Annual Report
31 December 2021
ABN 48 002 678 640
cypriummetals.com
arcexploration.com.au
CONTENTS
Corporate Directory
Chairman’s Letter
Overview and 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 (Managing Director)
Nicholas Rowley (Non-Executive Director)
Auditors
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
Company Secretary
Wayne Apted
Website
www.cypriummetals.com
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Registered Office & Principal Place of Business
Ground Floor
437 Roberts Road
Subiaco WA 6008
Telephone: +61 8 6374 1550
Share Registry
Automic
Level 5, 191 St Georges Terrace
Perth NSW 6000
Telephone: 1300 288 664 or +61 2 8072 1400
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 2021 Annual Report for Cyprium Metals Limited
(“CYM” or “the Company”).
Since the current Directors became involved with Cyprium in 2019, the focus has been to grow to a multi-asset,
mid-tier copper producing Company by advancing mid to late-stage Australian based copper projects, which
have the potential to be fast-tracked into production of copper metal on site.
There has been significant and rapid progress achieved over the course of the past year in the execution of our
strategy, including:
•
•
•
•
•
completion of the Company transforming Paterson Copper assets acquisition;
conducting extensive drilling programmes at Nifty, Maroochydore and Murchison Copper Projects;
increasing the Nifty mineral resource estimate to over 700,000 tonnes contained copper, which
excludes the copper contained within the existing heap leach pads and extension drilling;
finalising a detailed Nifty Re-start study to a standard suitable for project financing purposes, within a
year of Nifty’s acquisition;
recruitment of high-calibre mining professionals to enable the delivery of our plans in a timely manner
and to bolster our experienced management team.
Considerable progress has been made over the past year to return the iconic Nifty Copper Project to a profitable
operating mine. There has been over 30kms of drilling completed at Nifty for mineral resource infill and
extensions, metallurgical test-work, infrastructure sterilisation and waste characterisation.
An updated JORC 2012 mineral resource estimate was issued in November 2021 for Nifty of 732,000 tonnes
contained copper at an average grade of 1.6%. A further update of the Nifty mineral resource estimate will be
undertaken during the first half of 2022 which will include the results from our infill and extensional drilling
programmes that were completed during 2021.
Condition assessments have been completed on the existing infrastructure at Nifty which have resulted in a
decision to proceed with the refurbishment of the SX-EW plant rather than purchase a new plant, upgrade of
the communications infrastructure to 4G services and commence a mine site camp upgrade.
We have been particularly pleased with the results of our metallurgical test-work to refine our operating
parameters whilst optimising the use of reagents, which enables the steepening of recovery curves and
maximising the commercial extraction of copper from the retreatment of the existing heap leach pads.
Site surveys, baseline studies and water management plans have been completed so that the various
comprehensive regulatory approval submissions can be made in accordance with our projected timelines. Site
visits to demonstrate the current state of the facilities and Cyprium’s plans for the restart of the project have
been well received with government, traditional owners and investors.
Currently, the optimum open pit economic design for the Nifty Re-start Study is based entirely on the measured
and indicated categories of the updated Nifty mineral resource, with pit wall design incorporating the
geotechnical studies undertaken in 2021. The current pit envelope does not include any increases to the mineral
resource from the inferred conversion, infill or extensional drilling programmes completed during 2021. The final
extended open pit mine design and schedule will be incorporated into the model once the expanded mineral
resource is re-estimated during the first half of 2022. Incorporation of these drill results will in fact convert some
material which is currently included as waste in the pit envelope, into ore, consequently further enhancing the
already robust economics of the Nifty Re-Start Study.
During the year we have also strengthened our management team with the appointment of high-calibre
experienced mining professionals in preparation for the transition from Re-start Study to construction of the
Nifty Copper Project. We have been fortunate to make such quality appointments during a tight labour market,
which reinforces the quality of Cyprium’s portfolio of copper projects and the appeal of the Nifty Re-start to
experienced industry veterans.
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The focus for the upcoming year will be the completion of financing and development activities for the re-start
of the Nifty copper project to return it to an open pit, heap leach, SX-EW operation, producing LME Grade A
copper cathode as a finished metal product for sale to customers in Australia and Asia from the second half of
2023.
Over the next year we will also be conducting further metallurgical column test work on the sulphide
mineralisation of the Nifty orebody, with the objective of confirming our desire to treat the Nifty sulphide as
directly leachable, in preference to restarting the insitu 2.8mtpa copper concentrator, in either case, extending
the Nifty mine life to 20 years or more.
In conjunction with the Nifty development activities, updated mineral resource estimates will be provided for
the Maroochydore Copper-Cobalt and Murchison Copper-Gold Projects, which will then be used in scoping
studies for each project. Both of these advanced projects have shallow deposits that are still open, broad, with
long strike lengths of ~3km for Maroochydore and ~750m for Nanadie Well, both of which are complimented by
shallow sulphide mineralisation which could generate acid for the heap leaching of the extensive oxide
mineralised zones of the respective orebodies.
We are looking forward to another productive year ahead as we continue on our path toward establishing
Cyprium as a significant mid-tier copper producer with significant upside, including two advanced stage growth
projects to advance on the path of our next development project.
Gary Comb
Chairman
Cyprium Metals Limited
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Overview
Cyprium Metals Limited (ASX: CYM) (“Cyprium”) is a copper development company with a portfolio of advanced
stage exploration and development projects located in Western Australia. Cyprium’s current portfolio of assets
includes >1.2Mt of contained copper.
We conduct our activities with integrity, striving to balance the economic, environmental and social
considerations to create value for the mutual benefit of all stakeholders. Cyprium’s preferred processing
methodology, heap leach, reduces the environmental footprint of copper mines. The production of LME Grade A
copper cathode onsite eliminates the need for further downstream processing associated with copper
concentrate production and also benefits from reduced transportation costs due to lower shipping volumes.
Cyprium is focused on delivering an expedited development timeframe of its flagship Nifty Copper Project, with
first copper production expected in mid-2023. Cyprium’s project portfolio provides several advanced stage
opportunities that are also potential production assets, which will enable Cyprium to continue growing into a
multi-asset, mid-tier copper producer.
Cyprium’s current portfolio includes:
• Nifty Copper Project (100%), an advanced re-start heap-leach project;
• Maroochydore Copper Project (100%), one of Australia’s largest undeveloped copper deposits;
• Paterson Exploration Project (100%, diluting to 30%), a highly prospective tenement package on which IGO
Ltd (ASX: IGO) is spending A$32 million over 6.5 years to earn-in up to 70%;
• Murchison Copper Project, an early-stage development opportunity that collectively refers to the:
o Cue Copper Project (80%), containing a smaller scale, high grade copper resource; and
o Nanadie Well Copper Project (100%), containing a larger scale, lower grade copper gold deposit.
Strategy
Core Purpose
To grow shareholder value by acquiring, advancing and developing a portfolio of projects to produce copper
efficiently and sustainably, focusing on copper projects in Australia to minimise sovereign risk.
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. We minimise
bureaucracy and corporate overheads by facilitating responsibility at a project level, where people are best placed
to make decisions in a timely manner about the operation, reinforcing accountability across the organisation.
What we do
We use heap leach processing methods to produce copper metal cathode onsite. Cyprium is pursuing
opportunities that are capable of operating in the lower half of the cost curve with a mine life of >10 years.
How we do business
We conduct our activities with integrity, balancing 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.
Cyprium Metals Limited
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REVIEW OF OPERATIONS
The Company has projects in the Murchison and Paterson regions of Western Australia, that are host to a number
of base metals deposits with copper and gold mineralisation.
Figure 1 | Location of Murchison and Paterson Projects
Paterson Copper Projects
The acquisition of the Paterson Copper Projects from Metals X Limited was completed on 30 March 2021. This
portfolio of copper projects comprises the Nifty Copper Project, Maroochydore Copper-Cobalt Project and
Paterson Exploration Project.
The Nifty Copper Project (“Nifty”) is located on the western edge of the Great Sandy Desert in the north-eastern
Pilbara region of Western Australia, approximately 330 km southeast of Port Hedland. Nifty has a JORC 2012
compliant Mineral Resources of 732,000 tonnes contained copper (refer to CYM ASX announcement dated 17
November 2021 “Updated Nifty Copper Mineral Resource Estimate”), with substantial infrastructure including:
2.8 Mtpa sulphide concentrator (in care and maintenance since November 2019)
25 ktpa SX-EW plant (in care and maintenance since January 2009)
21 MW gas turbine power station
Water supply and reticulation systems including bore field operation
Full heavy vehicle workshops and accommodation village
Fully sealed all weather airstrip
Cyprium has completed a Nifty Restart Study for a heap leach solvent extraction electrowinning (“SX-EW”)
operation to retreat the existing heap leach pads and to process open pit oxide and transitional material.
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The Maroochydore deposit is located ~85km southeast of Nifty and includes a shallow 2012 JORC Mineral
Resources of 486,000 tonnes of contained copper (refer to MLX ASX announcements: 10 March 2020, “Nifty
Copper Mine Resource Update” and 18 August 2016, “Annual Update of Mineral Resources and Ore Reserves”).
The resource is in the top thirty copper resources by copper tonnes in Australia. Cyprium has conducted drilling
programmes to provide sample material for metallurgical test work programmes to be undertaken. 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.
An exploration earn-in joint venture has been entered into 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 of $11 million over the first 3.5
years. Upon earning a 70% interest, the Joint Venture will form and IGO will free-carry Paterson Copper, a wholly
owned subsidiary, to the completion of a pre-feasibility Study on a new mineral discovery.
Nifty Copper Project
Cyprium is focussed on rapidly advancing Nifty towards production and has completed the following works at the
Nifty Copper Project:
Mineral resource infill drilling review to identify priority targets
16,000m resource expansion drill program on western end of the pit
3,000m resource expansion drill program on eastern end of the open pit
Update the Nifty Copper Project Mineral Resource Estimate
Diamond drilling program to obtain sample material for column leach test work
Trenching of heap leach pad for metallurgical test-work bulk samples
Sonic drilling of heap leach pads to gain core samples
Column test with bulk samples to optimise the metallurgical parameters
Reverse circulation sterilisation drilling to confirm location of key site infrastructure
Engineering reports and cost estimates for the SX-EW plant
Site surveys, baseline studies and Regulatory Approvals
Design and scheduling of the open pit
Site communications and camp upgrades
Appointment of key management and technical personnel for site
Resource Definition Drilling
A reverse circulation (“RC”) drill rigs were mobilised to site immediately upon Cyprium taking control of the site.
The drill rigs focused on completing several time critical activities to enable the project to move forward to
construction and production.
The Nifty mineral resource remains open both up and down plunge of the host syncline. Technical studies and in-
fill drilling of the existing mineralised envelope were completed during 2021. The resource drilling at Nifty west
and east has been designed primarily to confirm the mineralisation and to improve the confidence, hence
classification of inferred resource, plus extension of mineralisation.
There is considerable potential to increase the mineral resource, including upgrading of the historical oxide
mineralisation, based on a detailed review of the existing geological data and the extensional reverse circulation
(“RC”) and diamond drilling programmes that have been undertaken.
Eastern Drilling
A 3,000m RC drilling programme was completed, targeting areas of potential oxide/transitional mineralisation
extending to the east of the Nifty open pit (refer to Figure 2).
The programme was designed to increase the density of drilling over the sparsely tested eastern extension of the
existing resource where limited previous drilling had intersected encouraging widths of oxide and transitional
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zone copper mineralisation. This area is being drilled to an appropriate density to add to the base load resource
for Cyprium’s Heap Leach Restart.
Holes 21NRSP001 (21m at 0.45% Cu, including 5m at 1.28% Cu), 21NRSP016 (10m at 0.37% Cu) and 21NRSP015
(3m at 0.62% Cu, including 1m at 1.22% Cu and 5m at 0.39% Cu) confirmed the eastern extensions to the Nifty
mine host carbonate-shale sequence. To the immediate south, a sub-parallel zone of interpreted supergene
copper mineralisation was intersected in a previously untested zone that will be followed up in the next phase of
drilling.
Western Drilling
Figure 2 | Drilling Locations and Survey Area
A 16,000 metre RC drilling campaign was undertaken to test the potential up-plunge extensions of the oxide and
transitional mineralisation at the western extremity of the Nifty open pit. Historically, mineralisation in this region
has been of lower confidence, being in the inferred resource category, due to the sparse drilling density.
Wide intervals of low to medium-grade copper sulphide mineralisation have been consistently encountered from
the drilling below the western end of the open pit. This mineralisation is interpreted associated with the up-plunge
extent of the Nifty Syncline keel zone, which has been lightly drilled tested from both surface and underground.
The intersections provide further confirmation of the presence of significant copper mineralisation associated
with the lightly tested Nifty Syncline keel zone up-plunge of the former underground mine.
Significant results included:
• 31m @ 1.61% Cu from 234m downhole in 21NRWP064
• 57m @ 1.01% Cu from 224m downhole in 21NRWP047
• 87m @ 0.92% Cu from 193m downhole in 21NRWP043
• 92m @ 0.55% Cu from 171m downhole in 21NRWP016
• 90m @ 0.45% Cu from 156m downhole in 21NRWP015
• 86m @ 0.57% Cu from 170m downhole in 21NRWP018
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• 97m @ 0.47% Cu from 145m downhole in 20NRWP020
• 94m @ 0.58% Cu from 168m downhole in 21NRWP021
• 100m @ 0.41% Cu from 190m downhole in 21NRWP042
• 115m @ 0.51% from 156m downhole in 21NRWP044
Section 1 / Nifty West drill hole section 101,640E
TARGET
AREA
Figure 3 / Nifty West target area
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Mineral Resource Estimate
The Company released an updated Mineral Resource estimate for the Nifty copper deposit during 2021 of 45.9Mt
@ 1.6% copper for a total contained copper inventory of approximately 732,000t (refer to Table 1 and CYM ASX
announcement dated 17 November 2021 “Updated Nifty Copper Mineral Resource Estimate”).
Ore
Source
Cut-
Off
%Cu
Measured
Indicated
Inferred
Total
Ore Grade Metal
t Cu
Mt
%Cu
Ore Grade Metal
t Cu
Mt
%Cu
Ore Grade Metal Ore Grade Metal
t Cu
Mt
%Cu
%Cu
t Cu
Mt
Oxide
0.4
1.1
1.2
12,300
0.3
1.1
3,300
0.2
0.9
1,700
1.6
1.1
17,300
Lower
Saprolite
0.4
1.3
0.9
12,200
0.4
0.8
3,000
0.2
0.8
1,200
1.8
0.9
16,300
Transition
0.4
0.2
0.7
1,500
0.2
0.7
1,000
0.2
0.7
1,200
0.5
0.7
3,700
Chalcocite
0.4
4.3
1.2
53,800
2.3
1.2
28,400
1.4
1.2
16,100
8.0
1.2
98,300
Total
Oxide
0.4
7.0
1.2
79,700
3.1
1.1
35,600
1.9
1.1
20,100 11.9
1.1
135,500
Sulphide
0.75
19.6
1.8
351,200
9.2
1.8
161,900
5.1
1.6
76,900 33.9
1.8
596,700
TOTAL
26.5
1.6
431,000 12.3
1.6
197,500
7.0
1.5
97,100 45.9
1.6
732,200
Table 1: November 2021 Mineral Resource Estimate – Nifty Copper Deposit
The Nifty copper deposit is a structurally and lithological controlled stratabound body within the Nifty Syncline,
which strikes southeast-northwest and plunges at about 6-12 degrees to the southeast.
The massive, disseminated and vein-style copper mineralisation occurs as a structurally controlled, chalcopyrite-
quartz-dolomite replacement of carbonaceous and dolomitic shale within the folded sequence. The copper
sulphide mineralisation is largely confined to the keel of the syncline and the northern limb.
The Nifty Heap Leach Restart Study is focussed on the development of the first phase of the project that involves
a return to heap leaching and SX-EW processing plant to produce refined copper cathode metal plate at the mine
site. The significant inventory of remnant heap leachable mineralisation confirmed by this Mineral Resource
Estimate (11.9Mt @ 1.1% copper for 135,500t of contained copper metal).
The resource reporting cut-off grade is 0.75% Cu for the sulphide resource and 0.4% Cu for the oxide resource and
is in keeping with past resource estimates for direct comparison purposes.
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Section 2 / Schematic cross-section through the Nifty Syncline
Metallurgical Test-work
Heap Leach Pad Drilling
A sonic drill rig was mobilised to site to obtain specialised core samples for metallurgical test-work. The rig was
very effective in producing complete core samples from the existing heap leach pads, for column leach
metallurgical test-work.
Image 1 | Metallurgical test-work sample from Sonic Rig
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Diamond Drilling
Diamond drilling was undertaken to obtain representative samples of the in-situ copper mineralisation around
the Nifty open pit for column leach testwork. Whilst over 200,000 tonnes of copper metal plate has been produced
at Nifty historically and the metallurgy is well understood, it has been over a decade since new methods have
been tested, particularly the unique methodology utilised by Cyprium on its Hollandaire resource.
The first metallurgical diamond hole 21NDMT001 was drilled into the existing resource at the eastern end of the
Nifty open pit (refer to Figure 2). The hole intersected native copper, chalcocite and covellite at downhole depths
of 129.8 to 133.3m, 141.3 to 152.3m (Images 2 and 3) and 154.6 to 155.4m. A further two metallurgical holes
were completed in the same area.
Image 2 | Hole 21NDMT001: 141.4m to 141.5m showing native copper and chalcocite
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Image 3 | Hole 21NDMT001: 150.3m to 150.5m showing
native copper, covellite, chalcopyrite and chalcocite
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Metallurgical Review
Image 4 | Heap Leach Pads at the Nifty Copper Project
Multiple work streams are being undertaken to optimise the metallurgical retreat process, which utilises a
significant amount of historical data and applies modern techniques to a proven process.
The bulk samples taken from the trenching of the existing heap leach pads are undergoing column testwork
leaching analysis in the laboratory.
The preliminary leaching results have been excellent and in line with Cyprium’s internal expectations.
Optimisation has commenced, using the bulk samples taken from the trenching using Cyprium’s Intellectual
Property, which have been factored into testwork using a column that is 6 metres high (refer to Image 7), to align
with operating parameters. Further optimisation metallurgical testwork is being undertaken on the specialised
core samples obtained from a sonic drill rig programme across the existing heap leach pads. Further column test
work is being conducted during the first half of in 2022 to continue optimisation of the operating parameters and
reagent usage, along with follow up tests undertaken on core and sonic drill samples.
A mass balance and copper recovery cathode software model has commenced development for the project based
on the metallurgical parameters and then a metallurgical accounting system for the project will be developed so
that it is ready upon the commencement of plating copper metal at Nifty.
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Image 5 | Trenching of the heap leach at the Nifty Copper Project
Image 6 / Native Copper sample taken from Heap 3
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Image 7 | Nifty 6m high metallurgical test work column
Other Heap Leach Restart Activities
Sterilisation Drilling
Sterilisation drilling was undertaken on the western end of the current heap leach pad which potentially lay over
a portion of the Nifty mineralisation. All drill holes intersected the footwall sequences of the Nifty rock formations,
which effectively sterilises the area. This is positive for the project as it allows the more detailed planning and
investigation to be conducted on the location designated for infrastructure.
SX-EW Processing Plant
A detailed SX-EW review determined that the refurbishment of the existing plant is the preferred course of action.
The cost of building a new SX-EW plant is approximately double that of refurbishing and requires a considerably
longer timeframe to construct without delivering significant additional operating efficiencies. The refurbishment
of the SX-EW plant will require replacement of key components within the EW plant with minimal relocation of
the existing site infrastructure.
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The engineering design of the SX-EW plant and heap leach pads continued during the quarter has been completed.
The new heap leach pads construction and design detail was required for the Works Approval submission so that
construction activities can commence. Concurrent with the design process, tenders are being issued for the
purchase and supply of long lead items.
Refurbishment of the oxide crushing circuit and SX-EW plant has begun, with the plant is being stripped down and
assessed for refurbishment on an item-by-item basis. The items to be refurbished are then despatched to the
required refurbishment location within Australia for the work to be undertaken.
Site surveys, baseline studies and Regulatory Approvals
Several flora and fauna surveys (part of the approval and permitting process) have been conducted. Water
management planning has been completed, including allowance for water extraction from the underground voids
below the open pit.
Government Approvals are required in the new areas of the project and as a State Agreement tenement, there is
a Ministerial approval required to amend the project size and life. There is also a requirement for clearing permits
for the new clearing required for the new heap leach pads and an amendment to a current approval for the
extension to the waste dump. There is an amended Mining Proposal required for the restart of the pit, pads and
SX-EW which includes submission of a Project Management Plan and a Mine Closure Plan. There is an amended
Works Approval required for the restart of the SX-EW and the new heap leach pads and an amendment to the
Water Licence for the change in water extraction method from underground. There are also a number of other
sundry permits required around the restart of the mining operation, which require reactivation or renewal.
The process of obtaining these approvals was advanced during 2021, including conducting the initial meetings
and workshops with the document compilation and submissions being done in the first half of 2022.
Site visits have been conducted with government, traditional owners and investors to showcase in a broad sense
the current state of the facilities and the plans for the restart of the project. All visits have been well received with
follow up meetings being undertaken.
Open Pit
The design and scheduling of the open pit was undertaken, based on the updated Nifty Mineral Resource. The
current pit envelope does not include any increase in mineral resources from the results of the drilling
programmes mentioned above. These designs are sufficient for use in the Restart Study and for the Finance
process and will be revised again once the mineral resource has been updated with the assay results from the
with Nifty west and southeast drilling programmes, during the first half of 2022.
Site Infrastructure
The communications
improvements to the speed and capacity of communication services to site.
infrastructure has been upgraded,
including 4G services, resulting
in significant
Refurbishment of the accommodation camp has commenced, with the eastern side of the camp undergoing a
refurbishment process first. The refurbishment will bring the accommodation standard to be aligned with
Cyprium’s attraction and retention requirements for site personnel. Once the eastern refurbishment is complete
the western refurbishment will commence. Refurbishment of the dry mess was also undertaken during the year.
Management Appointments
The management and technical teams have been strengthened over the past year, as Cyprium progresses towards
becoming a copper producer. Personnel have been recruited to ensure a smooth transition from the Restart Study
to construction and ultimately to production at the Nifty Copper Project. The company has been fortunate to have
secured high quality appointments during a very tight labour market. This reinforces the quality of Cyprium’s
portfolio of copper projects and the appeal of the Nifty Restart to experienced industry veterans.
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Maroochydore Copper – Cobalt Project
The Maroochydore Copper Project hosts a substantial shallow oxide and sulphide Mineral Resource of over
480,000 tonnes of copper (refer to MLX ASX announcements: 10 March 2020, “Nifty Copper Mine Resource
Update” and 18 August 2016, “Annual Update of Mineral Resources and Ore Reserves”). The Company’s initial 6
diamond drillhole programme for 1,226m, obtained oxide, supergene and sulphide core samples for metallurgical
and waste characterisation testing. The sulphide mineralisation remains open and has been lightly drilled to date.
The 50 RC drillhole programme included 46 resource definition and extension holes (5,990m) and 4 water bores
(228m) for a total of 6,218 metres as detailed in Figure 5 and Images 8 to 14. The RC drilling programme targeted
oxide, supergene, and transitional mineralisation at the project with several holes extending into fresh basement
rock. Sulphide mineralisation was intersected from 108m down hole in 21MDRC018 (refer to Image 11).
Significant results included:
• 11m @ 2.27% Cu & 429 ppm Co from 65m in 21MDRC015, including:
o 8m @ 2.95% Cu Ag & 555 ppm Co from 65m, and;
• 20m @ 0.72% Cu & 38 ppm Co from 78m, including:
o 5m @ 1.99% Cu & 30 ppm Co from 82m
• 20m @ 0.86% Cu & 609 ppm Co from 41m in 21MDRC016, including:
o 9m @ 1.25% Cu & 775 ppm Co from 44m
• 5m @ 1.68% Cu & 678 ppm Co from 34m in 21MDRC017
• 17m @ 0.84% Cu & 462 ppm Co from 56m in 21MDRC011, including:
o 11m @ 1.13% Cu & 570 ppm Co from 58m
• 13m @ 0.85% Cu & 429 ppm Co from 50m in 21MDRC012, including:
o 9m @ 1.10 % Cu & 303 ppm Co from 51m
• 41m @ 0.45% Cu & 263 ppm Co from 79m in 21MDRC018, including:
o 9m @ 0.95% Cu & 284 ppm Co from 108m
• 23m @ 0.58% Cu & 261 ppm Co from 25m in 21MDWB02, including:
o 14m @ 0.81% Cu & 366 ppm Co from 34m
The oxide mineralisation currently extends over a strike length of 3,000m, has a width of up to 500m and
thicknesses up to 100m, as modelled in the existing JORC 2012 mineral resource estimate. The resource shapes
are outlined in figure 4 and sections 3 and 4.
Once all the RC assay results are received, they will be included in a revised mineral resource estimate of the
Maroochydore copper – cobalt deposit.
Image 8 / RC drill chips: 21MDRC016 41-61m
(20m @ 0.86% Cu & 609ppm Co malachite, cuprite & chalcocite mineralisation)
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Image 9 / RC drill chips: 21MDRC012, 50-63m
(13m @ 0.85% Cu & 429ppm Co, cuprite, chalcocite & covellite mineralisation)
Image 10 / RC drill chips: 21MDRC015 65-76m
(11m @ 2.27% Cu & 429ppm Co & 78-98m 20m @ 1.99% Cu & 30ppm Co, chalcocite & covellite mineralisation)
Image 11 / RC drill chips: 21MDRC018 108-117m
(9m @ 0.95% Cu & 284ppm Co. pyrite & chalcopyrite mineralisation)
Image 12 | Malachite and Chrysocolla 46-51m 21MDRC016 (9m @ 1.25% Cu & 775 ppm Co from 44m)
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Image 13 | Malachite and chrysocolla mineralisation 87.2m 21MDMT01
Figure 4 / Maroochydore Copper – Cobalt Project location plan
Cyprium Metals Limited
19
Figure 5 / Maroochydore Copper – Cobalt Project RC drillhole collar location plan
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20
Section 3 / 49450mN mine grid Maroochydore Project drilling and interpreted mineralisation outlines1
Section 4 / 50210 mN mine grid Maroochydore Copper Project drilling and interpreted mineralisation outlines1
1 Note sections are drawn looking towards the northwest
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21
Image 14 | Native copper in carbonaceous shale 21MDMT03, 112.5m and 113.2m
Cyprium Metals Limited
22
Murchison Copper-Gold Projects
Cyprium has an 80% attributable interest in the Cue Copper-Gold Project, which is located ~20km to the east of
Cue in Western Australia. The Cue Copper-Gold Project includes the Hollandaire Copper-Gold 2012 JORC
compliant Mineral Resources of 51,500 tonnes contained copper, which is open at depth.
The Nanadie Well Project is located ~650km northeast of Perth and ~75 km southeast of Meekatharra in the
Murchison District of Western Australia, within mining lease M51/887.
Figure 6 | Location of the Murchison Copper Project and the Nanadie Well prospect
Nanadie Well Copper-Gold Project
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 RC drillholes over a strike length of 750 metres and between 100 to 200 metres wide, to a
maximum depth of 234 metres and an average depth of 100 metres, with numerous drill holes finishing in
mineralisation. Higher grade mineralisation occurs as fractionated layers in the host metagabbros and
metanorites.
Extensive near-surface oxide and sulphide mineralisation has been identified during drilling programmes, which
is open along strike to the north and south and across strike to the west. The mineralisation does not outcrop and
is covered by 1 to 25 metres of transported material. Preliminary investigations of the Nanadie Well deposit data
indicates potential for oxide and sulphide mineralisation over the currently identified strike of 750 metres.
Nanadie Well Sulphide Diamond Drilling Programme
The Company’s 1,328 metre Nanadie Well Phase 1 diamond drilling programme was completed 2021 and was
primarily designed to test the sulphide mineralisation below 50 metres depth at the deposit. The Phase 1 diamond
drilling programme has consistently intersected sulphide mineralisation at shallow depths ranging from 45 metres
to 341 metres downhole.
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23
There is an extensive shallow sulphide copper-gold intersection continuing immediately below the oxide material
derived from the layered mafic intrusive unit. Drillhole NWD2001 also includes a crackle breccia zone with high
grade silver sulphide mineralisation which had not been previously encountered at the project and requires
further analysis.
Significant results included:
• 144m @ 0.7% Cu & 0.21g/t Au from 25.0m in NWD2004, including:
o 5.9m @ 3.6% Cu & 3.4g/t Au from 82.1m
o 3.2m @ 3.9% Cu & 0.4g/t Au from 94.8m
o 25.0m @ 0.8% Cu & 0.2g/t Au from 139.0m
o 3.0m @ 2.2% Cu & 0.2g/t Au from 161.0m
o 4.0m @ 2.2% Cu & 0.2g/t Au from 181.0m
• 232m @ 0.4% Cu & 0.1g/t Au from 109.0m in NWD2001, including:
o 10.0m at 0.7% Cu & 0.1g/t Au from 109.0m
o 1.2m at 3.1% Cu & 0.2g/t Au from 131.0m
o 4.9m @ 1.2% Cu & 0.2g/t Au from 138.0m
o 0.7m at 4.8% Cu & 0.2g/t Au from 188.7m
o 12.3m @ 0.5% Cu & 0.1g/t Au from 190.1m
o 1.4m @ 1.3% Cu & 0.3g/t Au from 228.0m
o 9.9m @ 0.5% Cu & 0.1g/t Au from 232.2m
o 18.0m @ 0.4% & 0.1g/t Au from 256.0m
o 6.0m @ 1.2% Cu & 0.2g/t Au from 276.0m
o 9.0m @ 0.4% Cu & 392g/t Ag from 303.0m
• 180m @ 0.6% Cu & 0.2 Au g/t from 10.0m in NWD2003, including:
o 1.0m @ 2.2% Cu & 0.8 Au g/t from 30.0m
o 0.7m @ 3.1% Cu & 0.3 Au g/t from 56.6m
o 3.0m @ 1.7% Cu & 0.7 Au g/t from 87.0m
o 5.0m @ 3.0% Cu & 0.3 Au g/t from 95.0m
o 0.7m at 6.6% Cu & 2.8 Au g/t from 109.3m
o 0.8m @ 2.7% Cu & 0.9 Au g/t from 115.2m
o 0.7m @ 2.5% Cu & 0.3 Au g/t from 123.2m
o 24.9m @ 1.4% Cu & 0.3 Au g/t from 150.1m
o 4.9m @ 1.2% Cu and 1.1 Au g/t from 177.2m
• Hole NWD2002 – copper mineralisation extends over 168m downhole, including:
o 29m @ 0.6% Cu and 0.2 g/t Au from 49m
o 10m @ 1.9% Cu and 0.2 g/t Au from 106m
o 25m @ 0.6% Cu and 0.1 g/t Au from 146m
o 12m @ 0.6% Cu and 0.2 g/t Au from 187m
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• Hole NWD2101 - copper mineralisation extends over 274m downhole, including:
o 5m @ 0.7% Cu and 0.1 g/t Au from 45m
o 5m @ 1.9% Cu and 0.5 g/t Au from 75m
o 4m @ 0.9% Cu and 0.2 g/t Au from 83m
o 2m @ 1.0% Cu and 0.2 g/t Au from 91m
o 35m @ 0.5% Cu and 0.1 g/t Au from 108m
o 40m @ 0.4% Cu and 0.1 g/t Au from 157m
o 56m @ 0.9% Cu and 0.2 g/t Au from 202m
o 11m @ 0.9% Cu and 0.2 g/t Au from 262m
o 14m @ 0.7% Cu and 0.2 g/t Au from 290m
Image 15 | NWD2003: 155.0m to 156.0m; 1.0m @ 5.11% Cu, 0.40 Au g/t and 8.50 g/t Ag. 156.7m to 157.4m; 1.0m @ 11.0% Cu, 0.82
Au g/t and 18.5 g/t Ag
Image 16 | NWD2003: 109.2m to 110.05m; 0.7m @ 6.58% Cu, 2.83 Au g/t and 16.5 g/t Ag
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Image 17 | NWD2001: 303.0m to 312.0m; 9.0m @ 392 Ag g/t crackle breccia silver sulphide mineralisation, including 2.0m @ 1,470
Ag g/t from 306.0m.
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Image 18 | NWD2004: 82.1m to 88.0m; 5.9m @ 3.6% Cu chalcopyrite mineralisation, including 1.0m @ 10.9% Cu from 86.0m
Image 19 | NWD2004: 94.8m to 98.0m; 3.2m @ 3.9% Cu chalcopyrite mineralisation including 0.7m @ 11.6% Cu from 94.8m
Cyprium Metals Limited
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Figure 7 / Nanadie Well Phase 1 drill hole collar locations and diamond drill hole intercept highlights
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Significant Events after the Reporting Date
On 11 March 2022, the Company announced the results of the Restart Study for the Nifty Copper Project. The
study demonstrated a robust heap leach solvent extraction-electrowinning (SX-EW) operation in the initial stage
of the project. The Restart is focused around the first phase of heap leach retreat and oxide open pit, and it is
envisaged that the life will extend to the sulphide stage of the open pit with a considerably larger resource
available. The sulphide study has already commenced with design optimisation and metallurgical testwork
currently being undertaken.
A 2012 JORC compliant Mineral Resources estimate of 732,200 tonnes contained copper within an open pit 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 (in care and maintenance since January 2009).
21 MW gas turbine power station and gas pipeline.
Water supply and reticulation systems including multiple bore fields.
Mine village with a capacity of approximately 400 persons.
Sealed all weather airstrip.
Upgraded 4G communications infrastructure.
Restart of the heap leach SX-EW facility at the historic Nifty Copper Operation will involve the following:
•
•
•
•
•
•
Recommencement of open pit mining.
Refurbishment of existing heap leach agglomeration, stacking/materials equipment, and irrigation
systems.
Refurbishment of the existing leach pads to place new oxide material on for leaching.
Construction of additional leach pad capacity for retreatment of the existing heap leach pad material.
Refurbishment of existing SX-EW facilities.
Reinstatement of supporting reagent/utility systems.
The Project Development Schedule is summarised as follows:
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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 2021.
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 (Managing 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
Managing 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 a Non-Executive Director of Titan Minerals Limited.
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
Nicholas Rowley
Ironbark Zinc Limited
Boab Metals Limited
Titan Minerals Limited
Director from January 2012 to November 2019
Director from March 2020
Director since August 2016
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30
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
6,094,940
6,266,370
2,585,000
RESULTS OF OPERATIONS
The Group’s net loss after taxation attributable to the members of Cyprium Metals Limited for the year
ended 31 December 2021 was $26.7 million (2020: loss of $1.0 million).
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, evaluating, and developing 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 March 2021, CYM issued 450 million fully paid ordinary shares in the Company to institutional and
sophisticated investors to raise $90 million.
During 2021, the Company issued 16.25 million performance rights to Directors and 35.25 million
performance rights to employees and contractors.
In March 2021, Cyprium acquired 100% of the shares on issue held by Metals X Limited in Paterson Copper
Pty Ltd for $24 million in cash, Convertible Notes with a face value of $36 million and 40.6 million of unlisted
share options, of which 20.3 million share options expired on 30 March 2022.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 11 March 2022, the Company announced the results of the Restart Study for the Nifty Copper Project
(refer to the Review of Operations section for further details).
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Group will continue identifying, evaluating and developing 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.
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31
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.
OPTIONS
The Company issued 40.6 million options as part of the consideration payable for the acquisition of the
Paterson Copper Assets during 2021 (refer to note 3 of the Financial Statements), of which 20.3 million options
lapsed on 30 March 2022.
As at the date of this report, there were 26.3 million options on issue, expiring in December 2022 and March
2023, as follows:
• 6.0 million options exercisable at $0.30 per option before 11 December 2022
• 20.3 million options exercisable at $0.3551 per option before 30 March 2023
PERFORMANCE RIGHTS
The Company issued 16.25 million performance rights to Directors and 35.25 million performance rights to
employees during 2021.
As at the date of this report there were 57.0 million performance rights on issue, expiring in June and July
2024, and May and June 2026. The details of the performance conditions relating to the performance rights
are as follows:
Performance Condition
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
Number
2,750,000
Share for 5 consecutive trading days
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
2,750,000
Share for 5 consecutive trading days
Total expiring in June and July 2024
5,500,000
Cyprium Metals Limited
32
Performance Condition
Commence mining of the Nifty Copper open pit
Commissioning of the SX-EW processing plant at Nifty; or
a minimum 40 cent 20-day VWAP
Expand Cyprium’s copper equivalent resource inventory to 1.5mt contained copper
metal; or
a minimum 45 cent 20-day VWAP
Copper production exceeding 25,000 tonnes of contained copper metal after
commencement of mining of the Nifty Copper Project; or
a minimum 47.5 cent 20-day VWAP
Cyprium’s quarterly production of at least 50,000 tonnes per annum copper equivalent;
or
a minimum 50 cent 20-day VWAP
Total expiring in May and June 2026
DIRECTORS’ MEETINGS
Number
10,300,000
10,300,000
10,300,000
10,300,000
10,300,000
51,500,000
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
7
7
7
Attended
7
7
7
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.
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.
Cyprium Metals Limited
33
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 22 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 2021.
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.
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.
Cyprium Metals Limited
34
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.
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 - $70,000 per
annum during 2021. 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.
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;
Cyprium Metals Limited
35
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 - 2021 Annual General Meeting
The Company received approximately 99.99% of “yes” votes on its remuneration report for the year ended
31 December 2020.
Loans to Directors and Executives
There were no loans to Directors and KMP during the financial year ended 31 December 2021.
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 2021 are as follows:
2021
Directors
Gary Comb
Barry Cahill
Nicholas Rowley
Salary or
Consulting
Fees
$
Share-based
Payments 1
$
Other
Benefits 2
$
Total
$
Performance
related
%
67,500
431,607
450,319 1,066,196
116,021
558,319 1,613,824
40,500
6,587
505,694
43,905 1,560,420
156,521
50,492 2,222,635
-
85%
68%
74%
73%
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 1
$
Other
Benefits 2
$
Total
$
Performance
related
%
60,000
310,820
36,000
406,820
95,509
146,416
73,802
315,727
5,700
29,528
-
35,228
161,209
486,764
109,802
757,775
59%
30%
67%
42%
1These values relate to non-cash performance rights issued during 2019, 2020 and 2021 years and have
been derived using valuation techniques and inputs as set out in Note 17. The 2021 charge includes
adjustments from previous years due to the acceleration of actual and forecast vesting conditions.
2 Other benefit payments related to statutory superannuation.
Cyprium Metals Limited
36
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
2,394,940
2,466,370
1,300,000
Granted during
the year as
compensation
On vesting of
performance
rights
Other changes
during the year
Balance at the
end of the year
-
-
-
1,200,000
3,800,000
900,000
2,500,000
-
385,000
6,094,940
6,266,370
2,585,000
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.
Issued during 2021 and outstanding as at 31 December 2021:
Vesting Conditions
2021
Barry Cahill
Gary Comb
Total
1
2,250,000
1,000,000
3,250,000
2
2,250,000
1,000,000
3,250,000
3
2,250,000
1,000,000
3,250,000
4
2,250,000
1,000,000
3,250,000
5
2,250,000
1,000,000
3,250,000
Total
11,250,000
5,000,000
16,250,000
Vesting conditions
1. Commence mining of the Nifty Copper open-pit
2. Commissioning of the SX-EW processing plant at Nifty; or a minimum 40 cent 20-day VWAP
3. Expand Cyprium’s copper equivalent resource inventory to 1.5mt contained copper metal; or a minimum
45 cent 20-day VWAP
4. Copper production exceeding 25,000 tonnes of contained copper metal after commencement of mining
of the Nifty Copper Project; or a minimum 47.5 cent 20-day VWAP
5. Cyprium’s quarterly production of at least 50,000 tonnes per annum copper equivalent; or a minimum
50 cent 20-day VWAP
Outstanding as at 31 December 2021:
2019
Nicholas Rowley
Barry Cahill
Gary Comb
Total
1
-
-
-
-
Vesting Conditions
2
-
-
-
-
3
400,000
600,000
500,000
1,500,000
4
400,000
600,000
500,000
1,500,000
Total
800,000
1,200,000
1,000,000
3,000,000
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 Feasibility Study or the average share price of $0.40 per share for 5
consecutive days
Cyprium Metals Limited
37
Options Affecting Remuneration
There were no options affecting remuneration in the current reporting year.
Other transactions with key management personnel
There were no other transactions with key management personnel during the year ended 31 December 2021
(2020: $nil).
Additional Information
The factors that are considered to affect total shareholders’ return are summarised below:
2021
2020
2019
2018
2017
Loss attributable to
owners of the company
($’000)
Dividends paid ($)
Share price at financial
year end ($)
(26,672)
(997)
(2,354)
(5,892)
(894)
-
-
-
-
-
0.165
0.205 0.245
0.185
0.265
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 exploration and development projects so 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
This report is signed accordance with a resolution of the Board of Directors made pursuant to section 306(3)
of the Corporations Act 2001.
ROUNDING
The amounts contained in this report have been rounded to the nearest ‘000 (unless otherwise stated) under
the option available to the Company under ASIC Corporations Instrument 2016/91. The company is an entity
to which the legislative instrument applies.
Gary Comb
Chairman, Non-executive Director
Perth, WA
31 March 2022
Cyprium Metals Limited
38
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2021
Note
Continuing Operations
Interest income
Other income
Employee expenses
Management and administrative expenses
Travel and accommodation expenses
Power and gas expenses
Corporate advisory and consulting fees
Repair and maintenance expenses
Share-based payments – performance rights
Depreciation
Acquisition costs
Interest expense on lease liabilities
Loss before income tax
Income tax benefit
Net loss for the year from continuing operations
4
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)
Diluted loss per share (cents per share)
23
23
2021
$’000
139
24
(8,233)
(3,591)
(3,469)
(2,564)
(2,332)
(1,628)
(3,907)
(1,522)
(152)
(22)
(27,257)
585
(26,672)
-
-
(26,672)
(5.98)
(5.98)
2020
$’000
22
100
(734)
(157)
-
-
(291)
-
(547)
(40)
-
(4)
(1,651)
654
(997)
(1)
(1)
(998)
(1.65)
(1.65)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
Cyprium Metals Limited
39
Consolidated Statement of Financial Position
as at 31 December 2021
Note
31-Dec-21
$’000
31-Dec-20
$’000
Current Assets
Cash and cash equivalents
Receivables
Inventories
Current tax assets
Other assets
Total Current Assets
Non-Current Assets
Right-of-use asset
Property plant and equipment
Deferred exploration and evaluation expenditure
Other non-current financial assets
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
Convertible notes
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Convertible borrowings - equity component
Accumulated losses
Total Equity
5
6
7
4
8
9
10
11
12
13
14
13
14
15
16
17
18
19
25,474
1,073
6,951
-
1,429
34,927
484
102,789
28,763
6,949
138,985
173,912
13,948
301
14,249
-
255
29,705
42,381
72,341
86,590
5,374
200
-
654
53
6,281
58
-
7,107
-
7,165
13,446
1,014
42
1,056
300
19
-
-
319
1,375
87,322
12,071
251,993
8,321
8,748
(181,740)
87,322
164,980
3,308
-
(156,217)
12,071
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
40
Consolidated Statement of Changes in Equity
for the year ended 31 December 2021
Issued
capital
$’000
Accumulated
losses
$’000
159,600
(155,219)
-
-
-
(997)
-
(997)
6,000
-
400
(1,020)
-
164,980
-
-
-
(156,217)
164,980
-
(156,217)
(26,672)
-
(26,672)
90,000
-
-
-
-
-
Convertible
borrowings
- equity
component
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
8,748
Reserves
$’000
Total
$’000
1,997
6,378
-
(1)
(1)
(997)
(1)
(998)
-
6,000
-
628
684
3,308
3,308
-
-
-
-
400
(392)
684
12,071
12,071
(26,672)
(26,672)
90,000
8,748
-
4,037
4,037
-
2,577
(5,564)
251,993
-
1,149
-
(181,740)
-
-
-
8,748
4702
(3,726)
-
8,321
4,702
-
(5,564)
87,322
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
Balance at 1 January 2021
Loss for the year
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued – placements
Convertible borrowings issued
as consideration for acquisition
Options issued as consideration
for acquisition
Share-based payments
Transfer from reserves
Cost of issues
Balance at 31 December 2021
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
41
Consolidated Statement of Cash Flows
for the year ended 31 December 2021
Note
31-Dec-21
$’000
31-Dec-20
$’000
Cash flows from operating activities
Payments to suppliers and employees – continuing operations
Interest paid on lease liabilities
Interest received
Other Income
Receipts from Government incentives
Research and development offset received
Net cash used in operating activities 5
Cash flows from investing activities
Acquisition of plant and equipment
Acquisitions of projects
Payments for exploration expenditure
Payments for security deposits
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
3
5
(19,838)
(22)
139
24
-
1,239
(18,458)
(9,282)
(24,350)
(5,150)
(6,825)
(45,607)
90,000
(5,564)
(274)
84,162
20,097
5,374
25,471
(1,087)
(4)
22
-
100
-
(969)
-
-
(2,688)
-
(2,688)
6,000
(396)
(39)
5,564
1,908
3,466
5,374
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
42
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
1. Corporate Information
The financial report of Cyprium Metals Limited (“Cyprium Metals” or “the Company”) for the year ended 31
December 2021 was authorised for issue in accordance with a resolution of the Directors on 31 March 2022.
Cyprium Metals is a for-profit 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 26.
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
43
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
New standards, interpretations, and amendments
(e)
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 and development activities in Australia and has one geographical
operating segment, 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
44
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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
Cyprium Metals Limited
45
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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 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.
Cyprium Metals Limited
46
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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.
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
Cyprium Metals Limited
47
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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.
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.
Cyprium Metals Limited
48
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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.
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.
Cyprium Metals Limited
49
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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.
(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.
Long Service Leave
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
Cyprium Metals Limited
50
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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 23).
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.
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 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 3 and 17.
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 2021 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
Cyprium Metals Limited
51
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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.
Inventories
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net
realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and
fixed overhead expenditure. Costs are assigned to individual items of inventory on the basis of weighted
average costs. Costs of purchased inventory are determined after deducting rebates and discounts.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs)
and the redemption amount is recognised in profit or loss over the period of the borrowings using the
effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs
of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the
fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or
all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised
over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an
equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until
extinguished on conversion or maturity of the notes. The remainder of the proceeds is allocated to the
conversion option. This is recognised and included in shareholders’ equity and remains in equity with no
further remeasurement.
Borrowings are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled, or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Mine Rehabilitation Provision
Closure and rehabilitation provisions are initially recognised when an environmental disturbance first occurs.
The mine site provisions are an estimate of the expected value of future cash flows required to rehabilitate
the relevant site using current restoration standards and techniques and taking into account risks and
uncertainties. Individual site provisions are discounted to their present value using discount rates aligned to
the estimated timing of cash outflows.
When provisions for closure and rehabilitation are initially recognised, the corresponding cost is capitalised
as an asset, representing part of the cost of acquiring the future economic benefits of the operation. The
closure and rehabilitation asset, recognised within property, plant, and equipment, is depreciated over the
life of the operations. The value of the provision is progressively increased over time as the effect of
discounting unwinds, resulting in an expense recognised in net finance costs.
The closure and rehabilitation provision is reviewed at each reporting date to assess if the estimate continues
to reflect the best estimate of the obligation, and if necessary, the provision is remeasured.
Changes to the closure and rehabilitation estimate for operating sites are added to, or deducted from, the
related asset and amortised on a prospective basis accordingly over the remaining life of the operation,
generally applying the units of production method.
Other
The Group has not early adopted any other standard, interpretation or amendment that has been issued but
is not yet effective.
Cyprium Metals Limited
52
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(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.
At balance date the Group has a closing cash balance of $25.5 million (refer to note 5).
The Company is seeking additional funding in the coming year in order to meet its planned construction
expenditure and exploration expenditure for the next twelve months from the date of signing these financial
statements. The directors are confident of being able to obtain additional funding.
Should this not occur, or not occur on a sufficiently timely basis, there is a material uncertainty that may cast
significant doubt about the Group’s ability to continue as a going concern and therefore, the Group may be
unable to realise its assets and discharge its liabilities in the normal course of business.
3. Acquisitions
Paterson Copper Pty Ltd
In March 2021, Cyprium acquired 100% of the shares on issue held by Metals X Limited (“Metals X”) in
Paterson Copper Pty Ltd for $24.0 million in cash, Convertible Notes with a face value of $36.0 million and
40.6 million of unlisted share options with fair value of $4.0 million, of which 20.3 million share options
expired on 30 March 2022. Paterson Copper Pty Ltd is the holder of the Copper Assets, comprising:
• Nifty Copper Project;
• Maroochydore Copper Project; and
• Paterson Exploration Project
This acquisition did not constitute a business combination and the cost of the acquisition was allocated to the
individual identifiable assets and liabilities on the basis of their respective fair values. The identifiable net assets
acquired upon the acquisition of Paterson Copper Pty Ltd are as follows:
Identifiable assets/(liabilities) acquired:
Inventories
Prepayments
Deferred exploration and evaluation expenditure (refer to note 11)
Property, plant, and equipment (refer to note 10)
Trade and other payables
Lease liabilities
Provision for rehabilitation (refer to note 16)
Net assets
$’000
6,602
273
15,387
87,979
110,241
(4,187)
(176)
(41,841)
64,037
In addition to the Purchase consideration, Cyprium also reimbursed holding costs and working capital
adjustments from 1 January 2021 of $2,568,000, which has been recognised in the net loss for the period
ended 31 December 2021. Security deposits of $6,730,000 were also established in relation to the Nifty Copper
Project.
Terms of the Convertible Notes
The Convertible Notes were issued by Cyprium on the following terms:
-
-
4-year maturity from the Completion Date (“Redemption Date”); and
annual coupon of 4% to be capitalised and paid annually, payable in cash unless Metals X elects to
receive the interest in fully paid ordinary shares in the capital of Cyprium (“Shares”) at the Conversion
Price (refer below).
Cyprium Metals Limited
53
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
The convertible notes have been accounted for as a compound financial instrument with an equity
component. The fair value of the liability component of the instrument has been assessed at inception at a
value of $27,252,000 (refer to note 15) and the resulting equity component was $8,748,000.
Redemption
To the extent all or part of the Convertible Notes are not converted or redeemed early before the Redemption
Date, the Company shall pay to Metals X the principal sum and interest of the Convertible Notes on the
Redemption Date.
Conversion on the Redemption Date
On the Redemption Date, Metals X may elect that each Convertible Note shall be convertible into Shares (less
any amounts already repaid by the Company).
If elected to be converted by Metals X, the conversion price of the principal sum and interest of the Convertible
Notes shall be A$0.3551 per Share (“Conversion Price”), which was calculated based on the 20-day volume
weighted average price (“VWAP”) of the Shares on the ASX immediately prior to the Completion Date,
multiplied by 1.3 (30% premium).
Early Redemption
Within twenty business days prior to each annual anniversary from the Completion Date, the Company may
elect at its discretion to redeem the full or part amount of the principal sum and interest outstanding of each
Convertible Note, multiplied by 1.15 (15% premium) of the principal sum (“Early Redemption Value”).
Within seven business days of receipt of an early redemption notice from Cyprium, Metals X can elect instead
to convert the face value and accrued interest of the Convertible Notes proposed to be redeemed early into
Shares at the Conversion Price.
Options
For every five (5) Shares that could be issued on conversion of each Convertible Note, Metals X on the
Completion Date was issued two (2) free attaching unlisted options (“Options”) on the following terms:
-
-
the first Option is exercisable for 1 year from the Completion Date at a 15% premium to the Company’s
20-day VWAP on the ASX to the business day prior to the Completion Date; and
the second Option is exercisable for 2 years from the Completion Date at a 30% premium to the
Company’s 20-day VWAP on the ASX to the business day prior to the Completion Date.
Cyprium’s 20-day VWAP on the ASX to the business day prior to the Completion Date was A$0.273 per share.
Cyprium has therefore issued Metals X:
20.3 million options exercisable at A$0.3141 per option, which expired on 30 March 2022; and
20.3 million options exercisable at A$0.3551 per option before 30 March 2023.
-
-
Each Share to be issued from exercise of an Option is subject to copper price adjustment factors 1, as follows:
1 Share for each Option if the copper price is equal to or below US$7,000 per tonne as at the date of
exercise of the Option;
1.1 Shares for each Option if the copper price is between US$7,000 and US$7,999.99 per tonne at the
date of exercise of the Option;
1.2 Shares for each Option if the copper price is between US$8,000 and US$8,999.99 per tonne at the
date of exercise of the Option; and
1.3 Shares for each Option if the copper price is above US$9,000 per tonne at the date of exercise of
the Option.
-
-
1 All references to copper prices are to London Metals Exchange daily quoted prices.
Cyprium Metals Limited
54
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
These options have been valued at $4,037,000 using a Black and Scholes option pricing model with the
following inputs:
• Share price on date of issue $0.234 per share
• Risk free rate of 0.07%
• Volatility of 99.1%
•
LME Copper price of $8,789 per tonne with an appropriate adjustment factor
Prior Year Acquisitions
Nanadie Well Project
In September 2020, Cyprium acquired 100% of the Nanadie Well Copper-Gold Project, which is located
approximately 75km to the east of Cyprium’s Hollandaire copper deposits.
The up-front consideration payable by Cyprium to Horizon Minerals Limited 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 Minerals Limited:
$350,000 in cash or in CYM shares based on a 20-day VWAP and issued in 12 months.
$300,000 in cash or in CYM shares based on a 20-day VWAP and issued in 24 months (note 13); and
$200,000 in cash or in CYM shares based on a 20-day VWAP upon a decision to mine.
4.
Income Tax
(a) Income tax expense
2021
$’000
2020
$’000
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 from before income tax expense
Tax at the Australian rate of 26% (2020: 30%)
Share issue costs
Share-based payments
Non-assessable government allowances
Non-deductible expenses
Research and development offset
Income tax benefit not brought to account
Income tax benefit
(27,257)
(7,087)
(336)
1,016
-
88
585
6,319
585
(1,651)
(495)
(63)
164
(30)
1
654
423
654
(b) Recognised tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Exploration and evaluation expenditure
Property, plant and equipment
Other
Tax losses recognised
Net deferred tax asset/(liability)
(6,586)
(1,649)
(123)
8,358
-
(1,744)
-
(2)
1,746
-
Cyprium Metals Limited
55
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
(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:
2021
$’000
2020
$’000
239
1,211
7,778
9,228
35
172
3,923
4,130
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 with Cyprium Metals Limited as the head entity of the Group.
5. 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
Research and development allowance
Non-cash and non-operating items
Share-based payments
Net exchange differences
Depreciation
Unwinding discounting - Rehabilitation
Unwinding discounting - Convertible notes
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
31-Dec-21
$’000
31-Dec-20
$’000
179
25,295
25,474
(26,672)
1,239
3,907
-
1,522
540
(2,453)
(337)
(1,477)
5,273
(18,458)
38
5,336
5,374
(997)
(654)
547
(1)
40
-
-
(3)
34
65
(969)
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
Cyprium Metals Limited
56
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
6. Receivables – Current
Diesel Fuel Rebate receivable
GST receivable
Other receivable
Term deposits
31-Dec-21
$’000
31-Dec-20
$’000
142
873
58
-
1,073
6
94
-
100
200
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.
7.
Inventories
Store and spares
8. Other assets
Prepayments
9. Right-of-use asset
Leased premises
Movements in right-of-use asset:
Opening balance
Acquisitions
Amortisation for the year
Adjustment - transfer to lease liabilities
Other transfers
Closing balance
10. Property, Plant and Equipment
6,951
6,951
1,429
1,429
484
484
58
633
(150)
(41)
(17)
484
-
-
53
53
58
58
100
-
(39)
(2)
-
58
Balance at 1-Jan-2021
Acquisitions (refer to note 3)
Additions
Depreciation
Balance at 31-Dec-2021
Cost
Accumulated depreciation
Balance at 31-Dec-2021
Land and
buildings
$’000
-
1,379
67
(324)
1,122
1,446
(324)
1,122
Mining
properties
and leases
$’000
-
84,444
2,992
-
87,437
87,437
-
87,437
Plant and
equipment
$’000
-
2,156
5,354
(1,049)
6,461
7,511
(1,049)
6,461
Capital
works in
progress
$’000
-
-
7,769
-
7,769
7,769
-
7,769
Total
$’000
-
87,979
16,183
(1,373)
102,789
104,162
(1,373)
102,789
Cyprium Metals Limited
57
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
11. Deferred Exploration & Evaluation Expenditure
Exploration and Evaluation phase - at cost
Opening balance
Acquisition of exploration properties1
Exploration and evaluation expenditure incurred during the year
Closing balance
31-Dec-21
$’000
31-Dec-20
$’000
7,107
15,387
6,269
28,762
3,165
1,388
2,554
7,107
1 In March 2021, Cyprium acquired 100% of the Paterson Copper Project, which is located approximately
85km southeast of Nifty (refer to note 3).
In September 2020, Cyprium acquired 100% of the Nanadie Well Copper-Gold Project, which is located
approximately 75km to the east of Cyprium’s Hollandaire copper deposits. The up-front consideration
payable by Cyprium to Horizon Minerals Limited 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 Minerals Limited:
$350,000 in cash or in CYM shares based on a 20-day VWAP and issued in 12 months.
$300,000 in cash or in CYM shares based on a 20-day VWAP and issued in 24 months; and
$200,000 in cash or in CYM shares based on a 20-day VWAP upon a decision to mine.
12. Other non-current financial assets
Security deposits and bank guarantees
13. Trade and Other Payables
Current:
Trade payables and accrued expenses
Other consumption taxes payable
Deferred consideration (refer to note 11)
Non-current:
Deferred consideration (refer to note 11)1
6,949
6,949
-
-
12,775
873
300
13,948
-
-
467
197
350
1,014
300
300
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.
Cyprium Metals Limited
58
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
14. Lease liabilities
Leased premises – current
Lease premises - non-current
Movement in lease liabilities
Opening balance
Additions
Acquisitions (refer to note 3)
Adjustment – transfer to right-of-use asset
Principal repayments
Closing balance
15. Convertible notes
Opening balance
Issued as consideration for acquisition (refer to note 3)
Unwinding of discounting
Closing balance
31-Dec-21
$’000
31-Dec-20
$’000
301
255
556
61
633
176
(41)
(274)
556
-
27,252
2,453
29,705
42
19
61
102
-
-
(2)
(39)
61
-
-
-
-
The parent entity issued 4% convertible notes for $36.0 million on 30 March 2021 (refer to note 3). The notes
are convertible into ordinary shares of the parent entity, at the option of the holder, or repayable on 30 March
2025. The maximum number of ordinary shares of the parent entity upon conversion is 101,373,777.
The initial fair value of the liability portion of the convertible notes was determined using a market interest
rate for an equivalent non-convertible note at the issue date. The liability is subsequently recognised on an
amortised cost basis until extinguished on conversion or maturity of the convertible notes. The remainder of
the proceeds is allocated to the convertible borrowings – equity component and recognised in shareholders’
equity (refer to note 19) and is not subsequently remeasured.
16. Provisions
Provision for Rehabilitation
Movement in Provision
Opening balance
Additions
Unwinding of Discounting
Closing balance
42,381
42,381
-
41,841
540
42,381
-
-
-
-
-
-
Provisions are recognised when the group has a present (legal or constructive) obligation as a result of a past
event, it is probable the group will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation. The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the reporting date, considering the risks and
uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted
using a current pre-tax rate specific to the liability. The increase in the provision resulting from the passage
of time is recognised as a finance cost which is capitalised.
Cyprium Metals Limited
59
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
Mine Rehabilitation
The mine rehabilitation provision is recognised for the estimated cost of rehabilitation, decommissioning,
restoration, and long-term monitoring of areas disturbed during operation of the Nifty Copper Operations up
to reporting date but not yet rehabilitated. The provision is based upon current cost estimates and has been
determined on a discounted basis with reference to current legal requirements and technology. The
rehabilitation is expected to occur following the processing of copper ore from the Nifty Copper open pit
(subject to regulatory approvals).
17. Issued Capital
(a) Issued and paid-up capital
Issued and fully paid
(b) Movements in ordinary shares on issue
Opening Balance
Shares issued as consideration for acquisition 1
Shares issued and fully paid
Shares issued - vesting of performance rights
Transaction costs on share issues
31-Dec-21
$’000
31-Dec-20
$’000
251,993
164,980
31-Dec-21
No. of
shares
31-Dec-20
No. of
shares
‘000
$’000
‘000
$’000
98,569
-
450,000
16,250
-
564,819
164,980
-
90,000
2,577
(5,564)
251,993
56,059
2,510
40,000
-
-
98,569
159,600
400
6,000
-
(1,020)
164,980
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 3 and 11).
(c) Performance Rights
As approved at the Company’s General Meeting on 23 March 2021, the following performance rights were
issued under the Company’s Incentive Performance Rights Plan to directors (or their associates). These rights
are exercisable at nil cost and expire during May 2026:
Barry Cahill
Gary Comb
Total
1
1,250,000
1,000,000
2,250,000
2
1,250,000
1,000,000
2,250,000
Vesting Conditions
4
3
1,250,000
1,000,000
2,250,000
1,250,000
1,000,000
2,250,000
5
1,250,000
1,000,000
2,250,000
Total
6,250,000
5,000,000
11,250,000
Vesting conditions
1. Commence mining of the Nifty Copper open pit
2. Commissioning of the SX-EW processing plant at Nifty; or a minimum 40 cent 20-day VWAP
3. Expand Cyprium’s copper equivalent resource inventory to 1.5mt contained copper metal; or a minimum
45 cent 20-day VWAP
4. Copper production exceeding 25,000 tonnes of contained copper metal after commencement of mining
of the Nifty Copper Project: or a minimum 47.5 cent 20-day VWAP
5. Cyprium’s quarterly production of at least 50,000 tonnes per annum copper equivalent; or a minimum
50 cent 20-day VWAP
The performance rights which are subject to vesting condition 1 above are valued at $0.31 each, being the
Company’s share price at the date of the Company’s General Meeting held on 23 March 2021. At the date of
Cyprium Metals Limited
60
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
this report, the Directors consider it is probable that these vesting conditions will be achieved and that it is
appropriate to bring the value of these rights to account over the vesting period.
The performance rights which are subject to vesting conditions 2 to 5 above are valued at $0.298, $0.294,
$0.293, and $0.291 each respectively. These valuations are based on a binomial valuation model using the
following major inputs:
• Share price at date of approval
• Risk free interest rate
• Volatility
• Expiry date
$0.31
0.85%
98.1%
May 2026
The total value of these rights will be brought to account over the vesting period. A total of 28,500,000
performance rights (5,700,000 for each vesting condition 1 to 5 outlined above) were issued on the same
terms to Directors (as noted above), employees, and contractors during June 2021.
As approved at the Company’s Annual General Meeting on 31 May 2021, the following performance rights
were issued under the Company’s Incentive Performance Rights Plan to directors (or their associates). These
rights are exercisable at nil cost and expire during June 2026:
1
2
Vesting Conditions
4
3
5
Barry Cahill
Total
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
Total
5,000,000
5,000,000
Vesting conditions
1. Commence mining of the Nifty Copper open pit
2. Commissioning of the SX-EW processing plant at Nifty; or a minimum 40 cent 20-day VWAP
3. Expand Cyprium’s copper equivalent resource inventory to 1.5mt contained copper metal; or a minimum
45 cent 20-day VWAP
4. Copper production exceeding 25,000 tonnes of contained copper metal after commencement of mining
of the Nifty Copper Project; or a minimum 47.5 cent 20-day VWAP
5. Cyprium’s quarterly production of at least 50,000 tonnes per annum copper equivalent; or a minimum
50 cent 20-day VWAP
The performance rights which are subject to vesting condition 1 above are valued at $0.335 each, being the
Company’s share price at the date of the Company’s Annual General Meeting held on 31 May 2021. At the
date of this report, the Directors consider it is probable that these vesting conditions will be achieved and
that it is appropriate to bring the value of these rights to account over the vesting period.
The performance rights which are subject to vesting conditions 2 to 5 above are valued at $0.319, $0.314,
$0.312, and $0.309 each respectively. These valuations are based on a binomial valuation model using the
following major inputs:
• Share price at date of approval
• Risk free interest rate
• Volatility
• Expiry date
$0.335
0.82%
85.6%
June 2026
The total value of these rights will be brought to account over the vesting period. A total of 23,000,000
performance rights (4,600,000 for each vesting condition 1 to 5 outlined above) were issued on the same
terms to Directors, employees, and contractors during June 2021.
Cyprium Metals Limited
61
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
18. Reserves
Foreign exchange translation reserve
Share-based payment reserve
Movements in Reserves
Foreign exchange translation reserve
Opening balance
Foreign exchange translation difference
Closing balance
31-Dec-21
$’000
31-Dec-20
$’000
778
7,543
8,322
778
-
778
778
2,530
3,308
779
(1)
778
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
Allocation to Issued Capital – vesting of performance rights
Allocation to Accumulated Losses
Capitalised to exploration
Acquisition of Paterson Copper Pty. Ltd.
Share-based payments
Closing balance
2,530
-
(2,577)
(1,149)
795
4,037
3,907
7,543
1,218
628
-
-
-
-
684
2,530
The share-based payments reserve relates to the cumulative expense for share-based awards 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 as well as options to the vendor of
Paterson Copper Pty. Ltd. 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.
19. Convertible borrowings – equity component
Opening balance
Issued as consideration for acquisition (refer to note 3 and 15)
Closing balance
20. 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
Cyprium Metals Limited
62
-
8,748
8,748
-
-
-
2021
$’000
2020
$’000
558
1,614
51
2,223
407
316
35
758
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
21. Related Party Disclosures
(a) Key management personnel
For Director related party transactions please refer to note 20 “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
Paterson Copper Pty Ltd
Nifty Copper Pty Ltd
Maroochydore Copper Pty Ltd
PT Indonusa Mining Services
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Indonesia
Equity Holding
2021
100%
100%
100%
100%
100%
100%
2020
100%
100%
-
-
-
100%
22. 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
23. Loss per Share
Loss used in calculating basic and diluted EPS:
From continuing operations
Weighted average number of ordinary shares to calculate basic loss per share
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 operations
2021
$’000
2020
$’000
56
56
33
33
2021
$’000
2020
$’000
(26,672)
(998)
Number
of Shares
‘000
446,340
(5.98)
446,340
(5.98)
Number
of Shares
‘000
60,465
(1.65)
60,465
(1.65)
24. 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
Cyprium Metals Limited
63
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
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
2021
$’000
2020
$’000
25,471
5,374
Interest rate sensitivity
The following table demonstrates the sensitivity of the Company’s Statement of Profit or Loss and Other
Comprehensive Income to a reasonably possible change in interest rates, with all other variables constant.
2021
2020
Effect on
Post
Tax Loss
($’000)
Effect on equity
including Accumulated
losses ($’000)
Increase/(Decrease)
Effect on
Post
Tax Loss
($’000)
Effect on equity
including Accumulated
losses ($’000)
Increase/(Decrease)
191
(191)
191
(191)
40
(40)
40
(40)
Change in Basis Points
Increase 75 basis points
Decrease 75 basis points
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
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 2021, 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 2021.
(d) Fair value measurement
The Directors consider that the carrying value of current receivables and current payables approximate their
fair values.
Cyprium Metals Limited
64
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
25. Parent Entity Information
The following details information related to the parent entity, Cyprium Metals Limited, at 31 December 2021.
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
Convertible borrowings – equity component
Accumulated losses
Total Equity
Loss of the parent entity
Total comprehensive loss of the parent entity
2021
$’000
25,998
140,958
1,204
31,092
109,865
251,993
7,544
8,748
(158,419)
109,865
(4,141)
(4,141)
2020
$’000
6,256
13,397
(1,014)
(1,314)
12,084
164,980
2,530
-
(155,427)
(12,084)
(999)
(999)
Other Commitments
The Company had no commitments as at 31 December 2021.
Contingent Liabilities
The Company had no contingent liabilities as at 31 December 2021.
26. Contingent Assets and Liabilities
There are no known contingent assets or liabilities as at 31 December 2021 (2020: nil).
27. Commitments
The Group had commitments of $0.5 million as at 31 December 2021.
28. Dividends
No dividend was paid or declared by the Company in the year ended 31 December 2021 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 2021.
29. 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
geographic area that the entity operated in during the year was Australia.
Cyprium Metals Limited
65
Notes to the Consolidated Financial Statements
for the year ended 31 December 2021
30. Significant Events after the Reporting Date
On 11 March 2022, the Company announced the results of the Restart Study for the Nifty Copper Project. The
study demonstrated a robust heap leach solvent extraction-electrowinning (SX-EW) operation in the initial
stage of the project. The Restart is focused around the first phase of heap leach retreat and oxide open pit,
and it is envisaged that the life will extend to the sulphide stage of the open pit with a considerably larger
resource available. The sulphide study has already commenced with design optimisation and metallurgical
test work currently being undertaken.
A 2012 JORC compliant Mineral Resources estimate of 732,200 tonnes contained copper within an open pit
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 (in care and maintenance since January 2009).
21 MW gas turbine power station and gas pipeline.
Water supply and reticulation systems including multiple bore fields.
Mine village with a capacity of approximately 400 persons.
Sealed all weather airstrip.
Upgraded 4G communications infrastructure.
Restart of the heap leach SX-EW facility at the historic Nifty Copper Operation will involve the following:
•
•
Recommencement of open pit mining.
Refurbishment of existing heap leach agglomeration, stacking/materials equipment, and irrigation
systems.
Refurbishment of the existing leach pads to place new oxide material on for leaching.
Construction of additional leach pad capacity for retreatment of the existing heap leach pad material.
Refurbishment of existing SX-EW facilities.
Re-instatement of supporting reagent/utility systems.
•
•
•
•
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
66
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 2021
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 2021 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
2021.
On behalf of the Board
Gary Comb
Chairman, Non-Executive Director
Perth, WA
31 March 2022
Cyprium Metals Limited
67
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 2021, 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
31 March 2022
L Di Giallonardo
Partner
68
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 2021, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial 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 2021 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.
Material uncertainty related to going concern
We draw attention to Note 1(z) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the entity’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
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.
69
Key Audit Matter
How our audit addressed the key audit
matter
Carrying value of Deferred Exploration and Evaluation Expenditure
Refer to Note 11
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.
The carrying value of deferred exploration and
evaluation expenditure was a key audit matter due to
the significance of this asset to the financial statements.
Our procedures included but were not
limited to the following:
review of
of
• We obtained an understanding of
the key processes associated with
management’s
the
deferred
carrying
evaluation
exploration
expenditure;
• We considered
the Directors’
assessment of potential indicators
of impairment;
values
and
• We obtained evidence that the
Group has current rights to tenure
of its areas of interest;
• We examined the forecast for the
year ending 31 December 2022 for
planned exploration spend and
discussed with management the
nature
ongoing
activities;
planned
of
• 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.
Accounting for acquisition of Paterson Copper Pty Ltd
Refer to Note 3
During the year the Group acquired 100% of the
shareholding in Paterson Copper Pty Ltd held by Metal
X Limited for gross purchase consideration of $64m.
This was considered a significant purchase for the
Group.
requiring management
Accounting for this transaction is a complex and
judgemental exercise,
to
determine the fair value of acquired assets and
liabilities. This acquisition did not constitute a business
combination and the cost of the acquisition was
allocated to individual identifiable assets and liabilities
on the basis of their respective fair values.
It is due to the size of the acquisition and the estimation
process involved in accounting for it that this is a key
area of audit focus.
70
Our procedures included, amongst others:
• We read the sale and purchase
agreement to understand key terms
and conditions;
• We considered
the
acquired assets constituted a
business;
whether
• We agreed the fair value of the
consideration paid to supporting
information;
• We obtained audit evidence that the
acquisition
and
date
liabilities of the acquiree were fairly
stated;
assets
• We considered the allocation of the
consideration to the assets and
liabilities acquired; and
• We assessed the adequacy of the
Group’s disclosures in the financial
report with respect to this asset
acquisition.
Provision for Rehabilitation
Refer to Note 16
The Group has a site restoration provision of
$42,381,000 as at 31 December 2021.
The Group has obligations to restore the land on which
it has conducted drilling activities and remove the
operating plant. The provision is for the expected future
costs associated with the rehabilitation activities.
The site restoration provision was a key audit matter
due to the significant judgement involved in estimating
costs which are planned to be incurred in future years
and the related timing of incurring those costs.
Accounting for, and valuation of, the convertible note
Refer to Note 15
As part of the acquisition of Paterson Copper Pty Ltd
during the year, $36M of the consideration paid was
settled through convertible notes, with a 4 year
maturity and annual coupon rate of 4%.
The carrying value at 31 December 2021 is
$29,705,000.
The accounting for, and valuation of, the convertible
note was a key audit matter due to the significance of
this liability to the Group and the judgement involved in
determining the equity component of this transaction.
• We assessed the expertise of the
valuers in making an assessment of
the restoration obligations;
• We
the year
provision
considered
movements during
to
ensure that they were consistent
the
with our understanding of
Group’s activities during that period;
and
• We assessed
the
valuations
obtained by the Group to determine
supporting
whether
evidence was available to support
the cost estimates.
sufficient
• We
read
the most up-to-date
agreements between the Group
and its financiers to understand the
terms associated with the facility;
• We considered the valuation of the
equity component of the accounting
for this transaction;
• We assessed
capitalising
against
asset; and
the eligibility of
the borrowing costs
the acquired qualifying
• We
reviewed management’s
recalculation of the loan balance
and assessed for reasonableness.
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 2021 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.
71
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend to liquidate the Group
or to cease operations, or 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.
72
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 2021.
In our opinion, the Remuneration Report of Cyprium Metals Limited for the year ended 31
December 2021 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
31 March 2022
L Di Giallonardo
Partner
73
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 as at 30 March 2022.
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
315
506
371
1,302
612
3,106
94,044
1,554,833
2,940,597
54,177,931
506,051,809
564,819,214
There were 500 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
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
PRCM NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
UBS NOMINEES PTY LTD
OMNI INVESTMENTS PTY LIMITED
MRS MARISA MACKOW
MR PETER PIOTR MACKOW
PERTH SELECT SEAFOODS PTY LTD
PRCM NOMINEES PTY LIMITED
THE GOOD LUCK FAMILY PTY LTD
MR WAYNE FRANK APTED
BLUEDALE PTY LTD
ARALAD MANAGEMENT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
BRAZIL FARMING PTY LTD
MR CHRISTOPHER JAMES WEED &
MRS JANET ELIZABETH BROCKMAN
NATIONAL ENERGY PTY LTD
Total
Shares
89,917,244
30,238,584
21,030,253
19,715,646
17,500,000
14,133,853
12,440,428
6,705,000
6,650,000
5,700,000
4,600,000
3,997,882
3,997,730
3,699,995
3,218,750
3,200,000
3,171,625
3,000,000
2,810,555
%
15.92%
5.35%
3.72%
3.49%
3.10%
2.50%
2.20%
1.19%
1.18%
1.01%
0.81%
0.71%
0.71%
0.66%
0.57%
0.57%
0.56%
0.53%
0.50%
2,500,000
258,227,545
0.44%
45.72%
Substantial Shareholders
The names of substantial Shareholders who have notified the Company in accordance with Section 671B of the
Corporations Act are:
Beneficial Owner
Paradice Investment Management Pty Ltd
Ilwella Pty Ltd
* Figures as reported on the last Substantial Shareholder notice received by the Company.
%*
8.52%
5.35%
# of
Shares*
46,730,940
30,197,335
Date
27.05.2021
06.12.2021
Cyprium Metals Limited
74
ASX Additional Information
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
2021.
Share Options
As at the date of this report, there were the following share options:
6,000,00 Unlisted share options exercisable at 30 cents each, expiring 11 December 2022
20,274,755 Unlisted share options exercisable at 35.51 cents each, expiring 30 March 2023
On 30 March 2022, 20,274,755 Unlisted share options exercisable at 31.41 cents each, expired.
Performance Rights
As at the date of this report, there were 57,000,000 performance rights on issue. The details of the
performance shares are as follows:
Performance Condition
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
Number
2,750,000
Share for 5 consecutive trading days
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
2,750,000
Share for 5 consecutive trading days
Total expiring in June and July 2024
Performance Condition
Commence mining of the Nifty Copper open-pit
Commissioning of the SX-EW processing plant at Nifty; or
a minimum 40 cent 20-day VWAP
Expand Cyprium’s copper equivalent resource inventory to 1.5mt contained copper
metal; or
a minimum 45 cent 20-day VWAP
Copper production exceeding 25,000 tonnes of contained copper metal after
commencement of mining of the Nifty Copper Project; or
a minimum 47.5 cent 20-day VWAP
Cyprium’s quarterly production of at least 50,000 tonnes per annum copper equivalent;
or
a minimum 50 cent 20-day VWAP
Total expiring in May and June 2026
5,500,000
Number
10,300,000
10,300,000
10,300,000
10,300,000
10,300,000
51,500,000
Cyprium Metals Limited
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About Cyprium Metals and Schedule of Tenements
About Cyprium Metals Limited
Cyprium Metals Limited (ASX: CYM) is an ASX listed company with copper 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 and Paterson regions of Western Australia that is host to a
number of base metals deposits with copper and gold mineralisation.
Paterson Copper Projects
This portfolio of copper projects comprises the Nifty Copper Project, Maroochydore Copper Project and
Paterson Exploration Project.
The Nifty Copper Project (“Nifty”) is located on the western edge of the Great Sandy Desert in the north-eastern
Pilbara region of Western Australia, approximately 330km southeast of Port Hedland. Nifty contains a 2012
JORC Mineral Resource of 732,200 tonnes of contained copper i. Cyprium is focussed on a heap leach SX-EW
operation to retreat the current heap leach pads as well as open pit oxide and transitional material. Studies
will investigate the potential restart of the copper concentrator to treat open pit sulphide material.
The Maroochydore deposit is located ~85km southeast of Nifty and includes a shallow 2012 JORC Mineral
Resource of 486,000 tonnes of contained copper ii. Aeris Resources Limited (ASX: AIS, formerly Straits
Resources Limited) holds certain rights to “buy back up to 50%” into any proposed mine development in
respect of the Maroochydore Project, subject to a payment of 3 times the exploration expenditure
contribution that would have been required to maintain its interest in the project.
An exploration earn-in joint venture has been entered into with IGO Limited 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 of $11
million over the first 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.
Murchison Copper-Gold Projects
Cyprium has an 80% attributable interest in 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 Western Australia. Cyprium will free-
carry the Cue Copper Project to the completion of a definitive feasibility study (DFS). The Cue Copper-Gold
Project includes the Hollandaire Copper-Gold Mineral Resources of 51,500 tonnes contained copper iii, 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/).
The Nanadie Well Project is located ~650km northeast of Perth and ~75km southeast of Meekatharra in the
Murchison District of Western Australia, within mining lease M51/887.
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.
i Refer to CYM ASX announcement dated 17 November 2021 “Updated Nifty Copper Mineral Resource Estimate”
ii Refer to MLX ASX announcements: 10 March 2020, “Nifty Copper Mine Resource Update” and 18 August 2016, “Annual Update of Mineral
Resources and Ore Reserves”
iii Refer to CYM ASX announcement: 29 September 2020, “Hollandaire Copper-gold Mineral Resource Estimate”
Cyprium Metals Limited
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About Cyprium Metals and Schedule of Tenements
Tenement Information
Tenement
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
Location
Interest
Murchison region, WA 80%
Cyprium has a 100% interest in the Nanadie Well Copper-Gold Project, WA,
which comprises the following tenements:
Murchison region, WA 100%
M51/887, E51/1040, E51/1986 and E51/1987
Cyprium has a 100% interest in the Paterson Copper Project (Nifty Copper
Project and Maroochydore Copper Project), WA, which comprises the following
tenements:
Paterson Province,
WA
100%
E45/1018, E45/1840, E45/1841, E45/3011, E45/4318, M45/314, M45/315,
M45/317, M45/318, M45/492, P45/2924, P45/2925, P45/2926, P45/2927,
P45/3055, L45/102, L45/128, L45/143, L45/148, L45/74, L45/91, M271SA,
E45/4319, E45/5705, M45/711, M45/712, M45/713, M45/745, M45/746,
P45/3150, P45/3151, E45/3003, M45/752, M45/753 and M45/754
Cyprium has a 100% interest in the Paterson Exploration Project, WA (IGO
earning up to 70%), which comprises the following tenements:
Paterson Province,
WA
100%
E45/1839, E45/2280, E45/2415, E45/2771, E45/2772, E45/2773, P45/2792,
P45/2793, P45/2794, P45/2801, P45/2802, P45/2803, P45/2804, P45/2805,
P45/2806, P45/2807, P45/2808, E45/3573, E45/3574, E45/3575, E45/3576,
E45/3577, E45/4151, E45/4205, E45/4234, E45/4862, E45/5199, E45/5300,
M45/1109, M45/1110, M45/1111, M45/1112, M45/1113, M45/1114
Cyprium Metals Limited
77