DANAKALI LTD
ABN 56 097 904 302
AUDITED FINANCIAL REPORT
FOR THE YEAR ENDED
31 DECEMBER 2024
Corporate Information
DANAKALI LIMITED ABN 56 097 904 302
1
Directors
Seamus Cornelius
(Executive Chairman)
Paul Donaldson
(Non-Executive Director)
Zhang Jing
(Non-Executive Director)
Jon Coates
(Non-Executive Director)
Chinekwu Duru
(Non-Executive Director)
Executive Management
Joint Company Secretary
Greg MacPherson
(Chief Financial Officer)
Catherine Grant-Edwards
Melissa Chapman
Registered Office and Principal Place of Business
Level 1, 2A / 300 Fitzgerald Street
NORTH PERTH WA 6006
Telephone: +61 (0)8 6266 8368
Bank
Auditors
Bendigo Bank
Hall Chadwick
80 Grenfell Street
283 Rokeby Road
Adelaide SA 5000
SUBIACO WA 6000
Share Register (Australia)
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
Telephone: 1300 850 505 (Inside Australia)
Telephone: +61 (0)3 9415 4000 (Outside Australia)
Facsimile: +61 (0)3 9473 2500
www.computershare.com
Website
www.danakali.com
Stock Exchange Listing
Danakali Limited Shares are listed on the National Stock Exchange of Australia (NSX:DNK).
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
2
Page
Executive Chairman’s Letter
3
Directors' Report
4
Auditors’ Independence Declaration
22
Consolidated Statement of Profit or Loss and Other Comprehensive Income
23
Consolidated Statement of Financial Position
24
Consolidated Statement of Changes in Equity
25
Consolidated Statement of Cash Flows
26
Notes to the Consolidated Financial Statements
27
Directors' Declaration
46
Independent Auditor’s Report
47
NSX Additional Information
51
Executive Chairman’s Letter
DANAKALI LIMITED ABN 56 097 904 302
3
Dear Shareholders,
It is my pleasure to present Danakali Limited’s annual financial statements for the year ending 31 December 2024. This
has been a year of significant transformation for the Company, as we successfully executed on our commitment to return
substantial capital to shareholders, advanced our corporate strategy towards a new phase of growth and restored trading
in Danakali shares.
Delivering Value to Shareholders
Danakali’s core focus throughout 2024 was on ensuring that shareholders benefitted from the proceeds of the Colluli Potash
Project sale. In total, we have now distributed $162 million to shareholders, following the completion of the second cash
distribution of $7.4 million in July 2024. This comprised a special dividend of 0.924 cents per share and a capital return of
1.076 cents per share, approved at our Annual General Meeting on 31 May 2024.
We are pleased that the vast majority of shareholders have received their distributions, though we continue to encourage
those who have yet to update their payment details with our share registry, Computershare, to do so promptly to ensure
receipt of their entitlements.
Strategic Growth Initiatives
With the successful divestment of Colluli, Danakali is concentrating on new opportunities in the mineral-rich regions of
Eritrea and Saudi Arabia. This is part of our commitment to identifying and developing projects that align with our broader
vision of being a leading exploration and development company in Australia and the Arabian-Nubian Shield. Our focus is
on precious metals and critical minerals.
During the year, we progressed our application for the Ela Gedel exploration licence in Eritrea, an area highly prospective
for copper and gold. In September 2024, Danakali’s CFO Greg MacPherson and I visited the site with officials from the
Eritrean Ministry of Energy and Mines, reinforcing our known commitment to working collaboratively with local stakeholders.
This visit confirmed our confidence in the region's geological potential, and we remain optimistic about securing the
necessary approvals.
In parallel, Danakali has taken meaningful steps to establish a foothold in Saudi Arabia’s rapidly growing minerals sector.
In early 2025, we signed a joint venture agreement with Massadir Al-Zamrda for Mining (Emerald) to explore mineral
resources in Saudi Arabia. Under this agreement, Danakali will hold an 80% interest in the joint venture, with Emerald
leveraging its regional expertise to identify high-potential exploration projects. This partnership provides us with a
compelling entry point into a jurisdiction that is actively promoting mining investment and development.
Relisting and Liquidity Considerations
A key challenge throughout the year has been the suspension of Danakali’s securities from the Australian Securities
Exchange (ASX) following the Colluli sale in April 2023. ASX requirements dictated that re-listing would require a significant
commitment to exploration expenditure, a condition that the Board determined was not in shareholders' best interests given
our strong cash position and the flexibility and opportunities it provides.
To address this, Danakali successfully transitioned to the National Stock Exchange of Australia (NSX), with the Company’s
shares commencing trading on 19 December 2024. This move ensures that shareholders once again have a liquid market
to trade their shares while we continue executing on our strategy.
Board and Leadership Updates
In December 2024, we bid farewell to Mr Taiwo Adeniji, who retired from his position as Non-Executive Director following
his retirement from African Finance Corporation (AFC). We sincerely thank Mr Adeniji for his contributions and strategic
guidance. We are pleased to welcome Ms Chinekwu Duru as his successor. Ms Duru is a corporate lawyer with extensive
experience across a range of industries, notably mining and energy, She is Senior Vice President & Lead Counsel at AFC.
Additionally, we strengthened our leadership with the appointment of Mr Jon Coates as an Independent Non-Executive
Director. Mr Coates, a highly experienced geologist with a successful track record in global mining exploration and
development, will play an important role with which advice in advancing our projects in Eritrea and Saudi Arabia.
Financial Strength and Future Outlook
As we close 2024, Danakali remains in a strong financial position, with a cash balance of $31.2 million and minimal
operational expenditure. Our disciplined approach to capital management ensures that we can continue to evaluate and
pursue high-quality mineral projects without dilution to shareholders.
Looking ahead, 2025 promises to be an exciting year as we progress our exploration initiatives, particularly in Eritrea and
Saudi Arabia, while continuing to assess strategic opportunities to maximize shareholder value. Our focus remains on
responsible resource development, technological innovation, and sustainable growth.
On behalf of the Board, I extend my gratitude to our shareholders for their continued trust and support. We remain
committed to delivering long-term value and look forward to updating you on our progress in the year ahead.
Yours Sincerely,
Seamus Cornelius
Executive Chairman
Danakali Limited
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
4
The directors present their report together with the financial statements of the consolidated entity being, Danakali Limited
(Danakali or the Company) and its controlled entities (the Group) for the financial year ended 31 December 2024.
DIRECTORS
The names and details of the Company’s directors in office during the financial period and until the date of this report are
as follows. Where applicable, all current and former directorships held in listed public companies over the last three years
have been detailed below. Directors were in office for this entire period unless otherwise stated.
Seamus Ian Cornelius
Executive Chairman, LLB, LLM, initially appointed Non-Executive Chairman on 15 July 2013, transitioned to Executive
Chairman on 14 June 2018, resumed Non-Executive Chairman role on 25 June 2019, and transitioned to Executive
Chairman on 26 February 2021.
Mr Cornelius has extensive experience as a corporate lawyer and former partner of one of Australia’s leading international
law firms. He has a high degree of expertise in cross-border transactions, particularly in the resources and finance sectors.
Mr Cornelius was appointed as Non-Executive Chairman of the Company on 15 July 2013 and acted in the role of Executive
Chairman from 14 June 2018 to 25 June 2019. As announced on 26 February 2021, Mr Cornelius was re-appointed as
Executive Chairman.
Mr Cornelius is currently the Non-Executive Chairman of Duketon Mining Ltd (appointed 8 February 2013). Mr Cornelius
was previously Non-Executive Chairman Buxton Resources Ltd (appointed 29 November 2010 and resigned 22 November
2024) and of Element 25 Limited (appointed 30 June 2011 and resigned 28 November 2023) and was previously a Non-
Executive Director of First Tin PLC (appointed 8 April 2022 and resigned 6 September 2023) and South Harz Potash Limited
(appointed 21 August 2023 and resigned 10 March 2024).
Special Responsibilities:
During the year Mr Cornelius was a member of the Audit and Risk Committee and a member of the Remuneration and
Nomination Committee.
Paul Michael Donaldson
Independent Non-Executive Director, Master’s Degree - Mining Engineering, Master’s Degree - Business and Technology,
BEng Chemical (Honours, University Medal), Assoc Dip. Applied Science (Metallurgy), appointed 11 October 2021
Over 30 years’ experience in senior management at BHP, Danakali and Pacific National. Mr Donaldson held a series of
senior management roles spanning over 20 years with BHP Billiton where he managed large scale open-cut mining
operations, headed the BHP Carbon Steel Materials Technical Marketing Team, managed the Port Hedland iron ore facility,
as well as key roles in product and infrastructure planning across large scale supply chains.
He also has extensive experience in high level business improvement and logistics from base metal operations and a high
degree of integrated supply chain management, technical operational management and frontline leadership experience in
the steel industry.
Mr. Donaldson, in his previous role as the Company’s CEO and Managing Director, redefined the product and development
path and process for the Project, overseeing the pre-feasibility, definitive feasibility and FEED study phases.
Special Responsibilities:
During the year Mr Donaldson was Chairman of the Remuneration and Nomination Committee. He was also the Chairman
of the Audit and Risk Committee until 24 April 2024 after which he transitioned to be a member of the committee for the
remainder of the year.
Zhang Jing
Non-Executive Director, M.Sc., appointed 17 June 2016
Ms Zhang has more than 15 years of international trading and business development experience in China and previously
held investment and project managerial roles in public listed companies.
Ms Zhang holds a Master’s degree in International Consultancy and Accounting from the university of Reading in the United
Kingdom.
Special Responsibilities:
None.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
5
Jon Coates
Non-Executive Director, appointed 24 April 2024
Mr Coates has had a lengthy and successful career as a senior executive and board member in the global resources
sector. He has lived and worked in a number of jurisdictions and has operated in greenfield, brownfield and mine
exploration environments. His work has covered a wide range of commodities and varied geological environments. He
has held senior roles in major and junior companies. The majority of his career was with Shell/Billiton, where his last
position was Chief Geoscientist in the metals exploration team of BHP Billiton. More recently, Mr Coates held the role of
Executive Geoscience Advisor of Ma’aden at Riyadh.
He has direct experience in remote site exploration and mining operations with complex logistics, security, community
and sensitive ecosystem issues. He holds BSc and MSc degrees from the University of London and a MBA from
University of Queensland. He has broad experience across exploration, project development, mining operations and
M&A, from hands-on operational roles to senior executive duties and board positions.
Special Responsibilities:
Mr Coates was appointed Chairman of the Audit and Risk Committee and a member of the Remuneration and
Nomination Committee on 24 April 2024.
Chinekwu Duru
Non-Executive Director, appointed 13 January 2025
Ms Duru is Senior Vice President & Lead Counsel at the AFC.
She is a transactional lawyer with over 18 years of experience in infrastructure financing across various sectors (Natural
Resources (Critical Minerals & Energy Resources), Transport (Port & Logistics), Heavy Industries and telecoms, Power,
Project Development, Sovereign Lending, Debt Capital Markets (Funding, and OTC Derivatives) Financial Advisory,
Syndications and Trade Finance transactions). She was the lead counsel on the first gold mine in Nigeria and Sierra
Leone, where she advised on the debt ( Senior, Mezzanine and Insurance wrap) and equity ( stream financing and
vannila equity) investment of AFC into these assets.
Special Responsibilities:
None.
Taiwo Adeniji
Non-Executive Director, HCIB, appointed 23 April 2020, resigned 31 December 2024
Mr Adeniji was Senior Director for Investment Operations & Execution at AFC, where he had responsibility, amongst other
things, for the institution’s investments in oil & gas, and mining projects. Taiwo has had over 26 years of post-graduate and
extensive professional and managerial experience in several areas of banking and finance. He has deep knowledge and
extensive experience with infrastructure and mining policy issues, as well as the analysis, evaluation and financing of
infrastructure and mining projects. Mr Adeniji has supervised AFC’s investments in mining projects that spanned different
products, including gold, copper, bauxite, and iron ore, as well as in different geographies, including countries in West,
North and Central Africa. From 1994 to 2007, Mr Adeniji worked with the African Development Bank, focussing largely on
infrastructure investments and financial sector development.
Mr Adeniji’s academic background is in economics and finance. He is an Honorary Senior Member (HCIB) of the Chartered
Institute of Bankers of Nigeria.
Special Responsibilities:
None.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
6
COMPANY SECRETARY
Catherine Grant-Edwards and Melissa Chapman
Appointed Joint Company Secretary 7 July 2017
Ms Melissa Chapman (Certified Practicing Accountant (CPA), AGIA/ACIS, GAICD) and Ms Catherine Grant-Edwards
(Chartered Accountant (CA)) were appointed as Joint Company Secretary on 7 July 2017. Ms Chapman and Ms Grant-
Edwards are directors of Bellatrix Corporate Pty Ltd (Bellatrix), a company that provides company secretarial and
accounting services to a number of ASX listed companies. Between them, Ms Chapman and Ms Grant-Edwards have over
40 years’ experience in the provision of accounting, finance and company secretarial services to public listed resource and
private companies in Australia and the UK, and in the field of public practice external audit.
INTERESTS IN SHARES, OPTIONS AND PERFORMANCE RIGHTS OF THE COMPANY
As at the date of this report, the interests of the directors in the shares, options and performance rights on issue by Danakali
Limited were:
Director
Ordinary
Shares
Options over
Ordinary Shares
S Cornelius
20,649,867
2,000,000
Paul Donaldson
1,145,693
-
PRINCIPAL ACTIVITIES
The company is seeking new opportunities in line with its vision to become a leading exploration and development company
in the Arabian-Nubian Shield and Australia, driving sustainable growth, technological innovation, and responsible resource
management. The company undertook distribution of capital returns & dividends to shareholders and also listed on the
NSX during the year.
CORPORATE STRUCTURE
Danakali Limited is a company limited by shares that is incorporated and domiciled in Australia.
REVIEW OF OPERATIONS
Distribution to Shareholders
The return of capital of $100,466,735 approved at the shareholders general meeting held on 24 November 2023 and the
Board approved special dividend of $54,233,691 to shareholders as at 5:00pm (AWST) on 2 January 2024 (Record Date)
(DNK Announcement 24 November 2023) was paid to shareholders on the 8 January 2024.
A further distribution of $7.4 million (capital return of 1.076 cents per share approved at Annual General Meeting on
31 May 2024 and special dividend of 0.924 cents per share) was paid to shareholders on 8 July 2024.
NSX Listing
The Company was listed for trading on the National Stock Exchange of Australia (NSX) on 19 December 2024. After an
extended period of suspension on the ASX, on 19 November 2024 the Company announced its intention to list on the NSX
to provide shareholders with the opportunity to trade their shares and to move the Company to a more appropriate
exchange.
Corporate Development
Danakali continues with its corporate development activities to investigate suitable projects to grow the company in line
with its vision of being a leading exploration and development company in Arabian-Nubian Shield and Australia’s precious
metals and critical resources sectors, driving sustainable growth, technological innovation, and responsible resource
management.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
7
CORPORATE
Board and Management Changes
On 24 April 2024, Jon Coates was appointed as a Non Executive Director of the Company.
On 31 December 2024, Taiwo Adeniji resigned as a director of the Company.
On 13 January 2025, Chinekwu Duru was appointed as a Non Executive Director of the Company.
There were no other changes to the Board or management during the period. In the future, the composition and size of the
Board will be determined by the Company’s operations and the skills and experience needed to protect and enhance
shareholder value.
Shares
There were no new shares issued during the year.
At 31 December 2024, there were a total of 368,334,346 fully paid ordinary shares on issue.
Options
There were no unlisted options exercised or expired during the period.
As at 31 December 2024, there was a total of 10,000,000 unlisted options on issue with exercise price of $0.35624 which
expire on 30 July 2025. In accordance with Listing Rule 7.22.3, the exercise price of each option was reduced by the
equivalent of the return of capital per share made to shareholders on the 8 January 2024 and 1 July 2024. The options
strike price was reduced by $0.28376 in total per option to $0.35624 (DNK Announcement 19 January 2024).
Performance Rights
There were no performance rights vested or lapsed during the period.
As at 31 December 2024, there was no performance rights outstanding.
Annual General Meeting
The Company’s annual general meeting was held on 31 May 2024 (AGM). For more information, refer to the Notice of
AGM and Results available via the Company’s website.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Listing on the NSX
Refer to review of operations above for details (DNK Announcement 13 December 2024).
Other
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
8
EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
Joint venture agreement
Danakali’s wholly owned subsidiary, Danakali (KSA) Pty Ltd signed a joint venture agreement in January 2025 with
Massadir Al-Zamrda for Mining (Emerald), a company incorporated under the laws of the Kingdom of Saudi Arabia (Joint
Venture Agreement), which will govern the formation, management and operation of a limited liability to be established in
the Kingdom of Saudi Arabia to explore for prospective mineral projects in Saudi Arabia, in which Danakali will hold an 80%
interest and Emerald will hold a 20% interest (JV Company).
Director appointment
Ms Chinekwu Duru, Senior Vice President & Lead Counsel at Africa Finance Corporation (AFC), was appointed as a Non-
Executive Director of the Company effective 13 January 2025. She was appointed to the Board as the nominee of
substantial shareholder AFC, following the resignation of Mr Taiwo Adeniji in December 2024.
Share Buy-back
On 17 February 2025, the Company announced its intention to undertake a minimum holding buy-back for holders of
unmarketable parcels of fully paid ordinary shares in the Company. Under the NSX Listing Rules, any shareholding valued
at less than $500 based on the closing price of shares on the NSX Electronic Trading System (NETS) is considered to be
an “unmarketable parcel” of shares. The Buy-Back will occur at $0.045 per share, being the approximate volume weighted
average price for the previous ten trading days in which trades in the Company’s shares were recorded prior to the Record
Date (14 February 2025). Based on the closing price of shares on the record date, the aggregate value of such ordinary
shares is $233,015. These Shares will be cancelled once transferred to the Company in accordance with the Corporations
Act 2001.
Other matters
There are no other matters or circumstances that have arisen since the end of the financial year which significantly affected
or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group
in future financial years.
ACTIVITIES PLANNED FOR 2025
The following key activities are planned over the coming year:
•
Establish a presence in the Kingdom of Saudi-Arabia together with our Joint Venture Partner, Massadir Al-Zamrda
for Mining, and secure an exploration license to explore the vastly unexplored, highly prospective regions in the
Kingdom.
•
Identifying potential exploration prospects and strengthen our engagement with relevant stakeholders regarding
the Ela Gedel application.
•
Investigate and evaluate other mineral exploration and development opportunities in line with our strategic
objectives.
•
Ongoing compliance costs to maintain our license to operate.
FINANCE REVIEW
The Group recorded a net loss of $1,789,996 for the financial year to 31 December 2024 compared to a net profit of
$133,787,133 for the financial year to 31 December 2023. As the Group has no material revenue streams, the net loss for
the year reflects corporate & administration expenses. The net profit after tax for 2023 primarily reflect the profit made on
the disposal of the Colluli Project.
Total consolidated cash on hand at the end of the financial year was $31,183,180 (31 December 2023: $193,109,430).
Operating activities utilised $3,496,868 (31 December 2023: $4,621,269 utilised) of net cash flows. Net cash inflow from
investing activities of $3,676,858 was predominantly interest income (31 December 2023: $183,187,321 inflows mainly
from disposal of Colluli Mining Share Company). Net cash outflow from financing activities amounted to $162,086,612
during the financial year ended 31 December 2024 (31 December 2023: $302,500), for cash distribution to shareholders in
the form of capital return & dividends.
DIVIDENDS & CAPITAL RETURN
The return of capital of $100,466,735 approved at the shareholders general meeting held on 24 November 2023 and the
Board approved special dividend of $54,233,691 to shareholders as at 5:00pm (AWST) on 2 January 2024 was paid to
shareholders on the 8 January 2024.
At the shareholders meeting held on 31 May 2024, the shareholders approved a total return of capital of $3,963,278 and
the Board approved a special dividend of $3,403,409 to shareholders as at 5:00pm (AWST) on 1 July 2024. The total
distribution amounted to $7,366,687 and was paid on 8 July 2024.
The total return to shareholders for the year amounted to $162,067,112.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
9
DIRECTORS’ MEETINGS
The number of meetings of the Company’s Board of Directors and permanent Board sub-committees held during the
financial year ended 31 December 2024 and the number of meetings attended by each Director were:
Board of Directors
Audit and Risk Committee
Remuneration and Nomination
Committee
Director
Total meetings
held / eligible
to attend
Total
attended
Total meetings
held / eligible to
attend
Total
attended
Total meetings
held / eligible to
attend
Total
attended
S Cornelius
6
6
2
2
3
3
P Donaldson
6
5
2
1
3
3
J Zhang
6
5
-
-
-
-
J Coates1
3
3
1
1
-
-
T Adeniji2
6
2
-
-
-
-
1Appointed 24 April 2024.
2Resigned 31 December 2024.
OPTIONS
At the date of this report, unissued ordinary shares in respect of which options are outstanding are as follows:
Number of options
Balance at the beginning of the year
10,000,000
Movements of share options during the financial year ended 31 December 2024:
-
Share options outstanding at 31 December 2024
10,000,000
Movements since the financial year ended 31 December 2024:
-
Total number of share options outstanding as at the date of this report
10,000,000
Expiry date
Exercise price
Number of options
30 July 2025
$0.356241
2,000,000
30 July 2025
$0.356241
8,000,000
Total number of share options outstanding at the date of this report
10,000,000
1 In accordance with Listing Rule 7.22.3, the exercise price of each option was reduced by the equivalent of the return of
capital per share made to shareholders on the 8 January 2024 and 8 July 2024. The options strike price was reduced by
$0.273 and $0.01076 per option to $0.35624 (DNK Announcements 19 January 2024 and 8 July 2024).
There are no participating rights or entitlements inherent in these options and holders of the options will not be entitled to
participate in new issues of capital that may be offered to shareholders during the currency of the option. No option holder
has any right under the option to participate in any share issue of the Company.
No options were granted to KMP of the Company since the end of the financial year.
PERFORMANCE RIGHTS
During the year, there were no performance rights outstanding.
No performance rights holder has any right to participate in any other share issue of the Company or any other entity.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
10
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
Indemnification
An indemnity agreement has been entered into with each of the directors, company secretary and Key Management
Personnel of the Company named earlier in this report. Under the agreements, the Company has agreed to indemnify those
officers against any claim or for any expense or cost which may arise as a result of work performed in their respective
capacities to the extent permitted by law. There is no monetary limit to the extent of this indemnity.
Insurance
During the period, the Company paid an insurance premium in respect of Directors’ and Officers’ insurance. The premiums
relate to costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and
whatever their outcome, and other liabilities that may arise from their position, with the exception of conduct involving a
wilful breach of duty or improper use of information or position to gain a personal advantage. Premiums totalling $224,334
(2023: $305,515) were paid in respect of directors’ and officers’ liability cover. The insurance policies outlined above do not
contain details of the premiums paid in respect of individual officers of the Company.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Hall Chadwick, as part of the terms of
its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No
payment has been made to indemnify Hall Chadwick during or since the financial year.
NON-AUDIT SERVICES
There were no non-audit services provided during the year.
All non-audit services provided would be subject to the corporate governance procedures adopted by the Company and
would be reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and the non-audit
services provided would not undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants (including Independence Standards), as they would 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.
CORPORATE GOVERNANCE
The Company’s corporate governance statement can be found at the following URL: https://danakali.com.au/about-us/
RISK MANAGEMENT
The Company has established a Risk Management Policy which outlines the Board’s expectations in relation to risk
management, responsibilities, risk management objectives, and the principles of its risk management framework.
The Board, through the Audit and Risk Committee is responsible for overseeing the establishment and implementation of
effective risk management and internal control systems to manage the Company’s material business risks and for reviewing
and monitoring the Company’s application of those systems.
The Audit and Risk Committee continues to work closely with management to assess, monitor and review business risks
and to carry out assessments of internal controls and processes for improvement opportunities. In support of this, the
Committee receives reports from management on new and emerging risks and related controls and mitigation measures
that management have implemented.
A summary of the material business risks of the Company is set out in the below table.
RISK AREA
RISK
MITIGATION/CONTROL
Operational Risk
Exploration
The mineral exploration is a high-risk
speculative undertaking. There can be no
assurance that future exploration of any
exploration licences that the Company may
acquire an interest in will result in the
discovery of an economic resource. Even if
an apparently viable resource is identified,
there is no guarantee that it can be
economically exploited.
The Company will conduct comprehensive
geological surveys, including geophysical,
geochemical, and drilling programs,
leveraging advanced exploration
technologies to enhance discovery success
rates.
Furthermore, it aims to maintain a diversified
portfolio of exploration targets across
multiple regions to mitigate risk and
maximise potential opportunities.
Tenure and
Title
The ability of the Company to carry out
successful exploration and mining activities
will depend on the ability to obtain and
maintain tenure to mining titles. The
maintenance or issue of any such titles must
be in accordance with the laws of the
The Company has assembled a skilled team,
including legal experts, to oversee the
application and management of exploration
licenses.
Additionally, it maintains regular engagement
with relevant ministries across various
regions to ensure compliance and uphold its
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
11
RISK AREA
RISK
MITIGATION/CONTROL
relevant jurisdiction and in particular, the
relevant mining legislation. Conditions
imposed by such legislation must also be
complied with.
There is a risk that some or all of the
pending applications or parts thereof will not
be granted, or that they may be granted on
terms which are substantially less
favourable to the Company than would
typically prevail.
good standing.
Future
Acquisitions
As part of its growth strategy, the Company
may make further acquisitions of licences or
enter into strategic alliances with third
parties. Any such future transactions are
accompanied by the risks commonly
encountered in making acquisitions of
assets, such as short-term strain on working
capital requirements and achieving project
success.
The Company implements rigorous due
diligence processes and engages specialists
as needed when evaluating new business
opportunities. A comprehensive financial
analysis is conducted to assess potential
impacts and ensure adequate provisions for
working capital requirements.
Financial Risks
Future
Funding
Requirements
The funds currently available on hand are
considered sufficient to meet the short to
mid-term objectives of the Company.
Additional funding may be required in the
event exploration costs exceed the
Company’s estimates and to effectively
implement its business and operations plans
in the future, to take advantage of
opportunities for acquisitions, joint ventures
or other business opportunities, and to meet
any unanticipated liabilities or expenses
which the Company may incur, additional
financing will be required.
The Company has implemented appropriate
capital, financial and treasury management
processes and procedures to monitor and
manage its future cash requirement.
Liquidity
Shareholders are able to sell their Shares
on NSX. The timing and pricing of listed
securities is determined by the live market of
buyers and sellers. This type of risk is
particularly relevant in the context of Shares
that are not frequently traded or in situations
where market conditions suddenly
deteriorate.
The Company has implemented procedures
and processes to ensure that it complies with
the NSX listing rules.
The company periodically evaluates and
reviews liquidity options for shareholders.
Foreign
Exchange
Rates
The Company intends to operate in multiple
jurisdictions and this may result in the use of
multiple currencies.
The company monitors its Foreign Exchange
exposure and as required, will consider
hedge instruments and Multi-Currency
accounts.
Industry Specific Risks
Environmental
The operations and activities of the
Company are subject to the environmental
laws and regulations of various jurisdictions.
As with all mining operations and
exploration projects, the Company’s
activities are expected to have an impact on
the environment.
The Company intends to conduct its
operations and activities to high standards of
environmental performance, including
compliance with all environmental laws and
regulations. Nevertheless, such operations
may give rise to potentially substantial costs
for pollution abatement, environmental
rehabilitation, damage control and losses
that exceed estimates, and possible
regulatory intervention, potentially adversely
impacting the Company’s operations,
financial performance and financial position
Health and
Health event that could impact the employee
The Company has developed a business
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
12
RISK AREA
RISK
MITIGATION/CONTROL
Safety
wellbeing or disrupt business continuity.
continuity plan in the event of a business
interruption event and developed various
controls to limit the impact of a Pandemic.
General Risks
Key Personnel
The responsibility of overseeing the day-to-
day operations and the strategic
management of the Company depends
substantially on its senior management and
its key personnel. The loss of key personnel,
the inability to recruit necessary staff as
needed or the increased cost to recruit or
retain the necessary staff, may cause
disruption and adversely impact the
Company’s operations, financial
performance and financial position.
The Company has developed succession
plans to reduce the exposure to the loss of
any key personnel. In addition, incentive
plans have been implemented.
Economic
General economic conditions, movements in
interest and inflation rates and currency
exchange rates may have an adverse effect
on the Company’s activities, as well as on its
ability to fund those activities.
The Company regularly reviews broad
economic conditions and its financial risks.
The Company has implemented robust cash
flow projects to anticipates funding needs
and evaluate how adverse economic
conditions could impact the business and
prepare response strategies.
Changes to
Laws,
Regulations
and Policy
The Company may be affected by changes
to laws, regulations and policy (in Australia
and other countries in which the Company
may operate) concerning mining and
exploration, property, the environment,
superannuation, taxation trade practices and
competition, government grants, incentive
schemes, accounting standards and other
matters. Such changes could have adverse
impacts on the Company from a financial
and operational perspective.
The Company regularly engages with
external legal and financial advisors that
update the company of changes to laws,
regulations and policies which could impact
the business.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility
on behalf of the Company for all or any part of those proceedings.
No proceedings have been brought or intervened in or on behalf of the Company with leave of the Court under section 237
of the Corporations Act 2001.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
separately in this report on page 22.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
13
REMUNERATION REPORT (AUDITED)
The Remuneration Report outlines the director and executive remuneration arrangements of the Group in accordance with
the requirements of the Corporations Act 2001 (Cth) and its Regulations. For the purposes of this report, Key Management
Personnel (KMP) of the Group 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 Company. For the purposes of this report, the term ‘Executive’ includes the Executive Chairman and Chief Financial
Officer of the Group.
The KMP of Danakali Ltd and the Group during the financial year to 31 December 2024 were:
Directors
S Cornelius
Executive Chairman
P Donaldson
Non-Executive Director
J Zhang
Non-Executive Director
T Adeniji
Non-Executive Director
(Resigned 31 December 2024)
J Coates
Non-Executive Director
(Appointed 24 April 2024)
Non-Director KMP
G MacPherson
Chief Financial Officer
All of the above persons were KMP during the financial year to 31 December 2024 unless otherwise stated. The
information provided in this remuneration report has been audited as required by section 308 (3C) of the Corporations
Act 2001.
Key Elements of KMP Remuneration Strategy
The remuneration strategy for Danakali Ltd is designed to provide rewards that achieve the following:
•
Attract, retain, motivate and reward KMP;
•
Reward KMP for Company and individual performance against targets set by reference to appropriate
benchmarks;
•
Link reward with the strategic goals and performance of the Company;
•
Provide remuneration that is competitive by market standards;
•
Align executive interests with those of the Company’s shareholders; and
•
Comply with applicable legal requirements and appropriate standards of governance.
The Company is satisfied that its remuneration framework reflects current business needs, shareholder views and
contemporary market practice and is appropriate to attract, motivate, retain and reward employees.
A summary of the key elements of the remuneration arrangements during the period is as follows:
Remuneration
Component
Item
Purpose
Link to
Performance
Fixed Remuneration
•
Base salary
•
Superannuation
contributions
Provide competitive
remuneration with
reference to the role and
responsibilities, market and
experience, to attract high
calibre people.
Executive performance and
remuneration packages are
reviewed by the Board and
Remuneration and
Nomination Committee.
The review process
includes consideration of
the individual’s
performance in addition to
the overall performance of
the Group.
Performance Based
Short Term Incentive (STI)
•
Cash bonus
•
Options / rights
Provide reward to KMP for
the achievement of
individual and Group
performance targets linked
to the Company’s short-
term goals and strategic
objectives.
Award of STI linked directly
to achievement of company
and individual KPI’s and
performance targets.
Performance Based:
Long Term Incentive (LTI)
•
Shares
•
Options
•
Performance Rights
Provide reward to KMP for
their continued service and
their contribution to
achieving corporate
objectives set by the Board
to ensure the long-term
growth of the Company.
Award of LTI linked directly
to achievement of strategic
Company objectives.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
14
The Remuneration Report has been set out under the following headings:
a)
Decision Making Authority for Remuneration
b)
Principles Used to Determine the Nature and Amount of Remuneration
c)
Voting and Comments Made at the Last Annual General Meeting
d)
Details of Remuneration
e)
Service Agreements
f)
Details of Share Based Compensation
g) Equity Instruments Held by KMP
h)
Loans to KMP
i)
Other Transactions with KMP
j)
Additional Information
a) Decision Making Authority for Remuneration
The Company’s remuneration policy and strategies are overseen by the Remuneration and Nomination Committee on
behalf of the Board. The Remuneration and Nomination Committee is responsible for making recommendations to the
Board on all aspects of remuneration arrangements for KMP including:
•
the Company’s remuneration policy and framework;
•
the remuneration arrangements for the Chief Executive Officer, Executive Chairman and other KMP;
•
the terms and conditions of long-term incentives and short-term incentives for the Chief Executive Officer,
Executive Chairman and other KMP;
•
the terms and conditions of employee incentive schemes; and
•
the appropriate remuneration to be paid to non-executive Directors.
The Remuneration and Nomination Committee Charter is approved by the Board and is published on the Company’s
website. Remuneration levels of the Directors and KMP are set by reference to other similar sized mining and development
companies with similar risk profiles and are set to attract and retain KMP capable of managing the Group’s operations.
Remuneration levels for Executives are determined by the Board based upon recommendations from the Remuneration
and Nomination Committee. Remuneration of non-executive directors is determined by the Board within the maximum
levels approved by the shareholders from time to time.
b) Principles Used to Determine the Nature and Amount of Remuneration
The Company’s remuneration practices are designed to attract, retain, motivate and reward high calibre people capable of
delivering the strategic objectives of the Company. The Company’s KMP remuneration framework aligns their remuneration
with the achievement of strategic objectives and the creation of value for shareholders and conforms with market practice
for delivery of reward.
The Remuneration and Nomination Committee ensures that the remuneration of KMP is competitive and reasonable,
acceptable to shareholders and aligns remuneration with performance. The structure and level of remuneration for KMP is
conducted annually by the Remuneration and Nomination Committee relative to the Company’s circumstances, size, nature
of business and performance.
Remuneration of Non-Executive Directors
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of the
directors. Non-executive directors’ fees and payments are reviewed annually by the Board. The Board at times receives
advice from independent remuneration consultants to ensure non-executive Directors fees and payments are appropriate
and in line with the market. No advice was received during the period.
The general principles of non-executive Directors’ compensation are:
•
Non-executive Directors are paid a base fee prior to any statutory superannuation payments;
•
Additional fees are paid to Directors who serve on the board sub-committees; and
Adjustments may be made in the event that a specific non-executive Director’s contribution warrants an
adjustment. Such adjustments are at the recommendation of the board.
Fees for the non-executive directors are determined within an aggregate directors’ fee pool limit of $500,000 as approved
by shareholders on 27 May 2019.
Remuneration of Executive Chairman
Executive Chairman’s fees are determined independently to the fees of non-executive directors based on comparative roles
in the external market and the specific requirements that the Company has of the Chairman.
The Executive Chairman is not present at any of the discussions relating to the determination of his own remuneration.
Remuneration of Executives
The Company’s remuneration and reward framework is designed to ensure reward structures are aligned with shareholders’
interest by:
•
Being market competitive to attract and retain high calibre individuals;
•
Rewarding high individual performance,
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
15
•
Recognising the contribution of each executive to the contributed growth and success of the Company, and
•
Ensuring that long term incentives are linked to shareholder value.
To achieve these objectives, the remuneration of executive may comprise a fixed salary component and an ‘at risk’ variable
component linked to performance of the individual and the Company as a whole. Fixed remuneration comprises base
salary, superannuation contributions and other defined benefits. ‘At risk’ variable remuneration comprises both short term
and long-term incentives.
The remuneration and reward framework for executive may consist of the following areas:
i)
Fixed Remuneration,
ii)
Variable Short-Term Incentives,
iii)
Variable Long-Term Incentives.
The combination of these would comprise the executive’s total remuneration.
i)
Fixed Remuneration
The fixed remuneration for each senior executive is influenced by the nature and responsibilities of each role and
knowledge, skills and experience required for each position. Fixed remuneration provides a base level of
remuneration which is market competitive and comprises a base salary and statutory superannuation. It is structured
as a total employment cost package, which may be delivered as a combination of cash and prescribed non-financial
benefits at the executives’ discretion.
Executives are offered a competitive base salary that comprises the fixed component of pay and rewards. External
remuneration consultants may provide analysis and advice to ensure base pay is set to reflect the market for a
comparable role. External advice was taken this period and the recommendations have been actioned. Base salary
for executives is reviewed periodically to ensure the executives’ pay is competitive with the market. The pay of
executives is also reviewed on promotion. There is no guaranteed pay increase included in any executive’s contract.
ii)
Variable Remuneration – Short Term Incentives (STI)
The Danakali Ltd Short-Term Incentive Scheme applies to executives in the Company and is designed to link any
STI payment to shareholder value, with share price usually being used as the overarching performance metric. The
Board has the discretion to reduce or suspend any bonus payments where Company circumstances render it
appropriate.
iii)
Variable Remuneration – Long Term Incentives (LTI)
Details of options issued to executives in the previous years can be found in section f(i) below.
Voting and Comments Made at the Last Annual General Meeting
The Company received 81.2% of votes in favour of its Remuneration Report for the financial year ending 31 December
2023 and received no specific feedback on its Remuneration Report at the Annual General Meeting or throughout the
period.
c) Details of Remuneration
Details of the remuneration of the directors and other KMP of Danakali Ltd are set out in the following table. The disclosed
directors’ fees are inclusive of committee fees.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
16
KMP of the Company for the financial year to 31 December 2024:
Financial Year to
31 December 2024
Short-Term Benefits
Post-Employment
Share Based Payments
Total
Remuneration
Performance
related (a)
Salary
and Fees
Performance
Bonus
Super-
annuation
Shares
STI
Performance
Rights
LTI
Options
$
$
$
$
$
$
$
%
Executive Directors
S Cornelius
320,000
124,594(d)
36,000
-
-
-
480,594
26%
Non-Executive Directors
P Donaldson
56,000
-
6,300
-
-
-
62,300
0%
J Zhang
40,000
-
-
-
-
-
40,000
0%
T Adeniji(b)
40,000
-
-
-
-
-
40,000
0%
J Coates(c)
38,422
-
-
-
-
-
38,422
0%
Other Non-Director KMP
G MacPherson
320,000
-
43,992
-
-
-
363,992
0%
TOTAL
814,422
124,594
86,292
-
-
-
1,025,308
26%
Note:
(a) Performance related percentage calculated in reference to bonuses payments divided by total remuneration.
(b) Resigned 31 December 2024.
(c) Appointed 24 April 2024
(d) As at 31 December 2024, the performance bonus has not been paid.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
17
KMP of the Company for the financial year to 31 December 2023:
Financial Year to
31 December 2023
Short-Term Benefits
Post-Employment
Share Based Payments
Total
Remuneration
Performance
related (a)
Salary
and Fees
Performance
Bonus
Super-
annuation
Shares
STI
Performance
Rights
LTI
Options
$
$
$
$
$
$
$
%
Executive Directors
S Cornelius
225,000
90,000
34,088
-
-
-
349,088
26%
Non-Executive Directors
P Donaldson
56,000
-
6,020
-
-
-
62,020
0%
J Zhang
40,000
-
-
-
-
40,000
0%
T Adeniji
40,000
-
-
-
-
40,000
0%
N Gregson(b)
22,917
-
-
-
-
22,917
0%
S Zubairu(b)
18,333
-
-
-
-
18,333
0%
Other Non-Director KMP
R McEachern(c)
291,587
214,519(d)
57,184
-
-
-
563,290
44%
G MacPherson
290,000
230,338(d)
58,067
-
-
-
578,405
42%
TOTAL
983,837
534,857
155,359
-
-
-
1,674,053
35%
Note:
(a)
Performance related percentage calculated in reference to bonuses payments divided by total remuneration.
(b)
Resigned 15 June 2023.
(c)
Mr R McEachern ceased to be a KMP on 1 January 2024.
(d)
Performance bonuses were paid in the year ended 31 December 2024.
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
18
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Name
Financial Year to 31 December 2024
Fixed Remuneration
At risk – STI
At risk - LTI
Executive Directors
S Cornelius
74%
26%
-
Non-Executive Directors
J Zhang
100%
-
-
P Donaldson
100%
-
-
T Adeniji
100%
-
-
J Coates
100%
-
-
Other Non-Director KMP
G MacPherson
100%
-
-
d) Service Agreements
Remuneration and other terms of employment for the executive managers are formalised in employment contracts. Other
major provisions of the agreements relating to remuneration are set out below.
S Cornelius, Executive Chairman:
•
Appointed 26 February 2021.
•
Engaged as a permanent part-time employee (0.8 FTE).
•
Mr Cornelius’s remuneration is $320,000 per annum plus superannuation at the statutory rate. In addition, Mr
Cornelius is eligible to participate in the Company’s incentive plans, the terms and operation of which are at the
discretion of the Board and subject to shareholder approval in the case of securities.
•
Notice period of three months, required to be given by either party for termination.
G MacPherson, Chief Financial Officer:
•
Appointed 1 March 2022.
•
Mr MacPherson’s remuneration is $320,000 per annum plus superannuation at the Australian statutory rate.
•
Engaged as a permanent full-time employee.
•
Notice period of three months, required to be given by either party for termination.
e) Details of Share Based Compensation
(i) Options
No new options were issued to KMP’s during the period.
The terms and conditions of each grant of options constituting KMP remuneration that remain on issue to KMP at
31 December 2024 are set out in the following table:
Grant date
Vesting and first
exercise date
Expiry date
Number of
Options
Exercise
price
Value per
option at
grant date
Vested and
exercisable
%
30 July 2021
30 July 2021
30 July 2025
2,000,000
$0.356(i)
$0.171
100%
9 September 2021
9 September 2021
30 July 2025
2,000,000
$0.356(i)
$0.140
100%
Total Options
4,000,000
(i) In accordance with Listing Rule 7.22.3, the exercise price of each option was reduced by the equivalent of the return of capital per
share made to shareholders on the 8 January 2024 and 1 July 2024. The options strike price (originally $0.64) was reduced by $0.284
in total per option to $0.356 (DNK Announcement 8 July 2024).
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
19
Details of options over ordinary shares in the Company, provided as remuneration to KMP are set out in the following table.
Name
Year
of
grant
Year in
which
options
vest
Number of
options
granted
Value of
options at
grant date
Unamortised
value of
options at 31
Dec 2024
Number of
options
vested
Vested
and
exercisable
S Cornelius
2021
2021
2,000,000
$248,992
-
2,000,000
100%
G MacPherson
2021
2021
2,000,000
$280,806
-
2,000,000
100%
Total Options
4,000,000
4,000,000
Options will automatically expire on the earlier of the expiry date or the date the holder ceases to be an employee of the
Company, unless the Board otherwise may determine.
When exercisable, each option is convertible into one ordinary share. Further information on the options is set out in note
24.
(ii) Performance Rights
There remain no performance rights held by KMP at 31 December 2024.
f) Equity Instruments Held by KMP
(i) Shares
No shares were granted as remuneration during the year ended 31 December 2024.
The number of shares in the Company held during the financial period by each director of Danakali Ltd and other KMP of
the Group, including their personally related parties, are set out in the following tables.
(ii) Options
The numbers of options over ordinary shares in the Company held during the financial period by each director of Danakali
Ltd and other KMP of the Group, including their personally related parties, are set out in the following tables.
Financial Year to
31 December
2024
Options
Balance at
1 January
2024
Granted
Exercised
Expired
Cancelled
Other
Balance at
31 December
2024
Vested
and
exercisable
Unvested
Directors
S Cornelius
2,000,000
-
-
-
-
-
2,000,000
2,000,000
-
Other KMP
G MacPherson
2,000,000
-
-
-
-
-
2,000,000
2,000,000
-
TOTAL
4,000,000
-
-
-
-
-
4,000,000
4,000,000
-
Financial Year to
31 December
2024
Shares
Balance at
1 January 2024
Granted as
compensation
Received
on exercise of
remuneration
options
On market
purchases/
(sales)
Other
Balance at
31 December
2024
Directors
S Cornelius
14,741,126
-
-
3,243,397
-
17,984,523
P Donaldson
1,145,693
-
-
-
-
1,145,693
J Zhang
-
-
-
-
-
-
T Adeniji
-
-
-
-
-
-
J Coates
-
-
-
-
-
-
Other KMP
G MacPherson
-
-
-
-
-
-
TOTAL
15,886,819
-
-
3,243,397
-
19,130,216
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
20
(iii) Performance Rights held by KMP
There remain no performance rights held by KMP at 31 December 2024.
g) Loans to KMP
There were no loans to KMP during the period.
h) Other Transactions with KMP
The Company signed a non-binding term sheet with Buxton Resources Ltd on 27 March, 2024, to establish a joint venture
for exploration of tenements of interest. As part of the agreement, the Company paid a $150,000 exclusivity fee to Buxton.
Mr S Cornelius was the Non-Executive Chairman of Buxton Resources Ltd (appointed 29 November 2010 and resigned 22
November 2024). The agreement has not been progressed and was subsequently terminated. An Independent Directors’
Committee was formed to consider this transaction; Mr S Cornelius did not participate in the decision to enter into this non-
binding term sheet.
There were no other transactions with KMP during the period.
i) Additional Information
The remuneration structure has been set up with the objective of attracting and retaining the highest calibre staff who
contribute to the success of the Company’s performance and individual rewards. The remuneration policies seek a balance
between the interests of stakeholders and competitive market remuneration levels. The overall level of KMP compensation
takes into account the performance of the Group over a number of years and the stage of activities the Company is engaged
in.
The table below shows the performance of the Group over the last 5 reporting periods:
Financial Year
31 Dec 2024
31 Dec 2023
31 Dec 2022
31 Dec 2021
31 Dec 2020
Basic profit/(loss) per share
(0.4860)
0.3632
(0.095)
(0.0287)
(0.0259)
– Continuing Operations
(0.4860)
0.0041
(0.0122)
(0.0287)
(0.0259)
– Discontinued Operations
N/A
0.3591
0.0027
N/A
N/A
Share Price
$0.04
$0.41
$0.39
$0.43
$0.315
Profit/(Loss) for the period
($1,789,996)
133,787,133
(3,502,352)
($10,037,168)
($8,259,370)
– Continuing Operations
($1,789,996)
1,515,444
(4,500,780)
($10,037,168)
($8,259,370)
– Discontinued Operations
N/A
132,271,689
998,428
N/A
N/A
The Company continues to review its remuneration framework to ensure it reflects current business needs, shareholder
views and contemporary market practice and remains appropriate to attract, motivate, retain and reward employees.
- - END OF REMUNERATION REPORT - -
Directors’ Report
DANAKALI LIMITED ABN 56 097 904 302
21
Directors’ resolution
This report is signed in accordance with a resolution of the Board of Directors dated 14 March 2025.
Mr Seamus Cornelius
Executive Chairman
14 March 2025
To the Board of Directors,
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001
As lead audit director for the audit of the financial statements of Danakali Limited and its controlled entities for
the year ended 31 December 2024, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
•
any applicable code of professional conduct in relation to the audit.
Yours Faithfully,
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated this 14th day of March 2025
Perth, Western Australia
22
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
23
2024
2023
Notes
$
$
CONTINUING OPERATIONS
Revenue and Other Income
Interest revenue
4
1,642,121
5,829,251
Sundry
-
87,743
Expenses
Depreciation expense
9 & 10
(33,119)
(5,089)
Loss on disposal of plant and equipment
9
-
(849)
Administration expenses
5
(3,380,426)
(4,287,875)
Foreign exchange gain/(loss)
(18,572)
(107,737)
Profit/(Loss) before Income Tax from Continuing Operations
(1,789,996)
1,515,444
Income tax expense
7
-
-
Profit/(Loss) for the Year from Continuing Operations
(1,789,996)
1,515,444
DISCONTINUED OPERATIONS
Profit after tax for the year from discontinued operations
-
132,271,689
Profit/(loss) for the year
(1,789,996)
133,787,133
OTHER COMPREHENSIVE INCOME
Divestment of subsidiary - Foreign exchange
-
(2,590,023)
Total Comprehensive Profit/(Loss) for the Year
(1,789,996)
131,197,110
Earnings/(loss) per share attributable to the ordinary equity holders
of the Company:
Basic profit/(loss) per share (cents per share)
17
(0.49)
36.32
Diluted profit/(loss) per share (cents per share)
17
(0.49)
36.32
Earnings/(loss) per share from continuing operations:
Basic profit/(loss) per share (cents per share)
17
(0.49)
0.41
Diluted profit/(loss) per share (cents per share)
17
(0.49)
0.41
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
Consolidated Statement of Financial Position
AS AT 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
24
2024
2023
Notes
$
$
CURRENT ASSETS
Cash and cash equivalents
6
31,183,180
193,109,430
Receivables
8
144,973
2,264,324
Prepayments
118,284
165,982
TOTAL CURRENT ASSETS
31,446,437
195,539,736
NON-CURRENT ASSETS
Plant and equipment
9
-
9,526
ROU Asset
10
146,277
-
TOTAL NON-CURRENT ASSETS
146,277
9,526
TOTAL ASSETS
31,592,714
195,549,262
CURRENT LIABILITIES
Trade and other payables
11
180,455
488,196
Lease Liability
12
62,403
-
Provisions
13
236,199
184,280
TOTAL CURRENT LIABILITIES
479,057
672,476
NON-CURRENT LIABILITIES
Lease Liability
12
88,269
-
Provisions
13
69,739
64,029
TOTAL NON-CURRENT LIABILITIES
158,008
64,029
TOTAL LIABILITIES
637,065
736,505
NET ASSETS
30,955,649
194,812,757
EQUITY
Issued capital
14
31,286,723
135,716,735
Reserves
15
1,244,959
1,244,959
Accumulated losses
16
(1,576,033)
57,851,063
TOTAL EQUITY
30,955,649
194,812,757
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
25
Notes
Issued Capital
Reserves
Accumulated Profit /
(Losses)
Total Equity
Share Based
Payments
Foreign Currency
Translation
$
$
$
$
$
BALANCE AT 1 JANUARY 2024
135,716,735
1,244,959
-
57,851,063
194,812,757
Profit for the period
-
-
-
(1,789,996)
(1,789,996)
Total comprehensive loss for the period
-
-
-
(1,789,996)
(1,789,996)
Transactions with owners in their capacity as owners:
Capital returned on shares
14
(104,430,012)
-
-
-
(104,430,012)
Dividend paid
16
-
-
-
(57,637,100)
(57,637,100)
BALANCE AT 31 DECEMBER 2024
31,286,723
1,244,959
-
(1,576,033)
30,955,649
BALANCE AT 1 JANUARY 2023
127,866,319
13,868,006
2,590,023
(80,406,201)
63,918,147
Profit for the period
-
-
-
133,787,133
133,787,133
Other comprehensive income
-
-
(2,590,023)
-
(2,590,023)
Total comprehensive loss for the period
-
-
(2,590,023)
133,787,133
131,197,110
Transactions with owners in their capacity as owners:
Share based payments
15
Transfer reserve due to exercise share based payments
7,850,416
(12,320,547)
-
4,470,131
-
Cancellation of Share Based payments
-
(302,500)
-
-
(302,500)
BALANCE AT 31 DECEMBER 2023
135,716,735
1,244,959
-
57,851,063
194,812,757
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
26
2024
2023
Notes
$
$
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year
(1,789,996)
133,787,133
Adjusted for:
Finance Income
(1,642,120)
(5,829,251)
Foreign exchange losses
19,930
27,149
(Gains)/loss from discontinued operations
-
(132,939,627)
Depreciation of property plant and equipment
33,119
5,089
Loss on disposal of assets
-
849
Increase/(decrease) in provisions
57,629
55,126
Operating cashflows before movement in working capital
(3,321,438)
(4,893,532)
Decrease/(increase) in trade and other receivables
132,311
(91,953)
Increase/(Decrease) in trade and other payables
(307,741)
364,216
NET CASH INFLOW/(OUTFLOW) USED IN OPERATING ACTIVITIES
(3,496,868)
(4,621,269)
CASH FLOWS FROM INVESTING ACTIVITIES
Funding of joint venture
-
(16,301)
Net proceeds from the disposal of investment
-
179,609,548
Interest received
3,676,858
3,594,074
NET CASH INFLOW/(OUTFLOW) USED IN INVESTING ACTIVITIES
3,676,858
183,187,321
CASH FLOWS FROM FINANCING ACTIVITIES
Payment for capital return to shareholders
(104,430,012)
-
Dividends paid
(57,637,100)
-
Payment for lease liability
(19,198)
-
Payments for the cancellation of options
-
(302,500)
NET CASH OUTFLOW FROM FINANCING ACTIVITIES
(162,086,310)
(302,500)
NET INCREASE / (DECREASE) IN CASH
(161,906,320)
178,263,552
Cash at the beginning of the financial year
193,109,430
14,873,027
Net foreign exchange differences
(19,930)
(27,149)
CASH AT THE END OF THE YEAR
6
31,183,180
193,109,430
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
27
1.
GENERAL INFORMATION
Danakali Ltd (Danakali or the Company) is a for profit company limited by shares, incorporated and domiciled in Australia,
and whose shares are publicly listed on the National Stock Exchange of Australia (NSX). The consolidated financial report
of the group as at, and for the year ended 31 December 2024 comprises the Company and its subsidiaries (together
referred to as the Group). The address of the registered office is Level 1, 2A / 300 Fitzgerald Street, North Perth, WA,
6006.
The financial statements are presented in the Australian currency.
The financial report of Danakali for the year ended 31 December 2024 was authorised for issue by the Directors on 14
March 2025. The directors have the power to amend and reissue the financial statements.
The nature of the operations and principal activities of the consolidated entity are described in the Directors’ Report.
2.
BASIS OF PREPARATION
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the periods presented, unless otherwise stated.
The general purpose consolidated financial statements have been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting
Interpretations and the Corporations Act 2001.
The consolidated financial statements of the Danakali Ltd Group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
These consolidated financial statements have been prepared under the historical cost convention, except for the loan to
the joint venture that was measured at fair value.
(a)
New standards, interpretations and amendments adopted by the Group
The Group applied all new and amended Accounting Standards and Interpretations that were effective as at 1 January
2024.
(b)
New accounting standards and interpretations not yet effective
Australian Accounting Standards and interpretations that have recently been issued or amended but are not yet effective
and have not been adopted by the Group for the annual reporting year ended 31 December 2024. The Group assessed
that the new accounting standards and interpretation not yet effective do not have a significant impact on the Group. The
standards relevant to the Group are outlined in the table below.
Reference
Title
Summary
AASB 2021-5
Amendments to AASs -
Deferred Tax related to
Assets and Liabilities
arising from a Single
Transaction
AASB 112 Income Taxes requires entities to account for
income tax consequences when economic transactions take
place, and not at the time when income tax payments or
recoveries are made. Accounting for such tax consequences,
means entities need to consider the differences between tax
rules and accounting standards. These differences could
either be:
• Permanent – e.g., when tax rules do not allow a certain
expense to ever be deducted
Or
• Temporary – e.g., when tax rules treat an item of income
as taxable in a period later than when included in the
accounting profit
Deferred taxes representing amounts of income tax payable
or recoverable in the future must be recognised on
temporary differences unless prohibited by AASB 112 in
certain circumstances. One of these circumstances, known
as the initial recognition exception, applies when a
transaction affects neither accounting profit nor taxable profit,
and is not a business combination. Views differ about
applying this exception to transactions that, on initial
recognition, create both an asset and liability (and could give
rise to equal amounts of taxable and deductible temporary
differences) such as:
• Recognising a right-of-use asset and a lease liability
when commencing a lease
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
28
Reference
Title
Summary
• Recognising decommissioning, restoration and similar
liabilities with corresponding amounts included in the
cost of the related asset
The amendments to AASB 112 clarify that the exception
would not normally apply. That is, the scope of this exception
has been narrowed such that it no longer applies to
transactions that, on initial recognition, give rise to equal
amounts of taxable and deductible temporary differences.
The amendments apply from the beginning of the earliest
comparative period presented to:
• All transactions occurring on or after that date
• Deferred tax balances, arising from leases and
decommissioning, restoration and similar liabilities,
existing at that date
The cumulative effect of initial application is recognised as
an adjustment to the opening balance of retained earnings or
other component of equity, as appropriate.
Earlier application of the amendments is permitted.
The Group assessed that this amended accounting
standards does not have a significant impact on the Group.
AASB 2021-2
Amendments to AASB 108
– Definition of Accounting
Estimates
An accounting policy may require items in the financial
statements to be measured using information that is either
directly observable,or estimated. Accounting estimates use
inputs and measurement techniques that require judgements
and assumptions based on the latest available, reliable
information.
The amendments to AASB 108 clarify the definition of an
accounting estimate, making it easier to differentiate it from
an accounting policy. The distinction is necessary as their
treatment and disclosure requirements are different.
Critically, a change in an accounting estimate is applied
prospectively whereas a change in an accounting policy is
generally applied retrospectively.
The new definition provides that ‘Accounting estimates are
monetary amounts in financial statements that are subject to
measurement uncertainty.’ The amendments explain that a
change in an input or a measurement technique used to
develop an accounting estimate is considered a change in an
accounting estimate unless it is correcting a prior period
error.
• For example, a change in a valuation technique used to
measure the fair value of an investment property from
market approach to income approach would be treated
as a change in estimate rather than a change in
accounting policy.
• In contrast, a change in an underlying measurement
objective, such as changing the measurement basis of
investment property from cost to fair value, would be
treated as a change in accounting policy.
The amendments did not change the existing treatment for a
situation where it is difficult to distinguish a change in an
accounting policy from a change in an accounting estimate.
In such a case, the change is accounted for as a change in
an accounting estimate.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
29
(c)
Going concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
At the date of this report, the directors are satisfied there are reasonable grounds to believe that the Group will be able to
continue business activities and the Group will be able to meet its obligations as and when they fall due.
At balance date, the Group had cash and cash equivalents of $31,183,180 (31 December 2023: $193,109,430) and a net
working capital surplus of $30,967,381 (31 December 2023: $194,867,260). The existing cash reserves are sufficient to
cover the working capital requirements of the Group for the next 12 months.
(d)
Principles of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. They are de-consolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group. Intercompany
transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses
are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
(e)
Non-current assets held for sale and discontinued operations
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be recovered
principally through a sale transaction rather than through continuing use. Non-current assets and disposal groups classified
as held for sale are measured at the lower of their carrying amount and fair value less cost to sell. Costs to sell are the
incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance costs and income tax
expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset or
disposal group is available for immediate sale in its present condition. Actions required to complete the sale should indicate
that it is unlikely that significant changes to the sale will be made or that the decision to sell will be withdrawn. Management
must be committed to the plan to sell the asset and the sale expected to be completed within one year from the date of
classification.
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial
position.
Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as
profit or loss after tax from discontinued operations in the statement of profit or loss.
(f)
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the full Board of Directors.
(g)
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is Danakali's functional and presentation currency.
(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 period end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in profit or loss.
(iii) Foreign operations
The results and financial position of foreign operations (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 for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
•
income and expenses for each statement of comprehensive income are translated at average exchange rates
(unless that is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction
dates, in which case income and expenses are translated at the dates of the transactions); and
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
30
•
all resulting exchange differences are recognised in other comprehensive income.
When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of
such exchange differences is reclassified to profit or loss, as part of the gain or loss on sale where applicable.
(h)
Interest revenue
Interest revenue is recognised using the effective interest rate method.
(i)
Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s subsidiaries operate and generate taxable income. Management
periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements at the reporting date. However, the deferred
income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are
expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to
settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in
each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(j)
Leases
Group as Lessee
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration.
(i) Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption for 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 plant and equipment that are considered of low value. Lease payments on short-term
leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
(k)
Impairment of assets
Assets are reviewed for impairment annually to determine if events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. The recoverable amount
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 if assets, For the purposes of assessing impairment, assets are consolidated at the smallest
identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets
or group of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are
reviewed for possible reversal of the impairment at each reporting date.
(l)
Cash and cash equivalents
For Consolidated Statement of Cash Flows presentation purposes, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions and, 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.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
31
(m) Receivables
(i) Initial recognition
Receivables are initially recognised and measured at fair value. Receivables that are held to collect contractual cash flows
and are expected to give rise to cash flows representing solely payments of principal and interest are classified and
subsequently measured at amortised cost. Receivables that do not meet the criteria for amortised cost are measured at
fair value through profit or loss (FVTPL). The loan to CMSC is measured at FVTPL.
(ii) Subsequent measurement
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject
to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net
changes in fair value recognised in the statement of profit or loss.
(iii) Impairment
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract
and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest
rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are
integral to the contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next
12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since
initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
The Group considers an event of default has occurred when a financial asset is more than 90 days past due or external
sources indicate that the debtor is unlikely to pay its creditors. A financial asset is credit impaired when there is evidence
that the counterparty is in significant financial difficulty or a breach of contract, such as a default or past due event has
occurred. The Group writes off a financial asset when there is information indicating the counterparty is in severe financial
difficulty and there is no realistic prospect of recovering the contractual cash flow.
(n)
Investment in joint venture
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which
exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
The Group’s investment in a joint venture is accounted for using the equity method.
Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying amount of the
investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition
date. Goodwill relating to the joint venture is included in the carrying amount of the investment and is neither amortised nor
individually tested for impairment.
The statement of profit or loss reflects the Group’s share of the results of operations of the joint venture. Any change in
other comprehensive income of those investees is presented as part of the Group’s other comprehensive income. In
addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its
share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from
transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.
The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the statement of profit or loss
outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the joint
venture.
The financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on
its investment in its joint venture. At each reporting date, the Group determines whether there is objective evidence that
the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment
as the difference between the recoverable amount of the joint venture and its’ carrying value, then recognises the loss as
‘Share of profit of the equity accounted investment’ in profit or loss.
Upon loss of joint control over a joint venture, the Group measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
32
(o)
Plant and equipment
All plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item
can be measured reliably. The carrying amount of any component accounted for as a separate asset is de-recognised
when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they
are incurred.
Depreciation of plant and equipment is calculated using the straight-line basis so as to write off the net cost or other
revalued amount of each asset over its expected useful life to its estimated residual value.
The assets’ residual values and useful lives are reviewed, and adjusted prospectively if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit
or loss. When revalued assets are sold, it is Group’s policy to transfer the amounts included in other reserves in respect of
those assets to retained earnings.
(p)
Exploration and evaluation costs
Acquired exploration and evaluation costs are capitalised. Ongoing exploration and evaluation costs are expensed in the
period they are incurred.
(q)
Development Expenditure costs
When proven mineral reserves are determined and an application for development has been submitted subsequent
development expenditure is capitalised as development capital, a non-current asset, provided commercial viability
conditions continue to be satisfied. Capitalised exploration and evaluation expenditure is reclassified into capitalised
development costs and evaluated for impairment annually. On completion of development, all capitalised development
costs including capitalised exploration and evaluation expenditure are transferred to mine properties and depreciation
commences.
(r)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial period
which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms.
(s)
Employee benefits
(i) Wages and salaries, annual leave and long service leave
Liabilities for wages and salaries, including non-monetary benefits, and other short terms benefits expected to be settled
within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting
date and are measured at the amounts expected to be paid when the liabilities are settled.
Long-term employee benefits are measured using the projected unit credit valuation method.
(ii) Share-based payments
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for options or rights over shares (‘equity-settled
transactions’) refer to note 24.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted. The fair value of options is determined by an internal valuation using a Black-Scholes option pricing
model. The fair value of performance rights is determined by consideration of the Company’s share price at the grant date.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance and service 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 period has expired and (ii) the number of options or rights 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 market performance conditions being met as the effect of these conditions is
included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition or awards with non-vesting conditions.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of 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
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
33
were a modification of the original award.
(t)
Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value less directly attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the
effective interest rate method.
Borrowings are classified as current liabilities unless the Consolidated Entity has the unconditional right to defer settlement
of the liability for at least 12 months after the reporting date.
(u)
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of
that asset. Borrowing costs are capitalised from the date that sufficient funding has been secured and unconditional and
the project development execution has started. This judgment will be reviewed periodically relative to the Project
development. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and
other costs that an entity incurs in connection with the borrowing of funds.
(v)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
(w) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to owners of the Company, excluding any
costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during
the financial period, adjusted for bonus elements in ordinary shares issued during the period.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
(x)
Critical accounting judgements, estimates and assumptions
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies.
(y)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case, it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Consolidated
Statement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
(z)
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic
basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates
to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
3.
SEGMENT INFORMATION
The Group is organised into one main operating segment which involves the exploration of minerals. All of the Group’s
activities are interrelated and discrete financial information is reported to the Board (Chief Operating Decision Maker) as a
single segment.
Accordingly, all significant operating decisions were based upon analysis of the Group as one segment. The financial
results from this segment are equivalent to the financial statements of the Group as a whole as at 31 December 2024.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
34
4.
REVENUE
2024
$
2023
$
Interest revenue
1,642,121
5,829,251
5.
EXPENSES
2024
$
2023
$
Employee benefits (net of recharges)
919,323
2,009,062
Financial advisory & consultancy fees
137,500
365,364
Directors’ fees
661,316
532,357
Compliance and regulatory expenses
93,142
108,057
Lease payments relating to short term leases
-
64,500
Insurance
300,819
374,304
Investor and public relations
268,902
162,187
Other administration expenses
999,424
672,044
3,380,426
4,287,875
6.
CASH AND CASH EQUIVALENTS
2024
$
2023
$
Cash at bank and on hand
31,183,180
193,109,430
31,183,180
193,109,430
Cash at bank earns interest at floating rates and at a fixed rate on term deposits.
7.
INCOME TAX
2024
$
2023
$
(a) Income tax recognised in profit or loss
Current tax
-
-
Deferred tax
-
-
Total tax benefit/(expense)
-
-
(b) Reconciliation of income tax expense to prima facie tax payable
Profit/(loss) before income tax expense
(1,789,996)
133,787,133
Prima facie tax benefit at the Australian tax rate of 30.0% (2023: 30.0%)
(536,998)
40,136,140
Adjustment of under-provision of deferred tax in prior year
618,137
(968,600)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Net (gain)/ loss on discontinued operations
-
(39,237,346)
Movements in unrecognised temporary differences
(81,139)
69,806
Income tax expense/(benefit)
-
-
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
35
(c) Deferred Income Tax
Deferred income tax at 31 December relates to the following:
Statement of
Financial Position
Statement of
Comprehensive Income
Statement of
Change in Equity
2024
$
2023
$
2024
$
2023
$
2024
$
2023
$
Deferred Tax Liabilities:
Unrealised foreign
exchange gain/loss
(407)
-
(407)
139,029
-
-
Interest receivable
(30,066)
-
(30,066)
-
-
-
Lease Liability payments
(5,759)
-
(5,759)
-
-
-
Prepayments
(35,485)
(49,794)
14,308
(26,390)
-
-
Deferred Tax Assets:
Provision for employee
entitlements
91,780
74,493
17,288
16,538
-
-
Accrued expenditure
7,500
121,380
(113,880)
121,380
-
-
ROU Asset depreciation
7,078
-
7,078
-
-
-
Share issue expenses
126,700
261,595
-
-
(134,895)
(302,563)
Tax losses
9,853,096
9,822,798
30,298
(180,752)
-
-
Net deferred tax assets not
recognised as utilisation is not
probable
(10,014,437)
(10,230,472)
81,140
(69,805)
134,895
302,563
-
-
-
-
-
-
8.
RECEIVABLES
2024
$
2023
$
Current
Net GST receivable
38,518
29,148
Interest receivable on term deposit
100,220
2,235,176
Other receivables
6,235
-
144,973
2,264,324
During the prior year, until the sale of the Group’s interest in CMSC on March 29, 2023, Danakali’s wholly owned subsidiary,
Danakali Investments Pty Ltd (previously STB Eritrea Pty Ltd), was funding CMSC for the development of the Colluli Potash
Project and 50% of the funding was represented in the form of a shareholder loan. This loan was repaid as part of the sale
agreement. Until the sale, the value of the loan was discounted by applying a market interest rate of 25%.
2024
$
2023
$
Reconciliation of movement in loan to Colluli Mining Share Company
Opening carrying amount at beginning of the year
-
13,398,870
Additional loans during the year
-
1,790
Foreign exchange gain/(loss)
-
540,186
Net gain/(loss) on financial assets at fair value through profit or loss
-
781,873
Repayment via sale
-
(14,722,719)
Closing carrying amount at end of the year
-
-
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
36
9.
PLANT AND EQUIPMENT
2024
$
2023
$
Plant and equipment
Gross carrying value – at cost
36,471
36,471
Accumulated depreciation
(36,471)
(26,945)
Net book amount
-
9,526
Plant and equipment
Opening net book amount at beginning of the year
9,526
15,464
Additions
-
-
Disposals/Retirement
-
(849)
Depreciation charge
(9,526)
(5,089)
Closing net book amount at end of the year
-
9,526
10. ROU (RIGHT OF USE) ASSETS
2024
$
2023
$
Land and Building
Gross carrying value – at cost
-
-
Additions
169,870
-
Accumulated depreciation
(23,593)
-
Net book amount
146,277
-
Land and Building
Opening net book amount at beginning of the year
-
-
Additions
169,870
-
Depreciation charge
(23,593)
-
Closing amount
146,277
-
The lease agreement for the office premises is for a duration of 3 years ending 31 July 2027.
11. TRADE AND OTHER PAYABLES
2024
$
2023
$
Trade payables
4,380
58,703
Employee benefits payable
124,594
-
Accrued expenses
25,000
404,602
Other payables
26,481 24,891
180,455 488,196
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
37
12. LEASE LIABILITY
2024
$
2023
$
Opening carrying amount at beginning of the year
-
-
Additional liability during the year
169,870
-
Interest accrued
5,009
-
Repayments
(24,207)
-
Closing carrying amount at end of the year
150,672
-
Non-current liability (2-5 years)
88,269
-
Current liability (0- 1 year)
62,403
-
Total lease liability
150,672
-
Payments for the office lease, discounted at the RBA small business lending rate 7.41%, over 2.5 years.
13. PROVISIONS
2024
$
2023
$
Current
Employee entitlements
236,199
184,280
Non-Current
Employee entitlements
69,739
64,029
305,938
248,309
Employee entitlements relate to the balance of annual leave and long service leave accrued by the Group’s employees.
Recognition and measurement criteria have been disclosed in note 2.
14. ISSUED CAPITAL
2024
2023
Number
of shares
$
Number
of shares
$
(a) Share capital
Ordinary shares fully paid
368,334,346
31,286,723
368,334,346
135,716,735
Total issued capital
368,334,346
31,286,723
368,334,346
135,716,735
(b) Movements in ordinary share capital
Balance at the beginning of the year
368,334,346
135,716,735
368,334,346
127,866,319
Issued during the year:
− Capital returned
- (104,430,012)
-
7,850,416
Balance at the end of the year
368,334,346
31,286,723
368,334,346
135,716,735
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
38
(c) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
2024
Options
2023
Options
(d) Movements in options on issue
Balance at beginning of the year
10,000,000
15,200,000
Exercised, lapsed, cancelled or expired during the year:
−
Cancelled, exercisable at $0.450 on or before 31 December 2024
-
(4,000,000)
−
Cancelled, exercisable at $0.501 on or before 3 December 2023
-
(250,000)
−
Expired, exercisable at $0.664 on or before 8 July 2023
-
(200,000)
−
Expired, exercisable at $0.527 on or before 29 January 2023
-
(500,000)
−
Expired, exercisable at $0.780 on or before 24 March 2023
-
(250,000)
Balance at end of the year
10,000,000
10,000,000
(e) Movements in performance rights on issue
There were no performance rights on issue on 31 December 2024, and no movements during the year.
15. RESERVES
2024
$
2023
$
(a) Reserves
Share-based payments reserve
Balance at beginning of the year
1,244,959
13,868,006
Transferred to share capital
-
(7,850,416)
Transfer to retained earnings
-
(4,470,131)
Employee and contractor share options and performance rights (note 24)
-
(302,500)
Balance at end of the year
1,244,959
1,244,959
Total reserves
1,244,959
1,244,959
(b) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve is used to recognise the fair value of share options and performance rights issued.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
39
16. ACCUMULATED LOSSES
2024
$
2023
$
Balance at beginning of the year
57,851,063
(80,406,201)
Transfer from share-based payment reserve
-
4,470,131
Profit/(loss) for the year
(1,789,996)
133,787,133
Dividends paid
(57,637,100)
-
Balance at end of the year
(1,576,033)
57,851,063
17. EARNINGS PER SHARE
(a) Reconciliation of earnings used in calculating earnings per share (EPS)
2024
$
2023
$
Profit/(Loss) attributable to ordinary equity holders of the company
-
Continuing Operations
(1,789,996)
1,515,444
-
Discontinuing Operations
-
132,271,689
Profit/(Loss) attributable to the owners of the Company used in calculating
basic and diluted loss per share
(1,789,996)
133,787,133
Basic & Diluted Earnings/(loss) per share attributable to ordinary equity
holders of the Company
(0.49)
36.32
Basic & Diluted Earnings/(loss) per from Continuing operations
(0.49)
0.41
(b) Weighted average number of shares used as the denominator
2024
2023
No. of Shares
No. of Shares
Weighted average number of ordinary shares used as the denominator in
calculating basic loss per share
368,334,346
368,334,346
Weighted average number of ordinary shares used as the denominator in
calculating diluted loss per share
368,334,346
368,334,346
A total of 10,000,000 (2023: 10,000,000) share options and 0 (2023: 0) performance rights were outstanding at the end of
the year, which were excluded in the diluted EPS calculation. As the strike price of the outstanding options are significantly
above the current market price they have been excluded. The diluted EPS was equal to the basic EPS because as they
were anti-dilutive for that year.
18. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to market, liquidity and credit risks arising from its financial instruments.
The Group’s management of financial risk is aimed at ensuring net cash flows are sufficient to meet all of its financial
commitments and maintain the capacity to fund the activities of the business. The Board of Directors has overall
responsibility for the establishment and oversight of the risk management framework. Management monitors and manages
the financial risks relating to the operations of the Group through regular reviews of risks.
Market (including foreign exchange and interest rate risks), liquidity and credit risks arise in the normal course of business.
These risks are managed under Board approved treasury processes and transactions.
The principal financial instruments as at reporting date include cash, receivables and payables.
This note presents information about exposures to the above risks, the objectives, policies and processes for measuring
and managing risk, and the management of capital.
(a)
Market risk
(i) Foreign exchange risk
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency and net investments in foreign operations. The Group has not formalised
a foreign currency risk management policy however, it monitors its foreign currency expenditure in light of exchange rate
movements.
As at 31 December 2024, the Group held $4,138 (2023: $378) of cash and term deposits denominated in US Dollars.
The following table demonstrates the sensitivity to a reasonably possible change in US Dollar exchange rates, with all
other variables held constant. A strengthening of the Australian Dollar rate results in an increased loss before tax. The
Group’s exposure to foreign currency changes for all other currencies is not material.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
40
Change in
USD Rate
%
Effect on Loss
before tax
$
(increase)
decrease
Effect on
Equity
$
(increase)
decrease
Year to 31 December 2024
+5%
(333)
333
-5%
333
(333)
Year to 31 December 2023
+5%
-
-
-5%
-
-
(ii) Interest rate risk
The Group is exposed to movements in market interest rates on cash. The Group’s policy is to monitor the interest rate
yield curve out to six months to ensure a balance is maintained between the liquidity of cash assets and the interest rate
return. The entire balance of cash for the Group of $31,183,180 (2023: $193,109,430) is subject to interest rate risk. The
weighted average interest rate received on cash by the Group was 5.27% (2023: 4.7%).
The Group was also exposed to interest rate risk on the loan receivable for the year ending 31 December 2023 which was
measured at fair value.
(b)
Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and marketable securities are available to meet the current and future commitments of the Group. Due to the nature of the
Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary
source of funding being equity raisings.
The Board of Directors constantly monitors the state of equity markets in conjunction with the Group’s current and future
funding requirements, with a view to initiating appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the Consolidated Statement
of Financial Position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date.
(c)
Credit risk
The Group’s significant concentration of credit risk includes cash, which is held with a major Australian bank with AA3
credit rating, accordingly the credit risk exposure is minimal. The maximum exposure to credit risk at balance date is the
carrying amount of cash as disclosed in the Consolidated Statement of Financial Position and Notes to the Consolidated
Financial Statements.
The Group does not presently have any material debtors. A formal credit risk management policy is not maintained in
respect of debtors.
(d)
Fair values
The company had no financial instruments, other than cash at bank and on hand and short-term deposits, held by the
group as at 31 December 2024.
19. CAPITAL MANAGEMENT
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it may
continue to provide returns for shareholders and benefits for other stakeholders.
Capital managed by the Board includes Shareholder equity, which was $30,955,649 (2023: $194,812,757). The focus of
the Group’s capital risk management is the current working capital position against the requirements of the Group to
develop its new business activities plus corporate overheads. The Group’s strategy is to ensure appropriate liquidity is
maintained to meet anticipated business requirements, with a view to initiating appropriate capital raisings when required
in the future.
20. CONTINGENCIES
There are no material contingent liabilities or contingent assets of the Group as at 31 December 2024 and 2023.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
41
21. COMMITMENTS
2024
$
2023
$
Short-term lease commitments:
Minimum lease payments
- within one year
62,403
-
Long-term lease commitments:
Minimum lease payments
- beyond one year
102,116
-
Total Commitments
164,519
-
Operating Leases:
The minimum future payments above relate to non-cancellable leases for offices.
22. SHARE-BASED PAYMENTS
(a) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
2024
$
2023
$
Options issued
-
-
Performance Rights issued
-
-
Cancellation of options for value
-
(302,500)
-
(302,500)
(b) Options
The Group provides benefits to employees (including directors), contractors and consultants of the Group in the form of
share-based payment transactions, whereby employees, contractors and consultants render services in exchange for
options to acquire ordinary shares.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share
of the Company with full dividend and voting rights. Set out below is a summary of the options granted (being those the
subject of share-based payments).
2024
2023
Number of
options
Weighted average
exercise price
Number of
options
Weighted average
exercise price
Outstanding at the beginning of the year
10,000,000
$0.640(i)
15,200,000
$0.587
Granted
-
-
-
-
Exercised
-
-
-
-
Expired
-
-
(950,000)
$1.084
Cancelled
-
-
(4,250,000)
-
Outstanding at end of the year
10,000,000
$0.356(i)
10,000,000
$0.640(i)
Exercisable at end of the year
10,000,000
$0.356(i)
10,000,000
$0.640(i)
(i)
In accordance with Listing Rule 7.22.3, the exercise price of each option was reduced by the equivalent of the return of capital per
share made to shareholders on the 8 January 2024 and 8 July 2024. The options strike price was reduced by $0.273 and
$0.01076 per option to $0.35624 (DNK Announcements 19 January 2024 and 8 July 2024).
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
42
Movements within specific classes of unlisted options (being those the subject of share-based payments) during the year
is as follows:
Unlisted Options – Class
Opening
balance
1 Jan 2024
Granted
Cancelled
Expired
Closing
balance
31 Dec 2024
Exercise price $0.356(i) expiry date 30/07/2025
2,000,000
-
-
-
2,000,000
Exercise price $0.356(i) expiry date 30/07/2025
8,000,000
-
-
-
8,000,000
10,000,000
-
-
-
10,000,000
(i)
In accordance with Listing Rule 7.22.3, the exercise price of each option was reduced by the equivalent of the return of capital per
share made to shareholders on the 8 January 2024 and 8 July 2024. The options strike price was reduced by $0.273 and
$0.01076 per option to $0.35624 (DNK Announcements 19 January 2024 and 8 July 2024).
Remaining contractual life
The weighted average remaining contractual life of share options outstanding at the end of the period was 6 months
(31 December 2023: 1.5 years), with exercise prices at $0.356.
Options granted during the year
No options were granted during the years ended 31 December 2024 and 2023.
As detailed in the Company’s Annual Report, a short-term incentive (STI) scheme applies to executives in the Company
and is designed to link any STI payment with the achievement of specified key performance indicators (KPI’s) which are
in turn linked to the Company’s strategic objectives and targets.
(c) Performance Rights
There were no performance rights on issue during the year ended 31 December 2024.
23. RELATED PARTY TRANSACTIONS
(a) Parent entity
The ultimate parent entity within the Group is Danakali Limited.
(b) Subsidiary
Interests in the subsidiary is set out in note 25.
(c) Key management personnel compensation
2024
$
2023
$
Short-term benefits
814,422
983,837
Post-employment benefits
86,292
155,359
Performance bonus
124,594
534,857
1,025,308
1,674,053
(d) Transactions with directors, director related entities and other related parties
AFC is deemed to be a related party of the Company on the basis of significant influence. The related party status applies
from 23 April 2020, being when AFC held an interest of 14.4% (2023:14.4%) in the issued capital of the Company and the
date that Danakali appointed two AFC nominees to its Board of Directors.
AFC President and CEO, Samaila D. Zubairu, and AFC Senior Director for Investment Operations & Execution, Taiwo
Adeniji, joined Danakali’s Board as Non-Executive Directors on 23 April 2020. After their resignations as directors (Samaila
D. Zubairu on 15 June 2023 and Taiwo Adeniji on 31 December 2024), AFC Senior Vice President & Lead Counsel
Chinekwu Duru was appointed as a Non-Executive Director of the Company on 13 January 2025. These appointments
are in accordance with the terms of the Subscription Agreement which provides AFC the right to appoint two nominees to
the Board of Danakali provided AFC’s Danakali ownership remains above certain thresholds. As at the date of release of
this report, AFC holds one out of five board seats on the Company.
There were no other material related party transactions.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
43
24. REMUNERATION OF AUDITORS
During the year, the following fees were paid or payable for services provided by the auditor of the Company, its related
practices and non-related audit firms:
2024
$
2023
$
Assurance related
-
Hall Chadwick
59,405
38,016
-
Ernst & Young
-
84,736
59,405
122,752
25. SUBSIDIARIES
Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy:
Name
Principal Activities
Country of
Incorporation
Class of
Shares
Equity Holding
2024
2023
%
%
Danakali Investments Pty Ltd(a)
Investment in
Exploration
Australia
Ordinary
100
100
Danakali (KSA) Pty Ltd
Business Services
Australia
Ordinary
100
100
The proportion of ownership interest is equal to the proportion of voting power held.
(a) Previously STB Eritrea Pty Ltd.
26. PARENT ENTITY INFORMATION
The following information relates to the parent entity, Danakali Limited. The information presented here has been prepared
using accounting policies consistent with those presented in note 2.
2024
$
2023
$
Current assets
31,444,967
195,539,736
Non-current assets
149,006
9,526
Total assets
31,593,973
195,549,262
Current liabilities
416,654
672,476
Non-current liabilities
220,411
64,030
Total liabilities
637,065
736,506
Net Assets
30,956,908
194,812,757
Issued capital
31,286,723
135,716,725
Share-based payments reserve
1,244,959
1,244,959
Accumulated profit/(loss)
(1574,774)
57,851,073
Total equity
30,956,908
194,812,757
Profit/(Loss) for the year
(1,789,316)
133,787,133
Total Comprehensive profit/(loss) for the year
(1,789,316)
133,787,133
27. DIVIDENDS
At the shareholders meeting held on 31 May 2024, the shareholders approved a total return of capital of $3,963,278 and
the Board approved a special dividend of $3,403,409 to shareholders as at 5:00pm (AWST) on 1 July 2024 (Record Date).
The total distribution amounted to $7,366,687 and was paid on 8 July 2024.
The return of capital of $100,466,735 approved at the shareholders general meeting held on 24 November 2023 and the
Board approved special dividend of $54,233,691 to shareholders as at 5:00pm (AWST) on 2 January 2024 (Record Date)
was paid to shareholders on the 8 January 2024.
No dividends were paid in 2023.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
44
28. EVENTS OCCURRING AFTER THE BALANCE DATE
Joint venture agreement
Danakali’s wholly owned subsidiary, Danakali (KSA) Pty Ltd signed a joint venture agreement in January 2025 with
Massadir Al-Zamrda for Mining (Emerald), a company incorporated under the laws of the Kingdom of Saudi Arabia (Joint
Venture Agreement), which will govern the formation, management and operation of a limited liability to be established in
the Kingdom of Saudi Arabia to explore for prospective mineral projects in Saudi Arabia, in which Danakali will hold an
80% interest and Emerald will hold a 20% interest (JV Company).
Director appointment
Ms Chinekwu Duru, Senior Vice President & Lead Counsel at Africa Finance Corporation (AFC), was appointed as a Non-
Executive Director of the Company effective 13 January 2025. She was appointed to the Board as the nominee of
substantial shareholder AFC, following the resignation of Mr Taiwo Adeniji in December 2024.
Share Buy-back
On 17 February 2025, the Company announced its intention to undertake a minimum holding buy-back for holders of
unmarketable parcels of fully paid ordinary shares in the Company. Under the NSX Listing Rules, any shareholding valued
at less than $500 based on the closing price of shares on the NSX Electronic Trading System (NETS) is considered to be
an “unmarketable parcel” of shares. The Buy-Back will occur at $0.045 per share, being the approximate volume weighted
average price for the previous ten trading days in which trades in the Company’s shares were recorded prior to the Record
Date (14 February 2025). Based on the closing price of shares on the record date, the aggregate value of such ordinary
shares is $233,015. These Shares will be cancelled once transferred to the Company in accordance with the Corporations
Act 2001.
Other matters
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial years.
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 31 DECEMBER 2024
DANAKALI LIMITED ABN 56 097 904 302
45
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
As at 31 December 2024
Body Corporates
Tax Residency
Entity Name
Entity type
Place formed or
incorporated
% of share
capital held
Australian
or Foreign
Foreign
Jurisdiction
Danakali Ltd
Body Corporate
Australia
N/A
Australian
N/A
Danakali Investments Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Danakali (KSA) Pty Ltd
Body Corporate
Australia
100%
Australian
N/A
Directors’ Declaration
DANAKALI LIMITED ABN 56 097 904 302
46
In the Directors’ opinion:
(a) the financial statements and notes of Danakali Limited for the financial year ended 31 December 2024 are in
accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
(ii) giving a true and fair view of the Group’s financial position as at 31 December 2024 and of its performance for
the year ended on that date;
(b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 2;
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable subject to achieving the matters set out in note 2(c);
(d) the consolidated entity disclosure statement is true and correct as at 31 December 2024; and
The directors have been given the declarations by the Executive Chairman and Chief Financial Officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Seamus Cornelius
EXECUTIVE CHAIRMAN
Perth, 14 March 2025
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF DANAKALI LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Danakali Limited (“the Company”) and its subsidiaries (“the
Consolidated Entity”), which comprises the consolidated statement of financial position as at 31 December
2024, 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 material accounting policy information, the consolidated entity
disclosure statement and the director’s declaration.
In our opinion:
a.
the accompanying financial report of the Consolidated Entity is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2024
and of its financial performance for the year then ended; and
(ii)
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 Consolidated Entity in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and
Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
47
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.
Key Audit Matter
How our audit addressed the Key Audit Matter
As disclosed in note 14 to the financial statements,
the Group has distributed capital of $104,430,012.
The distribution of capital to shareholders is critical
due to its potential impact on the company's
liquidity, financial stability, and shareholder equity.
This process involves ensuring the accurate
calculation and timely payment of dividends, as well
as compliance with relevant legal and regulatory
requirements.
Our procedures included:
•
Evaluate the company's policies and
procedures for distributing capital to ensure
they adhere to legal and regulatory
standards.
•
Test the accuracy of dividend calculations
by reviewing financial statements and
underlying data.
•
Ensure that all dividend declarations and
distributions have been appropriately
approved by the board of directors.
•
Based on the procedures performed no
misstatements were identified.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Consolidated Entity’s annual report for the year ended 31 December 2024, 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, with the exception of the remuneration report and our related
assurance opinion.
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.
48
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, and the
consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’s ability 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 Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Consolidated Entity’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 Consolidated Entity’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 Consolidated Entity to cease to
continue as a going concern.
49
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Consolidated Entity audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, 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 in the directors’ report for the year ended 31 December
2024.
In our opinion, the Remuneration Report of Company, for the year ended 31 December 2024, 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 s 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.
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Director
Dated this 14th day of March 2025
Perth, Western Australia
50
NSX Listing Rules- Additional Disclosures
DANAKALI LIMITED ABN 56 097 904 302
51
NSX Listing Rule 6.9(12): Top 10 Shareholders
In accordance with NSX Listing Rule 6.9(12), the top 10 shareholders and the number of securities that they hold as at
31 December 2024 are as follows:
Listed ordinary shares
Number of shares
Percentage of
ordinary shares
1
AFC EQUITY INVESTMENTS LIMITED
52,958,908
14.38
2
WELL EFFICIENT LIMITED
35,000,000
9.50
3
CITICORP NOMINEES PTY LIMITED
34,821,277
9.45
4
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY
LIMITED
31,191,756
8.47
5
BNP PARIBAS NOMS PTY LTD
24,296,311
6.60
6
BNP PARIBAS NOMINEES PTY LTD
20,945,689
5.69
7
NGE CAPITAL LIMITED
20,000,000
5.43
8
BNP PARIBAS NOMINEES PTY LTD
9,864,020
2.68
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
8,139,706
2.21
10
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
6,641,387
1.80
243,859,054
66.21
NSX Listing Rule 6.9(13): Distribution of equity securities
In accordance with NSX Listing Rule 6.9(13), shareholder distribution as at 31 December 2024 is as follows:
Holders
Securities
%
1
-
1,000
494
172,228
0.05%
1,001
-
5,000
783
2,001,973
0.54%
5,001
-
10,000
332
2,605,833
0.71%
10,001
-
100,000
649
21,918,790
5.95%
100,001
and over
202
341,635,522
92.75%
TOTAL
2,460
368,334,346
100%
NSX Listing Rules 6.9(5) and (6): Director’s interest in contracts
No director proposed for election at the forthcoming annual general meeting has a service contract.
There are no contracts of significance subsisting during or at the end of the financial year in which a director is or was
materially interested, either directly or indirectly.
NSX Listing Rules- Additional Disclosures
DANAKALI LIMITED ABN 56 097 904 302
52
NSX Listing Rule 6.9(9): Summary of Financial Information for past 5 years
Balance Sheet as at 31 December
2024
2023
2022
2021
2020
Current Assets
31,446,437
195,539,736
14,976,203
23,042,875
10,253,647
Non-Current Assets
146,277
9,526
49,896,803
45,540,198
46,711,055
TOTAL ASSETS
31,592,714
195,549,262
64,873,006
68,583,073
56,964,702
Current Liabilities
479,056
672,476
902,699
1,349,684
799,273
Non-Current Liabilities
158,009
64,029
52,160
48,200
65,684
TOTAL LIABILITIES
637,065
736,505
954,859
1,397,884
864,957
NET ASSETS
30,955,649
194,812,757
63,918,147
67,185,189
56,099,745
Issued Capital
31,286,723
135,716,735
127,866,319
127,866,319
109,058,372
Reserves
(331,074)
59,096,022
(63,948,172)
(60,681,130)
(52,958,627)
TOTAL EQUITY
30,955,649
194,812,757
63,918,147
67,185,189
56,099,745
Income statement for the year ending 31
December
2024
2023
2022
2021
2020
CONTINUING OPERATIONS
Revenue
1,642,121
5,916,994
89,484
43,142
189,341
Expenses
(3,432,117)
(4,401,550)
(4,589,933)
(10,080,310)
(8,448,711)
Profit/(Loss) before Income Tax from
Continuing Operations
(1,789,996)
1,515,444
(4,500,449)
(10,037,168)
(8,259,370)
DISCONTINUED OPERATIONS
Profit after tax for the year from
discontinued operations
-
132,271,689
998,427
-
-
Profit/(loss) for the year
(1,789,996)
133,787,133
(3,502,352)
(10,037,168)
(8,259,370)
OTHER COMPREHENSIVE INCOME
Foreign currency translation reserve related
to equity accounted investment
-
(2,590,023)
-
1,064,052
(1,550,097)
TOTAL COMPREHENSIVE
PROFIT/(LOSS) FOR THE YEAR
(1,789,996)
131,197,110
(3,502,352)
(8,973,116)
(9,809,467)