Annual Report
31 December 2022
ABN 48 002 678 640
cypriummetals.com
arcexploration.com.au
CONTENTS
Corporate Directory
Chairman’s Letter
Overview
Strategy and 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)
Company Secretary
Wayne Apted
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Website
www.cypriummetals.com
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Registered Office & Principal Place of Business
Level 1
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
Securities Exchange
Australian Securities Exchange
ASX Code: CYM
Cyprium Metals Limited
1
CHAIRMAN’S LETTER
On behalf of the Board of Directors, I am pleased to present the 2022 Annual Report for Cyprium Metals Limited
(“CYM”, “Cyprium” 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 for development into production of copper metal on site.
Progress has continued to be achieved during the year in the execution of our strategy, including:
•
completion of the Nifty Copper Project Restart Study, released during the first quarter of 2022;
• obtaining all of the approvals required at present for the Nifty Copper Project restart;
•
•
•
•
completion of further metallurgical optimisation testwork during 2022 to improve the robustness of the
Nifty Copper Project Restart Study;
completion of pre-development refurbishment, infrastructure upgrades, site clean-up and operational
readiness activities at Nifty;
increasing the Nifty mineral resource estimate to over 940,000 tonnes contained copper, which
excludes the copper contained within the existing heap leach pads and extensional drilling results;
release of the Nanadie Well mineral resource estimate of over 160,000 tonnes contained copper;
• expand CYM’s mineral resource inventory to over 1.6 million tonnes of contained copper;
•
continuation of drilling programmes at Nifty, Maroochydore, and Murchison Copper Projects;
Following the completion of the Nifty Copper Project Restart Study, the independent technical expert reports,
and the receipt of all necessary regulatory approvals, the Company focused on the Nifty financing process,
targeting a total of AUD240 million to AUD260 million debt funding package.
Considerable global market volatility was experienced from mid-2022 which resulted in significant declines in
commodity prices (including copper), weaker AUD/USD exchange rates, increased inflationary pressures and
rising interest rates, adversely affecting global debt and equity markets. The unfavourable market conditions
inevitability led to a deterioration in investment market sentiment, which consequently delayed the Nifty
financing process during the second half of 2022. While global market prices have begun to trend upward from
the beginning of 2023, including improved copper prices, the global investment market still exhibits heightened
concerns about price and market volatility, Reserve Bank possible actions, and the resultant World economic
outlook.
The terms of a Copper Cathode Offtake Secured Prepayment Facility of USD35.0 million was agreed by the end of
2022 whilst due diligence activities and documentation were completed in respect to a USD denominated Senior
Secured Bond Issue during 2022, for the debt funding package to finance the restart of the Nifty Copper Project.
Fixed income investor calls with international debt capital market investors for the contemplated Senior Secured
Bond Issue were conducted in January and February 2023. The Company also received firm commitments for
AUD35 million through a two-tranche placement of fully paid ordinary shares to sophisticated and institutional
investors, that was conditional on the Senior Secured Bond Issue. Ultimately, the elevated levels of concern by
the investment market resulted in the proposed terms for the USD denominated Senior Secured Bond Issue being
so conservatively revised, that they were ultimately deemed not commercially satisfactory to the Company.
Cyprium Metals Limited
2
As a consequence of the Placement to support Nifty Project Restart and the Senior Secured Bond Issue not
proceeding, the Company requested the ASX for a voluntary suspension of CYM securities whilst it evaluates
alternative Nifty Copper Project restart financing arrangements and undertakes a strategic review on all of
Cyprium’s assets.
Copper is an essential component in the clean energy transition and is essential to modern life, with no available
substitutes. The global market outlook for copper remains very favourable, with demand expected to be in excess
of supply in the medium to long term, leading to a widening supply net deficit.
In March 2023, the Company entered into an AUD6 million Secured Loan Deed to support Cyprium’s near-term
funding to allow the development of a new strategic plan. The strategic plan will involve the short medium- and
long-term opportunities for the company in light of the positioning of copper in the critical metals supply chain.
Gary Comb
Chairman
Cyprium Metals Limited
3
OVERVIEW
Cyprium Metals Limited (ASX: CYM) (“Cyprium”, “CYM” or the “Company”) was formed in June 2019 with the
strategy of developing copper projects in Australia.
Cyprium’s first transaction in 2019 was an earn-in and Joint Venture of the Hollandaire Copper Project, a shallow
high grade copper sulphide resource. This was followed in 2020 by the purchase of the nearby shallow Nanadie
Well Copper Gold Project, which combined with Hollandaire forms the Murchison Copper Gold Project.
Cyprium then acquired a portfolio of assets in 2021 which included the Nifty Copper Project (in care and
maintenance), the large Maroochydore Copper-Cobalt deposit and a regional exploration earn-in and Joint
Venture with IGO Limited (ASX: IGO).
The Nifty Copper Project already has in place an open pit oxide heap leach solvent extraction electrowinning
(“SX-EW”) operation, an underground sulphide mine, 2.8 Mtpa sulphide concentrator and associated
infrastructure, all on care and maintenance.
Nifty is ranked 6th largest copper development project in Australia by copper metal and the highest grade of the
top group whilst Maroochydore is ranked 8th. Cyprium now has a near term production project from an
Australian based long-life mine, to produce copper metal onsite, a critical metal in the global transition to a
clean and sustainable energy base.
Figure 1 / – Australian Copper Projects Mineral Resource Benchmarking1
(S&P Global, Evolution Capital)
The Cyprium Metals portfolio includes 4 of the 26 largest Australian primary copper resources, being the Nifty,
Maroochydore, Nanadie Well and Hollandaire deposits (refer to OZ Minerals Limited (ASX: OZL), 26 August 2022,
“Strategy, Aspirations & Province Potential Presentation”). Cyprium’s total combined JORC 2012 mineral
resource estimate (MRE) inventory has increased from nil at the end of 2019 to over 1.6 million tonnes of
contained copper that is currently reported and illustrated in Figure 1.
The updated Nifty mineral resource estimate is to be included in the optimisation which will add further copper
tonnes (and cashflow) as well as mine life to the Phase 1 oxide schedule. The copper tonnes added come from
the conversion of inferred to indicated resources and the increase in resource by the drilling that has been
undertaken. Due to JORC 2012 reporting restrictions that prevent the existing leach pads at Nifty from being
included in the reported mineral resource estimates, a further estimated 17.16 Mt @ 0.53%Cu (~91Kt tonnes of
copper metal) is contained within the existing heap leach pads for retreatment at Nifty (refer to CYM ASX release
dated 11 March 2022, “Nifty Copper Project Restart Study”).
1.
Evolution Capital, 6 June 2022, “Cyprium Metals Limited, Right Plan – Right Team – Right Time for Nifty (update)”,
https://cypriummetals.com/wp-content/uploads/EvolutionCapitalEquityResearch06Jun22.pdf
Cyprium Metals Limited
4
STRATEGY
Core Purpose
To grow 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.
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 2 | Location of Murchison and Paterson Projects
Cyprium Metals Limited
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Nifty Copper Project
Brief History of Nifty
Nifty commenced as an open pit, oxide heap leach SX-EW operation, producing copper cathode from 1993-2009
under Western Mining Corporation (up to 1998), Straits Resources who increased the production capacity from
16,000 tonnes to 25,000 tonnes per annum (1998-2003) and Aditya Birla Minerals (2003-2009).
Aditya Birla Minerals constructed a flotation concentrator and underground sulphide mine. First sulphide
concentrate was produced in March 2006. Open pit operations ceased in 2006 with heap leaching operations
ceasing in 2009.
Metals X acquired the operation via an on-market takeover of Aditya Birla Minerals in September 2016.
Following operational difficulties and declining production levels from the underground mine, Metals X placed
the operation on care and maintenance in November 2019.
The re-start opportunity for Nifty:
• The oxide open pit was stopped prematurely to access the underground sulphide ore to produce a clean
copper concentrate to feed Aditya Birla Minerals India-based smelters
• Cyprium will restart the open pit oxide mine and re-treat the existing heap leach pads in Phase 1 of the
Nifty Copper Project restart
• Phase 2 will continue the open pit into the sulphide portion of the orebody for a +20-year mine life
Figure 3 / Historical production and copper prices
Cyprium Metals Limited
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Heap Leaching, SX-EW Operations
Heap leaching is a flexible and constantly improving mineral processing and extraction technology that
commenced from the 1960’s and now represents ~20% of global production. Heap leaching has operational
advantages over traditional flotation concentrate processing methods, where economically feasible options are
becoming limited.
Main advantages of heap leaching technology:
•
•
•
Lower operating and capital costs due to inter alia:
o Reduced transport costs and no downstream treatment and refining charge deductions from sales
revenue
o Simplified process with reduced reagent requirements
Less environmental concerns – lower energy and water requirements
o Closed-loop circuit, eliminating the need for a tailings dam
Lower operating and capital costs enables the extraction of minerals from lower grade ores that
otherwise would not be economically viable to extract
• At Nifty from the resumption of mining of the existing oxide open pit, production of a final LME Grade
A copper metal (>99.99%) cathode onsite
Typical heap leaching process involves the following steps:
Irrigate the ore with the appropriate lixiviant to dissolve the metals (leachate)
• Mine, crush and agglomerate the ore
• Stack the ore on a lined leach pad
•
• Collect the leachate in a pond or tank (pregnant or value bearing solution)
• Process the pregnant leach solution to recover the metals
• Recycle the raffinate solution (with additional lixiviant) back to the heap
Figure 4 / Heap Leach, SX-EW Process
Figure 5 / 1900-2020 World Copper Mine Production
Cyprium Metals Limited
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Decline & Conveyor Box cut
Processing Plant
Tailings Dam
Waste Dumps
Mine Village
Open Pit
Wastewater Treatment Facility
Heap Leach Pads
Solution Ponds
SX EW Plant
Power Plant
Gas Pipeline
Airstrip
Figure 6 / Nifty Copper Mine Site Layout
Nifty Copper Project Restart Study
The results of the Restart Study for the Nifty Copper Project were released during 2022 (refer to CYM ASX
announcements dated 11 March 2022, “Nifty Copper Project Restart Study” and “CYM Restart Study
Presentation”). The study demonstrates a robust heap leach SX-EW operation in the initial stage of the project.
The Restart is focused on 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 was also commenced with design optimisation and metallurgical testwork being undertaken.
The study did not include any inferred mineral resources, nor the drilling undertaken to the west and east of the
mineralisation, of which the results of the Nifty west drilling programme has been subsequently included in the
updated mineral resource estimate. The study also did not include the large sulphide resource which has the
potential to increase the mine life by over 20 years (the study included less than 10% of the total May 2022 Nifty
Resource Estimate).
The results of the Nifty Phase 1 Restart Study included:
• C1 costs of USD1.91/lb and C3 costs of USD2.82/lb
• Average production of 25,000 tonnes p.a. copper cathode
• Cathode production 146,100 tonnes copper metal
• Pre-production capital AUD149 million
• NPV @7% of AUD277M with an IRR of 37% (post tax)
• Oxide mine life 2023-29 at ~6.3 years (based on pre-MRE upgrade of 732kt contained Cu) with sulphide
potential +20-years
• Free cashflow AUD544 million
• Payback in 3 years
The pricing of a number of components of the project such as freight have reduced considerably since the
release of the study maintaining the project as a robust development project.
Cyprium Metals Limited
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There is already substantial infrastructure in place at the Nifty Copper Project, including:
• 2.8 Mtpa sulphide concentrator (care & maintenance since November 2019)
• 25 ktpa copper cathode heap leach SX-EW facility (care & maintenance since January 2009)
• 21 MW gas turbine power station, gas pipeline and power distribution systems
• Water supply and reticulation systems, including multiple bore fields
• Full heavy vehicle workshops and mine village with a capacity of approximately 400 persons
• Extensive stores inventory, mobile equipment, offices, paste and other fixed plant
• Sealed all weather airstrip
• Upgraded network and communications infrastructure
The restart of the heap leach SX-EW facility at the Nifty Copper Project 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 on which to stack new oxide material 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 and utility systems
The pit optimisation is based on only the material from the measured and indicated category of the November
2021 Nifty Mineral Resource Estimate with contained copper metal of 732,200 tonnes (refer to Table 1 and CYM
ASX announcement dated 17 November 2021, “Updated Nifty Copper Mineral Resource Estimate”), which does
not include any of the existing heap leach pad retreat material.
Ore
Source
Cut-
Off
%Cu
Measured
Indicated
Inferred
Total
Ore Grade Metal
Ore Grade Metal
Ore Grade Metal
Ore Grade Metal
Mt
%Cu
t Cu
Mt
%Cu
t Cu
Mt
%Cu
t Cu
Mt
%Cu
t Cu
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
Mining operations for Phase 1 at Nifty will involve resumption of open pit operations and no underground
mining, reaching a depth of 10,085mRL or approximately 225m below surface. The Nifty orebody mineralisation
is well understood and there will be a staged approach to mining via an initial oxide open pit that targets oxide
and transitional copper mineralisation.
Total ore mined from Phase 1 is 8.8Mt at 0.87% copper (representing ~10% of 732t of contained copper in
November 2021 MRE and ~8% of 940t contained copper in May 2022 MRE). Total waste mined is 52.9Mt for a
strip ratio of 6:1. Ore will be crushed and screened, agglomerated, and stacked onto the heap leach pads.
Cyprium Metals Limited
9
Figure 7 / Open pit – Stage 1-8 sequencing
Figure 8 / Open pit – Total material mined and copper grade by Stage 1- 8
Overview of Phase 1 – Open Pit Mining Operations:
• The mining sequence for the open pit divides the open pit into east and west cutbacks
• The eastern cutback will be developed first to access higher grade ore near surface
•
In Phase 1, oxide and transitional mineralisation will be mined through stages 1-8
• The planned operating areas are large enough to support two mining fleets, with the mined ore being
hauled to the ROM pad located adjacent to the west of the open pit. Waste will be hauled to an
expanded waste dump to the north of the pit
Heap leach operations commenced at Nifty in 1993 and ceased in 2009 due to the site focus changing to the
large and rapidly developing underground sulphide operation. The existing heap leach pads still contain a
substantial amount of copper. Results from metallurgical accounting figures have reconciled the historic heap
leach pads to have a mineral inventory of ~17Mt @ 0.53% Cu (approximately 91kt of copper metal). Cyprium
plans to retreat the historic heaps, by relocating the material to newly constructed heap leach infrastructure to
the south of the existing heap leach pads.
Cyprium Metals Limited
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The new leach pad facility will be constructed including leach pads and Pregnant Leach Solution (“PLS”),
Intermediate Leach Solution (“ILS”), Raffinate and Environmental storage ponds. Retreated material will be
screened and crushed to P80 20mm, and then continue to an agglomeration unit to improve percolation rates
to aid leaching, facilitating the recovery of copper into solution. The agglomerated material is then stacked on
the new heap leach pads.
Fresh Ore Overland
Fresh Ore Leach
Fresh Ore
Crusher
Proposed Pit
Stage 1
Fresh Ore stacking
Retreat Overland
conveyor, agglomerator
and screening plants
SX/EW
Retreat Leach
Pads
Figure 9 / Nifty Heap Leach Retreatment
Over time, Nifty was established as a robust oxide and secondary sulphide heap leach operation capable of
producing approximately 25,000tpa of copper metal as cathodes (LME Grade A with a purity of more than
99.999% copper metal) via SX-EW processing. The metallurgical testwork used in the Nifty Copper Project
Restart Study targeted copper recoveries of 85% with reduced acid consumption and reduced polymer
agglomerant consumption.
Optimisation testwork has enabled a scalable solution to be designed for the agglomeration, curing, stacking
and irrigation of the historic heap leach material based on this work.
Cyprium Metals Limited
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Numerous Government approvals are required for the restart project scope. Nifty is located on a State
Agreement Act tenement and Ministerial Approval is required to amend the project size and its operating life.
Clearing permits are required for the new heap leach pads and an amendment to a current approval for the
extension to the waste rock landform. There is an amended Mining Proposal required for the restart of the open
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 smaller permits required around the restart of the mining operation, that require reactivation or
renewal.
All of the numerous Government approvals required up to the final investment decision (“FID”) stage have been
received for the restart project scope. As Nifty is located on a State Agreement Act tenement, Ministerial
Approval to amend the project size and its operating life can only be submitted once the FID has been made.
NIFTY COPPER PROJECT APPROVALS
Department
Permit / Item
Description
Status
Date Lodged
Approved
Department of Water &
Environmental Regulation (DWER)
Works Approval and Licence
Amended Prescribed Activities
Licence to enable processing
Approved
8 Mar 2022
4 Aug 2022
26D Licence to Alter Water Abstraction
Methods of an Existing Licence
Change in abstraction mechanism
under the existing water license
Approved
25 Feb 2022
9 Jun 2022
Native Vegetation Clearing Permit x 2
Authorises the clearing of native
vegetation for project development
Approved
14 Nov 2021
25 Aug 2022
6 Sep 2022
Department of Mines Industry
Regulation & Safety (DMIRS)
Mining Proposal
Mine Closure Plan
Approval for mining activities and
construction of mine infrastructure
Approved
21 Feb 2022
10 Oct 2022
Defines rehabilitation and closure
accompanying the Mining Proposal
Approved
21 Feb 2022
10 Oct 2022
Project Management Plan
Project safety plan approval
Approved
20 Jan 2022
22 Mar 2022
Department of Jobs, Tourism,
Science and Innovation (JTSI)
State Agreement – Additional Proposal
Proposal to modify, expand, or vary
Nifty Copper’s activities beyond the
existing State Agreement approvals
Lodged
post
finance
Table 2 / Government Approvals Status
Since acquiring the Nifty copper project, Cyprium instituted a site maintenance and refurbishment programme
that was specifically targeted at key components of the SX-EW process and associated infrastructure required
to support the recommissioning of the heap leach SX-EW operation. This programme included the
refurbishment of the camp facilities and an upgrade to the communications infrastructure to meet the
immediate and future needs of the site.
Cyprium Metals Limited
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Pre-operations capital expenditure is estimated at AUD149 million, and including working capital and other site
costs, the project funding required is estimated at AUD193 million. The SX-EW annual production capacity is
25,000 tonnes per annum copper cathode metal and the oxide heap leach operation post construction life of
mine is 6.3 years.
C1 operating costs are USD1.91/lbs and all in C3 costs are USD2.82/lbs, to provide a post capital free cash flows
of AUD544 million, a post-tax Net Present Value of AUD277 million, an internal rate of return of 37% and a
project payback of 3 years.
Open Cut Ore mined
Re-treat ore tonnes stacked
Total ore stacked
Average Grade
Average Recovery
Copper Metal Cathode Production Capacity
Copper Metal Cathode Produced
Copper Metal Cathode Produced
Life of Oxide Heap Leach Operation (post construction)
Revenue
C1 Costs
C2 Costs
C3 Costs
Pre-production Capital Expenditure
Operating Cash Flows (EBITDA)
Free Cash Flows (EBIT)
NPV Pre-Construction (after tax) @7% discount rate
IRR (after tax)
Project payback post construction
Mt
Mt
Mt
%
%
ktpa
Kt
Mlbs
Years
USD/lb
USD/lb
USD/lb
USD/lb
AUDM
AUDM
AUDM
AUDM
%
Years
8.8
17.1
25.9
0.65
87.3
25.0
146.1
322.0
6.3
4.08
1.91
2.56
2.82
149.3
822.8
543.7
277.3
37
3.0
Table 3 / Nifty Copper Project Restart Study Economic Analysis Summary
The project cash flows and forecast returns are sensitive to the movement in the LME Copper price and
AUD/USD FX rate which has been based on an LME Copper price of USD9,000 per tonne (USD4.08/lb) and an
AUD/USD FX rate of 0.75, equating to AUD12,000 per tonne, compared to current copper prices which are over
AUD13,000 per tonne.
Sensitivities
Cu Price
Cu Price
AUD/USD FX
AUD/USD FX
C1 Costs
C1 Costs
Capital Costs
Capital Costs
1 Pre-tax cash flows
2 After tax cash flows
Base Case
USD9,000/t
0.75
USD1.91/lbs.
Sensitivity
USD1,000
USD10,000/t
5%
0.7125
10%
USD2.10/lb.
AUD279m
10%
Cash Flow1
AUD195m
AUD1,947m
AUD92m
AUD1,845m
AUD (82)m
AUD903m
AUD (28)m
AUD307m
NPV2
AUD101m
AUD379m
AUD48m
AUD325m
AUD (61)m
AUD216m
AUD (25)m
AUD252m
IRR2
+12%
49%
+6%
43%
(7) %
30%
(4) %
33%
Table 4 / Nifty Copper Project Restart Study Sensitivities
Cyprium Metals Limited
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Average LME Cash Price in A$/t since Nifty Acquisition in March
2021
LME Cash Price A$/t
Restart Study A$/t
Current copper price
15,000
14,500
14,000
13,500
13,000
12,500
12,000
11,500
11,000
10,500
10,000
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2021
2022
Figure 10 / LME Cash Price in AU$/t since Nifty Acquisition March 2021
(Source: LME USD Cash Price and RBA AUD/USD FX rates)
There are a number of opportunities at the Nifty Copper Project, including:
1. Significant near-term brownfield copper development project located in the Tier 1 mining jurisdiction of
Western Australia, with only 12 months to re-start the copper mine as there is extensive infrastructure in
place and start production of LME A Grade copper cathode metal (99.99% copper) on site.
2. The open pit shape contains 1.2MT at 0.8% copper of inferred resources (9,600 copper metal tonnes insitu)
that have the potential to provide additional copper tonnes to the heap leach. The material in this study
classifies and costs that material as waste.
3. The drilling conducted by Cyprium and released to the market in late 2021 and early 2022 has not been
included in the November 2021 Mineral Resource Estimate that was used for the Nifty restart study and
the results of this drilling will add further copper tonnes to the inventory and convert existing copper metal
classifications to higher confidence. An updated Mineral Resource Estimate that included the results from
the Nifty West drilling programme was released in May 2022 (refer to CYM ASX announcement dated 16
May 2022 “28.4% increased Nifty Copper MRE to 940,200t copper metal”) with further Mineral Resource
Estimates to follow.
4. Reagent consumptions are continually being optimised in the laboratory, with good results to date. The
optimisation tests have been undertaken on a representative trench sample and composite sonic drilling
samples. A chalcopyrite sample is also to be tested under the proposed regime. Further optimisation
testwork will be conducted on new ore from the oxide pit via diamond core currently in the laboratory.
5. The sulphide project will considerably extend the mine life, as either a sulphide heap leach operation or a
concentrator operation. These studies have commenced and include design optimisation and a
metallurgical test work phase.
6. Copper has a very favourable market outlook as it is viewed as a critical component in the energy transition,
being used in electrical motors, batteries, inverters, wiring and charging stations and there is no current
substitute for copper in electrical applications. Demand growth is expected to be solid going forward, while
supply is expected to be impacted by various issues such as declining ore grade, resource depletion, cost
inflation, and sovereign risk.
Cyprium Metals Limited
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Project Progress
Site Clean Up and Inventory
Since taking control of the site in April 2021, CYM has undertaken a significant clean-up of the mine site,
including the rectification of a number of outstanding safety and environmental legacy issues.
There has been significant sorting of equipment, parts, critical spares, and supplies. Required equipment has
been recredited to inventory and that which is not required was collated for sale as surplus. The process has
revealed the significant inventory of spares that was included in the Nifty acquisition.
Work has been completed on the concrete batching plant so that it is ready for refurbishment activities,
significantly improving project cost efficiencies during the construction phase.
SX-EW Refurbishment
Work continued on the preparation for refurbishment of the SX-EW plant. This included clean up around the
facility, stripping out tanks, pumps and pipes for assessment and refurbishment, pressure, and condition testing
of tanks.
The clean-up of the SX has been completed to a stage where it is ready for refurbishment tasks to commence.
The EW clean-up has proceeded very well with stripping of anodes and cathodes from cells. Many cathodes still
had copper attached which has been stripped and placed on pallets (refer to image 3). The dried solids have
been collected from the cells for return to the circuit for when the refurbishment commissioning commences.
Once the solids are removed, the pipework is taken out and the tanks cleaned. The tanks are then filled and
hydrotested for any leakage. The tanks are then emptied and await a reline and leak repair when refurbishment
commences.
The tank strip out includes hydrotesting to allow repair assessment:
Image 1 / SX Mixer Settler cleanout lower level
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Image 2 / EW - Removal of Cathodes
Image 3 / Copper Cathodes Removed
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Accommodation Refurbishment
Image 4 / Cleaned EW Cells ready for condition inspection
The refurbishment of the accommodation consisted of a full strip out and refit to each unit, including wet area
upgrade to bring the units up to current expected standards for on-site accommodation.
Image 5 / Refurbished accommodation
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Refurbishment has also included areas in the dry mess and dining area, as well as upgrading of laundry facilities
in the refurbished areas. The remaining rooms will be completed concurrently as the project ramps up.
Image 6 / Refurbished Bathroom
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Operational Readiness
The mobile communications tower has been significantly upgraded to enable 4G services once available with
communications and data capacity across site improved, allowing high definition calling and streaming services,
as well as vastly improved cloud/business capabilities.
There are also geological, mining and survey systems that have been completed.
Site control systems have been commissioned and made operational, including Safety and ERP systems. The
Safety systems are being reviewed and updated in line with Nifty’s approved Project Management Plan.
The ERP system has an embedded budget and project cost tracking process.
Image 7 / Copper rich solution flowing out of the heaps following recent rainfall at Nifty
Work around the heap leach pads has involved trenching and drilling to obtain samples for assay and testing.
Drainage has been re-established to direct leach solutions to the collection ponds and prevent overflowing
during rain events. Access has also been re-established to the top of the heap for transport and placement of
residue from the collection ponds. Image 8 shows where leach solution exits and collects after each significant
rain event. The blue colour is the copper sulphate in the leach solution and the copper can be seen precipitating
on the bottom lift of the heap in the background. This photograph was taken on the 25 September 2022 and
clearly demonstrates that the heap pads continue to leach copper.
The solution from the heap has been directed to collect in the drains at the heap front. To achieve this, repairs
had been undertaken to some liners and material has been cleaned out of a number of areas from these drains.
Image 9 shows where these drains have collected the solution and flows into the PLS pond.
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Image 8 / Copper Leaching from Heaps – blue is copper sulphate
Over time, the collection ponds have filled up with residue, limiting storage freeboard. The residue is a mixture
of ore fines, precipitated solids, and solution. The team has been pumping solution from these ponds and have
established access so that the ponds can be dried out and the material excavated back up to the heap leach.
Once the ponds have been emptied, they are able to be inspected, refurbished, and relined. Pond capacities
have also been improved so that in rainfall events, the solution is retained within the ponds, which has
previously been restricted due to being filled with solids. Image 10 shows this solution at the pump outlet being
discharged to the PLS pond (relatively clean and free of solids). The solution has a grade of +10 gpl copper when
compared to a usual solvent extraction (“SX”) feed grade of 3 to 4 gpl copper. This significant solution inventory
of over 500 tonnes of copper is available for project commissioning.
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Image 9 / Leach Solution from Heap Drains – twin drains of copper sulphate solution
Image 10 / Copper rich solution being pumped to PLS pond for future solution inventory
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Nifty Metallurgy
Image 11 | Nifty 6m high metallurgical test work column
Over 200,000 tonnes of copper has been produced as copper metal cathode from the SX-EW plant that is on
site at Nifty. The historical testwork demonstrates that recoveries of +90% are achievable. The heap leach pads
as treated had variable results, depending on the methodology used to treat the material. CYM has made
improvements to the process by focussing testwork on the practical parameters of the leach.
The first stage was to run 4 columns, including a 6-metre column, on heap leach retreat material to investigate
a number of parameters around crush size, copper recovery and agglomeration. Results to date have been very
good, with crush size being optimised and recovery of copper being as expected from the historical testwork.
The improved agglomeration is proving successful in allowing good solution flows right through the 6-metre
column.
The second stage has been to run 6 columns of heap leach material from various locations (via trench samples
and sonic drill holes) to reduce reagent consumption, particularly acid consumption. The results were very good
and confirm the reagent consumptions and recoveries that CYM anticipated for the retreat material and hence
fresh material from the oxide open pit.
Mineralogical reports have shown leaching of the full suite of copper minerals from the retreat material,
including minerals in the various rock types, and including secondary and primary sulphide minerals such as
covellite, digenite, bornite and chalcopyrite.
The next stage of testing, to be undertaken during the Nifty SX-EW refurbishment phase, will focus on a suite of
core samples taken from the open pit mineral resource. Although it is the same rock types and orebody as mined
and treated historically, Cyprium is ensuring that the leach process is tested on individual ore types to determine
if there are any further optimisation work that can be undertaken, if the material to be mined is not as uniformly
distributed as the retreat material. This stage of testing will also look at the recovery of the thin native copper
that has been identified historically in the Nifty orebody and has been seen in the footwall of the mineral
resource during diamond drilling.
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Resource Definition Drilling
The Nifty mineral resource remains open both up and down plunge of the host syncline. The resource drilling at
Nifty West and East undertaken in 2021 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.
Western drilling
The RC drilling programme targeted lightly drilled areas up-plunge of the former underground mine in the keel
area of the Nifty Syncline below the western end of the Nifty open pit (Figure 11).
Nifty West drill
Figure 11 / Nifty Copper Project showing location of Nifty West drill program (local grid)
Wide intervals of ~70m to ~115m thick zones of significant copper mineralisation intersected in the keel zone
of the Nifty Syncline, up-plunge of the former underground mine, have been consistently encountered from the
drilling below the western end of the open pit. These wide intervals are ideal for a large-scale open pit
development.
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. Excellent potential remains to outline further
copper mineralisation extending into the southern limb and up-plunge of the Nifty syncline, in a future phase of
drilling.
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The remaining assays for the Nifty West RC drilling programme were received during 2022. Significant results
included:
Hole 21NRWP064 – copper mineralisation extends over 92m downhole, including:
− 20m at 0.70% Cu from 210m, including:
1m at 1.04% Cu from 210m
4m at 1.29% Cu from 214m
1m at 1.23% Cu from 221m
1m at 1.42% Cu from 225m
− 31m at 1.61% Cu from 234m, including:
14m at 2.72% Cu from 235m
− 13m at 0.55% Cu from 268m, including:
1m at 1.14% Cu from 271m
1m at 1.26% Cu from 273m
Hole 21NRWP047 – copper mineralisation extends over 69m downhole, including:
− 57m at 1.01% Cu from 224m, including:
5m at 1.38% Cu from 225m
3m at 1.61% Cu from 232m
2m at 1.95% Cu from 244m
2m at 1.86% Cu from 267m
8m at 2.65% Cu from 270m, including:
o 2m @ 6.29% Cu from 274m
Hole 21NRWP048 – copper mineralisation extends over 115m downhole, including:
− 19m at 0.66% Cu from 186m, including:
2m at 1.64% Cu from 191m
1m at 1.28% Cu from 202m
− 10m at 0.49% Cu from 218m
− 17m at 1.19% Cu from 232m, including:
2m at 1.39% Cu from 234m
2m at 1.51% Cu from 238m
2m at 4.03% Cu from 241m
− 11m at 0.53% Cu from 271m, including:
2m at 1.08% Cu from 272m
Hole 21NRWP049 – copper mineralisation extends over 82m downhole, including:
− 5m at 1.96% Cu from 221m, including:
1m at 4.11% Cu from 225m
− 22m at 0.88% Cu from 227m, including:
4m at 1.96% Cu from 233m
1m at 1.88% Cu from 238m
1m at 1.03% Cu from 243m
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− 17m at 1.39% Cu from 265m, including:
8m at 2.65% Cu from 266m
Hole 21NRWP051 – copper mineralisation extends over 88m downhole, including:
− 1m at 1.16% Cu from 238m
− 20m at 0.85% Cu from 258m, including:
5m at 1.96% Cu from 270m
− 13m at 1.14% Cu from 288m, including:
9m at 1.47% Cu from 288m
Hole 21NRWP052 – copper mineralisation extends over 93m downhole, including:
− 30m at 1.12% Cu from 234m, including:
2m at 4.02% Cu from 237m
4m at 1.62% Cu from 240m
3m at 2.32% Cu from 253m
2m at 1.94% Cu from 259m
− 41m at 0.91% Cu from 265m, including:
3m at 1.92% Cu from 277m
2m at 3.17% Cu from 286m
1m at 1.38% Cu from 295m
4m at 1.36% Cu from 297m
TARGET
AREA
Figure 12 / Nifty West target area
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Section 101,720E
Hole 21NRWP064 successfully confirmed the continuity of the thick zone of copper mineralisation returning
20m at 0.70% Cu from 210m, 31m at 1.61% Cu from 234m, including 14m at 2.72% Cu from 235m, and 13m at
0.55% Cu from 268m, which remains open to the south. Five holes (21NRWP048 to 52) drilled along this
previously untested section line all returned significant widths of low to medium grade copper mineralisation
consistent with the historic holes (refer to Section 1).
Section 1 / Nifty West drill hole section 101720E
(Note: underground holes were drilled sub-parallel to the mineralisation and are displayed for information purposes only.
Intersections for historic holes not displayed if superseded by current drilling)
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Section 101,680E
A single infill hole (21NRWP047) drilled on this section confirmed the integrity of historic hole (YNC077),
returning an impressive 57m at 1.01% Cu from 224m, including 5m at 1.38% Cu from 225m, 3m at 1.61% Cu
from 232m, 2m at 1.95% Cu from 244m, 2m at 1.86% Cu from 267m and 8m at 2.65% Cu from 270m (refer to
Section 2).
Section 2 / Nifty West drill hole section 101,680E
(Note: underground holes were drilled sub-parallel to the mineralisation and are displayed for information purposes only.
Intersections for historic holes not displayed if superseded by current drilling)
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Eastern drilling
The Nifty East infill extensional drilling program was designed to increase the density of drilling over the sparsely
tested eastern extension of the existing resource and comprised 21 RC holes for 5,725m. This drilling programme
targeted areas from the previous program which identified encouraging widths of oxide/transitional
mineralisation extending east and sulphide mineralisation extending east at depth beneath the former Nifty
open pit (refer to Figure 13).
The assay results demonstrate potential to define additional shallow mineralisation for the planned heap leach
restart and grow the latest 940,200t contained copper Mineral Resource Estimate, including the total oxide
measured and indicated category, which is expected to increase the Phase 1 open pit mine life of the Nifty
Copper Project restart.
Eastern Drill
Figure 13 / Nifty Copper Project showing location of eastern extension drilling (local grid)
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Significant widths of copper mineralisation intersected included:
18m at 0.45% Cu from 65m in hole 21NRSP021 including:
1m at 2.35% Cu from 67m
17m at 0.52% Cu from 248m including:
o 2m at 1.14% Cu from 255m
• 11m at 0.66% Cu from 326m in hole 21NRSP022 including:
2m at 1.57% Cu from 332m
5m at 0.51% Cu from 354m including:
o 1m at 1.40% Cu from 354m
• 12m at 0.74% Cu from 234m in hole 21NRSP023 including:
2m at 1.20% Cu from 236m
1m at 1.50% Cu from 239m
1m at 1.26% Cu from 241m
• 5m at 0.47% Cu from 72m in hole 21NRSP024 including:
1m at 1.36% Cu from 73m
13m at 1.08% Cu from 314m including:
o 1m at 1.12% Cu from 316m
o 3m at 3.10% Cu from 321m
• 13m at 0.52% Cu from 242m in hole 21NRSP025 including:
1m at 1.48% Cu from 243m
1m at 2.13% Cu from 246m
• 7m at 1.14% Cu from 196m in hole 21NRSP031 including:
4m at 1.76% Cu from 196m
• 4m at 0.70% Cu from 128m in hole 21NRSP034 including:
2m at 1.17% Cu from 129m
• 3m at 0.69% Cu from 188m in hole 21NRSP039 including:
1m at 1.21% Cu from 189m
3m at 1.18% Cu from 255m including:
o 2m at 1.38% Cu from 256m
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Nifty Mineral Resource Estimate
The Company released an updated Mineral Resource Estimate (“MRE”) for the Nifty copper deposit following
completion of the successful Nifty west pit drilling program in 2021, which is outlined as follows:
Nifty is the 6th largest development project in Australia1, ranked by contained copper metal, but has the
highest grade and is the only project capable of being developed in the near term
208,000t (28.4%) increase in the contained copper metal to 940,200t in the updated Nifty Copper MRE
Total oxide MRE increased to 16.1Mt at 0.9% Cu for 144,300t of contained copper metal, providing further
near surface copper inventory for the Nifty Phase 1 oxide copper project
Nifty East drilling will be included in the next Nifty Copper deposit MRE update (primarily targeted further
oxide extension)
Drilling programmes confirmed copper mineralisation still open to the east and west
Copper metal contained in existing restart heap leach pads is in addition to the MRE
The Nifty copper deposit is a structurally and lithological controlled strata bound 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 current Nifty MRE of 95.1Mt at 1.0% copper for a total contained copper inventory of 940,200t (refer to
Table 5) is the result of the completion of the successful Nifty west pit drilling program and Nifty Copper Project
Restart Study. The Nifty west drilling program consisted of 71 RC holes for a total of 18,867 metres.
Table 5 / May 2022 Mineral Resource Estimate – Nifty Copper Deposit
The Nifty Copper Project Restart Study (which is based on the MRE of 732,200t of contained copper, refer to
CYM ASX release, 17 November 2021, “Updated Nifty Copper Mineral Resource Estimate”) is focussed on the
development of the first phase of the project that involves a return to heap leaching and SX-EW to produce
copper metal cathode on site. The significant inventory and increase of heap leachable oxide mineralisation
confirmed by this MRE (16.1Mt at 0.9% copper for approximately 144,300t of contained copper metal) presents
additional upside opportunity on project economics. The drilling programmes completed at Nifty West and East
were designed primarily to confirm the mineralisation and to improve the confidence, hence classification of
inferred resource, plus possible extension of mineralisation.
1 Evolution Capital Equity Research dated 6 June 2022, available at https://cypriummetals.com/investor-centre/analyst-research-reports/
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Maroochydore Copper 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”). An RC drilling campaign
was completed by the end of 2021, which 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 15.
The RC drill holes 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.
The oxide mineralisation currently extends over a strike length of 3,000 metres, has a width of up to 500 metres
and thicknesses up to 100 metres, as modelled in the existing JORC 2012 mineral resource estimate. The
sulphide copper - cobalt mineralisation currently extends over a strike length of 2,500 metres long (still open),
up to 500 metres wide and up to 50 metres deep (still open). The resource shapes are outlined in Figure 14 and
sections 3 and 4.
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
38m @ 1.04 % Cu & 508 ppm Co from 82m in 21MDRC027 including:
o 20m @ 1.60 % Cu & 794 ppm Co from 86m
61m @ 0.92% Cu & 543 ppm Co from 71m in 21MDRC030 including:
•
•
o 5m @ 1.39 % Cu & 795 ppm Co from 73m
o 4m @ 1.92 % Cu & 794 ppm Co from 90m
o 13m @ 1.77 % Cu & 818 ppm Co from 96m
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•
61m @ 0.35 % Cu & 203 ppm Co from 56m in 21MDRC033 including:
o 2m @ 0.45 % Cu & 146 ppm Co from 62m
o 5m @ 0.46 % Cu & 244 ppm Co from 69m
o 4m @ 1.27 % Cu & 212 ppm Co from 88m
o 6m @ 0.46 % Cu & 342 ppm Co from 102m
Significant Cobalt results include:
•
•
22m @ 0.19 % Cu & 529 ppm Co from 25m in 21MDRC022 including:
o 4m @ 0.16 % Cu & 1,659 ppm Co from 42m
35m @ 0.31 % Cu & 743 ppm Co from 39m in 21MDRC024 including:
o 7m @ 0.48 % Cu & 1,775 ppm Co from 48m
o 6m @ 0.54 % Cu & 1,186 ppm Co from 60m
Figure 14 / Maroochydore Copper – Cobalt Project location plan
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Figure 15 / Maroochydore Copper – Cobalt Project RC drillhole collar location plan
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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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Murchison Copper-Gold Project
Nanadie Well Mineral Resource Estimate
Cyprium’s maiden Mineral Resource Estimate for the Nanadie Well deposit to a JORC 2012 standard, is outlined
as follows:
Nanadie Well polymetallic orebody, preliminary Mineral Resource Estimate contains:
- Copper 162,000 tonnes
- Gold 130,000 ounces
-
Silver 1,364,000 ounces
- Cobalt 2,200 tonnes
- Nickel 11,900 tonnes
-
Zinc 6,500 tonnes
Nanadie Well extends to within one metre of surface
Mineralisation is shallow and broad, remaining open at depth and along strike to the north
Significant potential for extension
The Nanadie Well Copper-Gold Mineral Resource Estimate (refer to Table 6) forms part of the Murchison
Copper-Gold Project. The broader Nanadie Well model further highlights the potential to expand the known
resource both along strike and down dip. The current resource tapers with depth and the potential exists to
expand this laterally at depth with further deeper drilling. In addition, the current resource is modelled from
near surface to a nominal depth of 220mRL (255m from surface) but potential exists to increase the depth
extents to beyond the limits of the deepest drilling which is currently down to 160mRL (315m from surface).
The deeper holes that extend beyond the lower limits of the modelled 2022 resource have intersected
mineralisation with similar down hole mineralised widths and grades as those included in the modelled resource.
This further highlights the potential to identify additional mineralisation within the layered intrusive body at
depth. The model also highlighted trends in the mineralisation with Nickel and Cobalt grades increasing towards
the northern end of the current Inferred Resource. There is also potential to expand the known resource along
strike with further closer spaced drilling.
The Nanadie Well block model extends from 6993900mN to 6995350mN and 692600mE to 693600mE and from
160mRL to the topographic surface nominally around 475mRL. The Inferred Resource is confined to the more
densely drilled area between 6994040mN and 6995120mN and 692800mE and 693180mE (refer to Figure 16).
A broader block model has been generated to aid future drill planning and identify structural trends in the
mineralisation.
The Nanadie Well MRE currently extends from the base of the Quaternary surface cover sands and clays from
only 0.5m to 6m below surface, down to a maximum depth of 220mRL (255m from surface). The bulk of the
currently defined resource lies above 250mRL (above a depth of 225m from surface, refer to Figures 16 to 17
and Sections 5 to 6). The mineralisation remains open at depth.
The resource is estimated 60m beyond the last fence of drilling at the north end and 100m beyond the last fence
of drill holes at the southern end (Figure 17). The current drilling extends beyond the base of the estimated
resource (Figure 16, sections 5 to 6). The wireframe models that were used to generate the model domains
extend a further 140m to the south and 230m to the north of the reported resource limits.
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Table 6 / Nanadie Well 2012 JORC Mineral Resource Estimate
Note:
Differences in sum totals of tonnages and grades may occur due to rounding
Cut-off at 0.25% Cu
Reported Grades and tonnages for all metals are estimated top-cut grades and tonnages
Figure 16 / Isometric View of the Nanadie Well Block Model for Cu ≥ 0.25%
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Figure 17 / Plan View of the Nanadie Well Block Model at 470mRL Showing Drill Collars & Section Locations
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Section 5 / Section 6994740mN through the Nanadie Well Block Model
Section 6 / Section 6994940mN through the Nanadie Well Block Model
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Nanadie Well RC Drilling Programme
An RC drilling campaign was completed at the Nanadie Well Project during 2022.
The Highlights of the drilling programme were:
• RC drilling at the Nanadie Well Project has identified broad anomalous zones copper–nickel-PGE
mineralisation 1.6 kilometres north of the Nanadie Well deposit
• RC drilling on the 10 kilometre long layered magmatic/greenstone-metasediment basal contact has
identified further copper-nickel-PGE mineralisation
• RC drilling has successfully tested the Nanadie mineralisation a further 1.6km along strike to the north
• These encouraging results have been prioritised for follow up geophysical and drilling programmes
The RC drilling assay results included:
• 4m @ 746 ppm Cu & 0.11 ppm Pd from 100m in 22NWRC002
• 16m @ 2,325 ppm Cu & 0.06 ppm Au from 88m in 22NWRC003A, including:
o 4m @ 6,250 ppm Cu & 0.15 ppm Au from 92m
• 68m @ 2,305 ppm Cu, 0.09 ppm Pd & 0.05 ppm Pt from 36m in 22SKRC001
• 56m @ 3,337 ppm Cu, 0.14 ppm Pd & 0.06 ppm Pt from 116m in 22SKRC001 including:
o 24m @ 5,002 Cu, 1,294 ppm Ni, 0.23 ppm Pd & 0.11 ppm Pt from 140m
• 4m @ 4,720 ppm Cu, 1,330 ppm Ni, 0.28 ppm Pd & 0.11 ppm Pt from 68m in 22SKRC002
• 12m @ 3,620 ppm Cu, 0.09 ppm Pd & 0.06 ppm Pt from 116m in 22SKRC002
The 6 RC drillhole programme tested a variety of exploration targets in the Nanadie Well Project for a total of 918
metres as detailed in Figure 18 and Long section 1.
The Stark basal contact target consists of magmatic Cu-Ni-PGE mineralisation associated with the Barrambie
Igneous Complex (“BIC”), a layered mafic-ultramafic intrusive complex that extends for 75 kilometres along a
major NNW-SSE striking crustal boundary – the Youanmi Shear Zone. Mineralisation observed by previous
operators and Cyprium consists of disseminated, stringer, matrix, semi-massive and massive sulphides – primarily
chalcopyrite with lesser pyrrhotite, pyrite and pentlandite – located at or near the base of some intrusions within
the complex.
Outcropping Cu-Ni gossan and sulphide mineralisation was discovered in and around shallow historic workings at
the Stark prospect in 2014. Mineralisation is hosted by gabbro on or near its basal contact with banded iron
formation (“BIF”) and plunges gently south. Limited historical exploration at the prospect has included geological
mapping and surface sampling, geophysics and drilling.
Two holes were drilled at Stark as part of the recent program, with one drillhole testing a SQUID EM anomaly and
the other one testing up plunge of previous drill intercepts. Both drillholes hit sulphide mineralisation in gabbro
above the basal BIF contact:
• 22SKRC001 intersected a wide interval of disseminated, matrix and semi-massive chalcopyrite and
pyrrhotite from 36m within an embayment in the basal gabbro contact, and returned:
o 68 m @ 2,305 ppm Cu from 36m;
o 56 m @ 3,337 ppm Cu from 116m including:
24m @ 5,002 ppm Cu, 1,294 ppm Ni, 0.23 ppm Pd & 0.11 ppm Pt from 140m
• 22SKRC002 intersected disseminated to splashy pyrrhotite and chalcopyrite towards the base of the
gabbro, returning an intercept of 12 m @ 3,620 ppm Cu from 116m
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Cyprium tenements partly cover 12 kilometres of the BIC and 10 kilometres of lightly explored prospective basal
contacts. Cyprium considers that potential for polymetallic sulphide mineralisation has already been
demonstrated. Geophysical and drilling programmes are currently being designed to follow up this prospective
magmatic intrusive basal contact.
A line of four holes was drilled to test 1.6km along strike north of the Nanadie Well Inferred Mineral Resource
(40.4 Mt @ 0.40 % Cu, 0.10 g/t Au, refer to CYM ASX announcement: 19 July 2022, “Nanadie Well Mineral
Resource Estimate”) in the vicinity of anomalous intercepts in historic drillholes. Transported overburden up to
50m thick presented drilling challenges, which meant that drillhole 22NWRC003 had to be abandoned at 66m and
redrilled nearby as 22NWRC003A. Finely disseminated chalcopyrite was logged sporadically throughout the holes,
with the greatest volume between 86 m and 98 m in 22NWRC003A returning:
• 16 m @ 2,325 ppm Cu from 88 m including:
o 4 m @ 6,250 ppm Cu & 0.15 ppm Au from 92m
The RC drilling was designed to test the northern extents of the Nanadie Well layered magmatic intrusive
polymetallic mineralisation. The 16m zone of copper/gold mineralisation intersected in 22NWRC003A, 1.6 km
north of the current Nanadie Well mineral resource, demonstrates the extensional potential of the system and
follow up geophysical and drilling programmes are being designed by Cyprium geologists to further test this
potential.
The drilling has successfully tested the extensional potential of the current Nanadie Well mineralisation to the
north. The results open up a further 1.6km of potential strike for the current mineralisation. Cyprium is planning
the next stage of work programmes to target the potential mineralised corridor.
Analytical samples for the Nanadie Well extensional and Stark basal contact investigation programmes were
collected as 4 m scoop split composites. Cyprium geologists will select and submit for assay 1 m splits from the
mineralised composites to gain a full understanding of the grade distributions and to assist in the design of follow
up geophysical and drilling programmes for both exploration programmes.
Cyprium Metals Limited
40
Long Section 1 / Stark RC drilling 2022
Figure 18 / Nanadie Project RC drillhole collar location plan
Cue RC Drilling Programme
Cyprium completed an RC drilling campaign during 2022 at the Cue Copper Project.
The Highlights of the drilling programme were:
• RC drilling of targets at Cyprium’s Cue Copper Project has returned anomalous results at 5 of 7 targets
tested
• RC drilling is targeted at discovering syngenetic-structural base metal deposits
• RC drilling on E20/630, under the northern half of an extensive soil anomaly returned elevated copper
and gold values from 3 of the 4 drillholes the first completed under this untested soil anomaly
• RC drilling at Mt Eelya under outcropping gossan intersected anomalous levels of copper, zinc, and gold
The RC drilling assay results included:
• 4m @ 746 ppm Cu & 0.11 ppm Pd from 100m in 22NWRC002
• 16m @ 2,325 ppm Cu & 0.06 ppm Au from 88m in 22NWRC003A, including:
o 4m @ 6,250 ppm Cu & 0.15 ppm Au from 92m
• 68m @ 2,305 ppm Cu, 0.09 ppm Pd & 0.05 ppm Pt from 36m in 22SKRC001
• 56m @ 3,337 ppm Cu, 0.14 ppm Pd & 0.06 ppm Pt from 116m in 22SKRC001 including:
o 24m @ 5,002 Cu, 1,294 ppm Ni, 0.23 ppm Pd & 0.11 ppm Pt from 140m
• 4m @ 4,720 ppm Cu, 1,330 ppm Ni, 0.28 ppm Pd & 0.11 ppm Pt from 68m in 22SKRC002
• 12m @ 3,620 ppm Cu, 0.09 ppm Pd & 0.06 ppm Pt from 116m in 22SKRC002
Cyprium Metals Limited
41
The 26 RC drillhole programme tested targets on seven Cue exploration licences for a total of 3,441 metres as
detailed in Figures 19 - 21.
Figure 19 / RC drillhole collar location plan
The Cue tenements cover 180 square kilometres of volcano-sedimentary and intrusive rocks prospective for
syngenetic-structural base metal deposits comprised of disseminated, stringer, semi-massive and massive
sulphides – dominantly pyrite/pyrrhotite with associated chalcopyrite/chalcocite and minor bornite/sphalerite.
Weathering of primary sulphides has resulted in oxide mineralisation at Hollandaire with development of oxide
and supergene material noted but not fully defined at the Eelya South and Mount Eelya deposits.
Historic exploration in the area has predominately focussed on gold. The Hollandaire copper/gold deposit
(Indicated and Inferred Resources of 2.78Mt @ 1.90% Cu & 0.32g/t Au) was discovered in 2011 and led to an
exploration focus on base metal systems. Substantial datasets have been generated by previous owners of the
tenements; Cyprium geologists are continuing to review and evaluate the historic and Cyprium generated data to
identify potential base metal targets in the Cue Copper Project.
At Mt Eelya, 8 drillholes for 1,200m tested targets proximal to mineralisation intersected in historic drilling,
airborne EM geophysical survey anomalies and outcropping gossans. Four drillholes returned elevated Cu or Zn
values with associated anomalous Au in 22CURC004 as detailed in Figure 20.
Cyprium Metals Limited
42
Figure 20 / Mt Eelya gossans, VTEM anomalies and 2022 RC drilling results
• 22CURC004 returned an intercept of 44m @ 1,167 ppm Cu & 3,525 ppm Zn from surface, including:
o 4m @ 5,020 ppm Cu, 8,720 ppm Zn & 0.12 g/t Au from 8m; and
o 4m @ 3,800 ppm Cu, 2,030 ppm Zn & 0.39 g/t Au from 40m.
• 22CURC005 returned intercepts of 16m @ 1,549 ppm Zn from surface, including:
o 4m @ 6,850 ppm Zn from 24m; and
o 8m @ 5,385 ppm Zn from 68m.
• 22CURC006 returned an intercept of 12m @ 4,020 ppm Zn from 76m.
• 22CURC008 returned an intercept of 4m @ 3,790 ppm Zn from 140m.
A series of discontinuous linear magnetic highs concealed beneath transported overburden noted on E20/630
were interpreted by Cyprium geologists to be ultramafic horizons within a sequence of mafic rocks. A broad
200ppm Cu soil anomaly, with a peak of 1,384ppm coincides with one of the ultramafic units and extends for
more than 2 kilometres onto adjacent tenement E20/606 as detailed in Figure 20. Two RAB holes were drilled in
2012 on the western edge of E20/630 as part of a larger programme, but final depths of 6m and 9m meant these
holes did not test the soil anomaly effectively.
Cyprium geologists consider that the association of intrusive mafics with ultramafic rocks indicates potential for
magmatic Cu-Ni mineralisation, particularly given it is unusual for unmineralized ultramafic rocks to be anomalous
in Cu. The Ni/Cr ratio, which helps discriminate anomalous from background Ni values, was used to help define
the drilling targets. Copper anomalies near terminations of magnetic features are of interest as Cu mineralisation
was intersected in historic holes drilled immediately south of one such termination at the southern end of the Cu
soil anomaly on E20/606.
Cyprium Metals Limited
43
Figure 21 / E20/630 drillholes, soil anomalies and interpreted geology on RTP magnetic image
Four RC holes were drilled for 480m on two lines across an area of interest where the Cu soil anomaly (local peak
value of 1,085 ppm), with at least one sample of +0.5 Ni/Cr, coincides with the termination of a magnetic high.
Drill results are encouraging, with three of the four holes returning elevated Cu and Au values, Cyprium geologists
will design follow up drill programmes.
• 22CURC024 returned an intercept of 8m @ 2,315 ppm Cu & 0.10 g/t Au from 56m.
• 22CURC025 returned an intercept of 16m @ 2,969 ppm Cu from 88m, including:
o 4m @ 7,220 ppm Cu & 0.13 g/t Au from 88m.
• 22CURC026 returned an intercept of 20m @ 2,010 ppm Cu from 100m to EOH at 120m, including:
o 4m @ 3,750 ppm Cu and 0.15 g/t Au from 116m to EOH.
Intercepts of note from holes drilled during the May 2022 campaign as detailed on Figure 11 include:
• 8m @ 1,435 ppm Ni from 68m in 22CURC014 on E20/616;
• 16m @ 1,160 ppm Ni & 102 ppm Co from 52m in 22CURC015 on E20/616; and
• 12m @ 1,937 ppm Cu & 0.12 g/t Au from 72m in 22CURC022 at Eelya South on E20/659.
Analytical samples for all Cue drillholes were collected as 4m scoop split composites. CYM geologists will select
and submit for assay 1m splits through mineralised intervals to gain a full understanding of grade distribution
and to assist in the design of follow up drill programmes. Work is being planned to further investigate the
potential of these encouraging anomalous results.
Cyprium Metals Limited
44
Nifty Project Financing
The Nifty financing process has been a key focus for Cyprium since the release of the Nifty Copper Project restart
study, targeting a total of AUD240 million to AUD260 million debt funding package.
Offtake Prepayment Facility
By the end of 2022, Cyprium signed an exclusive Term Sheet with Transamine SA for USD35.0 million following
completion of due diligence activities, in respect of a Copper Cathode Offtake Secured Prepayment Facility as part
of the debt funding package to finance the restart of the Nifty Copper Project. The terms of the Offtake agreement
include all the Copper Cathode produced during Phase 1 of the Nifty Copper Project Restart and pricing of Copper
Cathode shipments is to be determined by reference to average market rates.
Senior Secured Bond Issue
Due diligence activities and documentation were completed during 2022 to enable the commencement of fixed
income investor calls with international debt capital market investors for a contemplated Senior Secured Bond
Issue, with a five-year tenor during January and February 2023, which was subject to inter alia market conditions.
The net proceeds from the contemplated bond issue together with the Offtake Prepayment Facility comprised
the targeted AUD240 million to AUD260 million debt funding package to finance the restart of the Nifty Copper
Project.
Significant Events after the Reporting Date
Placement to Support Nifty Project Restart
During February 2023, the Company received firm commitments for AUD35 million through a two-tranche
placement (“the Placement”) of fully paid ordinary shares to sophisticated and institutional investors at $0.11 per
share. Each participant in the Placement was to receive 1 free attaching option exercisable at $0.15 per option for
every 1 share to be issued under the Placement. From the Placement proceeds, AUD20 million was to be applied
as part of the Company’s funding strategy to finance the restart of the Nifty Copper Project.
The settlement of the Tranche 1 Placement was conditional upon receipt of binding commitments in relation to
the Senior Secured Bond Issue whilst settlement of the Tranche 2 Placement was subject to shareholder approval
at the General Meeting following settlement of the Tranche 1 Placement.
Senior Secured Bond Issue
During January and February 2023, the Company undertook fixed income investor calls with international debt
capital market investors for a proposed issue of a USD denominated Senior Secured Bond Issue with a five-year
tenor, subject to inter alia market conditions. The terms proposed for the USD denominated senior secured bond
were revised and deemed not commercially satisfactory to the Company.
Voluntary Suspension
As a consequence of the Placement to Support Nifty Project Restart and the Senior Secured Bond Issue not
proceeding, the Company requested the ASX for a voluntary suspension of CYM securities whilst the Company
evaluates possible alternative financing arrangements for the Nifty Copper Project restart and the Company has
completed a strategic review.
Secured Loan Deed
In March 2023, the Company entered into a AUD6 million Secured Loan Deed to support Cyprium’s near-term
funding whilst the Company undertakes a strategic review. The strategic plan will involve the short medium- and
long-term opportunities for the Company.
Cyprium Metals Limited
45
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 2022.
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 a mechanical 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 has a Bachelor of Commerce and holds a graduate diploma of Applied Finance and Investment. 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
Boab Metals Limited
Titan Minerals Limited
Director from March 2020
Director since August 2016
Cyprium Metals Limited
46
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
7,856,806
9,299,665
2,860,000
RESULTS OF OPERATIONS
The Group’s net loss after taxation attributable to the members of Cyprium Metals Limited for the year ended
31 December 2022 was $27.5 million (2021: $26.7 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 July and August 2022, CYM received $16.8 million (after costs) through an oversubscribed placement from
sophisticated, professional, and institutional investors of 139,130,435 fully paid ordinary shares in the Company
at $0.115 per Share and 16,748,651 shares issued from an Entitlements Issue at $0.115 per Share.
During 2022, the Company issued 2.5 million performance rights to Directors and 12.25 million performance
rights to employees and contractors.
SIGNIFICANT EVENTS AFTER THE REPORTING DATE
As a consequence of a Placement as part of the Nifty Project restart and the Senior Secured Bond Issue not
proceeding, the Company requested the ASX for a voluntary suspension of CYM securities whilst the Company
evaluates possible alternative financing arrangements for the Nifty Copper Project restart. The Company entered
into a $6.0 million Secured Loan Deed in March 2023 (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.
Cyprium Metals Limited
47
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 and the remaining 20.3 million options lapsed on 30 March 2023.
6,000,000 unlisted share options exercisable at 30 cents each expired on 11 December 2022.
As at the date of this report, there were no outstanding options.
PERFORMANCE RIGHTS
The Company issued 2.5 million performance rights to Directors and 12.25 million performance rights to
employees during 2022, 9.5 million performance rights vested and were exercised, and 4.0 million performance
rights lapsed. A further 7.0 million performance rights have lapsed to the date of this report.
As at the date of this report there were 51.25 million performance rights on issue, expiring in June and July 2024,
May and June 2026, and July 2027. 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 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 Share
for 5 consecutive trading days
Total expiring in June and July 2024
Number
2,750,000
2,750,000
5,500,000
Cyprium Metals Limited
48
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
Copper production exceeding 25,000 tonnes of contained copper metal after
commencement of mining of the Nifty Copper mine; 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
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 2.0mt 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 mine; 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 July 2027
Number
8,500,000
8,500,000
8,500,000
8,500,000
34,000,000
Number
2,350,000
2,350,000
2,350,000
2,350,000
2,350,000
11,750,000
DIRECTORS’ MEETINGS
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.
Cyprium Metals Limited
49
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
Cyprium Metals Limited support and adhere to the principles of sound corporate governance. The Board
recognises the recommendations of the Australian Securities Exchange Corporate Governance Council and
considers that Cyprium Metals Limited complies to the extent possible with those guidelines, which are of
importance and add value to the commercial operation of an ASX listed resources company. The Company has
established a set of corporate governance policies and procedures, and these can be found on the Company’s
website: cypriummetals.com.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Company’s auditors to provide the Directors of Cyprium
Metals Limited with an Independence Declaration in relation to the audit of the financial report. A copy of that
declaration is included within the annual report, and forms part of this directors’ report.
During the year the Company's auditors did not perform any other services in addition to their statutory audit
duties. The Board considers any non-audit services provided by the auditor and satisfies itself that the provision
of those non-audit services is compatible with, and do not compromise, the auditor independence requirements
of the Corporations Act 2001 for the following reasons:
all non-audit services are subject to the corporate governance procedures adopted by the Company and are
reviewed to ensure they do not impact upon the impartiality and objectivity of the auditor.
the non-audit services do not undermine the general principles relating to auditor independence as set out
in APES 110 code of Ethics for Professional Accountants, as they do not involve reviewing or auditing the
auditor's own work, acting in a management or decision-making capacity for the Company, acting as an
advocate for the Company or jointly sharing risks and rewards. Details of the amounts paid to the auditors of
the Company, and its related practices for audit and non-audit services provided during the year are set out
in note 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 2022. 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
Cyprium Metals Limited
50
influence shareholder value. Shareholder value is created by project acquisition, analysis, expansion, financing,
development, and operations.
During the pre-decision to construct mine phase, KMP and employees are incentivised deliver the business
strategy to acquire and grow our project base.
Fixed remuneration
Fixed remuneration consists of total Directors’ fees, salaries, bonus, consulting fees and employer contributions
to superannuation funds, excluding performance pay (cash, shares and options). Fixed remuneration levels are
reviewed annually by the Board.
Executive remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive
and appropriate for the results delivered. The framework has the following components:
Base salary (which is based on factors such as length of service, performance, and experience) and (where
applicable) employer contributions to superannuation;
Consulting fees for executives providing services under a services contract; and
Long-term incentives through participation in the Performance Rights Plan of Cyprium Metals Limited and as
approved by the Board.
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 $60,000 - $90,000 per annum
during 2022. 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.
Employee Securities Incentive Plan
The Employee Securities Incentive Plan of Cyprium Metals Limited was last approved by Shareholders at the
2022 Annual General Meeting.
Directors, full and part time employees and contractors of Cyprium Metals Limited are eligible to participate in
the Employee Securities Incentive Plan. Any issue of Employee Securities Incentives 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 Employee Securities Incentive Plan represents an
appropriate method to:
Cyprium Metals Limited
51
Reward Directors, KMP and employees for their performance;
Provide long-term incentives for participation in the Company’s future growth;
Motivate and retain Directors, KMP and employees;
Establish a sense of ownership in the Company for Directors and employees;
Enhance the relationship between the Company and its employees for the long-term mutual benefit of all
parties; and
Enable the Company to attract high calibre individuals who can bring specific expertise to the Company.
Voting on the Remuneration Report - 2022 Annual General Meeting
The Company received approximately 99.81% of “yes” votes on its remuneration report for the year ended 31
December 2021.
Loans to Directors and Executives
There were no loans to Directors and KMP during the financial year ended 31 December 2022.
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 2022 are as follows:
2022
Directors
Gary Comb
Barry Cahill
Nicholas Rowley
Salary or
Consulting
Fees
$
Share Based
Payments 1
$
Other
Benefits 2
$
Total
$
Performance
related
%
90,000
420,301
60,000
387,475
909,038
31,922
570,301 1,328,435
9,225
486,700
43,007 1,372,346
91,922
52,232 1,950,968
-
80%
66%
35%
68%
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
505,694
6,587
43,905 1,560,420
156,521
50,492 2,222,635
-
85%
68%
74%
73%
1 These values relate to non-cash performance rights issued during 2019, 2020, 2021 and 2022 years and have
been derived using valuation techniques and inputs as set out in Note 17. The 2022 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
52
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.
2022
Gary Comb
Barry Cahill
Nicholas Rowley
Balance at the
start of the
year
or
appointment
6,094,940
6,266,370
2,585,000
Granted
during the
year as
compensation
On vesting of
performance
rights
Other changes
during the year
Balance at the
end of the
year
-
-
-
1,000,000
2,250,000
-
761,866
783,295
275,000
7,856,806
9,299,665
2,860,000
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 2022 and outstanding as at 31 December 2022:
2022
Barry Cahill
Total
1
500,000
500,000
2
500,000
500,000
Vesting Conditions
3
500,000
4
500,000
500,000
500,000
5
500,000
500,000
Total
2,500,000
2,500,000
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 2.0mt 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 mine; 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 2022:
2021
Barry Cahill
Gary Comb
Total
Vesting Conditions
1
2,250,000
1,000,000
3,250,000
2
2,250,000
1,000,000
3,250,000
3
-
-
-
4
2,250,000
1,000,000
3,250,000
5
2,250,000
1,000,000
3,250,000
Total
9,000,000
4,000,000
13,000,000
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 mine; 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
Cyprium Metals Limited
53
2019
Vesting Conditions
3
400,000
600,000
500,000
1,500,000
4
400,000
600,000
500,000
1,500,000
2
-
-
-
-
Nicholas Rowley
Barry Cahill
Gary Comb
Total
Vesting conditions
1. Completion of a transaction to acquire or earn into majority ownership interests in projects
2. Release of a Copper mineral resource of at least 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
Total
800,000
1,200,000
1,000,000
3,000,000
1
-
-
-
-
consecutive days
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 2022
(2021: $nil).
Additional Information
The factors that are considered to affect total shareholders’ return are summarised below:
Loss attributable to owners of the
company ($’000)
Dividends paid ($)
Share price at financial year end
($)
2022
2021
(27,474)
-
(26,672)
-
2020
(997)
-
2019
2018
(2,354)
-
(5,892)
-
0.105
0.165
0.205
0.245
0.185
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.
Cyprium Metals Limited
54
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 2023
Cyprium Metals Limited
55
Consolidated Statement of Profit or Loss and Other Comprehensive Income
for the year ended 31 December 2022
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 and amortisation
Acquisition costs
Interest expense on lease liabilities
Loss before income tax
Note
2022
$’000
183
-
(11,859)
(3,360)
(3,493)
(2,254)
(1,480)
(1,759)
(3,216)
(1,662)
-
(49)
2021
$’000
139
24
(8,233)
(3,591)
(3,469)
(2,564)
(2,332)
(1,628)
(3,907)
(1,522)
(152)
(22)
(28,949)
(27,257)
Income tax benefit
4
1,475
585
Net loss for the year from continuing operations
(27,474)
(26,672)
Other comprehensive income
Total comprehensive loss for the year
-
-
(27,474)
(26,672)
Loss per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
23
23
(4.29)
(4.29)
(5.98)
(5.98)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
Cyprium Metals Limited
56
Consolidated Statement of Financial Position
as at 31 December 2022
31-Dec-2022
31-Dec-2021
Note
$’000
$’000
Current Assets
Cash and cash equivalents
Receivables
Inventories
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
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
8
9
10
11
12
13
14
14
15
16
17
18
19
1,694
459
6,606
1,375
10,134
236
105,282
31,995
6,855
144,368
154,502
6,190
341
6,531
710
31,700
35,181
67,591
74,122
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
80,380
87,322
271,685
6,086
8,748
(206,139)
80,380
251,993
8,321
8,748
(181,740)
87,322
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
57
Consolidated Statement of Changes in Equity
for the year ended 31 December 2022
Issued
capital
Accumulated
losses
Convertible
borrowings-
equity
component
Reserves
Total
$’000
$’000
$’000
$’000
$’000
Balance at 1 January 2021
164,980
(156,217)
Loss for the year
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
-
-
(26,672)
(26,672)
Shares issued
90,000
Convertible borrowings issued
as consideration for acquisition
Options issued as consideration
for acquisition
Share based payments
Transfer from reserves
Cost of Issues
-
-
-
2,577
(5,564)
1,149
-
-
-
-
-
-
-
-
-
8,748
-
-
-
-
3,308
-
-
-
-
12,071
(26,672)
(26,672)
90,000
8,748
4,037
4,037
4,702
(3,726)
-
Balance at 31 December 2021
251,993
(181,740)
8,748
8,321
Balance at 1 January 2022
251,993
(181,740)
8,748
8,321
Loss for the year
Total comprehensive loss for
the year
Transactions with owners in
their capacity as owners
Shares issued
Share based payments
Transfer from reserves
Cost of Issues
-
-
(27,474)
(27,474)
17,926
-
2,883
(1,117)
-
-
3,075
-
-
-
-
-
-
-
-
-
-
3,723
(5,958)
-
Balance at 31 December 2022
271,685
(206,139)
8,748
6,086
4,702
-
(5,564)
87,322
87,322
(27,474)
(27,474)
17,926
3,723
-
(1,117)
80,380
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
58
Consolidated Statement of Cash Flows
for the year ended 31 December 2022
31-Dec-
2022
$’000
31-Dec-
2021
$’000
Note
Cash flows from operating activities
Payments to suppliers and employees – continuing operations
(25,282)
(19,838)
Interest paid on lease liabilities
Interest paid on convertible notes
Interest received
Other Income
Research and development allowance received
(49)
(1,440)
296
-
1,475
(22)
-
139
24
1,239
Net cash (used in) operating activities 5
(25,000)
(18,458)
3
Cash flows from investing activities
Acquisition of plant and equipment
Acquisitions of projects
Payments for exploration expenditure
Proceeds from the sale of plant and equipment
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 decrease/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
5
(11,377)
(300)
(3,948)
117
94
(9,282)
(24,350)
(5,150)
-
(6,825)
(15,414)
(45,607)
17,926
(1,117)
(174)
16,635
(23,780)
25,474
1,694
90,000
(5,564)
(274)
84,162
20,100
5,374
25,474
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Cyprium Metals Limited
59
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
1. Corporate Information
The financial report of Cyprium Metals Limited (“Cyprium Metals” or “the Company”) for the year ended 31
December 2022 was authorised for issue in accordance with a resolution of the Directors on 31 March 2023.
Cyprium Metals is a company limited by shares incorporated in Australia whose shares are publicly traded on
the Australian Securities Exchange. The nature of the operations and the principal activities of the Company
are described in the Directors’ Report and Review of Operations.
2. Summary of Significant Accounting Policies
Basis of Preparation
(a)
The financial statements are general purpose financial statements, which have been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards, and other authoritative
pronouncements of the Australian Accounting Standards Board. The financial statements have also been
prepared on a historical cost basis. The presentation currency is Australian dollars.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group
only. Supplementary information about the parent entity is disclosed in note 25.
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.
Unrealized 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
60
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
(f)
(i) Functional and presentation currency
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.
(ii) Transactions and balances
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 recognized in the Statement of Profit or Loss and Other
Comprehensive Income.
(iii) Group entities
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
61
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 recognized 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 recognized 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.
Cyprium Metals Limited
62
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Income Tax
(i)
Income tax expense or benefit for the year is the tax payable on the current year’s taxable income or loss
based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Current and deferred tax expense attributable to amounts
recognized directly in equity is also recognized directly in equity.
Deferred tax assets and liabilities are recognized 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 recognized 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 recognized for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilize 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 realize 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.
Cyprium Metals Limited
63
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
A reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future
years to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
Cash and cash equivalents
(k)
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand, deposits
held at call with banks or financial institutions, other short-term, highly liquid investments with original
maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to insignificant risk of changes in value, and bank overdrafts.
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.
Cyprium Metals Limited
64
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 Profit or Loss and after Statement of
Comprehensive Income net of any reimbursement. Provisions are measured at the present value or
management’s best estimate of the expenditure required to settle the present obligation at the end of the
reporting year. If the effect of the time value of money is material, provisions are discounted using a current
pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as an interest expense.
Issued capital
(q)
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction from proceeds.
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.
Cyprium Metals Limited
65
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 recognized as an expense in the
period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if
there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and
do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases
of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-
value assets are recognised as expenses in profit or loss as incurred.
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.
Cyprium Metals Limited
66
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Diluted earnings per share is calculated as net profit/loss attributable to members, adjusted for:
a) costs of servicing equity (other than dividends) and preference share dividends.
b) the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses, and
c) other non-discretionary changes in revenues or expenses during the year that would result from the
dilution of potential ordinary shares,
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted
for any bonus element.
Employee Benefits
Wages, salaries, and annual leave
(w)
(i)
Liabilities for wages and salaries and annual leave expected to be settled within 12 months of the reporting
date are recognised in provisions in respect of employees' services up to the reporting date. The amount is
measured at the amount expected to be paid, including expected on-costs, when liabilities are settled.
Expenses for non-accumulating sick leave are recognised when the leave is taken and are measured at the
rates paid or payable.
(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
Cyprium Metals Limited
67
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
expense is recognised for any increase in the value of the transaction as a result of the modification, as
measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a modification of the original award, as described in the
previous paragraph.
The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods
and services received unless this cannot be measured reliably, in which case the cost is measured by reference
to the fair value of the equity instruments granted. The dilutive effect, if any, of outstanding options is reflected
in the computation of loss per share (see note 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 notes 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 2022 on the basis that the ability to utilise these temporary differences and tax losses cannot yet
be regarded as probable.
Cyprium Metals Limited
68
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
Deferred Exploration and Evaluation Expenditure
Deferred exploration and evaluation expenditure has been capitalised on the basis that the Group will
commence commercial production in the future, from which time the costs will be amortised in proportion to
the depletion of the mineral resources. Key judgements are applied in considering costs to be capitalised
which includes determining expenditures directly related to these activities and allocating overheads between
those that are expensed and capitalised.
In addition, costs are only capitalised that are expected to be recovered either through successful
development or sale of the relevant mining interest. Factors that could impact the future commercial
production at the mine include the level of reserves and resources, future technology changes, which could
impact the cost of mining, future legal changes, and changes in commodity prices. To the extent that
capitalised costs are determined not to be recoverable in the future, they will be written off in the year in which
this determination is made.
Inventories
Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net
realizable 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 recognized 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.
Cyprium Metals Limited
69
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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.
(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 $1.7 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.
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
There were no acquisitions during the year.
Prior Year 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 Mine;
• 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
Trade and other payables
Lease liabilities
Provision for rehabilitation (refer to note 16)
Net assets
Cyprium Metals Limited
70
$’000
6,602
273
15,387
87,979
110,241
(4,187)
(176)
(41,841)
64,037
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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 year ended
31 December 2021. Security deposits of $6,730,000 were also established in relation to the Nifty Copper mine.
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).
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 (refer to note 19).
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 which expired on 30 March 2023.
Cyprium Metals Limited
71
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
-
-
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.
-
-
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
4.
Income Tax
(a) Income tax expense
Numerical reconciliation of income tax expense to prima facie tax payable:
A reconciliation between tax expense and the product of accounting
loss before income tax multiplied by the Company’s applicable tax rate
is as follows:
Loss before income tax expense
Tax at the Australian rate of 25% (2021: 26%)
Share issue costs
Share based payments
Movement in unrecognised temporary differences
Other assessable income
Non-deductible expenses
Research and development allowances
Income tax benefit not brought to account
Income tax benefit
(b) Recognised tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
Exploration and evaluation expenditure
Property, plant and equipment
Convertible note
Other
Tax losses recognised
Net deferred tax asset/(liability)
2022
$’000
2021
$’000
(28,949)
(7,237)
(375)
804
192
1
33
1,475
6,582
1,475
(7,472)
(2,375)
(2,547)
(45)
12,439
-
(27,257)
(7,087)
(336)
1,016
-
-
88
585
6,319
585
(6,586)
(1,649)
-
(123)
8,358
-
1 All references to copper prices are to London Metals Exchange daily quoted prices.
Cyprium Metals Limited
72
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(c) Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the
following items:
Accruals and other payables
Other
Share issue costs
Tax losses Cyprium Metals Limited
Net deferred tax asset not recognised
2022
$’000
2021
$’000
304
3
1,116
10,973
12,396
239
-
1,211
7,778
9,228
The benefit for tax losses will only be obtained if:
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.
31-Dec-2022
$’000
31-Dec-2021
$’000
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
Interest paid - convertible notes
Depreciation
Change in assets and liabilities
(Increase) /decrease in receivables
(Increase)/decrease in other assets
Increase/(decrease) in trade and other payables
Net cash (used in) operating activities
Cyprium Metals Limited
73
496
1,198
1,694
(27,474)
-
3,216
(1,440)
1,662
363
400
(1,787)
(25,000)
179
25,295
25,474
(26,672)
1,239
3,907
-
1,522
(337)
(1,477)
3,360
(18,458)
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
31-Dec-2022
$’000
31-Dec-2021
$’000
6. Receivables – Current
Diesel Fuel Rebate receivable
GST receivable
Other receivable
7.
Inventories
Stores & 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
-
245
214
459
142
873
58
1,073
6,606
6,606
6,951
6,951
1,375
1,375
1,429
1,429
236
236
484
-
(248)
-
-
236
484
484
58
633
(150)
(41)
(17)
484
Balance at 1-Jan-2022
Transfers – Provisions (note 16)
Additions
Depreciation
Balance at 31-Dec-2022
Cost
Accumulated depreciation
Balance at 31-Dec-2022
Land and
buildings
Mining
properties
and leases
Plant and
equipment
Capital
works in
progress
Total
$’000
1,122
-
226
(343)
1,005
1,673
(668)
1,005
$’000
87,437
(8,605)
4,841
-
83,673
83,673
-
83,673
$’000
6,461
-
8,827
(1,071)
14,217
16,337
(2,120)
14,217
$’000
$’000
7,769
102,789
-
(1,382)
-
(8,605)
12,512
(1,414)
6,387
105,282
6,387
108,070
-
(2,788)
6,387
105,282
Cyprium Metals Limited
74
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
11. Deferred Exploration and Evaluation Expenditure
Opening balance
Acquisition of exploration properties 1
Exploration and evaluation expenditure incurred during the year
Closing balance
28,762
-
3,233
31,995
7,107
15,387
6,269
28,762
31-Dec-2022
$’000
31-Dec-2021
$’000
1 In March 2021, Cyprium acquired 100% of the Patterson Copper Project, which is located approximately
85km southeast of Nifty (refer to note 3).
Refer to note 2 (y) for conditions under which deferred exploitation and evaluation expenditure if carried
forward.
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
14. Lease Liabilities
Leased premises - current
Leased premises - non-current
Movements 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 acquisitions (refer to note 3)
Unwinding of discounting
Interest on Convertible Notes
Closing balance
Cyprium Metals Limited
75
6,855
6,855
6,949
6,949
4,439
1,751
-
6,190
341
710
1,051
556
865
-
-
(370)
1,051
29,705
-
3,435
(1,440)
31,700
12,775
873
300
13,948
301
255
556
61
633
176
(41)
(274)
556
-
27,252
2,453
-
29,705
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
Movements in Provision
Opening balance
Transfer – PPE (note 10)
Acquisition
Unwinding of discounting
Closing balance
31-Dec-2022
$’000
31-Dec-2021
$’000
35,181
35,181
42,381
(8,605)
-
1,406
35,181
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.
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
271,685
251,993
Cyprium Metals Limited
76
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
(b) Movements in ordinary shares on issue
Opening Balance
Shares issued and fully paid
Shares issued - vesting of performance rights
Transaction costs on share issues
31-Dec-2022
No. of
shares
‘000
$’000
31-Dec-2021
No. of
shares
$’000
‘000
564,819
155,879
9,500
-
251,993
17,926
2,883
(1,117)
98,569
450,000
16,250
-
164,980
90,000
2,577
(5,564)
730,198
271,685
564,819
251,993
(c) Performance Rights
As approved at the Company’s Annual General Meeting on 31 May 2022, 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 July 2027:
Vesting Conditions
1
500,000
500,000
2
500,000
500,000
3
500,000
500,000
4
500,000
500,000
5
500,000
500,000
Total
2,500,000
2,500,000
Barry Cahill
Total
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 2.0mt 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 mine; 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 $0.165 each, being the
Company’s share price at the date of the Company’s Annual General Meeting held on 31 May 2022. 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 $0.134, $0.129,
$0.127, and $0.125 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
$0.165
3.1%
77.3%
July 2027
Cyprium Metals Limited
77
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
The total value of these rights will be brought to account over the vesting period. A total of 14,750,000
performance rights (2,950,000 for each vesting condition 1 to 5 outlined above) were issued on the same
terms to Directors, employees, and contractors during August 2022. A total of 3,000,000 performance rights
(600,000 for each vesting condition 1 to 5 outlined above) have lapsed to the date of to the date of this
report.
18. Reserves
Foreign exchange translation reserve
Share-based payment reserve
Share-based payment reserve
Opening balance
Allocation to Issued Capital – vesting of performance rights
Allocation to Accumulated Losses
Capitalised to exploration
Acquisition of Paterson Copper Pty. Ltd.
Share-based payments expensed
Closing balance
31-Dec-2022
$’000
31-Dec-2021
$’000
778
5,308
6,086
7,543
(2,883)
(3,076)
508
-
3,216
5,308
778
7,453
8,231
2,530
(2,577)
(1,149)
795
4,037
3,907
7,543
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
Issued as consideration for acquisitions (refer to notes 3 and 15)
20. Directors and Key Management Personnel Disclosures
Short term employee benefits
Share-based payments
Other benefits
Total Remuneration
21. Related Party Disclosures
a) Key management personnel
8,748
8,748
8,748
8,748
570
1,329
52
1,951
558
1,614
51
2,223
For Director related party transactions please refer to note 20 “Key Management Personnel Disclosures”.
Cyprium Metals Limited
78
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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
Cyprium Metallurgy Australia Pty Ltd
PT Indonusa Mining Services
Country of
Incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Indonesia
2022
100%
100%
100%
100%
100%
100%
100%
Equity Holding
2021
100%
100%
100%
100%
100%
-%
100%
22. Auditor’s Remuneration
Audit Services:
Amounts received or due and receivable by the auditors of the parent company
31-Dec-2022
$’000
31-Dec-2021
$’000
HLB Mann Judd:
Audit and review of financial reports
Total Remuneration
23. Loss per Share
Loss used in calculating basic and diluted EPS:
From continuing operations
95
95
56
56
(27,474)
(27,474)
(26,672)
(26,672)
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
Number
of Shares
$’000
641,097
(4.29)
641,097
Number
of Shares
$’000
446,340
(5.98)
446,340
(4.29)
(5.98)
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.
Cyprium Metals Limited
79
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
a) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with
financial liabilities. The Company manages liquidity risk by maintaining sufficient cash facilities to meet the
operating requirements of the business and investing excess funds in highly liquid short-term investments.
The responsibility for liquidity risk management rests with the Board of Directors. Alternatives for sourcing
our future capital needs include our cash position and the issue of equity instruments. These alternatives are
evaluated to determine the optimal mix of capital resources for our capital needs. The Directors expect that
present levels of liquidity along with future capital raising will be adequate to meet expected capital needs.
b) Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the
fair value of financial instruments. The Company’s exposure to market risk for changes to interest rate risk
relates primarily to its earnings on cash and term deposits. The Company manages the risk by investing in
short term deposits.
Cash and cash equivalents
2022
$’000
2021
$’000
1,694
25,474
Interest rate sensitivity
The following table demonstrates the sensitivity of the Company’s Statement of Profit or Loss and Other
Comprehensive Income to a reasonably possible change in interest rates, with all other variables constant.
2022
2021
Effect on
Post
Tax Loss
($’000)
13
(13)
Effect on equity
including Accumulated
losses ($’000)
Increase/(Decrease)
13
(13)
Effect on
Post
Tax Loss
($’000)
191
(191)
Effect on equity including
Accumulated losses
($’000)
Increase/(Decrease)
191
(191)
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.
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.
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 2022, 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 2022.
Cyprium Metals Limited
80
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
d) Fair value measurement
The Directors consider that the carrying value of current receivables and current payables approximate their
fair values.
25. Parent Entity Information
The following details information related to the parent entity, Cyprium Metals Limited, at 31 December 2022.
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
2022
2021
713
159,055
1,650
33,388
125,667
271,685
5,308
8,748
(160,073)
125,667
(4,730)
(4,730)
25,998
140,958
1,204
31,092
109,865
251,993
7,544
8,748
(158,419)
109,865
(4,141)
(4,141)
Other Commitments
The Company had no commitments as at 31 December 2022.
Contingent Liabilities
The Company had no contingent liabilities as at 31 December 2022.
26. Contingent Assets and Liabilities
There are no known contingent assets or liabilities as at 31 December 2022 (2021: nil).
27. Commitments
The Group had no commitments as at 31 December 2022 (2021: $0.5 million).
28. Dividends
No dividend was paid or declared by the Company in the year ended 31 December 2022 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 2022.
Cyprium Metals Limited
81
Notes to the Consolidated Financial Statements
for the year ended 31 December 2022
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.
30. Significant Events after the Reporting Date
Placement to Support Nifty Project Restart
During February 2023, the Company received firm commitments for AUD35 million through a two-tranche
placement (“the Placement”) of fully paid ordinary shares to sophisticated and institutional investors at $0.11
per share. Each participant in the Placement was to receive 1 free attaching option exercisable at $0.15 per
option for every 1 share to be issued under the Placement. From the Placement proceeds, AUD20 million was
to be applied as part of the Company’s funding strategy to finance the restart of the Nifty Copper Project.
The settlement of the Tranche 1 Placement was conditional upon receipt of binding commitments in relation
to the Senior Secured Bond Issue whilst settlement of the Tranche 2 Placement was subject to shareholder
approval at the General Meeting following settlement of the Tranche 1 Placement.
Senior Secured Bond Issue
The net proceeds from the contemplated Senior Secured Bond Issue together with a USD35 million Offtake
Prepayment Facility comprised the targeted AUD240 million to AUD260 million debt funding package to finance
the restart of the Nifty Copper Project.
During January and February 2023, the Company undertook fixed income investor calls with international debt
capital market investors for a proposed issue of a USD denominated Senior Secured Bond Issue with a five-
year tenor, subject to inter alia market conditions. The terms proposed for the USD denominated senior
secured bond were revised and deemed not commercially satisfactory to the Company.
Voluntary Suspension
As a consequence of the Placement to Support Nifty Project Restart and the Senior Secured Bond Issue not
proceeding, the Company requested the ASX for a voluntary suspension of CYM securities whilst the Company
evaluates possible alternative financing arrangements for the Nifty Copper Project restart and the Company
has completed a strategic review.
Secured Loan Deed
In March 2023, the Company entered into a AUD6 million Secured Loan Deed to support Cyprium’s near-term
funding whilst the Company undertakes a strategic review. The strategic plan will involve the short medium-
and long-term opportunities for the company.
Cyprium Metals Limited
82
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 2022
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 2022 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
2022.
On behalf of the Board
Gary Comb
Chairman, Non-Executive Director
Perth, WA
31 March 2023
Cyprium Metals Limited
83
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 2022, 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 2023
L Di Giallonardo
Partner
84
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 2022, the consolidated statement of profit or loss and other comprehensive income , the
consolidated statement of changes in equity and the consolidated statement of cash flows for the
year then ended, and notes to the financial 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 2022 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 2(z) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the Group’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. In addition to the matter described in the Material
Uncertainty Related to Going Concern section, we have determined the matters described below
to be the key audit matters to be communicated in our report.
85
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.
Provision for Rehabilitation
Refer to Note 16
The Group has a provision for rehabilitation of $35.2
million as at 31 December 2022.
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 provision for rehabilitation 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.
Our procedures included but were not
limited to the following:
− We obtained an understanding of the
key
associated with
management’s review of the carrying
values of deferred exploration and
evaluation expenditure;
processes
− We
considered
Directors’
assessment of potential indicators of
impairment;
the
− 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 2023 for planned
exploration expenditure and discussed
with management the nature of planned
ongoing activities;
− We
enquired with management,
reviewed ASX announcements and
reviewed minutes of Directors’ meetings
to ensure that the Group had not
resolved to discontinue exploration and
evaluation at any of its areas of interest;
and
− We examined the disclosures made in
the financial report.
Our procedures included but were not
limited to the following:
− We assessed the expertise of the
valuers in making an assessment of the
restoration obligations;
− We considered provision movements
during the year to ensure that they were
consistent with our understanding of the
Group’s activities during that period;
and
− We assessed the evaluations carried
out by the Group to determine whether
sufficient supporting evidence was
available to support the cost estimates.
Accounting for, and Valuation of, the Convertible Notes
Refer to Note 15
As part of the acquisition of Paterson Copper Pty Ltd in
the prior period, $36M of the consideration paid was
settled through convertible notes, with a 4 year maturity
and annual coupon rate of 4%.
86
Our procedures included but were not
limited to the following:
− We
up-to-date
the most
agreements between the Group and its
financiers
terms
to understand
associated with the facility;
read
the
Accounting for, and Valuation of, the Convertible Notes
Refer to Note 15
The carrying value at 31 December 2022 is $31.7
million.
The accounting for, and valuation of, the convertible
notes 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 considered the valuation of the
equity component of the accounting for
this transaction;
assessed
of
capitalising the borrowing costs against
the acquired qualifying asset; and
eligibility
− We
the
− We
reviewed
management’s
recalculation of the loan balance and
assessed it 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 2022, but does
not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation
of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group
to continue as a going concern, disclosing, as applicable, matters related to going concern and
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
87
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.
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 2022.
In our opinion, the Remuneration Report of Cyprium Metals Limited for the year ended 31
December 2022 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
31 March 2023
88
L Di Giallonardo
Partner
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 31 March 2023.
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
552
526
1,665
791
3,849
91,126
1,817,873
4,224,574
69,759,413
654,305,314
730,198,300
There were 749 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
PRCM
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
PERTH SELECT SEAFOODS PTY LTD
UBS NOMINEES PTY LTD
OMNI INVESTMENTS PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
MR RAM SHANKER KANGATHARAN
MR WAYNE FRANK APTED
EST MR PETER PIOTR MACKOW
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
OMNI INVESTMENTS PTY LTD
MR VAUGHAN THALES KENT
MR RAM SHANKER KANGATHARAN
THE GOOD LUCK FAMILY PTY LTD
SHARESIES NOMINEE LIMITED
BLUEDALE PTY LTD
Total
Shares
108,298,544
30,474,619
28,994,906
26,210,580
19,768,401
16,372,227
13,000,000
8,096,061
7,175,000
7,030,973
6,956,522
6,750,000
5,700,000
4,887,297
4,404,521
4,239,155
3,919,478
3,768,760
3,695,829
3,621,093
313,363,966
%
14.83%
4.17%
3.97%
3.59%
2.71%
2.24%
1.78%
1.11%
0.98%
0.96%
0.95%
0.92%
0.78%
0.67%
0.60%
0.58%
0.54%
0.52%
0.51%
0.50%
42.91%
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
* Figures as reported on the last Substantial Shareholder notice received by the Company.
%*
8.52%
# of
Shares*
46,730,940
Date
27.05.2021
Cyprium Metals Limited
89
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
2022.
Share Options
On 11 December 2022, 6,000,000 Unlisted share options exercisable at 30 cents each, expired.
On 30 March 2022, 20,274,755 Unlisted share options exercisable at 31.41 cents each, expired.
On 30 March 2023, 20,274,755 Unlisted share options exercisable at 35.51 cents each, expired.
As at the date of this report, there were nil share options.
Performance Rights
As at the date of this report, there were 51,250,000 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
Copper production exceeding 25,000 tonnes of contained copper metal after
commencement of mining of the Nifty Copper mine; 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
8,500,000
8,500,000
8,500,000
8,500,000
34,000,000
Cyprium Metals Limited
90
ASX Additional Information
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 2.0mt 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 mine; 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 July 2027
Number
2,350,000
2,350,000
2,350,000
2,350,000
2,350,000
11,750,000
Cyprium Metals Limited
91
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 Mine, Maroochydore Copper Project, and Paterson Exploration
Project.
The Nifty Copper Mine (“Nifty”) is located on the western edge of the Great Sandy Desert in the north-eastern Pilbara region
of Western Australia, approximately 330km southeast of Port Hedland. Nifty contains a 2012 JORC Mineral Resource of
940,200 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, includes the Nanadie Well Copper-Gold Mineral Resources of
162,000 tonnes contained copper iv, which is open at depth and along strike to the north.
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 16 May 2022 “28.4% increased Nifty Copper MRE to 940,200t copper metal”
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”
iv Refer to CYM ASX announcement: 19 July 2022, “Nanadie Well Mineral Resource Estimate”
Disclaimer
References may have been made in this report to certain ASX announcements, including references regarding exploration
results, mineral resources, and ore reserves. For full details, refer to said announcement on said date. The Company is not
aware of any new information or data that materially affects this information. Other than as specified in this announcement
and the mentioned announcements, the Company confirms that it is not aware of any new information or data that
materially affects the information included in the original market announcements and, in the case of estimates of Mineral
Resources, Exploration Target(s) or Ore Reserves that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms
that the form and context in which the Competent Person’s findings are presented have not been materially modified from
the original market announcement.
Cyprium Metals Limited
92
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 Mine
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, P45/3177, P45/3150, P45/3151, L45/102, L45/128, L45/143, L45/148,
L45/74, L45/91, M271SA, E45/4319, E45/5705, E45/6263, M45/752, M45/753,
M45/754, M45/711, M45/712, M45/713, M45/745 and M45/746
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 and M45/1114
Cyprium Metals Limited
93