance date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,
and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies,
exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation and
amortisation of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated being
no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss (if any).
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised
estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the
carrying amount that would have been determined had no impairment loss been recognised for the asset in
previous years.
Where a decision has been made to proceed with development in respect of a particular area of interest, the relevant
exploration and evaluation asset is tested for impairment and the balance is then reclassified to development.
Where an area of interest is abandoned, any expenditure carried forward in respect of that area is written off.
Income Tax
(i)
Income tax expense or benefit for the year is the tax payable on the current year’s taxable income or loss based on
the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. Current and deferred tax expense attributable to amounts recognised directly in equity is
also recognised directly in equity.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted
for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable
Cyprium Metals Limited
44
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary
differences arising from the initial recognition of an asset or liability. No deferred tax asset or liability is recognised
in relation to these temporary differences if they arose in a transaction, other than a business combination, that at
the time of the transaction did not affect either accounting or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets
and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when
deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset when the
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and
settle the liability simultaneously.
Impairment of non-financial assets other than goodwill
(j)
The Company assesses at each balance date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate
of the asset’s recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined
for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from
other assets or Group of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such
cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying
amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is
considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is
treated as a revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years.
A reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is
treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future years to allocate
the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Cash and cash equivalents
(k)
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at
call with banks or 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 insignificant risk of
changes in value, and bank overdrafts.
Cyprium Metals Limited
45
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Trade Receivables
(l)
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision
for impairment. Collectability of trade receivables is reviewed on an ongoing basis. Individual debts that are known
to be uncollectible are written off when identified.
A provision for estimated credit losses is established when there is objective evidence that the Group will not be
able to collect all amounts due according to the original terms of the receivables. The amount of the provision is
the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted
at the original effective interest rate. The amount of the provision is recognised in the Statement of Profit or Loss
and Other Comprehensive Income.
Goods and Services Tax (GST)
(m)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office. In these circumstances the GST is recognised as part of the
cost of acquisition of the asset or as part of an item of the expense. Receivables and payables are stated inclusive
of the amount of GST receivable and recoverable. The net amount of GST recoverable from, or payable to, the
Australian Taxation Office is included with other receivables or payables in the Statement of Financial Position. Cash
flows are included in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash
flows.
Intangible assets
(n)
Intangible assets relate to the option right to farm-in on exploration projects measured at cost. As costs are being
incurred with respect to the option commitment, it is capitalised and recognised as an exploration and evaluation
expenditure asset.
Trade and other payables
(o)
Trade and other payable amounts represent liabilities for goods and services provided to the Group prior to the
end of the financial year which are unpaid. The amounts are non-interest bearing, unsecured and generally paid
within 30 days of recognition. They are recognised initially at fair value less directly attributable transaction costs
and subsequently at amortised cost using the effective interest rate method.
Provisions
(p)
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for
future operating losses.
When the Company expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required to settle
the present obligation at the end of the reporting year. If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used,
the increase in the provision due to the passage of time is recognised as an interest expense.
Issued capital
(q)
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 from proceeds.
Cyprium Metals Limited
46
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Property, plant and equipment
(r)
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and any
accumulated impairment losses. The cost of self-constructed assets includes the costs of materials, direct labour, any
other costs directly attributable to bringing the asset to a working condition for its intended use, and the initial
estimate, where relevant, of the costs of dismantling and removing items, restoring the site and an appropriate
proportion of production overheads. Purchased software that is integral to the functionality of the related equipment
is capitalised as part of that equipment.
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 value exceeds
its recoverable amount.
Depreciation
Plant and equipment, motor vehicles, office equipment, and furniture are recorded at cost and are depreciated over
their estimated useful economic lives to their estimated residual values using either straight line or diminishing value
methods. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and
adjusted if appropriate.
Leases
(s)
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset
is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount
of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement
date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased
asset at the end of the lease term, the recognised right-of-use assets are depreciated on a straight-line basis over
the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance
fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price
of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a
lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do
not depend on an index or a rate are recognised as an expense in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the
underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment
(i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment
that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognised
as expenses in profit or loss as incurred.
Cyprium Metals Limited
47
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Significant judgement in determining the lease term of contracts with renewal options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered
by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to
terminate the lease, if it is reasonably certain not to be exercised.
Current and Non-Current Classification
(t)
Assets and liabilities are presented in the Statement of Financial Position based on a 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 Group'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 Group'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.
Revenue
(u)
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
Earnings per share
(v)
Basic earnings/loss per share is calculated as net profit/loss attributable to members, adjusted to exclude any costs
of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for
any bonus element.
Diluted earnings per share is calculated as net profit/loss attributable to members, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the year that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any
bonus element.
Employee Benefits
Wages, salaries, and annual leave
(w)
(i)
Liabilities for wages and salaries and annual leave expected to be settled within 12 months of the reporting date are
recognised in provisions in respect of employees' services up to the reporting date. The amount is measured at the
amount expected to be paid, including expected on-costs, when liabilities are settled. Expenses for non-accumulating
sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
Cyprium Metals Limited
48
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Long Service Leave
(ii)
The liability for long service leave is recognised, and measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date, plus expected on-costs.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using interest rates on national government guaranteed securities
with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Share based payment transactions
Equity settled transactions:
(x)
(i)
The Company provides benefits to individuals acting as, and providing services similar to employees (including
Directors) of the Company in the form of share-based payment transactions, whereby individuals render services in
exchange for shares, options or rights over shares (‘equity settled transactions’).
The cost of equity settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value is determined by using a binomial valuation model taking into account the terms
and conditions upon which the instruments were granted. The expected price volatility is based on the historic
volatility of the Company’s share price on the ASX.
In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of Cyprium Metals (‘market conditions’). The cost of the equity settled transactions
is recognised, together with a corresponding increase in equity, over the period in which the performance conditions
are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting
date’).The cumulative expense recognised for equity settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting year has expired and (ii) the number of awards that, in the opinion of the
Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at
balance date.
No adjustment is made for the likelihood of the market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date. The statement of comprehensive income
charge or credit for a year represents the movement in cumulative expense recognised at the beginning and end of
the year. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition. Where the terms of an equity settled award are modified, as a minimum an
expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase
in the value of the transaction as a result of the modification, as measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the
cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award
are treated as if they were a modification of the original award, as described in the previous paragraph.
The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods and
services received unless this cannot be measured reliably, in which case the cost is measured by reference to the fair
value of the equity instruments granted. The dilutive effect, if any, of outstanding options is reflected in the
computation of loss per share (see note 18).
Cash settled transactions:
(ii)
The Company may also provide benefits to employees in the form of cash-settled share-based payments, whereby
employees render services in exchange for cash, the amounts of which are determined by reference to movements
in the price of the shares of the Company. The cost of cash-settled transactions is measured initially at fair value at
the grant date using the Black-Scholes formula taking into account the terms and conditions upon which the
instruments were granted. This fair value is expensed over the year until vesting with recognition of a corresponding
liability. The liability is remeasured to fair value at each balance date up to and including the settlement date with
changes in fair value recognised in profit or loss.
Cyprium Metals Limited
49
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Critical accounting estimates and judgements
(y)
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying
values of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results
may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions are recognised in the year in which the estimate is revised if it affects only that year, or in the year of the
revision and future years if the revision affects both current and future years.
Share-Based Payments:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using a binomial valuation
model, using the assumptions detailed in Note 12.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using a binomial
valuation model taking into account the terms and conditions upon which the instruments were granted.
Deferred Tax
In accordance with the Group's accounting policies for deferred taxes, a deferred tax asset is recognised for unused
tax losses only if it is probable that future taxable profits will be available to utilise those losses. Determination of
future taxable profits requires estimates and assumptions as to future events and circumstances, in particular,
whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest
will be achieved. This includes estimates and judgements about commodity prices, ore reserves, exchange rates,
future capital requirements, future operational performance and the timing of estimated cash flows. Changes in
these estimates and assumptions could impact on the amount and probability of estimated taxable profits and
accordingly the recoverability of deferred tax assets.
The Group has not recognised a net deferred tax asset for temporary differences and tax losses as at 31 December
2020 on the basis that the ability to utilise these temporary differences and tax losses cannot yet be regarded as
probable.
Deferred Exploration and Evaluation Expenditure
Deferred exploration and evaluation expenditure has been capitalised on the basis that the Group 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 year in which this determination is made.
(z)
Going concern
The financial report has been prepared on the going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and settlements of liabilities in the ordinary course of business.
Cyprium Metals Limited
50
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
3.
Income Tax
(a) Income tax expense
Numerical reconciliation of income tax expense to prima facie tax payable:
A reconciliation between tax expense and the product of accounting loss
before income tax multiplied by the Company’s applicable tax rate is as
follows:
Loss before income tax expense
Tax at the Australian rate of 30% (2019: 30%)
Share issue costs
Non-deductible impairment of exploration
Share-based payments
Non-assessable government allowances
Non-deductible expenses
Research and development allowances
Income tax benefit not brought to account
Adjustment for different tax rates
Income tax benefit
(b) Recognised tax assets and liabilities
Current income tax asset/(liability)
Deferred tax assets and liabilities are attributable to the following:
Exploration and evaluation expenditure
Other
Tax losses recognised
Net deferred tax asset/(liability)
(c) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Accruals and other payables
Share issue costs
Tax losses Cyprium Metals Limited
Net deferred tax asset not recognised
The benefit for tax losses will only be obtained if:
2020
$
2019
$
(1,651,335)
(495,401)
(62,717)
-
164,211
(30,000)
1,469
653,969
422,438
-
653,969
(2,354,202)
(706,261)
(31,649)
291,894
105,949
-
44,245
-
259,839
35,983
-
653,969
-
(1,744,157)
(1,904)
1,746,091
-
(552,323)
-
552,323
-
34,519
171,853
3,923,462
4,142,288
8,061
79,550
812,162
899,773
i.
ii.
iii.
the Company derives future assessable income in Australia of a nature and of an amount sufficient to enable
the benefit from the deductions for the losses to be realised; and
the Company continues to comply with the conditions for deductibility imposed by tax legislation in Australia;
and
no changes in tax legislation in Australia adversely affect the Company in realising the benefit from the
deductions for the losses.
(d) Tax consolidation
Cyprium Metals Limited and its wholly owned Australian resident subsidiaries have formed a tax consolidated group
with effect from 1 January 2019. Cyprium Metals Limited is the head entity of the tax consolidated group.
Cyprium Metals Limited
51
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
4. Cash and Cash Equivalents
Cash comprises:
Cash at bank and on hand
Short term deposits
Reconciliation of operating loss after tax to net cash from operations
Loss after tax
Income tax benefit
Non-cash and non-operating items
Exploration expenditure impaired and written off
Share based payments
Net exchange differences
Employee provisions - Indonesia
Depreciation
Change in assets and liabilities
(Increase) / decrease in receivables
Decrease/ (increase) in other assets
Increase in trade and other payables
Net cash used in operating activities
2020
$
2019
$
37,709
5,002,111
5,373,820
166,183
3,300,000
3,466,183
(997,366)
(653,969)
(2,354,202)
-
-
547,371
(559)
-
40,353
(3,153)
33,675
64,915
(968,733)
972,979
353,162
317
(71,104)
24,280
47,565
(28,879)
210,487
(845,395)
Non-cash investing and financing activities
During the year ended 31 December 2020, the Company issued 2,509,750 ordinary shares as consideration for the
acquisition of the Nanadie well tenement. Refer to note 8 for details of the identifiable assets and liabilities acquired.
During the year ended 31 December 2019, the Company issued 7,058,750 ordinary shares as consideration for the
acquisition of Cyprium Australia Pty Ltd. Refer to note 8 for details of the identifiable assets and liabilities acquired.
5. Receivables - Current
Diesel Fuel Rebate receivable
GST receivable
Term deposits
6,345
93,570
100,000
199,915
-
87,266
100,000
187,266
Debtors, other debtors and GST receivable are non-interest bearing and generally receivable on 30-day terms. They
are neither past due nor impaired. The amount is fully collectible. Due to the short-term nature of these receivables,
their carrying value is assumed to approximate their fair value.
6. Other Current Assets
Prepayments
Security deposits
2020
$
2019
$
28,782
24,750
53,532
62,457
24,750
87,207
Cyprium Metals Limited
52
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
7. Right-of-use asset
Leased premises
Movements in right-of-use asset:
Opening balance
Additions on adoption of AASB 16
Amortisation for the year
Adjustment - transfer to provision
Closing balance
8. Deferred Exploration & Evaluation Expenditure
Exploration and Evaluation phase - at cost
Opening balance
Acquisition of exploration properties – current year1
Exploration expenditure written off (refer to note 9)
Exploration and evaluation expenditure incurred during the year
Closing balance
2020
$
2019
$
57,830
57,830
100,587
100,587
100,587
-
(40,353)
(2,404)
57,830
-
124,867
(24,280)
-
100,587
3,164,517
1,388,439
-
2,553,971
7,106,927
946,030
1,309,026
(972,979)
1,882,440
3,164,517
1 In September 2020, the Group acquired a 100% interest in the Nanadie Well Copper-Gold Project from Horizon
Minerals Limited (“Horizon”), which has been accounted for as an asset acquisition.
The following up-front consideration was paid by Cyprium to Horizon:
$250,000 cash; and
$400,000 of CYM shares (2,509,750 fully paid ordinary shares) based on a 20-day VWAP.
The following deferred consideration will be payable by Cyprium to Horizon:
$350,000 of CYM shares based on a 20-day VWAP and issued in 12 months (refer to Note 10);
$300,000 of CYM shares based on a 20-day VWAP and issued in 24 months (refer to Note 10); and
$200,000 of CYM shares based on a 20-day VWAP upon a decision to mine (this portion of the
consideration has not been booked yet as the Directors consider it too early to determine that this is
payable).
In June 2019, the Group acquired 100% of the share capital of Cyprium Australia Pty Ltd, which holds rights to
earn-in and joint venture for an 80% interest in the non-gold rights over the tenements at the Cue Copper-Gold
Project in Western Australia. This acquisition did not constitute a business combination and the cost of the
acquisition have been allocated to the individual identifiable assets and liabilities on the basis of their respective
fair values.
Cyprium Metals Limited
53
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
The identifiable assets acquired upon the acquisition of Cyprium Australia Pty Ltd is as follows:
Purchase consideration:
7,058,750 Ordinary shares
Identifiable assets/(liabilities) acquired:
Cash
Exploration properties
Other assets
9. Discontinued Operations
$
1,342,500
4,017
1,309,026
29,457
1,342,500
The Manitou Gold Project tenements held by the Company in North-western Ontario Canada reduced from 245
km2 to 5 km2 during the year ended 31 December 2019. The Board has impaired the fair value of the Canadian
assets to $nil as at 31 December 2019. An amount of $972,979 relating to previously capitalised exploration
expenditure forms part of the discontinued operation in the previous period. In addition, $100,088 of exploration
costs relating to the Trenggalek Project had also been allocated to discontinued operations in the Statement of
Profit or Loss and Other Comprehensive Income in the previous period.
Manitou Gold Project
Trenggalek Project
Loss after tax from discontinued operations
10. Trade and Other Payables
Current:
Trade payables and accrued expenses
Other consumption taxes payable
Deferred consideration (refer to note 8)
Non-current:
Deferred consideration (refer to note 8)1
2020
$
2019
$
972,979
100,088
1,073,067
-
-
-
466,926
196,918
350,000
1,013,844
300,000
300,000
413,120
112,597
-
525,717
-
-
1This portion of the consideration has not been discounted to present values as the effect would be immaterial.
Trade creditors and other creditors are non-interest bearing and generally payable on 30-day terms. Due to the
short-term nature of these payables, their carrying value is assumed to approximate their fair value.
11. Lease liabilities
Leased premises – current
Lease premises - non-current
Movement in lease liabilities
Opening balance
Additions on adoption of AASB 16
Adjustment – transfer to right-of-use asset
Principal repayments
Closing balance
Cyprium Metals Limited
54
42,409
18,613
61,022
102,864
-
(2,404)
(39,438)
61,022
40,011
62,853
102,864
-
124,867
-
(22,003)
102,864
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
12. Issued Capital
(a) Issued and paid-up capital
Issued and fully paid
(b) Movements in ordinary shares on issue
Opening Balance
Shares issued and fully paid
Shares issued as consideration for acquisition 1
Shares issued - placements
Shares issued to corporate advisor 2
Transaction costs on share issues 3
2020
$
2019
$
164,980,087
159,599,915
31 December 2020
31 December 2019
Number of
shares
$
Number of
shares
$
56,059,482 159,599,915
-
400,000
6,000,000
-
(1,019,828)
98,569,214 164,980,087
-
2,509,750
39,999,982
-
-
25,250,732
-
7,058,750
22,250,000
1,500,000
-
153,680,857
-
1,342,500
4,560,000
285,000
(268,442)
56,059,482 159,599,915
1 2,509,750 fully paid ordinary shares were issued to Horizon Minerals Limited for the acquisition of the Nanadie
Well Copper Project in September 2020 (refer to note 8).
7,058,750 fully paid ordinary shares were issued to the vendors of Cyprium Australia Pty Ltd and Musgrave
Minerals Limited for the acquisition of the Cue Copper-Gold Project in Western Australia in June 2019 (refer to
Note 8).
2 As approved at the Company’s Annual General Meeting on 29 May 2019, 1,500,000 fully paid ordinary shares were
issued to a corporate advisor for consideration received of $1,500. These shares were valued at the Company’s
share price at that time. The value above the consideration received, namely $283,500 has been recorded as a
share-based payment.
3 As approved at the Company’s General Meeting on 3 December 2020, a total of 6,000,000 options were issued to
the Joint Lead Managers for a Placement of 33.3 million ordinary shares. These options were valued at $627,908
which has been recorded as a share issued cost (also refer to note 12(e)).
(c) Performance Shares
As at 31 December 2020, there were nil performance shares on issue. The remaining Manitou Gold Project
tenements of 5 km2 in North-western Ontario Canada were relinquished during 2020, consequently 1,030,000
performance shares lapsed.
Cyprium Metals Limited
55
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
(d) Performance Rights
As approved at the Company’s Annual General Meeting on 29 May 2019, the following performance rights were
issued under the Company’s Incentive Performance Rights Plan to directors (or their associates) (6,400,000 in June
2019) and senior management (6,000,000 in July 2019). These rights are exercisable at nil cost and expire during
June and July 2024 respectively:
Vesting Conditions
Nicholas Rowley
Barry Cahill
Gary Comb
Other
Total
1
500,000
700,000
700,000
1,875,000
3,775,000
2
400,000
600,000
500,000
1,375,000
2,875,000
3
400,000
600,000
500,000
1,375,000
2,875,000
4
400,000
600,000
500,000
1,375,000
2,875,000
Total
1,700,000
2,500,000
2,200,000
6,000,000
12,400,000
Vesting conditions
1. Completion of a transaction to acquire or earn into majority ownership interests in projects
2. Release of a Copper mineral resource of at least 80,000 tonnes
3. Announcement of a Scoping Study or the average share price of $0.35 per share for 5 consecutive days
4. Board resolves to proceed with a Definitive Feasibility Study or the average share price of $0.40 per share for
5 consecutive days
The performance rights which are subject to vesting conditions 1 and 2 above are valued at $0.19 each, being the
Company’s share price at the date of the Company’s AGM held on 29 May 2019. The value of these rights are
being brought to account as the Directors consider that these vesting conditions are probable of being achieved.
At this stage of the Company’s development, the Directors consider it appropriate to bring the value of these
rights to account. The performance rights which are subject to vesting conditions 3 and 4 above are valued at
$0.124 and $0.119 each respectively. These valuations are based on a binomial valuation model using the following
major inputs:
Risk free interest rate
Volatility
Expiry date
$0.19
1.18%
70.9%
June and July 2024
Share price at date of approval
The value of these rights are brought to account over the vesting period. The expense recorded in the current
year was $538,324, of which $277,844 related to key management personnel.
As approved at the Company’s Annual General Meeting on 28 May 2020, the following performance rights were
issued under the Company’s Incentive Performance Rights Plan to directors (or their associates) (2,500,000 in May
2020) and senior management (7,100,000 in May 2020). These rights are exercisable at nil cost and expire during
May 2025:
Vesting Conditions
1
700,000
2,225,000
2,925,000
2
600,000
1,625,000
2,225,000
3
600,000
1,625,000
2,225,000
4
600,000
1,625,000
2,225,000
Total
2,500,000
7,100,000
9,600,000
Barry Cahill
Other
Total
Vesting conditions
1. Completion of a transaction to acquire or earn into majority ownership interests in projects
2. Release of a Copper mineral resource of at least 125,000 tonnes
3. Announcement of a Scoping Study or the average share price of $0.26 per share for 20 consecutive days
4. Board resolves to proceed with a Definitive Feasibility Study or the average share price of $0.30 per share for
20 consecutive days
Cyprium Metals Limited
56
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
The performance rights which are subject to vesting conditions 1 and 2 above are valued at $0.15 each, being the
Company’s share price at the date of the Company’s AGM held on 28 May 2020. The value of these rights are
being brought to account as the Directors consider that these vesting conditions are probable of being achieved.
At this stage of the Company’s development, the Directors consider it appropriate to bring the value of these
rights to account. The performance rights which are subject to vesting conditions 3 and 4 above are valued at
$0.111 and $0.102 each respectively. These valuations are based on a binomial valuation model using the following
major inputs:
Risk free interest rate
Volatility
Expiry date
$0.15
0.41%
110.2%
May 2025
Share price at date of approval
The value of these rights are brought to account over the vesting period. The expense recorded in the current year
was $145,469, of which $37,883 related to key management personnel.
(e) Options
During the year, 6,000,000 options exercisable at $0.30 each with an exercise period to December 2022, were
issued on 11 December 2020 to the Joint Lead Managers for a Placement of 33.3 million ordinary shares, as
approved at the Company’s General Meeting on 3 December 2020. These options were valued at 0.105 each or
$627,908 in total. The valuation is based on a binomial valuation model using the following major inputs:
Risk free interest rate
Volatility
Expiry date
$0.22
0.09%
106.0%
December 2022
Share price at date of approval
13. Reserves
Foreign exchange translation reserve
Share-based payment reserve
Movements in Reserves
Foreign exchange translation reserve
Opening balance
Foreign exchange translation difference
Closing balance
2020
$
2019
$
777,560
2,530,118
3,307,678
778,119
1,218,417
1,996,536
778,119
(559)
777,560
764,240
13,879
778,119
The foreign exchange translation reserve comprises all foreign exchange differences arising from the translation of
the financial statements of foreign operations where their functional currency is different to the presentation
currency of the reporting entity.
Share-based payment reserve
Opening balance
Share issue costs (refer to note 12)
Share based payments
Closing balance
1,218,417
627,908
683,793
2,530,118
1,148,755
-
69,662
1,218,417
The share-based payments reserve relates to the cumulative expense for share options granted to directors,
employees and contractors in prior periods and performance rights granted to directors and employees and options
to the Joint Lead Managers in the current year. Upon the exercise of the options or conversion of the performance
rights, the balance of the reserve relating to those securities is transferred to issued capital.
Cyprium Metals Limited
57
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
14. Accumulated Losses
Movements in accumulated losses were as follows:
Opening balance
Loss for the year
Closing balance
15. Directors and Key Management Personnel Disclosures
(a) Remuneration of Directors and Key Management Personnel
Details of the nature and amount of each element of the emolument
of each Director and key management personnel of the Company for
the financial year are as follows:
Short-term employee benefits
Share-based payments
Other benefits
Total remuneration
16. Related Party Disclosures
(a) Key management personnel
2020
$
2019
$
(155,219,272)
(997,366)
(152,865,070)
(2,354,202)
(156,216,638) (155,219,272)
406,820
315,727
35,228
757,775
239,655
36,345
19,631
295,631
For Director related party transactions please refer to note 15 “Key Management Personnel Disclosures”.
Subsidiaries
The consolidated financial statements include the financial statements of Cyprium Metals Limited and the following
subsidiaries:
Name of Entity
Cyprium Australia Pty Ltd
Cyprium Services Pty Ltd
GNR Minerals Pty Ltd
PT Indonusa Mining Services
Country of
Incorporation
Australia
Australia
Australia
Indonesia
Equity Holding
2020
100%
100%
-
100%
2019
100%
-
100%
100%
2020
$
2019
$
17. Auditor’s Remuneration
Audit services:
Amounts received or due and receivable by the auditors of the parent company
HLB Mann Judd:
- Audit and review of financial reports
18. Loss per Share
Loss used in calculating basic and diluted EPS:
From continuing and discontinued operations
From continuing operations
32,711
32,711
36,680
36,680
(997,366)
(997,366)
(2,354,202)
(1,281,135)
Cyprium Metals Limited
58
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Weighted average number of ordinary shares to calculate basic loss per share
Basic loss per share (cps) from continuing and discontinued operations
Basic loss per share (cps) from continuing operations
Weighted average number of ordinary shares to calculate diluted loss per share
Diluted loss per share (cps) from continuing and discontinued operations
Diluted loss per share (cps) from continuing operations
Number of
Shares
60,464,278
(1.65)
(1.65)
60,464,278
(1.65)
(1.65)
Number of
Shares
36,761,852
(6.40)
(3.48)
36,761,852
(6.40)
(3.48)
19. Financial Risk Management
Exposure to foreign currency risk, credit risk, liquidity risk and interest rate risk arises in the normal course of the
Company’s business. The Company uses different methods as discussed below to manage risks that arise from these
financial instruments. The objective is to support the delivery of the financial targets while protecting future financial
security.
(a) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities. The Company manages liquidity risk by maintaining sufficient cash facilities to meet the operating
requirements of the business and investing excess funds in highly liquid short-term investments. The responsibility
for liquidity risk management rests with the Board of Directors. Alternatives for sourcing our future capital needs
include our cash position and the issue of equity instruments. These alternatives are evaluated to determine the
optimal mix of capital resources for our capital needs. The Directors expect that present levels of liquidity along
with future capital raising will be adequate to meet expected capital needs.
(b) Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair value
of financial instruments. The Company’s exposure to market risk for changes to interest rate risk relates primarily to
its earnings on cash and term deposits. The Company manages the risk by investing in short term deposits.
Cash and cash equivalents
2020
$
2019
$
5,373,820
3,466,183
Interest rate sensitivity
The following table demonstrates the sensitivity of the Company’s Statement of Profit or Loss and Other
Comprehensive Income to a reasonably possible change in interest rates, with all other variables constant.
Effect on equity
including
Accumulated losses
($)
Increase/(Decrease)
Effect on Post
Tax Loss ($)
Effect on Post
Tax Loss ($)
Effect on equity
including
Accumulated losses
($)
Increase/(Decrease)
2019
40,304
(40,304)
25,996
(25,996)
25,996
(25,996)
Change in Basis Points
Increase 75 basis points
Decrease 75 basis points
2020
40,304
(40,304)
A sensitivity of 75 basis points has been used as this is considered reasonable given the current level of both short
term and long-term Australian Dollar interest rates. The change in basis points is derived from a review of historical
movements and management’s judgement of future trends.
(c) Credit Risk Exposures
Cyprium Metals Limited
59
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation
and cause the Company to incur a financial loss. The Company’s maximum credit exposure is the carrying amounts
on the statement of financial position. The Company holds financial instruments with credit worthy third parties. At
31 December 2020, the Company held cash at bank with all of the Company’s cash being held in financial institutions
with a rating from Standard & Poors of AA or above (long term). The Company has no past due or impaired debtors
as 31 December 2020.
(d) Fair value measurement
The Directors consider that the carrying value of current receivables and current payables approximate their fair
values.
20. Parent Entity Information
The following details information related to the parent entity, Cyprium Metals Limited, at 31 December 2020. The
information presented has been prepared using consistent accounting policies with those presented in note 2.
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total Equity
Loss of the parent entity
Total comprehensive loss of the parent entity
Other Commitments
The Company had no commitments as at 31 December 2020.
Contingent Liabilities
The Company had no contingent liabilities as at 31 December 2020.
2020
$
2019
$
6,255,522
13,397,235
(1,013,571)
(1,313,571)
12,083,664
165,607,995
1,902,210
(155,426,541)
12,083,664
(998,899)
(998,899)
3,627,016
6,804,358
(438,669)
(438,669)
6,365,689
159,599,915
1,218,417
(154,452,643)
6,365,689
(2,399,235)
(2,399,235)
21. Contingent Assets and Liabilities
There are no known contingent assets or liabilities as at 31 December 2020 (2019: nil).
22. Dividends
No dividend was paid or declared by the Company in the year ended 31 December 2020 or the period since the
end of the financial year and up to the date of this report. The Directors do not recommend that any amount be
paid by way of dividend for the financial year ended 31 December 2020.
23. Segment Information
The Group has identified its operating segments based on the internal reports that are reported to the Board of
Directors (the chief operating decision makers) in assessing performance and in determining the allocation of
resources. The Board as a whole will regularly review the identified segments in order to allocate resources to the
segment and to assess its performance.
The Group operates predominately in one industry, being the exploration of mineral resources. The main
geographic areas that the entity operated in during the year are Australia, Canada and Indonesia.
Cyprium Metals Limited
60
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
The following table present revenue, expenditure and certain asset and liability information regarding geographical
segments for the year ended 31 December 2020 and 31 December 2019:
31 December 2020
Interest income
Other Income
Segment income
Employee expenses
Other expenses
Income tax benefit
Loss for the year after tax
Asset and liabilities
Segment assets
Segment liabilities
Other Information
Acquisition of non-current assets:
Exploration and evaluation expenditure
31 December 2019
Interest income
Segment income
Employee expenses
Exploration expenditure
Other expenses
Exploration asset impairment
Unrealised foreign exchange loss
Loss for the year after tax
Asset and liabilities
Segment assets
Segment liabilities
Other Information
Acquisition of non-current assets:
Exploration and evaluation expenditure
Right-of-use asset
Continuing
Operations
Australia /
Corporate
$
Discontinued
Operations
Discontinued
Operations
Canada
$
Indonesia
$
Total
$
22,136
100,000
122,136
(733,911)
(917,414)
653,959
(997,366)
13,445,993
(1,374,866)
1,934,374
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Discontinued
Operations
Discontinued
Operations
Canada
$
Indonesia
$
Total
$
16,781
16,781
-
-
-
(100,088)
-
-
-
(100,088)
(518,232)
(100,088)
(762,586)
(972,979)
(317)
(2,354,202)
-
-
-
-
7,005,760
(628,581)
3,164,517
124,867
-
-
-
-
-
(972,979)
-
(972,979)
-
-
-
-
22,136
100,000
122,136
(733,911)
(917,414)
653,959
(997,366)
13,445,993
(1,374,866)
1,934,374
Continuing
Operations
Australia /
Corporate
$
16,781
16,781
(518,232)
-
(762,586)
-
(317)
(1,281,135)
7,005,760
(628,581)
3,164,517
124,867
Cyprium Metals Limited
61
Notes to the Consolidated Financial Statements
for the year ended 31 December 2020
24. Significant Events after the Reporting Date
On 10 February 2021, the Company announced it had entered into a Share Sale Agreement with Metals X Limited
to acquire its 100% owned entity Paterson Copper Pty Ltd, the owner of the Nifty Copper Mine, Maroochydore
Copper Project and the Paterson Exploration Project, which includes the farm-in agreement with IGO Limited
(together “Copper Assets”) (the “Transaction”).
The Transaction and development of the Copper Assets is to be funded from existing cash reserves and a $90 million
Placement. The Company has received binding commitments for the Placement from professional and sophisticated
investors in Australia and eligible investors in certain overseas jurisdictions.
The Placement will result in the issue of approximately 450 million fully paid ordinary shares in the Company at an
offer price of $0.20 per Share. The Placement is being made subject to approval by the Company’s shareholders.
As the acquisition is not yet complete at the date of issue of this financial report, the Group is not required to
disclose information as required by AASB 3 Business Combinations. Once the acquisition is complete, the Directors
will determine whether the acquisition constitutes a business combination, and if it does, the Group will then be
required to attend to the accounting for the business combination.
There are no other significant events subsequent to the end of the financial year to the date of this report that are
required to be disclosed.
Cyprium Metals Limited
62
Directors’ Declaration
In accordance with a resolution of the Directors of Cyprium Metals Limited, I state that:
1. In the opinion of the Directors:
a)
the financial statements and notes of Cyprium Metals Limited for the year ended 31 December 2020 are in
accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 31 December 2020 and of its
performance for the year ended on that date; and
complying with Accounting Standards (including the Australian Accounting Interpretations), the
Corporations Regulations 2001 and other mandatory professional reporting requirements; and
b)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed
in note 2(b).
2. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
3. This declaration has been made after receiving the declarations required to be made by the Directors in
accordance with sections of 295A of the Corporations Act 2001 for the financial year ended 31 December 2020.
On behalf of the Board
Gary Comb
Chairman, Non-Executive Director
Perth, WA
22 March 2021
Cyprium Metals Limited
63
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Cyprium Metals Limited for the
year ended 31 December 2020, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
22 March 2021
L Di Giallonardo
Partner
64
INDEPENDENT AUDITOR’S REPORT
To the members of Cyprium Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cyprium Metals Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 31
December 2020, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial 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 Group’s financial position as at 31 December 2020 and of its
financial performance for the year then ended; and
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 (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. We have determined the matters described below to
be the key audit matters to be communicated in our report.
65
Key Audit Matter
How our audit addressed the key audit
matter
Carrying value of Deferred Exploration and Evaluation
Expenditure
(Refer to Note 8)
In accordance with AASB 6 Exploration for and
Evaluation of Mineral Resources, the Group capitalises
acquisition costs of rights to explore as well as
subsequent exploration and evaluation expenditure and
applies the cost model after recognition.
Our audit focussed on the Group’s assessment of the
carrying amount of the deferred exploration and
evaluation expenditure, because this is a significant
asset of the Group. We planned our work to address
the audit risk that the capitalised expenditure might no
longer meet the recognition criteria of the standard. In
addition, we considered it necessary to assess whether
facts and circumstances existed to suggest that the
carrying amount of the deferred exploration and
evaluation expenditure may exceed its recoverable
amount.
Our procedures included but were not
limited to the following:
processes
• We obtained an understanding of the
key
associated with
management’s review of the carrying
values of deferred exploration and
evaluation expenditure;
considered
the Directors’
assessment of potential indicators of
impairment;
• We
• We obtained evidence that the Group
has current rights to tenure of its areas
of interest;
• We examined the exploration budget
for the year ending 31 December 2021
and discussed with management the
nature of planned ongoing activities;
• We enquired with management,
reviewed ASX announcements and
reviewed minutes
of Directors’
meetings to ensure that the Group had
not resolved to discontinue exploration
and evaluation at any of its areas of
interest;and
• We examined the disclosures made in
the financial report.
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 Group’s annual report for the year ended 31 December 2020, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
66
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 Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
-
-
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the 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.
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.
-
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period 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.
67
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
31 December 2020.
In our opinion, the Remuneration Report of Cyprium Metals Limited for the year ended 31
December 2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
22 March 2021
L D Giallonardo
Partner
68
ASX Additional Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is
as follows. The information is current at 19 March 2021.
Distribution of Share Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
TOTAL
Ordinary Shares
Number of Holders
Number of Shares
316
296
165
389
172
1,338
102,860
836,518
1,366,773
15,809,004
80,454,059
98,569,214
There were 371 holders of ordinary shares holding less than a marketable parcel.
Top Twenty Share Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ARALAD MANAGEMENT PTY LTD
HORIZON MINERALS LIMITED
PERSHING AUSTRALIA NOMINEES PT Y LTD
BNP PARIBAS NOMINEES PTY LTD
KYRIACO BARBER PTY LTD
BLUEDALE PTY LTD
MR MICHAEL HSIAU YUN LAN
MUSGRAVE MINERALS LIMITED
JET CAPITAL PTY LTD
CITICORP NOMINEES PTY LIMITED
RMVW PTY LTD
RMVW PTY LTD
BIG BEAR NOMINEES PTY LTD
ILWELLA PTY LTD
BOTSIS HOLDINGS PTY LTD
SLAM CONSULTING PTY LTD
DURBECK PTY LTD
MR WAYNE FRANK APTED
RED PUMA PTY LTD
Substantial Shareholders
Shares
6,836,072
2,700,000
2,509,750
2,304,240
2,145,666
2,016,110
1,676,190
1,625,684
1,308,750
1,300,000
1,206,976
1,200,000
1,187,500
1,178,750
1,100,000
1,083,333
1,000,000
1,000,000
1,000,000
1,000,000
35,379,021
%
6.94
2.74
2.55
2.34
2.18
2.05
1.7
1.65
1.33
1.32
1.22
1.22
1.2
1.2
1.12
1.1
1.01
1.01
1.01
1.01
35.89
The names of substantial Shareholders who have notified the Company in accordance with Section 671B of the
Corporations Act are:
Beneficial Owner
Ilwella Pty Ltd
* Figures as reported on the last Substantial Shareholder notice received by the Company.
# of Shares*
5,880,952
Date
15.12.2020
%*
5.97
On-Market Buy Back
There is no current on-market buy back.
Voting Rights
All ordinary shares carry one vote per share without restriction. Options have no voting rights.
Use of Proceeds
In accordance with listing rule 4.10.19, the Company confirms that it has used cash and assets in a form readily
convertible to cash in a way consistent with its business objectives during the financial year ended 31 December 2020.
Cyprium Metals Limited
69
ASX Additional Information
Share Options
As at the date of this report, there were 6,000,000 options exercisable at $0.30 each, with an exercise period to
December 2022.
Performance Rights
As at the date of this report, there were 22,000,000 performance rights on issue. The details of the performance
shares are as follows:
Performance Condition
Completion of a transaction to acquire or earn into majority ownership interests in projects with
exploration and mining tenements
Announcement of the delineation of 80,000t of contained copper (within any Mineral Resource
category) upon the Projects
Each Performance Right will vest upon the earlier of:
Announcement of a Scoping Study that confirms the positive economics of the
Projects; or
The volume weighted average price of the Shares equals or exceeds $0.35 per Share
for 5 consecutive trading days
Number
3,775,000
2,875,000
2,875,000
Each Performance Right will vest upon the earlier of:
Board approval to Proceed with a Project Definitive Feasibility Study; or
The volume weighted average price of the Shares equals or exceeds $0.40 per Share
2,875,000
for 5 consecutive trading days
Total expiring in June and July 2024
Performance Condition
Completion of a transaction to acquire or earn into majority ownership interests in projects with
exploration and mining tenements
Announcement of the delineation of 125,000t of contained copper (within any Mineral Resource
category) upon the Projects
Each Performance Right will vest upon the earlier of:
Announcement of a Scoping Study that confirms the positive economics of the
12,400,000
Number
2,925,000
2,225,000
Projects; or
The volume weighted average price of the Shares equals or exceeds $0.26 per Share
for 20 consecutive trading days
2,225,000
Each Performance Right will vest upon the earlier of:
Board approval to Proceed with a Project Definitive Feasibility Study; or
The volume weighted average price of the Shares equals or exceeds $0.30 per Share
for 20 consecutive trading days
Total expiring in May 2025
2,225,000
9,600,000
Cyprium Metals Limited
70
About Cyprium Metals and Schedule of Tenements
Cyprium Metals Limited (ASX: CYM) is an ASX listed company with projects in Australia. The Company has a highly
credentialed management team that is experienced in successfully developing sulphide heap leach copper projects
in challenging locations. The Company’s strategy is to acquire, develop and operate mineral resource projects in
Australia which are optimised by innovative processing solutions to produce copper metal on-site to maximise value.
The Company has projects in the Murchison region of Western Australia, that is host to a number of base metals
deposits with copper and gold mineralisation. The Cue and Nanadie Well Copper-Gold projects are included in an
ongoing scoping study, to determine the parameters required to develop a copper project in the region, which
provides direction for resource expansion work.
Cue Copper-Gold Project
Cyprium has a joint venture with Musgrave Minerals Limited (ASX: MGV) at the Cue Copper-Gold Project, which is
located ~20km to the east of Cue, in the Murchison region of Western Australia. Cyprium has an 80% attributable
joint venture interest in the project’s copper, gold and silver mineralisation however MGV has a 100% interest in
primary gold deposits that are not associated with a copper-gold deposit.
Cue
Project
Copper-Gold
Resource
The
(https://cypriummetals.com/hollandaire-copper-gold-mineral-resource-estimate/), which
is open at depth.
Metallurgical test-work has been undertaken to determine the optimal copper extraction methodology, which
resulted in rapid leaching times (refer to 9 March 2020 CYM announcement, “Copper Metal Plated”,
https://cypriummetals.com/copper-metal-plated/).
Copper-Gold Mineral
the Hollandaire
includes
Hollandaire 2012 JORC Mineral Resource Estimate (values are rounded)
Notes:
Differences in sum totals of tonnages and grades may occur due to rounding
Nominal cut-off at 0.3% Cu
Cyprium has an 80% attributable interest in the copper, gold and silver
Nanadie Well Copper-Gold Project
The Nanadie Well Project is located ~650km north east of Perth and ~75 km south east of Meekatharra in the
Murchison District of Western Australia, within mining lease M51/1040.
Nanadie Wells’ basement geology consists of Meeline Suite layered igneous intrusive rocks and amphibolites which
are part of the GSWA mapped Murchison Supergroup. Details of the Nanadie Well Copper-Gold Project are available
in the announcement made on the Company’s ASX platform (ASX: CYM) on 14 July 2020, (“Nanadie Well Copper
Project Acquisition”, https://cypriummetals.com/nanadie-well-copper-project-acquisition/).
Tenement Information
Tenement
AUSTRALIA
Cyprium has an 80% joint venture interest in the Cue Copper-Gold project’s copper, gold
and silver mineralisation however Musgrave Minerals Limited (ASX Code: MGV) has a
100% interest in primary gold deposits that are not associated with copper-gold deposits,
for the following tenements at the Cue Copper Project, WA:
M20/0225, M20/0245, M20/0277, M20/526, E20/0606, E20/0608, E20/0616, E20/0629,
E20/0630, E20/0659, E20/0698, E20/0700, E20/0836 and P20/2279
Cyprium has a 100% interest in the Nanadie Well Copper-Gold Project, WA, which
comprises the following tenements:
M51/887, E51/1040, E51/1986 and E51/1987
Location
Interest
Murchison
region, WA
80%
Murchison
region, WA
100%
Cyprium Metals Limited
71