NEWS RELEASE
27 September 2023
2023 ANNUAL REPORT
Attached for immediate release is the 2023 Annual Report including audited financial
statements for the year ended 30 June 2023.
JOHN BORSHOFF
Managing Director/CEO
Deep Yellow Limited
This ASX announcement was authorised for release by Mr John Borshoff, Managing
Director/CEO, for and on behalf of the Board of Deep Yellow Limited.
Contact
Investors:
John Borshoff Managing Director/CEO
+61 8 9286 6999
john.borshoff@deepyellow.com.au
Media:
Cameron Gilenko
+61 466 984 953
cgilenko@citadelmagnus.com
Level 1, 502 Hay Street, Subiaco, WA 6008 Australia
PO Box 1770, Subiaco, WA 6904 Australia
+61 8 9286 6999
info@deepyellow.com.au
www.deepyellow.com.au
ABN: 97 006 391 948
DYL: ASX & NSX (Namibia)
DYLLF: OTCQX
Corporate Information
Board of Directors
Chris Salisbury
John Borshoff
Gillian Swaby
Mervyn Greene
Victoria Jackson
Tim Lindley
Greg Meyerowitz
Chairman (Non-executive)
Managing Director/CEO*
Executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
* referred to as Managing Director throughout this report.
Company Secretary
Mark Pitts
Registered Office
Level 1
502 Hay Street
Subiaco Western Australia 6008
Telephone: + 61 8 9286 6999
Email: info@deepyellow.com.au
Postal Address
PO Box 1770
Subiaco Western Australia 6904
Stock Exchange Listings
Australian Securities Exchange (ASX) Code: DYL
OTC Markets Group (OTCQX)
Namibian Stock Exchange (NSX)
Code: DYLLF
Code: DYL
Auditor
Ernst & Young
11 Mounts Bay Road
Perth Western Australia 6000
Website Address
www.deepyellow.com.au
Australian Business Number
97 006 391 948
Share Registry
Computershare Investor Services Pty Limited
Level 17, 221 St Georges Terrace
Perth Western Australia 6000
Telephone:
1300 557 010
Corporate Overview
Chairman’s Letter
Project Description and Review
Sustainability and Governance
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
CONTENTS
2
4
5
19
20
28
41
42
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
ASX Additional Information
Schedule of Mineral Tenure
43
44
45
46
82
83
89
90
Cover Photo: Mulga Rock Project Camp, Western Australia.
Deep Yellow Limited
Annual Report 2023
1
BUILDING A GLOBAL TIER-1 URANIUM PRODUCER
Corporate Overview
Deep Yellow Limited (Deep Yellow) is a differentiated, advanced uranium exploration company, in pre-development
phase, implementing a dual strategy to position the Company to become globally significant as a uranium producer
and grow shareholder wealth. This strategy is founded upon growing the existing uranium resources across the
Company’s uranium projects in Namibia and Australia and the pursuit of accretive, counter-cyclical acquisitions to
build a global, geographically diverse asset portfolio. A Definitive Feasibility Study (DFS) on its Tumas Project in
Namibia was completed in January 2023. The Company’s Namibian suite of projects are situated in a top-ranked
African mining destination in a jurisdiction that has a long, well-regarded history of safely and effectively developing
and regulating its considerable uranium mining industry.
The Company’s Australian suite of projects have resulted through its successful sector consolidation strategy delivered
by completion of the merger with Vimy Resources Limited (Vimy) as announced on 5 August 2022. This saw the
acquisition of the Mulga Rock Project (MRP) in Western Australia, one of Australia’s largest undeveloped uranium
resources and lies in the Great Victoria Desert in Western Australia, 290km by road ENE of Kalgoorlie. and the Alligator
River Project (ARP) in the Northern Territory.
The long-term outlook for uranium remains very positive with the resurgence of nuclear as many major economies are
adopting policies to increase contribution from nuclear. This is underpinned by the integral role nuclear power will need
to play in meeting clean energy targets and overcoming a supply shortage. Aside from growth in nuclear that was
already forecasted to meet electricity demand in regions such as India, Asia, Middle East and Eastern Europe,
significant additional nuclear growth is now being indicated by many developed economies. This is driven by both the
realisation by many countries that energy demand will not be met by renewables alone together with the adoption of
stringent zero emission targets to be met by 2050. Further, geopolitical uncertainties have created the essential need
for geographic diversity of supply with renewables now showing to be inadequate. Nuclear will become a natural
partner ensuring its long-term growth, with 59 reactors currently under construction on top of the 436 reactors currently
in operation. It is estimated the current nuclear fleet will need to triple to achieve net zero by 2050.
The merger with Vimy has created one of the world’s largest diversified pure-play uranium companies. Post-merger
integration of assets and staff was a key focus, delivering significant value enhancements.
Deep Yellow is focused on becoming a Tier-1 uranium producer by establishing a multi-project, globally diversified
uranium portfolio and positioning itself to provide a secure and reliable supply of uranium to this growing market.
CORPORATE STRATEGY
Since the appointment of John Borshoff as CEO and Managing Director in late October 2016, the Company set a new
direction built around a counter-cyclical strategy focused on organic and inorganic growth aiming to deliver annual
production of 10+Mlb with a low cost, multi-project global uranium platform.
Organic growth will be delivered through exploration and development of the Company’s Namibian and Australian
project portfolios. Since 2016, exploration success has nearly quadrupled the resource base at the Tumas Project, at
an extremely low discovery cost of 11c/lb. The acquisition of MRP and ARP has added significantly to both the overall
resource base of the Company and geographic diversity of its project pipeline.
The Company’s “inorganic” growth plan is based on continuing its merger and acquisition program to establish a
diversified portfolio of uranium projects for development from 2025 onwards (see Figure 1). Effective execution of this
unique strategy is now exhibited through its successful merger with Vimy, facilitated by a leadership team with a
proven track record in uranium, extensive industry knowledge and capability to deliver.
To service the Company’s growth strategy, Deep Yellow has assembled a highly credible, proven uranium team that
brings strong project development, operational and corporate capabilities. The majority of this team successfully
worked together at Paladin Energy, which grew from a $2M explorer into a $5B high-quality uranium producer pre-
Fukushima. The merger with Vimy has strengthened the team further.
Deep Yellow is focused on becoming a Tier-1 uranium producer by establishing a multi-project,
globally diversified uranium portfolio and positioning itself to provide a long-term secure and
reliable supply of uranium to this growing market.
Deep Yellow Limited
Annual Report 2023
2
Corporate Overview
Figure 1: Deep Yellow’s Worldwide Project Locations.
HIGHLIGHTS OF THE 2023 FINANCIAL YEAR
•
Tumas Project (Tumas) - the DFS was completed in January 2023 with positive results providing a project Life
of Mine (LOM) of 22.25 years with annual production of 3.6Mlb U3O8 (uranium) and 1.15 Mlb V2O5 (vanadium
by-product) (refer ASX announcement 2 February 2023).
The Project go-ahead with commencement of metallurgical test work to test ore variability and further optimise
beneficiation, membrane concentration, metal recovery and reagent recycling preparatory to detailed
engineering. The initiation of project financing activities has commenced, aiming for Final Investment Decision
(FID) in H2 FY2024.
A preparedness to Grant the Mining Licence (ML) was received from the Ministry of Mines and Energy (MME) in
August 2022 subject to receiving an Environmental Clearance Certificate (ECC). The Environmental Impact
Assessment (EIA) was submitted to the Environmental Commissioner for consideration in April 2023. Grant of
the ML is anticipated on issue of the ECC.
MRP - assessment is underway to maximise project value uplift with added focus on recovery of copper, nickel,
cobalt, and rare earth elements and extending LOM. The operation has strong potential for value uplift by the
inclusion of critical minerals, rare earth elements and additional uranium into a larger project with an extended
LOM. This could change the calibre of MRP significantly (refer ASX announcement 9 August 2022).
The Commonwealth Department of Climate Change, Energy, the Environment and Water (DCCEEW) approved
the Mulga Rock Project Sandhill Dunnart Conservation Plan (SDCP) in February 2023.
ARP - achieved a 27% increase in Inferred Mineral Resource for the Angularli deposit (Alligator River Project).
The Inferred Mineral Resource for the Angularli deposit now stands at 32.9Mlb U3O8, for 1.37Mt at 1.09% U3O8
using a cut-off grade of 0.15% U3O8.
Omahola Basement Project (Omahola) - completion of two-stage, 10,000m follow-up RC drill program
delivered positive results with 3 new targets identified.
Yellow Dune Project (Aussinanis) - a detailed review of the Aussinanis Mineral Resource base resulted in an
upgrade of identified resources to JORC (2012) classification with an Indicated and Inferred Mineral Resource
base of 28.1Mlb at 171ppm U3O8, reporting at a 100ppm U3O8 cut off.
Board of Directors - appointment of experienced resources and energy executive Ms Victoria Jackson (refer ASX
Announcement 20 October 2022) and Mr Tim Lindley, an experienced capital markets and banking executive,
(refer ASX Announcement 18 May 2023) as independent Non-Executive Directors.
Strong Cash Balance - $40.8 million with anticipated inflow of funds of approximately $8M in Q1 & 2 FY2024,
the majority of this relating to R&D reimbursement.
•
•
•
•
•
•
•
Deep Yellow Limited
Annual Report 2023
3
Chairman’s Letter
Dear Shareholder
In 2023 Deep Yellow took significant steps to execute its strategy of becoming a diversified multi-
asset supplier of uranium to the world’s nuclear power industry.
The merger with Vimy occurred in August 2022, and significant effort was expended during the
year integrating the two companies’ staff, systems, and projects, into a single efficient
organisation. The integration work is now substantially complete.
Meanwhile work continued at pace on the Company’s flagship projects of Tumas and Mulga Rock.
The comprehensive DFS on Tumas was completed in early calendar year 2023, and the Board approved moving forward
to Front-End Engineering and Design (FEED) and project financing – at a suitable pace that matches the improving
uranium market. The DFS showed strong financial results despite the project being exposed to the global inflation
present across the resources industry. The technical work and engineering work was completed to a high standard
which will serve the project well when execution commences.
At Mulga Rock, the DFS is being optimised. Through the integration process, the combined technical teams recognised
the potential opportunity to extend mining and processing targeted at higher resource utilisation – with greater focus
being applied to recovery of base metals and rare earths, as well as increasing uranium. The revised DFS will be
progressed through FY2024.
Meanwhile targeted exploration at Alligator River resulted in a new resource model with significantly higher uranium
resources, showing the great potential of the tenure held by the Company.
Especially pleasing was that all the field work was completed with no recordable injuries for the full year. There was
also no significant environmental or heritage related incidents. Work continues laying the foundation of HSE culture
and management systems as the Company grows in scale and complexity.
The global narrative is increasing on the critical role nuclear power will play in achieving a low carbon future. Many
nations have recognised the importance of nuclear in providing low carbon baseload to support renewables in the
energy transition and have reversed or extended their nuclear power ambitions. This is in addition to the 436 reactors
already operating, with a further 59 reactors in construction.
Meanwhile, the supply response remains muted. This all points to a near term uplift in uranium price to support a
sustainable mined uranium supply industry. Your Company remains well placed to benefit when the uranium price
lifts.
The board continued its focus on renewal and adding capability with the appointment of two new directors – Ms
Victoria Jackson and Mr Tim Lindley. Their broad experience in the resources sector combined, with ESG credentials,
will serve the Company well as it continues to grow.
The Board also took further steps to strengthen governance, with the implementation of the Sustainability Committee
to oversee the Company’s ESG risk management. This year will also see a major step forward with disclosures in the
Sustainability Report aligned with the GRI Standards.
The Board and management are committed to being the best-in-class uranium producer. Our focus remains on the
key underpinning pillars of technical excellence, financial discipline, and the highest levels of governance, as we
execute the Company’s growth strategy.
It has been my pleasure to chair Deep Yellow in 2023, and I look forward to the continued success of your Company.
Chris Salisbury
Chairman
Deep Yellow Limited
Annual Report 2023
4
Project Description and Review
REVIEW AND RESULTS OF OPERATIONS
NAMIBIA
The full-year activities were extensive, with a primary focus on the completion of the Tumas DFS for consideration by
the Board in early 2023. The DFS was completed in January 2023 with positive results and the Board approved the
go-ahead for the Tumas Project with commencement of further test work preparatory to the start of FEED. Project
financing discussions have also commenced.
Figure 2: Namibian Project Location Map.
Deep Yellow Limited
Annual Report 2023
5
Project Description and Review
FLAGSHIP TUMAS PROJECT, NAMIBIA (MLA 137 within EPLs 3496, 3497) - 100%*
Definitive Feasibility Study Completed, Generating Strong Results
Positive results released from the Tumas DFS highlighted the Project as a potential world-class uranium operation
delivering robust returns to shareholders (refer Tables 1 and 2), with further upside using the mid-range FAM-2
uranium pricing forecast.
The DFS identified significant increases in both capital and operating cost unit rates since the release of the Pre-
Feasibility Study in 2021 and importantly, despite these negative headwinds, the Project’s economic and production
numbers remain robust. The cost estimate was derived utilising up to date market data, predominantly sourced in Q4
2022.
The Project displayed only moderate to low sensitivity to almost all elements analysed, with the highest sensitivity
being to uranium price and USD:NAD exchange rate, both of which may be mitigated through identified management
strategies.
Table 1: DFS Project Summary.
Parameter
Nameplate process throughput
Head grade
Initial LOM
Total mineral resources
Total ore reserves
Annual production (U3O8 max)
Annual production (V2O5 max)
Initial CAPEX
Capital cost per annual pound U3O8
Capital estimate reference date
Operating cost reference date
Unit
Mtpa
ppm U3O8
Years
Mlb
Mlb
Mlb pa
Mlb pa
US$M
US$
DFS
(Feb ’23)
4.15
340
22.25
114
67.4
3.6
1.15
372
103
Q4 2022
Q4 2022
Table 2: DFS Forecast Project Financial Outcomes at Various Uranium Prices.
Project Financials (Ungeared, 100% basis):
Real unless stated
U3O8 gross revenue
V2O5 gross revenue (US$7/lb)
Gross revenue: total
Downstream operating expenses (TC/RCs, freight)
Site operating expenses
Namibian state royalty & export levy
Operating margin (EBITDA)
Initial capital cost
Capitalised pre-production operating costs
Sustaining and closure
Total capital and sustaining capital
Tax payable
Undiscounted cashflow after tax
C1 cost (U3O8 basis with V2O5 by-product)
All-in Sustaining Cost (U3O8 basis with V2O5 by-product)
Project NPV (post tax)
Project IRR (post tax)
Project payback period from production start
Unit
US$65/lb
FAM-2
US$77/lb
US$85/lb
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$M
$/lb
$/lb
$M
%
Years
4,145
162
4,307
(64)
(2,281)
(139)
1,823
(372)
(51)
(127)
(563)
(473)
793
34.68
38.72
341
19.2
4.1
5,039
162
5,201
(64)
(2,281)
(168)
2,687
(372)
(51)
(127)
(563)
(795)
1,333
34.68
39.18
614
26.4
3.3
5,421
162
5,582
(64)
(2,281)
(181)
3,057
(372)
(51)
(127)
(563)
(933)
1,564
34.69
39.38
754
31.4
2.8
FAM-2 pricing in Table 2 above reflects the latest independent pricing forecast from TradeTech, the FAM-2 uranium
price forecast (mid-point assumption at US$77/lb).
Deep Yellow Limited
Annual Report 2023
6
Project Description and Review
Metallurgical Test Work
Further metallurgical test work commenced to inform the design criteria for FEED and later detailed design. This work
program is focussed on the beneficiation section, using both representative composites and variability samples
developed from samples collected in the drilling campaign completed at the end of 2022.
The purpose of the beneficiation work is to further optimise design conditions, with a focus on power consumption
and an improved Project economic outcome.
Further planned work will examine the membrane upgrade section and optimise the configuration of this circuit, as
well as guide the selection of the actual membrane supply, using liquors derived from leaching of Tumas samples
rather than synthetic liquors. This work is underway.
The uranium and vanadium recovery sections, in addition to the reagent recycling processes of the Tumas flowsheet,
will be tested on the liquors produced in the membrane test work. This work will allow the deportment of radionuclides
and elements potentially concentrated by the circuit (and hence needing to be bled from the circuit) to be examined
and suitable design criteria established.
EIA and MLA237
On 5 April 2023, the final EIA Report, inclusive of all appendices (among them, the Environmental Management Plan)
for the proposed Tumas Project and associated infrastructure was submitted to the Ministry of Environment, Forestry
and Tourism, as well as the respective “Competent Authorities” - i.e., the MME, and the Ministry of Agriculture, Water
and Land Reform. This included separate EIA Reports and EMPs for the proposed water pipeline and proposed power
line. These two EIA Addendum Reports and EMPs for the major infrastructure are effectively standalone documents
but were also presented as appendices in the main EIA Report.
MLA237 is conditionally approved for grant subject to the provision of an ECC for the Project. Following the submission
of the EIA, an approval period of three to four months is anticipated after which the ECC is expected to be issued in
Q3 CY2023.
Exploration and Resource Drilling
In April 2023, Deep Yellow commenced a two-phase, 340-hole, 9,500m reverse circulation resource drill program. The
aim of the program was to extend the Tumas 3 Mineral Resource towards the west, through Tumas 3 West and Tumas
Central to connect with the Tubas Mineral Resource and support a +30-year LOM (see Figure 3).
Phase 1 of the program was the exploration phase and was developed to isolate areas for follow-on Phase 2 resource
infill drilling. The area immediately to the west of Tumas 3 was identified as most prospective for resource infill
drilling, across an area of 2.5km by 1.8km west of Tumas 3 using a line and hole spacing of 100m. A total of 125 RC
holes for 4500m was planned for this part of the program. The drill program was completed in August 2023 and
detailed results will be reported when all data is at hand and interpreted.
* 5% right given to Oponona Investments Ltd (Namibian based partner) to participate in any projects.
Figure 3: Tumas Project Location.
Deep Yellow Limited
Annual Report 2023
7
Project Description and Review
OMAHOLA BASEMENT PROJECT
Omahola comprises the Ongolo, MS7, and Inca basement-related deposits and is located on EPL3496, held by Deep
Yellow through its wholly owned subsidiary Reptile Uranium Namibia (Pty) Ltd (RUN).
Omahola is located within the prospective ‘Alaskite Alley’ corridor, which includes major uranium deposits such as
Rössing and Husab (see Figure 4). The Project provides Deep Yellow with a compelling exploration growth opportunity,
with the potential to develop a Rössing/Husab style basement-related operation should sufficient resources be
discovered and delineated.
A 2-month drilling program was completed mid-November 2022 with 78 holes for 4,929m. Drilling targeted
continuation of the prospective lithological-structural zone under cover. Importantly, the drill program delivered
positive results and successfully identified a new prospective area 2km north of Inca and west of MS7, with two drill
holes opening and extending the fertile zone of Omahola by 2km.
The most promising of the newly discovered targets are the thick, stacked mineralised alaskites west of MS7 which
will be explored with deeper RC drilling (refer ASX announcement 22 December 2022).
Figure 4: Basement Deposits.
AUSSINANIS PROJECT (Yellow Dune Joint Venture, Namibia)
Aussinanis Project Resource Upgrade to JORC (2012)
The Company upgraded the Mineral Resource Estimate (MRE) from JORC (2004) to JORC (2012) for the Aussinanis
Project located in MDRL3498 in Namibia (see Figure 2) 40 km south of the Tumas 3 deposit. The deposit is held in the
Yellow Dune Joint Venture by Deep Yellow 85% through its wholly owned subsidiary RUN, 5% Epangelo Mining Company
(Pty) Ltd (Epangelo) 5% and 10% Oponona Investments (Pty) Ltd (Oponona).
Aussinanis had, at a 150ppm cut off, a previously reported Indicated and Inferred Mineral Resource base of 18Mlb
U3O8 at 237ppm conforming to the JORC (2004) Code, occurring from a depth of 4m to 31m, averaging 11m below
surface.
This Mineral Resource has been upgraded to the JORC (2012) Code reporting standard and is now estimated as
28.1Mlb at 171ppm U3O8, using a 100ppm U3O8 cut-off, to conform with the cut off adopted for the Tumas Deposit to
the north. (refer ASX announcement 31 March 2023) At a 150ppm cut-off the deposit contains 16.5Mlb U3O8 at
242ppm.
As part of the resource revision, the current MRE of the Aussinanis Project was extensively reviewed by Mr Martin
Hirsch, Deep Yellow’s in-house mineral resource geologist who qualifies as a competent person under the JORC (2012)
code. Mr Hirsch verified the information available, in terms of geological understanding and drilling data validity, to
reclassify the MRE for the whole of the Aussinanis deposit under the JORC (2012) Code.
Deep Yellow Limited
Annual Report 2023
8
Project Description and Review
NOVA JOINT VENTURE (Namibia)
The follow-up drill program aimed at further exploring the Barking Gecko North and East, Iguana and Turtle’s Neck
prospects, including thirteen RC holes and one RC pre-collared diamond cored hole, was completed in February 2023.
These prospects form part of the Nova Joint Venture Project (NJV) in Namibia, located within EPL3369. The Japan
Organization for Metals and Energy Security (formerly Japan Oil Gas and Metals National Corporation) (JOGMEC)
completed its 39.5% earn-in obligation through expenditure of A$4.5M.
The parties are now jointly contributing and the NJV equity holdings are as follows.
Reptile Mineral Resources & Exploration (Pty) Ltd
Subsidiary of Deep Yellow Limited
Japan Organization for Metals and Energy Security (JOGMEC)
Nova Energy (Africa) Pty Ltd
Subsidiary of Toro Energy Ltd
Sixzone Investments (Pty) Ltd, Namibia
39.5% (Manager)
39.5%
15%
6% (carried interest)
Although the size of the prospective area at Barking Gecko, which includes high grade and thick uranium
mineralisation, appears to be restricted laterally, results from recent drilling confirmed the continuation of the
mineralisation at depth to the northeast.
AUSTRALIA
In August 2022, the Company acquired two projects in Australia via its merger with Vimy.
MULGA ROCK PROJECT (Western Australia) - 100%
The MRP is one of Australia’s largest undeveloped uranium resources and lies in the Great Victoria Desert in Western
Australia, 290km by road ENE of Kalgoorlie. It is one of only four projects in Western Australia to receive State
Ministerial approval to progress uranium mining and it is currently the only one of those four likely to be developed in
the near future. In late 2021, the Western Australian Department of Water and Environment Regulation provided
formal confirmation that “substantial commencement” had been achieved.
The previous management completed a DFS confirming a 15-year LOM using a simple, low-cost uranium mining and
recovery process and an annual production target of ~3.5Mlb U308. Since the merger with Vimy, the Company has
confirmed a potential uplift in project value through the possible recovery of both critical and rare earth minerals in
addition to uranium. An evaluation program is in progress and if successful, will also result in access to the additional
uranium resources that exist within the broader identified resource shells.
The evaluation program is investigating the potential value uplift through the consideration of critical metals such as
copper, nickel, cobalt and zinc, plus rare earths elements (particularly neodymium and praseodymium), known to be
present in these deposits in addition to benefits gained getting access to the more broadly occurring uranium.
Preliminary assessment work undertaken is demonstrating that optimising the process flow sheet and mining
schedules and adopting a less selective mining approach, within approved pit boundaries, may add substantial value
to the MRP. This work is considering the full mineral suite associated with these polymetallic deposits, rather than
focusing solely on uranium with minor critical mineral contribution as previous.
Drilling associated with this evaluation program and completed to date has been restricted to the Mulga Rock East
deposits (Ambassador and Princess) (see Figure 5). These two deposits are richer in critical minerals and uranium
and represent most of the known mineral resources at MRP. Based on the current preliminary mining schedule, these
deposits will be mined with an extended mine life of greater than 20-years compared to the 15-years previously
identified. Beyond this there is the opportunity to develop the lower grade deposits to the west (Shogun and Emperor
deposits) which, in combination, have the potential to establish a project of major significance.
A drill program was undertaken with the aim of providing sample material for metallurgical analysis to determine ore
variability and estimating process recoveries for critical minerals and rare earths.
Deep Yellow Limited
Annual Report 2023
9
Project Description and Review
Sandhill Dunnart Conservation Plan Approved
Figure 5: Mulga Rock Location Map.
The DCCEEW approved the MRP SDCP in accordance with condition 2 of the Environment Protection and Biodiversity
Conservation Act 1999 for the Project. Implementation of the MRP was approved under Ministerial Statement No.
1046 (MS 1046) on 16 December 2016. Under Condition 2 of MS 1046 with a requirement to prepare the SDCP to
manage the potential impact to the Sandhill Dunnart marsupial associated with the implementation of the Project
and reduce the threat to the Sandhill Dunnart posed by feral animals within the defined area.
Condition 2 of MS1046 required further that the proposed defined area of the SDCP be located outside of the MRP
development envelope and within the Project boundary, contain at least 6,000ha of suitable habitat and contain a
local population of Sandhill Dunnart (see Figure 6).
On approval, the SDCP was published on the Deep Yellow website for stakeholder review on 1 February
2023(https://deepyellow.com.au/projects/australia/mulga-rock-project/approvals-and-compliance/). The SDCP was
developed in collaboration with suitably qualified experts. The study comprised the monitoring of 50 quadrats,
providing a unique long-term survey of small mammal behaviour along with other wildlife occurring in the Yellow
Sand Plain region of the Great Victoria Desert. The approval of the SDCP represented the culmination of a first-of-a-
kind camera trapping program targeted at small mammals and established since 2013. Camera surveys were carried
out to support permitting of the MRP and exceeded 50,000 trap nights offering a unique insight into the ecology of the
region surrounding the project (see Figure 7).
Figure 6: Mulga Rock Project - Sandhill Dunnart Conservation Plan Defined Area.
Deep Yellow Limited
Annual Report 2023
10
Project Description and Review
Results from the study identified numerous positive sightings of the Sandhill Dunnart marsupials which were found to
occur over a large portion of the SDCP defined area, all pointing to existence of a robust Sandhill Dunnart population
across the survey area.
Figure 7: Site Layout and Sandhill Dunnart Captured on Camera at Site 17B (25 January 2022).
Moving forward, Deep Yellow will provide a list of all Sandhill Dunnart and feral species sightings made in future
Annual Environmental Reports to DCCEEW and in accordance with MS 1046 to the WA Department of Water and
Environmental Regulation (DWER) and Department of Biodiversity, Conservation and Attractions (DBCA).
Deep Yellow will also engage and share those datasets with local and national stakeholders involved in biodiversity
preservation, threatened species and habitat management such as the Great Victoria Desert Biodiversity Trust, the
Threatened Species Index, and research institutions. The prolonged and extensive investment associated with the
development of the SDCP will result in the preservation of a habitat supportive of the Sandhill Dunnart and deliver
critical knowledge in managing and re-establishing habitat for threatened species in an Australian desert
environment.
Metallurgical Testing
Metallurgical testing is underway on samples collected during the November 2022 drilling program. The purpose of
this work program is to examine metallurgical variability in the ore at MRP, as well as the potential for greater
exploitation of the metals, other than uranium, known to be contained within the deposits. These other metals of
interest are copper, nickel, cobalt, zinc and Rare Earth Elements (REE), refered to collectively as “critical minerals”.
Initial analysis of available resource data indicated the potential for a material increase in the in-situ contained value
within the Mulga Rock resources. Work is underway to gain a detailed understanding of the potential resource
implication of these critical minerals from both a geological and metallurgical perspective.
Previous work undertaken on the Project with respect to the critical minerals contained values for each metal but were
considered in isolation, rather than on a “whole-of-ore basis”. The current work program will consider all metals of
potential value and in a holistic manner, considering the total contained value in each potential resource block.
To date, selective tests have been undertaken to examine the beneficiation performance of the critical minerals and
also the potential extraction of the critical minerals in the leaching process. Deep Yellow is of the view that
downstream recovery of the critical minerals, once extracted in leach, will be achievable in a commercial manner.
Further testwork is planned to test this view and provide necessary design data.
The results from the sighter tests indicated variable beneficiation recoveries and leach extractions for the critical
minerals. This work is not yet sufficiently advanced to allow conclusions to be drawn concerning any potential impact
on Project outcome, but does indicate that a material uplift in Project value is possible. Consequently the work will
continue and be reported, as conclusions are able to be drawn.
Resource Drilling
Deep Yellow commenced an extensive air core drill program in early April to better define ore reserve/mineral resource
variability factors and upgrade the mineral resource base for uranium and the targeted non-uranium critical minerals
at the MRP. This program with a total of 656 holes for 36,647m involved two phases of drilling.
Phase 1 focused primarily on increasing the understanding of the grade variability of uranium and critical minerals at
the MRP. All holes drilled were assayed on a preliminary basis using a portable XRF instrument and logged downhole
for gamma radioactivity, density, chargeability, and deviation. Currently the drill data is being analysed to determine
whether the current drill density is sufficient to draw conclusions with respect to the ore variability.
Deep Yellow Limited
Annual Report 2023
11
Project Description and Review
Phase 2 of the program was completed post year end focusing on resource infill drilling on the Mulga Rock East
deposits (Ambassador and Princess) as shown in Figure 8 and aimed at converting the remaining Inferred Mineral
Resources to an Indicated Mineral Resource status.
These deposits are richer in critical minerals and uranium and represent the majority of the known mineral resources
in the MRP, where significant potential exists to establish an operation with a LOM greater than 20 years. The
expectation is that these deposits, Ambassador and Princess, located in the east would be mined first before
transitioning to the lower grade deposits of Emperor and Shogun (Mulga Rock West).
Figure 8 shows the deposit and drill hole locations respectively.
Figure 8: Ambassador and Princess Deposit Outlines with Drill Hole Locations.
ALLIGATOR RIVER PROJECT (Northern Territory)
The ARP is the largest granted uranium exploration package in the world class Alligator River uranium province,
located in Arnhem Land, Northern Territory. The potential of Alligator River is demonstrated by the outstanding
mineral resources of the nearby Jabiluka and Ranger deposits providing over 750Mlb of U3O8 in mineral endowment
(current mineral resources and mined). Historical government policies have left this target-rich environment under-
explored and Deep Yellow plans to capitalise on the potential of this area.
The drill program at Angularli commenced in late June 2022 and was completed in October 2022. This successfully
extended the deposit and identified further mineralised fault corridors nearby to the known Inferred Mineral Resource,
which then totalled 25.9Mlb at 1.29% U3O8, at a cut-off grade of 0.15% U3O8.
Results from the 1,116 chemical assays associated with this extension drilling, were combined with historical
assays and provided the basis for an upgraded MRE as announced on 3 July 2023. The upgraded MRE currently
totals 32.9Mlb at 1.09 % U3O8, at a cut-off grade of 0.15% U3O8.
Deep Yellow Limited
Annual Report 2023
12
Project Description and Review
Figure 9: Alligator River Location Map.
The drill program was successful in extending the sandstone-hosted primary uranium mineralisation, primarily in up-
dip position from the Mineral Resource domain defined in 2018 and along strike (further north). The broadly spaced
extensional drilling holes demonstrated continuity of mineralisation up-dip and down-plunge of the current Mineral
Resource.
An MRE upgrade was undertaken subsequent to the extension drilling and Angularli is now estimated to contain an
Inferred MRE of 1.37Mt at 1.09% U3O8, containing 32.9Mlb U3O8 at a cut-off grade of 0.15% U3O8 in a combination of
altered sandstone, quartzite, silica flooded breccia and schists. This constitutes a 27% resource upgrade to the
previously announced resource.
The MRE upgrade was supported by 18 diamond holes completed in 2022, in addition to 30 historical diamond drill
holes. The Angularli deposit comprises multiple stacked lenses, with the main lens accounting for about 95% of the
total volume of the MRE, the majority of which is sandstone or silica-flooded breccia hosted.
Table 3 lists the MRE at various cut-offs and illustrates the relative insensitivity of the Angularli deposit to cut-off
grade. Following the work program detailed above, the new MRE was released to ASX on 3 July 2023.
Table 3: Mineral Resource Estimate at Various Cut-offs.
Deposit
UNCONFORMITY-RELATED MINERALISATION
Category
Cut-off
(% U3O8)
Tonnes
(Mt)1
U3O8
(%)2
U3O8
(t)
U3O8
(Mlb) Measured
Resource Categories (Mlb U3O8)
Indicated
Inferred
Alligator River Project - JORC 2012
Angularli Deposit
Inferred
0.10
0.15
0.20
0.25
0.30
ALLIGATOR RIVER PROJECT TOTAL
1.47
1.37
1.27
1.18
1.09
1.37
1.02
1.09
1.16
1.24
1.31
15,051
14,917
14,748
14,538
14,288
33.2
32.9
32.5
32.0
31.5
1.09
14,917
32.9
-
-
-
-
-
-
-
-
-
-
-
-
33.2
32.9
32.5
32.0
31.5
32.9
t = metric dry tonnes; appropriate rounding has been applied and rounding errors may occur.
1
2 Using chemical U3O8 composites from drill core.
Deep Yellow Limited
Annual Report 2023
13
Project Description and Review
DEEP YELLOW GROWTH STRATEGY
The Deep Yellow strategic growth plan is focused on establishing the Company as a low-cost, Tier-1 global uranium
platform holding a geographically diversified project pipeline. The dual-pillar strategy has been developed to deliver
organic and inorganic growth through firstly, advancing the development of its Namibian and Australian projects and
secondly, via sector consolidation, to acquire additional projects through merger and acquisition. This utilises the
strong uranium project development, operational and corporate capabilities and proven track record of the Deep
Yellow management team.
The Company remains well-funded to continue the execution of this strategy,
ANNUAL MINERAL RESOURCE AND ORE RESERVE STATEMENT
The MRE and Ore Reserve tables shown in Tables 4, 5 and 6 incorporate updates completed during the year including:
-
-
-
confirmation of the Tumas Ore Reserve following updates to the Tumas DFS (2 February 2023);
an update to the Aussinanis MRE to conform to the JORC (2012) guidelines (31 March 2023); and
the inclusion of the Mulga Rock and Angularli projects completed during the year.
The results achieved to date vindicate the modelling and planning carried out by the geological team and auger well
for the Tumas DFS and the upcoming Mulga Rock DFS.
The JORC 2004 classified resources of the Tubas Calcrete Project have not been updated to comply with the JORC
Code 2012 on the basis that the information has not materially changed since it was last reported, however they are
currently being reviewed to bring all resources up to JORC 2012 standards.
Review of Material Changes
The total MRE as at 30 June 2023 is summarised in Table 4 and 5(a) and is 686.9Mt at 265ppm for 402.3Mlb of U3O8
up from 570.6Mt at 219ppm for 276.0Mlb of U3O8 as at 30 June 2022.
The total MRE is comprised of a Namibian MRE of 614.6Mt at 211ppm for 286.3Mlb of U3O8 and an Australian MRE of
72.3Mt at 729ppm for 116Mlb of U3O8.
In addition, the total Base Metal MRE is an Australian mineral resource and is summarised in Table 5(b).
The material changes occurred as a result of:
-
-
a review of the Aussinanis deposit data and previous MRE and the re-stating of the MRE to comply with the
JORC (2012) guidelines. The previously reported Indicated and Inferred Mineral Resource base of 18Mlb U3O8
at 237ppm at a 150ppm cut off was upgraded to 28.1Mlb at 171ppm U3O8, using a 100ppm U3O8 cut-off, to
conform with the cut off adopted for the Tumas Deposit to the north; and
the Company merger with Vimy also added the entirety of the Australian Mineral Resources and Ore Reserves
to the company totals. These additional Mineral Resources and Ore Reserves were unchanged from those
quoted by Vimy in their 2022 Annual Report prior to the merger.
Subsequent to the end of the financial year an update to the MRE for the Angularli deposit in the Northern Territory
was announced (3 July 2023) based on drilling completed during the year. This update resulted in 27% increase to the
previous Inferred MRE which now stands at 32.9Mlbs U3O8 for 1.37Mt at 1.09% U3O8 at a 0.15% U3O8 cut-off grade.
Deep Yellow Limited
Annual Report 2023
14
Project Description and Review
Table 4: Namibian Mineral Resource Estimate – Current as at 30 June 2023.
Deposit
BASEMENT MINERALISATION
Category
Cut-off
(ppm U3O8)
Tonnes
(M)
U3O8
(ppm)
U3O8
(t)
U3O8
(Mlb) Measured
Resource Categories (Mlb U3O8)
Inferred
Indicated
Omahola Project - JORC 2012 1
INCA Deposit ♦
INCA Deposit ♦
Ongolo Deposit #
Ongolo Deposit #
Ongolo Deposit #
MS7 Deposit #
MS7 Deposit #
Indicated
Inferred
Measured
Indicated
Inferred
Measured
Indicated
100
100
100
100
100
100
100
21.4
15.2
47.7
85.4
94.0
18.6
7.2
260
290
187
168
175
220
184
Inferred
MS7 Deposit #
Omahola Project Sub-Total
CALCRETE MINERALISATION Tumas 3 Deposit - JORC 2012 2
Tumas 3 Deposits ♦
8.7
298.2
100
190
190
Tumas 3 Deposits Total
Tumas 1 & 2 Deposit
♦
Tumas 1 & 2 Deposit
♦
Tumas 1, 1E & 2 Deposits Total
Sub-Total of Tumas 1, 2 and 3
Tubas Sand Deposit
#
Tubas Sand Deposit
#
Tubas Red Sand Project Total
Tubas Calcrete
Deposit
Tubas Calcrete Total
Aussinanis Deposit ♦
Aussinanis Deposit ♦
Aussinanis Project Total
100
100
78.0
10.4
88.4
Indicated
Inferred
320
219
307
Tumas 1, 1E & 2 Project – JORC 2012 3
220
Indicated
206
Inferred
90.4
21.8
100
100
100
100
112.2
200.6
10.0
24.0
34.0
219
258
Tubas Red Sand Project - JORC 2012 4
187
Indicated
163
Inferred
171
Tubas Calcrete Resource - JORC 2004 5
374
Inferred
374
Aussinanis Project - JORC 2012- DYL 85% 6
168
Indicated
172
Inferred
12.3
62.1
100
100
7.4
7.4
100
74.4
171
5,600
4,400
8,900
14,300
16,400
4,100
1,300
1,600
56,600
24,900
2,265
27,165
19,860
4,692
24,552
51,717
1,900
3,900
5,800
2,767
2,767
2,000
10,700
12,700
12.3
9.7
19.7
31.7
36.3
9.1
2.9
3.7
125.4
54.9
5.0
59.9
43.8
10.3
54.1
114.0
4.1
8.6
12.7
6.1
6.1
4.5
23.6
28.1
-
-
19.7
-
-
9.1
-
-
28.8
-
-
-
-
-
-
-
-
-
12.3
-
-
31.7
-
-
2.9
-
46.9
54.9
-
-
9.7
-
-
36.3
-
-
3.7
49.7
-
5.0
43.8
-
-
10.3
4.1
-
-
8.6
-
6.1
4.5
-
-
23.6
Calcrete Projects Sub-Total
GRAND TOTAL NAMIBIAN RESOURCES
316.4
614.6
231
72,984
160.9
-
107.3
53.6
211
129,584
286.3
28.8
154.2
103.3
Notes:
Figures have been rounded and totals may reflect small rounding errors.
XRF chemical analysis unless annotated otherwise.
♦ eU3O8 - equivalent uranium grade as determined by downhole gamma logging.
# Combined XRF Fusion Chemical Assays and eU3O8 values.
Where eU3O8 values are reported it relates to values attained from radiometrically logging boreholes.
Gamma probes were calibrated at Pelindaba, South Africa in 2007. Recent calibrations were carried out at the Langer
Heinrich Mine calibration facility in July 2018 and September 2019.
During drilling, probes are checked daily against standard source.
1 ASX Release 04 Nov 2021 ‘Omahola Basement Project Resource Upgrade to JORC 2012’
2 ASX Release 29 Jul 2021 ‘Drilling at Tumas 3 Delivers Significant Resource Upgrade’
3 ASX Release 02 Sep 2021 ‘Tumas Delivers Impressive Indicated Mineral Resource’
4 ASX Release 24 Mar 2014 ‘Tubas Sands Project – Resource Update’
5 ASX Release 28 Feb 2012 ‘TRS Project Resources Increased’
6 ASX Release 31 Mar 2023 ‘Aussinanis Project Resource Upgrade To JORC (2012)’
Deep Yellow Limited
Annual Report 2023
15
Project Description and Review
Table 5(a): Australian Mineral Resource Estimate.
Deposit
Northern Territory
Category
Cut-off
(ppm U3O8)
Tonnes
(M)
U3O8
(ppm)
U3O8
(t)
Angularli Project - JORC 2012 1
U3O8
(Mlb) Measured
Resource Categories (Mlb
U3O8)
Indicated
Inferred
Angularli
Inferred
1,500
Angularli Project Sub-Total
Western Australia
0.91
0.91
12,900
11,739
12,900
11,739
25.9
25.9
-
-
Mulga Rock Project – JORC 2012 2
Ambassador
Ambassador
Ambassador
Measured
Indicated
Inferred
Princess
Princess
Mulga Rock East Total
Indicated
Inferred
Shogun
Shogun
Emperor
Indicated
Inferred
Inferred
Mulga Rock West Total
Mulga Rock Project Sub-Total
150
150
150
150
150
150
150
150
5.2
14.8
14.2
2.0
1.3
37.5
2.2
0.9
30.8
33.9
71.4
1,100
800
420
820
420
686
680
290
440
451
574
5,720
11,840
5,964
1,640
546
25,710
1,496
261
13,522
15,279
40,989
12.6
26.0
13.1
3.6
1.2
56.5
3.2
0.6
29.8
33.6
90.1
GRAND TOTAL AUSTRALIAN RESOURCES
72.3
729
52,728
116.0
12.6
-
-
-
-
-
-
-
12.6
12.6
-
26.0
-
3.6
-
3.2
-
-
32.8
32.8
25.9
25.9
-
-
13.1
-
1.2
-
0.6
29.8
44.7
70.6
Notes:
Figures may not add due to rounding.
Using combined chemical and radiometric grades.
1 ASX Release 20 Mar 2018 ‘Maiden Mineral Resource at Angularli Deposit Alligator River Project’
(Note: This MRE has been upgraded subsequent to year-end).
2 ASX Release 12 Jul 2017 ‘Significant Resource Update – Mulga Rock Cracks 90Mlbs’
Table 5(b): Australian Base Metal Mineral Resources.
Deposit 1
Princess
Princess
Ambassador
Class
Indicated
Inferred
Indicated
Ambassador
Inferred
TOTAL
Tonnes
(Mt)
1.3
2.5
13.2
16.1
33.1
Cu
(ppm)
750
270
330
160
260
Cu
(Kt)
0.9
0.7
4.4
2.6
8.6
Zn
(ppm)
1270
510
1330
320
770
Zn
(Kt)
1.6
1.3
17.5
5.2
25.6
Ni
(ppm)
440
250
600
310
430
Ni
(Kt)
0.6
0.6
7.9
5.1
14.2
Co
(ppm)
210
140
250
170
200
Co
(Kt)
0.3
0.4
3.3
2.7
6.7
Notes:
Figures may not add due to rounding.
Base metals mineral resources are contained wholly within the uranium Mineral Resource and are reported at a 150ppm
U3O8 cut-off grade.
1 ASX Release 17 Sep 2015 ‘Improved Economics for the Mulga Rock Project Increases the Mineral Resource Estimate’
Deep Yellow Limited
Annual Report 2023
16
Project Description and Review
Table 6: Ore Reserves.
Deposit
Namibia
Category
Cut-off Tonnes
(ppm
U3O8)
(M)
U3O8
(ppm)
U3O8
(t)
U3O8
(Mlb)
Reserve Categories (Mlb U3O8)
Proved Probable
Tumas Project - JORC 2012 1
Tumas 3
Probable
Tumas 1E
Tumas 1 and 2
Tumas Project Sub-Total
Probable
Probable
Western Australia
150
150
150
44.9
29.5
13.9
88.4
414
266
292
346
18,600
7,850
4,090
30,540
Mulga Rock Project – JORC 2012 2
Ambassador
Ambassador
Princess
Princess
Proved
Probable
Proved
Probable
Mulga Rock East Total
Shogun
Shogun
Proved
Probable
Mulga Rock West Total
Mulga Rock Project Sub-Total
150
150
150
150
150
150
5.3
14.1
-
1.7
21.1
1.6
1.6
22.7
1,055
775
-
870
852
760
760
845
5,580
10,890
-
1,500
17,970
1,225
1,225
19,195
41.0
17.3
9.0
67.3
12.3
24.0
-
3.3
39.6
2.7
2.7
42.3
GRAND TOTAL ORE RESERVES
111.1
448
49,735
109.6
Notes
Figures may not add due to rounding.
1 ASX Release 2 Feb 2023 ‘Strong Results From Tumas Definitive Feasibility Study’
2 ASX Release 4 Sep 2017 ‘Major Ore Reserve Update – Moving to the Go Line’
Governance and Internal Controls
-
-
-
12.3
-
-
-
-
12.3
12.3
41.0
17.3
9.0
67.3
-
24.0
-
3.3
2.7
30.0
97.3
The Company maintains thorough QAQC protocols for conducting exploration, site practice, sampling, safety, monitoring
and rehabilitation which are documented in the Company’s various standard operating procedure manuals (SOPs).
Drilling methods vary according to the nature of the prospect under evaluation. These can include auger, sonic, air core or
reverse circulation drilling for unconsolidated formations; to reverse circulation (hammer) and diamond core drilling (HQ &
NQ) for hard rock formations. Typically, resource estimations are based on a mix of downhole radiometric sampling and
chemical assaying. Assay samples are collected over one metre intervals. Radiometric data is acquired at 5cm intervals
and composited to one metre intervals. Where statistical validation confirms radiometric and chemical assay equivalence,
the resource estimate is primarily based on the radiometric data.
All radiometric data is acquired digitally by in-house personnel trained to operate the Company’s fleet of Auslog downhole
probes. These probes are calibrated at the Pelindaba pits in South Africa or at the Langer Heinrich pit in Namibia. QAQC
controls for radiometrically acquired data comprise daily calibration sleeve checks and periodic comparison at a RUN test
hole in Namibia. Assay samples are acquired by a three-tier riffle splitter or cone splitter at the drill site. Duplicate samples
are inserted at 1:20 frequency. Diamond core samples are assayed as quarter-core over one metre intervals. External
laboratories (ALS South Africa) assay for uranium by either pressed powder XRF or fused bead XRF. Characterisation of
radiometric equilibrium has been assessed by submission of samples to ANSTO Minerals Laboratory in Sydney, Australia.
Drill hole collars are DGPS-surveyed by in-house operators, after an initial pick-up by hand-held GPS. Downhole directional
surveys are outsourced to independent contractors.
Drill hole sample logging captures a suite of lithologic, alteration, mineralogic and hand-held radiometric data, at one metre
intervals. This data is captured as permanent hard copy prior to digital input onto an in-house GBIS database. The parallel
collection of drill sample and wireline probe data enables error recognition in depth discrepancies and confirmation of
sampling accuracy.
Drill plans and sections generated from drilling and surface mapping are used to constrain wireframe mineralisation models;
upon which resource estimations are made. Resource estimations for currently quoted prospects have been calculated by
internal qualified staff or independent third-party consultants.
Deep Yellow Limited
Annual Report 2023
17
Project Description and Review
COMPETENT PERSON’S STATEMENTS’
Exploration
The information in this report as it relates to Namibian exploration results was compiled by Dr Katrin Kärner, a Competent
Person who is a Member of the Australasian Institute of Mining and Metallurgy (AusIMM). Dr Kärner, who is currently the
Exploration Manager for RMR, has sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which she is undertaking, to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Kärner
consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.
Dr Kärner holds shares in the Company.
The information in this report as it relates to Australian exploration results in this announcement was compiled by Xavier
Moreau, a Competent Person who is a Member of the Australasian Institute of Geology (AIG) and a full-time employee
(Exploration Manager - Australia) of Deep Yellow Limited. Mr Moreau has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking, to qualify as a Competent
Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves’. Mr Moreau consents to the inclusion in this announcement of the matters based on the information in the
form and context in which it appears. Mr Moreau holds shares in the Company.
Mineral Resource Estimates and Ore Reserve
The information in this Report including references to MREs and Ore Reserve Statements and the Annual Mineral Resource
and Ore Reserve Statement is based on and fairly represents information and supporting documentation prepared or
reviewed and compiled by Mr Martin Hirsch, M.Sc. Geology, who is a member of the Institute of Materials, Minerals and
Mining (UK) and the South African Council for Natural Science Professionals, Mr David Princep who is a Fellow and Chartered
Professional of the AusIMM and Mr Eduard Becker who is a member of the AusIMM, respectively. Mr Hirsch is the Manager
for Resources and Pre-Development for RMR. Mr Princep is an independent consultant and Mr Becker is Head of
Exploration/Resources Development for Deep Yellow. Messrs Hirsch, Princep and Becker have sufficient experience which is
relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking,
to qualify as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’ (JORC Code 2012 Edition). Messrs Hirsch, Princep and Becker consent to the inclusion in this report of the
matters based on their information in the form and context in which it appears.
Geophysics Component
Deconvolution was used to convert the current down-hole gamma data from the Tumas Project to equivalent uranium values
(eU3O8) and was performed by experienced in-house personnel from Deep Yellow. The data conversion was checked and
validated by Mr Matt Owers up to October 2019, a geophysicist who is knowledgeable in this process and worked as a
consultant for Resource Potentials with over 5 years of relevant experience in the industry. Mr Owers is a member of
Australian Institute of Geoscientists and has sufficient experience with this type of processes to qualify as a Competent
Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC
Code 2012 Edition). Mr Owers consents to the inclusion in this Report of the matters based on his information in the form
and context in which it appears. In 2020 this work was done by Dr. Doug Barrett, a geophysicist who works as a consultant
with over 10 years of relevant experience in the industry. Dr. Barrett has sufficient experience with this type of processes to
qualify as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’ (JORC Code 2012 Edition). Dr. Barrett consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
From 2021 the down hole gamma logging was checked by Dr Patrick Brunel a geophysicist who works as a consultant with
25 years of relevant experience in the industry. Dr. Brunel obtained his doctorate in Earth Sciences (Geophysics) in 1995 and
has over 10 years’ experience with this type of process to qualify as a Competent Person in terms of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code 2012 Edition). Dr Brunel in a member
of the European Association of Geoscientists and Engineers and consents to the inclusion in the report of those matters based
on his information in the form and context in which it appears. Where the Company refers to the other JORC 2012 resources
and JORC 2004 resources in this report, it confirms that it is not aware of any new information or data that materially affects
the information included in the original announcements and all material assumptions and technical parameters underpinning
the Mineral Resource Estimates in those original announcements continue to apply and have not materially changed.
Project and Technical Expertise
Mr Darryl Butcher is a process engineer/metallurgist working for Deep Yellow and has sufficient relevant experience to advise
the Company on matters relating to mine development and uranium processing, project scheduling, processing methodology
and project capital and operating costs. Mr Butcher is satisfied and consents to the information provided in this report
regarding the Tumas PFS and Tumas DFS progress.
Deep Yellow Limited
Annual Report 2023
18
Sustainability and Governance
OUR APPROACH TO SUSTAINABILITY
Deep Yellow is focused on creating long-term value for its shareholders, stakeholders and the communities in which it
operates. A key pillar to successfully achieving this goal is through the efficient, effective and ongoing implementation
of environmental, social and governance (ESG) pillars.
With a management team that has a proven and successful history in the uranium sector, the importance of
sustainability and making it core to the business is clearly understood. By taking an early approach to the
implementation of key ESG practices and principles, Deep Yellow is focused on creating a company-wide approach to
sustainable practices and developing the Company and its projects in a responsible manner.
Deep Yellow has been reporting publicly on the ESG aspects of the business for several years and has produced the
broader scope Sustainability Reports for the last three years. Each year the Sustainability Report has expanded and
improved in detail with the aim of expanding its context and reporting framework in accordance with a recognised
global sustainability reporting framework as the business progressed. The intent for 2023 was to undertake a review
and investigate the most suitable reporting framework for Deep Yellow in terms of global acceptance, bench marking
and applicability to both exploration and mining operations, given the stage of the Company’s assets.
Following a detailed assessment and review it was determined that the GRI Universal and Mining Sector Standards
should be applied for future sustainability reporting. The Global Reporting Initiative (GRI) was established in 1997 and
as quoted “...The GRI Standards are the world’s most widely used standards for sustainability reporting. They have
been widely adopted by leading companies in more than 100 countries and are referenced in policy instruments and
stock exchange guidance around the world. Over 160 policies in more than 60 countries and regions reference or require
GRI.”
Reporting in accordance with the GRI Standards will enable Deep Yellow to provide a comprehensive picture of its
most significant impact on the economy, environment and people, including human rights, and how it manages these
impacts. This allows information users to make informed assessments and decisions about the Company’s impacts
and contribution to sustainable development.
The 2023 Sustainability Report will be prepared to meet the GRI Standards’ requirements and allow the Company to
achieve consistent and comparable benchmarking through a global framework as Deep Yellow moves into
development and operations. Data collection and reporting will be expanded and continually improved upon as the
Company moves forward. Once issued the report will be available on the Company’s website.
GOVERNANCE FRAMEWORK
The Board of Deep Yellow has responsibility for corporate governance for the Company and its subsidiaries (the Group)
and has implemented policies, procedures and systems of control with the intent of providing a strong framework and
practical means for ensuring good governance outcomes which meet the expectations of all stakeholders.
The Corporate Governance Statement, for the year ended 30 June 2023 and approved by the Board on 26 September
2023, sets out corporate governance practices of the Group which, taken as a whole, represents the system of
governance.
The framework for corporate governance follows the 4th Edition of the ASX Corporate Governance Council’s Principles
and Guidelines. The Directors have implemented policies and practices which they believe will focus their attention
and that of their Executives on accountability, risk management and ethical conduct. DYL will continue to review its
policies to ensure they reflect any changes within the Group, or to accepted principles and good practice. The updated
policies are available on the Company’s website (https://deepyellow.com.au/about-us/corporate-governance/).
Where the Board considers the Group is not of sufficient size or complexity to warrant adoption of all the
recommendations set out in the ASX Corporate Governance Council’s published guidelines, these instances have been
highlighted.
This statement is available on the Deep Yellow website, along with the ASX Appendix 4G, a checklist cross-referencing
the ASX Principles and Recommendations to disclosures in this statement and copies and summaries of charters,
principles and policies referred to in this statement.
Deep Yellow Limited
Annual Report 2023
19
Directors’ Report
The Directors present their report on Deep Yellow Limited (Deep Yellow or Company) and the entities it controlled at
the end of, and during, the year ended 30 June 2023 (the Group).
DIRECTORS
The names and details of the Directors of the Company in office during the financial year and until the date of this
report are as set out below. Directors were in office for this entire period unless stated otherwise.
Names, Qualifications, Experience and Special Responsibilities
Chris Salisbury B.Eng, FAICD
Non-executive Chair
Mr Salisbury is a highly experienced mining executive, with over 30 years of global experience across senior strategic
and operational roles for the Rio Tinto Group. He is a qualified metallurgical engineer and Fellow of the Australian
Institute of Company Directors. He brings extensive uranium experience having led operating companies in Australia
and in Namibia. He was Chief Executive of Energy Resources Australia (ERA) between 2004 – 2008, a significant global
uranium business, and, during his time, an ASX 100 company. Mr Salisbury also served as Non-executive Director of
ERA. From 2011-2013 Mr Salisbury was Managing Director/Head of Country for Rio Tinto’s Rössing Uranium Mine and
was based in Swakopmund Namibia. During his long career with Rio Tinto, Mr Salisbury also held executive roles across
a diverse range of commodities including Chief Operating Officer – Pacific Bauxite and Alumina (2008-11), Chief
Operating Officer – Rio Tinto Coal (2013-16) and most recently Chief Executive – Iron Ore (2016-20).
Mr Salisbury is recognised as a transformational leader delivering significant improvements across safety, productivity
and culture. He has board experience beyond ERA including chair of the Robe River Mining joint venture, director of
the Minerals Council of Australia and Australia Japan Business Cooperation Committee and was director of a number
of non-listed Rio Tinto entities and joint ventures. Mr Salisbury is a Non-executive director of Infinite Green Energy, a
pioneer of green hydrogen developments that facilitate the transitioning of the Australian economy towards net zero
emissions.
Mr Salisbury is the Chair of the Nomination and Remuneration Committee and serves on the Audit and Risk Committee.
During the past three years Mr Salisbury has also served as a director of the following listed companies:
BCI Minerals Limited – appointed 28 May 2021*
John Borshoff BSc, FAusIMM, FAICD
Managing Director/CEO
Mr Borshoff joined the Deep Yellow Board in 2016. He is an experienced mining executive and geologist with more than
30 years of uranium industry experience. He spent more than a decade at the start of his career as a senior geologist
and manager of the Australian activities of German uranium miner Uranerz. In 1993, following the withdrawal of
Uranerz from Australia, Mr Borshoff founded Paladin Energy Ltd (Paladin). He built that company from a junior explorer
into a multi-mine uranium producer with a global asset base and valuation of more than $5 billion at its peak.
At Paladin, Mr Borshoff led the team that completed the drill out, feasibility studies, financing, construction,
commissioning and safe operation of the first two conventional uranium mines built in the world for 20 years. He also
oversaw numerous successful, large public market transactions including acquisitions and major capital raisings before
leaving Paladin in 2015.
Mr Borshoff is recognised as a global uranium industry expert and has a vast international network across the uranium
and nuclear industries, as well as the mining investment market. He has a Bachelor of Science (Geology) from the
University of Western Australia and is a Fellow of both the Australian Institute of Company Directors and the
Australasian Institute of Mining and Metallurgy.
He is a member of the Uranium Forum within the Minerals Council of Australia (of which he is a former Board member)
and sits on the Council of the Namibian Chamber of Mines.
Deep Yellow Limited
Annual Report 2023
20
Directors’ Report
Gillian Swaby Bbus, FCIS, FAICD, AAusIMM
Executive Director
Ms Swaby joined the Deep Yellow Board in 2005 as Non-executive director and became an Executive director in 2016.
She is an experienced mining executive with a broad skillset across a range of corporate, finance and governance
areas.
She has spent more than 35 years working with natural resources companies in numerous roles including Chief Financial
Officer, Company Secretary, Director and corporate advisor. Ms Swaby worked at Paladin for the period 1993 – 2015
in the capacity as Executive Director for 10 years and as GM – Corporate Affairs. She had a key role in managing that
company’s growth through mine development, operation, acquisition and exploration. This role included responsibility
for the company’s complex corporate, legal, human relations and corporate social responsibility programs as an
operating uranium miner in multiple African countries.
During the past three years Ms Swaby has also served as a Director of the following listed companies:
Comet Ridge Limited – appointed 9 January 2004 *
Panoramic Resources Limited – appointed 8 October 2019 *
Mervyn Greene MA (Maths), BAI (Engineering), MBA
Non-executive Director
Mr Greene joined the Deep Yellow Board in November 2006 and was Chairman from August 2007 to August 2013. He
is an experienced investment banker and entrepreneur who has been working in investment markets in Africa, Europe
and the United States for more than 35 years. His most recent experience has focussed on private equity investment
in a range of sectors, specialising in fin-tech, construction, general technology and property. He currently serves as
co-founder and Director of EPIC, The Irish Emigration Museum and is co-founder and Chairman of Dogpatch Labs,
Ireland’s leading tech start-up hub and recently became the Chairman of the NDRC, the Irish government’s national
tech start-up accelerator. He leads, as managing director, both CHQ Dublin Limited and MGR Properties, specialised
Irish property development companies. All these businesses are located in Dublin, Ireland.
From 1997 – 2005 Mr Greene was co-founder and London-based partner of Irwin Jacobs Greene, one of Namibia’s
premier stockbroking, private equity and corporate finance advisory firms. Prior to this Mr Greene worked for
investment bank Morgan Stanley in New York and London.
Mr Greene serves on the Sustainability Committee.
Victoria Jackson BSc Geology, GAICD, Dip. Cartography (appointed 20 October 2022)
Non-executive Director
Ms Jackson is an experienced resource sector executive with capabilities in executive management, leadership, and
strategy. She has some 35 years’ diverse experience, including leading strategic negotiations for major resource and
state infrastructure projects.
As Executive Director, Energy (NT 2014 – 2019), Ms Jackson led onshore petroleum regulation, including the NT’s
regulatory reform. She also played a key role in energy policy development and the Territory’s renewable energy
framework. During her WA Department of State Development (2000 – 2012) leadership roles, Ms Jackson developed
significant experience in strategic and operational policy development and implementation across the ESG spectrum
including safety, heritage and communities. Before joining the public sector, Ms Jackson worked in exploration geology
and cartography/engineering surveying roles in the WA exploration industry.
Ms Jackson is currently the Minerals Council of Australia Executive Director – WA, engaging with members and
enhancing the MCA’s profile. She is also a member of the National Offshore Petroleum Safety and Environment
Management Authority board and Chair of the Charles Darwin University Energy and Resources Institute Advisory
Board.
Ms Jackson holds a Bachelor of Science (Geology), a Diploma in Cartography and is a Graduate of the Australian
Institute of Company Directors.
Ms Jackson is Chair of the Sustainability Committee and serves on the Nomination and Remuneration Committee.
Deep Yellow Limited
Annual Report 2023
21
Directors’ Report
Timothy Lindley Mcom, BA, GAICD (appointed 17 May 2023)
Non-executive Director
Mr Lindley is an experienced investment banker who brings a proven track record and background in project finance,
debt, equity capital markets and M&A. During his 25-year career, Mr Lindley has held several senior and executive
roles in both Australia and internationally, including Country Head (Australia) of Barclays Bank and a Managing
Director of Morgan Stanley (Australia).
Mr Lindley has led and completed more than 100 financing transactions for resource companies operating across
jurisdictions including Africa, Asia and Australia. He led several transactions for the Langer Heinrich mine and Paladin
Energy Ltd. Mr Lindley has a Master of Commerce, and a Bachelor of Arts from the University of New South Wales; is
a graduate member of the Australian Institute of Company Directors.
Mr Lindley serves on the Audit and Risk and the Sustainability Committees.
Greg Meyerowitz Bcom, CA, MAICD, FCA(ANZ), FFINSIA, MCA(SA)
Non-executive Director
Mr Meyerowitz is a chartered accountant with over 35 years of experience in the professional services industry and
commerce. As a senior audit partner at the international accounting firm of EY, and head of the Perth Audit Division
for 10 years, Mr Meyerowitz has acted as the lead audit signing partner for five ASX 100 companies, including two ASX
20 companies. He has worked across a diverse range of sectors and has extensive experience working with mining and
energy companies with global operations in countries such as Australia, Brazil, Finland, Indonesia, Italy, Malawi,
Mauritania, Namibia, Sweden and the USA. This includes time spent in the uranium sector.
Up until 30 June 2023, Mr Meyerowitz was the Group Risk and Compliance Director of APM Human Services
International Limited, an ASX-listed human services provider operating in 11 countries. Since that date he has
transitioned to an Advisory Board Member and continues to manage the outsourced internal audit function of the APM
Group.
Mr Meyerowitz is Chair of the Audit and Risk Committee and serves on the Nomination and Remuneration Committee.
Wayne Bramwell BSc Mineral Science – Ext Met, Grad Dip Bus, MSc Mineral Science, GAICD
(appointed 4 August 2022, ceased role on 31 January 2023)
Non-executive Director
Mr Bramwell is a metallurgist, mineral economist and experienced company director. He has extensive international
and Australian mining, exploration and project development, M&A and governance expertise in precious and base
metal companies spanning nearly three decades. He is currently the Managing Director of Western Australian gold
miner, Westgold Resources Limited.
During the past three years Mr Bramwell has also served as a director of the following listed companies:
Vimy Resources Limited (appointed 19 October 2021, ceased role on 4 August 2022)
CZR Resources Limited (appointed 3 November 2020, ceased role on 19 February 2021)
Azure Minerals Limited (appointed 14 October 2020, ceased role on 19 February 2021)
Ardea Resources Limited – appointed 29 January 2018; ceased role on 3 July 2020
Westgold Resources Limited – appointed 3 February 2020 *
Steven Michael Bcom, CA, MAICD (appointed 4 August 2022, ceased role on 25 November 2022)
Executive Director
Mr Michael has over 25 years’ experience in the global resources sector, specialising in corporate finance and equity
capital markets. He was previously a Managing Director at FTI Consulting, an independent global business advisory
firm, was engaged by Vimy Resources Ltd Interim CEO in August 2021 and subsequently made Managing Director in
January 2022.
Mr Michael has previously worked in the natural resources division of Macquarie Bank, Rothschild & Co and Royal Bank
of Canada, in global mining equities research and sales, corporate finance and investment banking. He was previously
CFO of an exploration and development company with significant uranium resources in South Korea.
During the past three years Mr Michael has also served as a Director of the following listed companies:
Predictive Discovery Limited – appointed 18 December 2019 *
WIA Gold Limited – appointed 8 September 2020 *
Vimy Resources Limited – appointed 29 November 2021; ceased role on 4 August 2022
Flinders Mines Limited – appointed 2 March 2023 *
* Denotes current directorship.
Deep Yellow Limited
Annual Report 2023
22
Directors’ Report
Company Secretary
Mark Pitts Bbus, FCA, GAICD
Mr Pitts provides secretarial support, corporate and compliance advice to a number of listed company’s he has over
30 years’ experience in business administration and corporate compliance. Having started his career with KPMG in
Perth, he has worked at a senior management level in a variety of commercial and consulting roles including mining
services, healthcare and property development.
The majority of the past 20 years has been spent working for, or providing company secretarial, accounting, finance
and compliance services to, publicly listed companies in the resources sector.
He holds a Bachelor of Business Degree from Curtin University, is a Fellow of Chartered Accountants Australia and New
Zealand and is a graduate of the Australian Institute of Company Directors.
Interests in the Shares and Options of the Company
As at the date of this report, the Directors’ interests in shares and options of the Company were:
Director
Chris Salisbury
John Borshoff *
Gillian Swaby**
Mervyn Greene
Victoria Jackson
Timothy Lindley
Greg Meyerowitz
Number of Ordinary
Shares
-
15,100,364
9,763,043
2,778,337
-
-
50,000
Number of Options over
Ordinary Shares
133,333
-
-
176,519
-
-
-
*15,043, 687 subject to loan repayment of which 5,689,470 shares have not vested.
**6,711,296 subject to loan repayment of which 2,755,985 shares have not vested.
Dividends
No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current
year.
Principal Activities
The principal activities during the financial year of entities within the Group were:
•
•
•
•
•
•
•
•
•
•
completion of the Vimy merger and integration of the two companies’ staff, systems and projects into a single
efficient organisation;
completion of the Tumas Project DFS and progressing the Front-End Engineering and Design (FEED) and project
financing at a suitable pace that matches the improving uranium market;
follow-up drilling continued at the Omahola Project with positive results, new targets identified and upside
potential in identifying additional resources;
successful drilling campaign at Alligator River returning strong results and 27% uplift in Inferred Mineral Resource
Estimate (MRE) at the Angularli deposit;
completion of an aircore drilling program to support a geo-metallurgical study at the Mulga Rock Project to
inform an updated assessment of critical minerals and recovery options, forming the basis for a planned revised
Mulga Rock Project DFS;
termination of Minerals Royalty Deed which was entered into by Resource Capital Fund VI L.P. (RCF) and Narnoo
Mining Pty Ltd (Narnoo) whereby RCF was entitled to receive a 1.15% royalty on all ore, concentrates and other
products extracted from the Mulga Rock Project;
approval of the Mulga Rock Project Sandhill Dunnart Conservation Plan by the Department of Climate Change,
Energy, the Environment and Water. Outstanding early results from the camera study program offers unique
ecological insights into the local ecosystem;
exploration activities on the Nova JV Project adjacent to the Reptile Project in Namibia;
upgraded the Aussinanis Project Resource to JORC (2012), reported at a 100ppm U3O8 cut off and contains an
Indicated and Inferred Resource base of 28.1Mlb at 171ppm U3O8; and
evaluating uranium projects for growth opportunities resulting in the successful merger with Vimy Resources in
August 2022.
Other than the foregoing, there have been no significant changes in the nature of activities during the year.
Deep Yellow Limited
Annual Report 2023
23
Directors’ Report
Operating and Financial Review
Review of Operations
A detailed review of the Group’s operations by project is set out in the ‘Review of Operations’ on pages 5 to 18.
Operating Results for the Year
The Group’s net loss after income tax for the financial year is $10,116,105 (2022: loss $6,825,310).
Financial Position
At the end of the financial year the Group had $40,770,146 (2022: $64,924,350) in cash and at-call deposits. Capitalised
mineral exploration and evaluation expenditure carried forward was $339,592,920 $ (2022: $49,727,889).
The Group has net assets of $374,642,354 (2022: $115,117,018).
Risk Management
The Company takes a proactive approach to risk management. The Board is responsible for ensuring that risks,
including emerging risks, and also opportunities, are identified on a timely basis and the Company’s objectives and
activities are aligned with the risks and opportunities identified by the Board.
The Board oversees and guides the Company’s risk management framework, and the CEO is charged with
implementing appropriate risk systems within the Company. The Board is supported in its oversight of risk by the Audit
and Risk Committee. Deep Yellow’s Risk Management Policy is reviewed and endorsed bi-annually by the Board in
line with ASX Corporate Governance Principles and Recommendations.
Material Business Risks
There are inherent risks associated with the exploration for minerals, compounded by an uncertain economic
environment which can impact the Company’s ability to deliver its strategic objectives. The Group faces the usual risks
encountered by companies engaged in exploration and evaluation activities and the development of mining operations.
The material business risks for the Group include:
1.
Commodity Prices
Deep Yellow is an exploration company, with the aim of developing uranium mining operations for the sale of uranium
oxide via customer sales agreements. The price of uranium is determined by an independent market and outside of
the Company’s control. Movements in the uranium price are driven by supply and demand factors, as well as
government policy and geopolitical issues. It is impossible to predict future uranium price movements with any
certainty. Despite the Company potentially mitigating this risk via the use of fixed price or collared offtake agreements,
a sustained low uranium price will adversely affect Deep Yellow’s ability to finance planned expenditures, including
the development of its uranium projects.
2.
Sovereign Risk
The Tumas development project is located in Namibia, where the project is subject to specific mining regulations and
fiscal regime. There is a risk that a change of Government may delay or reject approvals or implement regulatory
changes which could make the Tumas development project financially less attractive. The Company regularly monitors
the local political and legislative environment for the early identification of proposed changes. This is achieved by
direct Government and industry liaison, through peak industry bodies and attendance at local industry events. This
said, any Government change or change in policies is out of Deep Yellow’s control.
3.
Mineral Resources and Ore Reserves
The Mineral Resources and Ore Reserves for the Company’s mineral deposits are determined in accordance with the
JORC code, based on elements of estimation and judgment. The process of creating these estimates entails significant
judgment, and it is important to note that there are no guarantees or assurances regarding mineral recovery levels or
the commercial viability of deposits. The true quality and characteristics of mineral deposits can only be determined
through actual mining operations and could diverge from the assumptions used in resource development. Furthermore,
Ore Reserves are valued based on assumed future costs and commodity prices. As a result, the actual value of Ore
Reserves, including their economic extraction and mineral resources, may vary from initial estimates, potentially
impacting operations either positively or negatively.
Deep Yellow Limited
Annual Report 2023
24
4.
Financing Risk
Directors’ Report
The Company does not have adequate funding available to develop the Tumas uranium project or the Mulga Rock
uranium project and will be required to access capital markets. Since Deep Yellow is a company without pre-existing
cash flow, it relies on obtaining equity, debt, or external capital to meet its financial obligations. Accessing these
financial markets may be difficult due to global economic conditions, uranium price or financier appetite/ability to
fund uranium developments and there is no certainty of successfully securing these funds.
5.
Native Title
The Native Title Act 1993 (Cth) in Australia recognises and safeguards the land and water rights of Aboriginal and
Torres Strait Islander people in accordance with their traditional laws and customs. Native title claims or procedures
may pose potential risks for the Company’s plans to develop its Australian-based uranium projects. The Company
may incur delays and significant costs to enable development and may also need to fulfil compensatory obligations in
settling Native Title claims over its tenements. Deep Yellow maintains engagement with Traditional Owners and their
representative organisations, combined with continued monitoring of heritage information and approvals.
6.
Environmental, Social and Governance
Stakeholders are increasingly calling for proactive Environmental, Social, and Governance (ESG) oversight. To meet the
growing expectations of stakeholders, it is imperative to maintain precise data and open reporting. Neglecting the
implementation of robust ESG strategies and the provision of comprehensive disclosures exposes the Company to
potential repercussions, including decreased investments, approval delays, heightened responsibilities, elevated
insurance expenses, harm to its reputation, and potential difficulties in attracting and retaining talent. Following on
from the reports issued since 2019, Deep Yellow will issue its first Sustainability Report under the formal GRI framework
covering FY2023.
7.
Operational
As a group operating in remote areas, vehicle and air travel remain a high risk that the Group mitigates to the extent
practical. Work health and safety, whilst always a risk, is at the forefront of operational focus to ensure this remains a
top priority in all areas of the business. Retention and recruitment of experienced personnel also presents challenges
particularly given the lack of uranium experience and expertise globally. The ongoing risk of cyber security continues
to be addressed with appropriate systems’ implementation and training of personnel.
Business Strategies and Prospects for Future Financial Years
Deep Yellow Limited is a clearly differentiated, advanced uranium exploration company in pre-development phase
that was rejuvenated by the appointment of John Borshoff, founder of Paladin Energy Ltd, as CEO in October 2016.
The Company then set a new direction built around a unique, counter-cyclical strategy focused on organic and
inorganic growth to deliver a Tier-1 uranium producer with a low cost, multi project global uranium platform.
Organic growth is delivered through exploration and development of the Company’s Namibian project portfolio. Since
2016, exploration success has quadrupled the resource base at the Tumas Project, at a very low discovery cost.
Namibia is a top-ranked uranium mining jurisdiction where Deep Yellow holds four large cornerstone tenements
situated in the heart of what is a world recognised, prospective uranium province containing major uranium deposits
which includes the three largest open cut uranium mines worldwide.
The Company’s inorganic growth plan is based on a targeted merger and acquisition program to establish a diversified
portfolio of uranium operations for development. The first growth opportunity was achieved when Deep Yellow
successfully merged with Vimy Resources Ltd post the FY22 reporting period.
Effective execution of this unique strategy requires a leadership team with a proven track record, extensive industry
knowledge and capability to deliver. Deep Yellow has assembled a standout uranium team that brings strong project
development, operational and corporate capabilities. The majority of this team successfully worked together at Paladin
Energy Ltd, which grew from a US$2M explorer into a $5B high-quality uranium producer pre-Fukushima.
The medium to long-term outlook for uranium is extremely positive, supported by the integral role nuclear power will
play in meeting global clean energy targets. Through the operational expertise of the Company’s Board and
management team, Deep Yellow is well placed to provide uranium supply security and certainty into a growing market.
Deep Yellow Limited
Annual Report 2023
25
Significant Events after the Balance Date
Directors’ Report
There have been no events or circumstances which materially affect the Annual Financial Statements of the Group
between 30 June 2023 and the date of this report.
Environmental Regulation and Performance
The Group holds various mineral licences in Namibia and Australia where exploration and evaluation activities are
conducted. The right to conduct these activities is granted subject to environmental conditions where the holder is
required to observe any requirements, limitations or prohibitions on its exploration operations in the interest of the
environmental protection, as imposed by the relevant authorities. The Group aims to ensure a high standard of
environmental care is achieved and as a minimum, to comply with relevant environmental regulations.
The Group undertook an Environmental Impact Assessment (EIA) in connection with the current Tumas Mining Licence
Application for which a Preparedness to Grant the Mining Licence was issued on 10 August 2022, subject to the issuance
of the Environmental Clearance Certificate. There have been no known breaches of the Group’s mineral licence
conditions or any environmental regulations to which it is subject.
Share Options
Unissued Shares
As at the date of this report, there were 309,852 unissued ordinary shares under options (459,916 at the reporting
date).
Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any
related body corporate.
Performance Rights
As at the date of this report, there were 2,780,029 Performance Rights outstanding (1,879,515 at the reporting date).
Refer to Note 22 for further details of the Performance Rights outstanding.
There are no participating rights or entitlements inherent in the Performance Rights and holders of Performance Rights
will not be entitled to participate in new issues of capital that may be offered to shareholders during the currency of
the Performance Rights. During the financial year, 520,515 shares have been issued at a weighted average issue price
of 62.51 cents per share in relation to Performance Rights that vested.
Indemnification and Insurance of Directors and Officers
During or since the financial year, the Company has paid premiums to insure certain officers of the Company. The
officers of the Company covered by the insurance policy include the Directors and the Company Secretary named in
this report.
The Directors’ and Officers’ Liability insurance provides cover against all costs and expenses that may be incurred in
defending civil proceedings that fall within the scope of the indemnity and that may be brought against the officers in
their capacity as officers of the Company. The insurance policy does not contain details of the premium paid in respect
of individual officers of the Company. Disclosure of the nature of the liability cover and the amount of the premium is
subject to a confidentiality clause under the insurance policy.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit. No payment has
been made to indemnify Ernst & Young during or since the financial year.
Non-audit Services and Auditor’s Independence Declaration
During the 2023 financial year Ernst & Young, the Group’s auditor, has not provided any non-audit services in addition
to their statutory duties.
A copy of the Auditor’s Independence Declaration as required under Section 307C of the Corporations Act is set out on
page 41.
Deep Yellow Limited
Annual Report 2023
26
Directors’ Meetings
Directors’ Report
The number of meetings of Directors (including meetings of Committees of Directors) held during the year ended
30 June 2023, whilst each Director was in office, and the number of meetings attended by each Director was:
Directors’ Meetings
Meetings of Committees
Nomination and
Remuneration
Board
Audit and Risk
Eligible Attended Eligible Attended Eligible Attended
3
12
3
Sustainability
Eligible Attended
1
12
12
12
12
7
2
12
5
7
12
12
12
12
7
2
12
4
7
3
-
-
2
-
-
3
-
-
3
-
-
2
-
-
3
-
-
3
-
-
-
2
-
3
-
-
3
-
-
-
2
-
3
-
-
-
-
1
1
1
-
-
-
-
-
-
1
1
1
-
-
-
-
Number of meetings held:
Number of meetings
eligible and attended:
Chris Salisbury
John Borshoff
Gillian Swaby
Mervyn Greene
Victoria Jackson
Timothy Lindley
Greg Meyerowitz
Steven Michael
Wayne Bramwell
Committee Membership
As at the date of this report, the Company had Audit and Risk; Nomination and Remuneration and Sustainability
Committees as detailed below:
Audit and Risk
Greg Meyerowitz (Chair)
Timothy Lindley
Chris Salisbury
Nomination and Remuneration
Chris Salisbury (Chair)
Victoria Jackson
Greg Meyerowitz
Sustainability *
Victoria Jackson (Chair)
Mervyn Greene
Timothy Lindley
Notes
* The Sustainability Committee was inaugurated on 31 January 2023.
Deep Yellow Limited
Annual Report 2023
27
REMUNERATION REPORT (AUDITED)
Remuneration Report
This Remuneration Report for the year ended 30 June 2023 outlines the remuneration arrangements of the Company in
accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This information has been
prepared in accordance with section 300A and audited as required by section 308(3C) of the Act.
The Remuneration Report is presented under the following sections:
1.
2.
3.
4.
Introduction.
Highlights for FY23.
Remuneration governance.
Executive remuneration arrangements:
(a)
(b)
Executive remuneration outcomes for FY23 (including link to performance).
Executive contracts.
Non-executive Director (NED) remuneration arrangements.
Additional disclosures relating to shares and options.
Other transactions and balances with key management personnel and their related parties.
Actual Executive Key Management Personnel (KMP) remuneration.
Remuneration principles and strategy; and
Approach to setting remuneration and details of incentive plans.
5.
6.
7.
8.
9.
10.
1.
Introduction
The Remuneration Report details the remuneration arrangements for KMP who are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company, directly or
indirectly, including any director (whether executive or otherwise) of the Company.
Each KMP was appointed for the full financial year, unless otherwise stated. For the purposes of this report, the term
“Executive” includes the Managing Director and the Executive Director of the Company.
The table below outlines the KMP of the Group and their movements during FY23.
Position
Term as KMP
Name
Executive Directors
John Borshoff
Managing Director (MD)/
Chief Executive Officer (CEO)
Executive Director (ED)
Executive Director (ED)
Gillian Swaby
Steven Michael
Non-executive Directors (NEDs)
Chris Salisbury
Mervyn Greene
Gregory Meyerowitz
Wayne Bramwell
Victoria Jackson
Timothy Lindley
Non-executive Chairman
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
Full financial year
Full financial year
Appointed 4 August 2022. Ceased 25 November 2022
Full financial year
Full financial year
Full financial year
Appointed 4 August 2022. Ceased 31 January 2023
Appointed 20 October 2022
Appointed 17 May 2023
2.
Highlights for FY23
Executive fixed
remuneration
5.05% increase
for the Managing
Director
A remuneration review was conducted following the integration with Vimy Resources Ltd.
Given the increased scale and complexity the MD/CEO’s remuneration position was
assessed against relevant market comparators. The review was undertaken by an
individual performance and
independent remuneration consultant and considered
experience, role complexity and external remuneration relativity.
As a result of the review and recommendation, the Board made the decision to increase the
MD’s fixed remuneration by 5.05% from $470,000 to $495,000 per annum during FY23 with
effect from 1 March 2023. There were no further increases for Executives in FY23. See
Statutory Remuneration in Section 5 for more details
Short-term
incentive (“STI”)
outcome
Long-term
incentive (“LTI”)
outcome
96% of Maximum
Awarded
Assessment of FY23 performance measures resulted in a 96% outcome for payments of STI
targets to the MD and ED.
See Section 5 for more information.
100% Vesting
(FY19 Grant)
For the three-year performance period ending 30 November 2022, the FY19 LTI award
(granted on 18 December 2019) vested at 100% meeting the share price test of A$0.459.
Deep Yellow Limited
Annual Report 2023
28
REMUNERATION REPORT (AUDITED) (continued)
Remuneration Report
NED fees
NED fees /
Aggregate
NED fee pool
Completed
Review of the
Executive
remuneration
framework
The aggregate NED fee pool increased by $300,000 to $750,000 with effect from the
approval received at the 2022 AGM.
The practice of issuing equity to NEDs, in addition to fees, ceased during FY23. There was
no additional increase in individual NED fee remuneration during the financial year ended
30 June 2023.
Refer to Section 7 for disclosures regarding NED remuneration
A detailed review of short and long-term incentives (STI, LTI) was undertaken in
collaboration with independent remuneration consultants to ensure the incentive
framework remains appropriate for the Company based on the stage of operations and
projected growth.
As a result of the review, the LTI was modified with the vesting period increased to three
years and performance linked solely to share price growth (previously approximately 30%
service based only). The STI performance metrics were revised for FY23 reflecting the
Company’s stage of operations.
3.
Remuneration Governance
Remuneration Decision Making
The following diagram represents the Group’s remuneration decision making framework:
Board
Reviews and approves executive remuneration and incentives. Sets aggregate NED fees, subject to
shareholder approval.
Nomination and Remuneration Committee
Remuneration framework and policy. Executive & NED remuneration recommendations.
Managing Director
Recomendations on executive remuneration.
Management
Implementation of remuneration policies
Remuneration Consultants
External and independent remuneration advice
and information, as required
The composition of the Nomination and Remuneration Committee is set out on page 27 of this Annual Report,
comprises three independent NEDs and meets regularly through the year. The MD attends certain Nomination and
Remuneration Committee meetings by invitation, where management input is required. The MD is not present during
any discussions related to his own remuneration arrangements. Further information on the Nomination and
Remuneration Committee’s role, responsibilities and membership can be seen at https://deepyellow.com.au/about-
us/corporate-governance/.
Use of Remuneration Consultants
To ensure the Nomination and Remuneration Committee is fully informed when making remuneration decisions, it seeks
external remuneration advice where required. Remuneration consultants are engaged by, and report directly to the
Committee. In selecting remuneration consultants, the Committee considers potential conflicts of interest and requires
independence from the Company’s KMP and other executives as part of their terms of engagement.
During the financial year, the Nomination and Remuneration Committee approved the engagement of The Reward
Practice Pty Ltd (TRP) to provide a remuneration recommendation relating to the remuneration package for the
Managing Director. Both TRP and the Committee are satisfied the advice received from TRP is free from undue influence
from the KMP to whom the remuneration recommendations apply.
The remuneration recommendations were provided to Deep Yellow as an input into decision making only. The Board
considered the recommendations, along with other factors, in making its remuneration decisions. The fees paid to TRP
for the remuneration recommendations were $8,000. Other services provided by TRP included benchmarking for other
Executives and Non-Executive Directors, incentive design, implementation and ongoing support with ad-hoc
remuneration related matters. The fees for all other services were $122,700.
Remuneration Report Approval at 2022 AGM
The FY22 Remuneration Report received positive shareholder support at the 2022 AGM with a vote of 97.72% in favour.
Deep Yellow Limited
Annual Report 2023
29
Remuneration Report
4.
Executive Remuneration Arrangements
(a)
Remuneration Principles and Strategy
Deep Yellow’s executive remuneration strategy is designed to attract, motivate and retain high performing individuals
and align the interests of executives and shareholders.
The following diagram illustrates how the Company’s remuneration strategy aligns with the strategic direction and
links remuneration outcomes to performance.
To establish a multi-mine, Tier-1 globally diversified uranium company to provide security and certainty of
uranium supply into a growing market.
Business Objective
Reasonable & Fair
► Remuneration
provides a fair
level of reward to
all employees and
is competitive for
companies of a
similar size and
complexity
Remuneration strategy linkages to business objective
Shareholder Alignment
► The remuneration
Transparent & Value adding
► Build a culture of achievement by
framework incorporates
“at-risk” components,
including both short and
longer term elements
delivered in cash and
equity
aligning remuneration to financial
and non-financial performance
outcomes, promoting safety, diversity
and stakeholder satisfaction
► Longer-term remuneration
encourages retention of high
performers
(b)
Approach to Setting Remuneration and Details of Incentive Plans
Remuneration
Component
Fixed Remuneration
STI
LTI
Vehicle
Comprises base salary or
service fee only.
Purpose
To provide competitive
fixed remuneration set
with reference to role,
market and experience.
Link to Performance
Individual performance is
considered during the
annual remuneration
review.
Paid in a combination of
cash and Loan Plan
Shares at conclusion of
performance period.
Loan Plan Shares vest
after 12 months.
Rewards Executives for
their contribution to
achievement of priority
Company outcomes in the
financial year.
Awards are made in the
form of Loan Plan Shares
which vest after 3 years.
Rewards Executives for
their contribution to the
creation of shareholder
value over the longer term
and/or continued service.
Linked to measures
including:
(i) Health and Safety
(ii) Resources and
Exploration
(iii) Growth objectives
(iv) Environment Social, &
Governance
Vesting of awards is
dependent on share price
growth and continued
service.
Deep Yellow Limited
Annual Report 2023
30
REMUNERATION REPORT (AUDITED) (continued)
Remuneration Report
In FY23, the Executive remuneration framework consisted of fixed remuneration and short and long- term incentives.
The following diagrams set out the remuneration structure for the Managing Director and Executive Director.
Each component of the remuneration structure is further outlined below.
Overall Remuneration Level and Mix
How is overall
remuneration
and mix
determined?
Remuneration levels are considered annually through a review that considers comparative market
data, the performance of the Company and the individual, and the broader economic environment.
The Company aims to reward Executives with a level and mix (proportion of base salary and other
benefits, short term incentives and long-term incentives) of remuneration appropriate to their
position, responsibilities and performance within the Company and that which is aligned with
targeted market comparators including industry peers with comparable market capitalisation and
other companies with which Deep Yellow competes for talent.
The chart below summarises the MD’s and ED’s remuneration mix based on maximum opportunity
for fixed remuneration, short term incentives (STI) and long-term incentives (LTI). The mix is
considered appropriate for Deep Yellow based on the Company’s current phase of operations. Note
the remuneration mix is composed of the opportunity levels, rather than actual remuneration
outcome.
Deep Yellow Limited
Annual Report 2023
31
REMUNERATION REPORT (AUDITED) (continued)
Remuneration Report
MD
33%
8%
19%
40%
ED
41%
10%
10%
39%
Fixed Rem
STI Cash
STI Loan Shares
LTI Loan Shares
Fixed Remuneration and Other Benefits
How are fixed
remuneration and
other benefits
reviewed and
approved?
Fixed remuneration and other benefits are reviewed annually from benchmarked remuneration data.
Fixed remuneration changes for Executives are subject to approval from the Board considering
recommendations from the Nomination and Remuneration Committee.
Short Term Incentives
What is the STI
plan?
What are the
performance
criteria and how
do they align
with business
performance?
►
The Company operates an annual STI program that is available to Executives and awards Cash and
Loan Plan Shares to the Executives, subject to the attainment of clearly defined corporate measures.
The Executives performance measures are focused on key performance drivers for the business,
including:
► Health and Safety (15%)
- Measures include no fatalities and number of recordable injuries/illnesses
Resources and exploration (20%)
- Measures reflect exploration success or resource growth at Alligator River, Mulga Rock
and Namibian projects
►
Growth (50%)
-
Tumas DFS completed to allow Front End Engineering and Design (FEED) and project
financing to commence
Substantial progress on Mulga Rock DFS refresh
Achieve cost/capital objectives
-
-
➢ Environment Social and Governance (15%)
- No significant environmental or heritage incidents/breaches
-
-
Enhance sustainability disclosures in FY23 Sustainability report
Fully integrate Vimy Resources staff and systems
The MD has a maximum STI opportunity of 80% of fixed remuneration, of which 25% is settled in cash
and the remaining 55% as Loan Plan Shares. The maximum opportunity may be awarded where all
the performance measures are met, at the discretion of the Board.
The ED has a maximum STI opportunity of up to 50% of fixed remuneration, which is settled in equal
parts of cash and Loan Plan Shares. The maximum opportunity may be awarded where all the
performance measures are met, at the discretion of the Board.
On an annual basis, after consideration of performance measure outcomes, the Board in line with
their responsibilities, determine the amount (if any) of the short-term incentive to be paid to the
Executives, seeking recommendations from the Nomination and Remuneration Committee.
The Loan Plan Shares awarded under the STI plan fully vest following a 12-month deferral period.
Where an Executive ceases to provide services prior to the vesting of their Loan Plan Shares, all
unvested shares will be compulsorily divested on a date determined by the Board unless the Board
exercises its discretion to allow vesting at or post cessation of employment.
What is the value
of the STI award
opportunity?
How are STI
payouts
determined?
What is the STI
Deferral period?
What happens to
STI awards in the
event of
employment
cessation?
Deep Yellow Limited
Annual Report 2023
32
REMUNERATION REPORT (AUDITED) (continued)
Remuneration Report
What happens if
there is a change
in control?
In the event of a change of control of the Group, the Board may determine, acting reasonably and in
good faith, whether any of the unvested Loan Plan Shares will vest in a manner that allows the
Executive to participate in and/or benefit from any transaction from or in connection with the Change
of Control Event.
Are Executives
eligible for
dividends?
The Executive is entitled to receive dividends on unvested Loan Plan Shares. For so long as there is
an outstanding loan balance in relation to the Loan Plan Shares, the Executive irrevocably and
unconditionally directs the Company to withhold all after-tax dividends in respect of the participants
Loan Plan Shares and apply all amounts so withheld in repayment of the outstanding loan balance.
Long Term Incentive
What is the LTI
plan?
Under the LTI plan, annual grants of Loan Plan Shares are made to executives to align remuneration
with creation of shareholder value over the long-term.
The Loan Plan Shares reward and incentivise participants through an arrangement where shares are
offered subject to long term performance conditions in the form of share price target and time-based
vesting conditions.
The shares are offered at market value such that the incentive is linked to the increase in value over
and above the purchase price and so aligns the participants to the risks and rewards of a
shareholder. The purchase price payable by the participant for the ordinary shares is lent to the
participant under an interest free limited recourse loan, with the loan secured against the shares.
The loan can be repaid at any time, however, to avoid compulsory divestment of Loan Plan Shares,
the loan must be repaid on the earlier of periods ranging between 5-10 years (determined with each
issue) after the issuance of the shares and the occurrence of:
(a)
(b)
in the case of vested shares, the date being 12 months after cessation of employment or
service contract for any reason; or
pre-determined occurrences as per the Loan Share Plan including but not limited to a Control
Event or material breach by the Participant.
Loan Plan Shares were deliberately chosen because they provide an appropriate level of incentive in
a competitive environment and are cost effective in that there is no cash outlay for the Group which
is appropriate given the Group’s exploration/early-stage developer status.
How much can
Executives earn?
The MD has a maximum LTI opportunity of 120% of fixed remuneration and the ED has a maximum
LTI opportunity of up to 95% of fixed remuneration.
The number of Loan Plan Shares granted is determined using the fair value at the date of formalising
the Notice of Meeting to obtain shareholder approval for the grant. Those Loan Plan Shares with
non-market based vesting conditions are valued using a Black Scholes option pricing model whilst
those with market based vesting conditions are valued using a Monte Carlo simulation. Actual value
is determined using the fair value at the date of Shareholder approval and multiplying it by the
number of Loan Plan Shares granted.
All granted Loan Plan Shares vest subject to continued service and the achievement of Company
share price growth targets.
All Loan Plan Shares conditions are tested three years after grant.
Where an Executive ceases to provide services prior to the vesting of their Loan Plan Shares, all
unvested shares will be compulsorily divested on a date determined by the Board unless the Board
exercises its discretion to allow vesting at or post cessation of employment. The divested shares are
treated as full consideration for the repayment of the loan.
How is
performance
measured?
When is
performance
measured?
What happens if
an Executive
leaves?
What happens if
there is a change
in control?
In the event of a change of control of the Group, the Board may determine, acting reasonably and in
good faith, whether any of the unvested Loan Plan Shares will vest in a manner that allows the
Executive to participate in and/or benefit from any transaction from or in connection with the Change
of Control Event.
Are Executives
eligible for
dividends?
The Executive is entitled to receive dividends on unvested Loan Plan Shares. For so long as there is
an outstanding loan balance in relation to the Loan Plan Shares, the Executive irrevocably and
unconditionally directs the Company to withhold all after-tax dividends in respect of the participants
Loan Plan Shares and apply all amounts so withheld in repayment of the outstanding loan balance.
Deep Yellow Limited
Annual Report 2023
33
Remuneration Report
REMUNERATION REPORT (AUDITED) (continued)
5.
Executive Remuneration Outcomes for FY23 (including link to performance)
Company Performance
A summary of Company performance is outlined in the table below.
Measure
Share price at end of year (cents)
(Loss)/Profit per share
U3O8 spot price (US$/lb)
FY23
75.5
(1.42)
56.1
FY22
59.5
(1.84)
49.75
FY21
71.5
(1.74)
32.25
FY20
20.5
1.19
32.80
FY19
32.0
(1.98)
24.60
Short-Term Incentive Outcomes
Performance outcomes against the corporate measures as indicated in Section 4(b) achieved 96% of targets for the
Executives.
Table 1 outlines the proportion of maximum STI that was earned and forfeited in relation to the 2023 financial year.
Table 1: STI Earned and Forfeited FY23
Executive
Mr. Borshoff
Ms. Swaby
Individual
Outcomes
STI
Awarded
(% of base salary)
96%
96%
76.8%
48.0%
STI
Awarded
($)
380,160
174,936
Percentage of Maximum STI
Executive
Awarded
96%
96%
Forfeited
4%
4%
Long-Term Incentive Outcomes
Table 2 outlines performance conditions applicable to the 2019, 2020 and 2021 LTI grants which vested either entirely
or partially in FY23. Projected outcomes for awards still to be tested are assuming the current share price remains
unchanged at the relevant vesting date.
Table 2: Performance Conditions LTI Grants
Grant Date
Vesting Date/s
Portion to Vest in FY23
Share Price Target
Share Price Vesting %
Service Criteria
Service Vesting %
Total vesting
FY22 LTI
6-Dec-21
30-Nov-22
30-Nov-23
30-Nov-24
9%
n/a
0%
met
9%
9%
ED
FY21 LTI
27-Nov-20
30-Nov-21
30-Nov-22
30-Nov-23
9%
n/a
0%
met
9%
9%
FY20 LTI
18-Dec-19
30-Nov-20
30-Nov-21
30-Nov-22
83%
$0.459
75%
met
8%
83%
MD
FY20 LTI
18-Dec-19
30-Nov-22
100%
$0.459
75%
met
25%
100%
Deep Yellow Limited
Annual Report 2023
34
Remuneration Report
REMUNERATION REPORT (AUDITED) (continued)
Statutory Executive KMP Remuneration
Table 3 sets out total remuneration for Executive KMP in FY23 and FY22, calculated in accordance with statutory
accounting requirements.
Table 3: Statutory KMP Remuneration.
Short-
Term
Benefits
Fees
478,333
435,000
171,076
-
364,450
327,450
1,013,859
762,450
Post-
Employment
Cash
Bonus (i)
123,750
117,500
-
-
91,113
-
214,863
117,500
Super-
annuation
-
-
23,044
-
-
-
23,044
-
Share-Based
Payments
Loan Plan
Shares
(ii)(iii)
1,049,054
746,490
-
-
574,047
432,394
1,623,101
1,178,884
Executive
Directors
Mr. Borshoff
Mr. Michael (vi)
Ms. Swaby (vii)
Totals
Year
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
Termination
Payments
(iv)
-
-
210,000
-
-
-
210,000
-
Total
1,651,137
1,298,990
404,120
-
1,029,610
759,844
3,084,867
2,058,834
%
Performance
Related (v)
62.2
54.9
-
-
50.4
27.9
(i)
(ii)
Mr Borshoff earned 100% and 96% of his maximum STI opportunity for FY22 and FY23 respectively. Ms Swaby earned
96% of her maximum STI opportunity for FY23 and did not have an opportunity for a cash incentive for FY22. The cash
bonus component of FY23 was paid after the end of the performance period.
Share-based payments are calculated in accordance with Australian Accounting Standards and are the fair value of
equity related awards that have been granted to Executives.
(iii) Mr Borshoff’s share-based payments are made up of short term and long-term employee benefits amounting
(iv)
(v)
$424,453 and $624,601 respectively and Ms Swaby’s $230,423 and $343,624 respectively.
In line with Mr Michael’s employment agreement he received a termination payment of $210,000 by serving out a
maximum employment term from 4 August 2022 to 31 December 2022.
Performance measures are based on the cash bonus and the market and participant performance vesting hurdles of
Loan Plan Shares.
(vi) Mr Michael was employed by the company for the period starting on 4 August 2022 and ceased on 31 December 2022.
(vii)
Included in his fee is an amount of $12,230 of annual leave accrued.
Included in Ms Swaby remuneration of $364,450 for FY23 is an amount of $31,450 for services rendered in relation to
incremental project work.
6.
Executive Contracts
Remuneration arrangements for KMP are formalised in employment agreements. The following outlines the details of
contracts with key management personnel:
Managing Director - Mr. J. Borshoff
Scomac Management Services Pty Ltd as trustee for the Scomac Unit Trust (Scomac) has been appointed on a non-
exclusive basis to provide the Company with management, strategic, technical and geological expertise and services
through Scomac personnel which they employ or have access to (Scomac agreement).
Consultant personnel who Scomac employ or have access to include Mr John Borshoff, who has offered himself as
managing director and/or chief executive officer of the Group. Where any of the Scomac personnel acts as an officer
of the Group, neither Scomac or the personnel receive any additional payment or increase in fee for discharging the
duties and responsibilities as an officer of the Group.
The terms of the Scomac agreement, as it relates to Mr Borshoff as an employee of Scomac, are formalised in the
Scomac agreement and were disclosed to the ASX on 24 October 2016.
The current terms are as follows:
►
►
►
►
►
no fixed term, duration subject to termination provisions;
fee for services rendered of $495,000 per annum (plus GST);
the service fee and/or structure to be reviewed annually;
eligibility to receive an annual short-term incentive of up to 25% of the Service Fee, at the discretion of the
Company, paid in cash; and
eligibility to participate in the Company’s Loan Share Plan as both long and short-term incentive on terms
determined by the Board, subject to receiving any required or appropriate shareholder approval.
Deep Yellow Limited
Annual Report 2023
35
Remuneration Report
REMUNERATION REPORT (AUDITED) (continued)
The Managing Director’s termination provisions are as follows:
Reason for Termination
Termination by Scomac
Notice Period
6 months
6 months
Payment in
lieu of notice Treatment of STI and LTI on Termination
Termination by the Company
12 months
12 months
Termination for cause
None
None
Executive Director - Ms. Swaby
Unvested awards compulsorily divested unless the
Board exercises its discretion to allow vesting at or
post cessation of employment.
Unvested awards compulsorily divested unless the
Board exercises its discretion to allow vesting at or
post cessation of employment.
Unvested awards compulsorily divested unless the
Board exercises its discretion to allow vesting at or
post cessation of employment.
The Company has entered into a Consultancy Agreement with Strategic Consultants Pty Ltd (Strategic) for consultancy
services provided by Ms Swaby. The current term commenced 24 October 2016 and continues until such time as
terminated by either party are as follows:
►
consulting fee of $1,850 per day to a maximum of $333,000 per annum unless otherwise determined in
accordance with business needs;
the fee and/or structure to be reviewed from time to time having regard to the performance of Ms Swaby and
the Company;
either party may terminate the agreement on one month’s notice to the other party; and
eligibility to participate in the Company’s Loan Share Plan as long and short-term incentive on terms determined
by the Board, subject to receiving any required or appropriate shareholder approval.
►
►
►
7.
Non-executive Director (NED) Remuneration Arrangements
Remuneration Policy
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the fee structure is reviewed
annually against fees paid to NEDs of comparable ASX listed companies with similar market capitalisation of the
Company as well as similar sized industry comparators. The Board considers advice from external consultants when
undertaking the annual review process.
The Company’s constitution and the ASX listing rules specify that the NED fee pool shall be determined from time to
time by a general meeting. The latest determination was at the 2022 AGM when shareholders approved an aggregate
fee pool of $750,000 per year.
The Board will not seek any increase for the NED pool at the 2023 AGM.
Structure
The remuneration of NEDs consists of directors’ fees and committee Chair fees. The payment of additional fees for
serving as a committee Chair recognises the additional time commitment required by NEDs who chair sub-committees.
NEDs may be reimbursed for expenses reasonably incurred in attending to the Group’s affairs. NEDs do not receive
retirement benefits, nor do they participate in any incentive programs.
Shareholder approval was obtained during November 2021 to provide the NEDs with a component of equity-based
remuneration in the form of Zero Exercise Price Options (ZEPOs). The practice of issuing equity to NEDs, in addition to
fees, ceased during FY23. There was no increase in individual NED fee remuneration and Table 4 summarises the NED
fee policy for FY23.
Deep Yellow Limited
Annual Report 2023
36
REMUNERATION REPORT (AUDITED) (continued)
Remuneration Report
Table 4: NED Fee Policy.
Board Fee
Chairman
Directors
Committee Fees
Committee Chair
$103,000
$85,000
$5,000
Table 5 sets out total remuneration for Non-executive KMP in FY23 and FY22, calculated in accordance with statutory
accounting requirements.
Table 5: Statutory NED Fees.
Non-Executive Directors
Mr. Salisbury
Mr. Bramwell (ii)
Mr. Brunovs (iii)
Mr. Greene
Ms. Jackson (iv)
Mr. Lindley (v)
Mr. Meyerowitz (vi)
Mr. Reid (vii)
Mr. Urtel (viii)
Totals
Year
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
Short-Term
Benefits
Board and
Committee Fees
93,424
93,636
38,549
-
-
40,909
85,000
60,000
51,398
-
9,534
-
94,860
34,470
-
52,500
-
25,000
372,765
306,515
Share-Based
Payments (i)
Post-Employment
Superannuation
9,576
9,364
3,951
-
-
4,091
-
-
5,268
-
977
-
9,723
3,447
-
-
-
-
29,495
16,902
42,699
67,034
-
-
-
-
-
25,000
-
-
-
-
-
-
-
25,000
-
-
42,699
117,034
Total
145,699
170,034
42,500
-
-
45,000
85,000
85,000
56,666
-
10,511
-
104,583
37,917
-
77,500
-
25,000
444,959
440,451
Details in respect to the awards are provided in Table 7.
(i)
(ii) Mr Bramwell was appointed on 4 August 2022 and ceased his role on 31 January 2023
(iii) Mr Brunovs ceased his role on 31 December 2021
(iv) Ms Jackon was appointed on 20 October 2022
(v) Mr Lindley was appointed on 17 May 2023
(vi) Mr Meyerowitz was appointed on 1 December 2021. Included in his total remuneration for FY23 is an amount
of $14,583 in lieu of shares not issued in relation to FY22 services following the practice of issuing equity to
NEDs ceasing
(vii) Mr Reid ceased his role on 3 May 2022.
(viii) Mr Urtel ceased his role on 29 November 2021.
8.
Additional Disclosures Relating to Loan Plan Shares, Options and Shares
Loan Plan Shares Awarded, Vested and Lapsed During the Year
Table 6 discloses the number of Loan Plan Shares granted, vested and lapsed in relation to KMP during FY23.
Loan Plan Shares carry voting rights and participants are entitled to dividends on unvested Loan Plan Shares. For so
long as there is an outstanding loan balance in relation to the Loan Plan Shares, the participant irrevocably and
unconditionally directs the Company to withhold all after-tax dividends in respect of the participants Loan Plan
Shares and apply all amounts so withheld in repayment of the outstanding loan balance.
Deep Yellow Limited
Annual Report 2023
37
REMUNERATION REPORT (AUDITED) (continued)
Remuneration Report
The award of Loan Plan shares to Messrs Borshoff and Swaby relating to the LTI approved in the 2022 Annual
General Meeting was understated as a result of a valuation error identified during the year. The basis of the
underlying value of the LTI is unchanged, however the award of Loan Plan shares was understatement by 474,134
and 253,187 Loan Plan Shares respectively. The Company proposes to seek shareholder approval for the issuance of
these Loan Plan Shares at the upcoming 2023 Annual General Meeting.
Table 6: Loan Plan Shares Granted, Vested and Lapsed.
Number
Value
Financial
Year
Number
Issued
Issue
Date
Fair Value
Per Share at
Issue Date
(cents)
Vesting
Date
Exercise
Price
(cents)
Expiry
Date
(i)
Vested
During
Year
Lapsed
During
Year
Executive Directors
2020
J Borshoff
2020
2020
2021
G Swaby
2022
2023
2023
2023
2023
2020
2020
2021
2021
2022
2022
2023
2023
2023
268,559
530,588
1,610,714
340,032
122,741
155,828
155,828
155,827
960,981
111,765
1,017,857
215,311
133,971
94,660
50,518
170,490
170,490
537,271
18-Dec-19
18-Dec-19
18-Dec-19
27-Nov-20
6-Dec-21
21-Dec-22
21-Dec-22
21-Dec-22
21-Dec-22
18-Dec-19
18-Dec-19
27-Nov-20
27-Nov-20
6-Dec-21
6-Dec-21
21-Dec-22
21-Dec-22
21-Dec-22
15.9
18.1
12.9
27.4
79.2
57.2
57.2
57.2
56.1
15.9
12.3
27.4
27.4
71.3
79.2
51.5
51.5
56.1
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-23
30-Nov-24
30-Nov-25
30-Nov-25
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-22
30-Nov-23
30-Nov-24
30-Nov-25
27.0
27.0
27.0
35.5
92.8
72.1
72.1
72.1
72.1
27.0
27.0
35.5
35.5
92.8
92.8
72.1
72.1
72.1
18-Dec-24
18-Dec-26
18-Dec-26
30-Nov-25
6-Dec-31
21-Dec-32
21-Dec-32
21-Dec-32
21-Dec-32
18-Dec-24
18-Dec-26
30-Nov-25
30-Nov-25
6-Dec-28
6-Dec-31
21-Dec-29
21-Dec-29
21-Dec-32
201,718
530,588
1,610,714
340,032
122,741
-
-
-
-
111,765
1,017,857
215,311
133,971
94,660
50,518
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Issued
During
Year
$A
-
-
-
-
-
89,134
89,134
89,133
539,110
-
-
-
-
-
-
87,802
87,802
301,409
Vested
During
Year
A$ (ii)
88,756
233,459
708,714
120,711
-
-
-
-
-
49,177
447,857
76,435
47,560
-
-
-
-
-
(i)
(ii)
Loan Plan Shares do not have an expiry date. The limited recourse loan in respect of the Loan Plan Shares has
to be fully paid between 5-10 years (determined with each issue) after grant date of the Loan Plan Shares
The value is based on the number of Loan Plan Shares vested multiplied by the share price on vesting dates
and reduced by the outstanding loan in relation to the Loan Plan Shares that vested
Table 7: Share Options Awarded, Exercised and Lapsed During the Year.
Financial
Year
Number
Issued
Issue
Date
Fair Value
Per Option at
Issue Date
(cents)
Vesting
Date
Exercise
Price
(cents)
Expiry
Date
Vested
During
Year
Issued
During
Year
$A
Vested
During
Year
A$ (i)
Number
Value
Non-executive Directors
2022
M Greene
2022
C Salisbury
26,455
44,444
29-Nov-21
29-Nov-21
94.5
94.5
1-Jul-22
1-Jul-22
-
-
1-Jul-25
1-Jul-26
-
-
-
-
15,741
26,444
(iii)
The value is based on the number of Options vested multiplied by the share price on vesting date.
For details on the valuation of Loan Plan Shares and Options, including models and assumptions used, please refer to
Note 22.
The Loan Plan Shares and Options were provided at no cost to the recipients. However, the Loan Plan Shares have an
attaching non-recourse loan which must be repaid following vesting. Until such time as the loan is repaid a holding
lock remains in place. There were no alterations to the terms and conditions of Loan Plan Shares or Options issued as
remuneration since their grant/issue dates.
Deep Yellow Limited
Annual Report 2023
38
Remuneration Report
REMUNERATION REPORT (AUDITED) (continued)
Table 8: Shareholdings*.
2023
Name
Balance at Start
of the Year
Balance on
Commencement
(i)
Granted as
Remuneration
(ii)
Balance on
Resignation
(iii)
Balance at
the End of the
Year
Executive directors
J Borshoff (iv)
G Swaby (v)
S Michael
Non-executive Directors
C Salisbury
M Greene
G Meyerowitz
W Bramwell
V Jackson
T Lindley
13,671,900
8,884,792
-
-
2,778,337
50,000
-
-
-
1,428,464
878,250
-
-
-
588,000
15,100,364
9,763,042
-
588,000
-
-
-
-
-
-
-
-
-
-
-
-
-
2,778,337
50,000
-
-
-
* Includes shares held directly, indirectly and beneficially by KMP
(i)
(ii)
(iii)
(iv)
(v)
Balance at date directorship commenced
On 21 December 2022 Mr Borshoff and Ms Swaby were issued with Loan Plan Shares. Details in respect of the
awards are provided in Table 6.
Balance at date of directorship ceasing.
15,043,687 subject to loan repayment of which 5,689,470 shares have not vested.
6,711,296 subject to loan repayment of which 2,755,985 shares have not vested.
A participant may not trade shares acquired under the Loan Share Plan until the shares have vested, any imposed
dealing restrictions have ended and the limited recourse loan in respect to those shares has been paid in full.
2023
Name
Balance at
Start of the Year
Granted as
Remuneration
Options
Exercised
Balance at the
End of the Year
Vested and
Exercisable
Table 9: Option Holdings.
Non-executive Directors
C Salisbury
M Greene
G Meyerowitz
W Bramwell
V Jackson
T Lindley
133,333
176,519
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
133,333
176,519
-
-
-
-
44,444
176,519
-
-
-
-
9.
Other Transactions and Balances with KMP and their Related Parties
Details and Terms and Conditions of other Transactions with KMP and their Related Parties
Scomac Management Services Pty Ltd as trustee for the Scomac Unit Trust (Scomac or Consultant) has been appointed
on a non-exclusive basis to provide the Group with management, strategic, technical and geological expertise and
services through the Consultant personnel they employ or have access to (Scomac agreement).
Consultant personnel who Scomac employ or have access to include Mr John Borshoff, who has offered himself as
managing director and/or chief executive officer of the Group. Where any of the Scomac personnel acts as an officer
of the Group, neither Scomac or the personnel receive any additional payment or increase in fee for discharging the
duties and responsibilities as an officer of the Group.
Mr Borshoff has a financial interest in Scomac. During the year ended 30 June 2023 Scomac billed the Company
$1,563,021, inclusive of GST and on-costs (2022: $1,411,868), for technical and geological services (excluding Mr
Borshoff) on normal commercial terms and conditions. These amounts are not included in the remuneration tables
above. Fees paid to Scomac in relation to services provided by Mr Borshoff as Managing Director are detailed in
section 6(a). An amount of $126,777 was outstanding at 30 June 2023 (2022: $120,049). The amount for other services
was recognised as non-current asset: capitalised mineral exploration and evaluation expenditure.
Deep Yellow Limited
Annual Report 2023
39
Remuneration Report
REMUNERATION REPORT (AUDITED) (continued)
10. Actual Executive KMP Remuneration
The actual remuneration earned by Executives in FY23 is set out in Table 10. The value of remuneration includes equity
grants where the Executive received control through vesting of their shares in FY23. This differs from the statutory
remuneration disclosures in accordance with applicable accounting standards which, for example, discloses the value
of LTI grants which may or may not vest in future years, whereas Table 10 discloses the value of LTI grants from
previous years which have vested in FY23.
Table 10: Actual Executive KMP Remuneration.
Name
Mr. J. Borshoff
Mr S Michael
Ms. G. Swaby
Totals
Fees
(i)
478,333
183,312
364,450
1,026,095
Short-Term
Incentive (ii)
117,500
-
-
117,500
Termination
Payment
210,000
210,000
STI Award
Vested (iii)
182,709
-
55,800
238,509
LTI Award
Vested (iii)
942,173
-
533,580
1,475,753
Total Actual
Remuneration
1,720,715
393,312
953,830
3,067,857
Includes fees, base salary, superannuation and annual leave payout on termination.
(i)
(ii) Maximum cash bonus was awarded to the managing Director for FY23 but only paid during FY24.
(iii)
The value is based on the number of Loan Plan Shares vested multiplied by the share price on vesting dates and
reduced by the outstanding loan in relation to the Loan Plan Shares that vested.
End of Remuneration Report (Audited)
This report is made in accordance with a resolution of the Directors.
DATED at Perth this 27th day of September 2023.
JOHN BORSHOFF
Managing Director/CEO
Deep Yellow Limited
Annual Report 2023
40
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the directors of Deep Yellow Limited
As lead auditor for the audit of the financial report of Deep Yellow Limited for the financial year ended
30 June 2023, I declare to the best of my knowledge and belief, there have been:
a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b. No contraventions of any applicable code of professional conduct in relation to the audit; and
c. No non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Deep Yellow Limited and the entities it controlled during the financial
year.
Ernst & Young
Gavin Buckingham
Partner
27 September 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
41
Consolidated Statement of Profit or Loss and Other
Comprehensive Income for the Financial Year Ended 30 June 2023
Interest
Other income
Revenue from contracts with customers
Income
Depreciation and amortisation expenses
Interest expense
Marketing expenses
Occupancy expenses
Administrative expenses
Employee expenses
Capitalised mineral exploration and evaluation expenditure written
off
Loss before income tax
Income tax expense
Consolidated
Note
7(a)
7(a)
7(b)
2023
$
1,781,421
111,041
38,459
2022
$
353,175
110,233
51,566
1,930,921
514,974
(818,133)
(196,183)
(566,674)
(319,071)
(4,580,215)
(5,201,911)
(356,861)
(10,284)
(319,422)
(131,685)
(3,338,283)
(3,140,796)
8
8
8
8
8
15
(364,839)
(42,953)
9(a)(b)
(10,116,105)
-
(6,825,310)
-
Loss for the year after income tax
(10,116,105)
(6,825,310)
Other comprehensive income
Items to be reclassified to profit and loss in subsequent periods,
net of tax
Foreign currency translation loss
18(d)
(5,930,301)
(2,026,340)
Other comprehensive loss for the year, net of tax
(5,930,301)
(2,026,340)
Total comprehensive loss for the year, net of tax
(16,046,406)
(8,851,650)
Earnings per share for loss attributable to the ordinary equity holders
of the Company.
Cents
Cents
Basic loss per share
Diluted loss per share
10
10
(1.42)
(1.42)
(1.84)
(1.84)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be
read in conjunction with the accompanying notes.
Deep Yellow Limited
Annual Report 2023
42
Consolidated Statement of Financial Position as at 30 June 2023
ASSETS
Current assets
Cash and cash equivalents
Receivables
Other assets
Total current assets
Non-current assets
Right-of-use asset
Property, plant and equipment
Capitalised mineral exploration and evaluation expenditure
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Employee provisions
Lease liabilities
Total current liabilities
Non-current liabilities
Employee provisions
Lease liabilities
Provision for rehabilitation
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued equity
Accumulated losses
Employee equity benefits' reserve
Foreign currency translation reserve
Consolidated
Note
2023
$
2022
$
12
14(a)
14(b)
40,770,146
3,680,058
980,315
64,924,350
605,426
734,397
45,430,519
66,264,173
17
13
15
3,553,804
3,091,251
339,592,920
3,803,633
1,120,098
49,727,889
346,237,975
54,651,620
391,668,494
120,915,793
16
17
17
19
10,154,769
409,274
266,537
1,697,527
144,654
210,956
10,830,580
2,053,137
160,692
3,567,291
2,467,577
36,030
3,649,608
-
6,195,560
3,685,638
17,026,140
5,738,775
374,642,354
115,177,018
18(a)
18(d)
18(d)
18(d)
594,396,624
(215,022,954)
20,665,779
(25,397,095)
321,796,741
(204,906,849)
17,753,920
(19,466,794)
Total equity
374,642,354
115,177,018
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Deep Yellow Limited
Annual Report 2023
43
Consolidated Statement of Changes in Equity for the
Financial Year Ended 30 June 2023
Accumulated
Losses
$
Employee Equity
Benefits’ Reserve
$
Foreign Currency
Translation
Reserve
$
(204,906,849)
(10,116,105)
-
17,753,920
-
-
(19,466,794)
-
(5,930,301)
Issued Equity
$
321,796,741
-
-
Total Equity
$
115,177,018
(10,116,105)
(5,930,301)
-
(10,116,105)
(5,930,301)
(16,046,406)
-
-
-
-
-
-
-
-
(215,022,954)
(325,386)
-
3,237,245
20,665,779
-
-
-
(25,397,095)
-
-
258,257,511
14,000,000
-
16,986
3,237,245
374,642,354
At 1 July 2022
Loss for the period
Other comprehensive loss
Total comprehensive loss for the
period
Issued under acquisition of Vimy
Resources Ltd (Note 11)
Issued under payment of royalty
deed termination (Note 15)
Vesting of Performance Rights
Repayment of Loan Plan Shares
Share-based payments
At 30 June 2023
258,257,511
14,000,000
325,386
16,986
-
594,396,624
Accumulated
Losses
$
Employee Equity
Benefits’ Reserve
$
Foreign Currency
Translation
Reserve
$
(198,081,539)
(6,825,310)
-
15,444,255
-
-
(17,440,454)
-
(2,026,340)
Issued Equity
$
296,373,482
-
-
Total Equity
$
96,295,744
(6,825,310)
(2,026,340)
-
(6,825,310)
-
(2,026,340)
(8,851,650)
267,245
25,144,691
11,323
-
321,796,741
-
-
-
-
(204,906,849)
(267,245)
(100,463)
-
2,677,373
17,753,920
-
-
-
-
(19,466,794)
-
25,044,228
11,323
2,677,373
115,117,018
At 1 July 2021
Loss for the period
Other comprehensive loss
Total comprehensive loss for the
period
Vesting of Performance Rights
Exercise of options
Repayment of Loan Plan Shares
Share-based payments
At 30 June 2022
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Deep Yellow Limited
Annual Report 2023
44
Consolidated Cash Flow Statement for the
Financial Year Ended 30 June 2023
Cash flows from operating activities
Interest received
Funds received from JV Partners
Payments to suppliers and employees
Payments for evaluation of project acquisition opportunities
Funds spent by JV Manager
Other receipts
Interest paid
Consolidated
Note
2023
$
2022
$
28
28
7(a)(b)
8
1,821,084
756,369
(6,227,829)
(787,081)
(756,170)
140,566
(176,759)
353,175
542,465
(2,436,355)
(1,812,795)
(539,277)
161,799
(10,284)
Net cash used in operating activities
12
(5,229,820)
(3,741,272)
Cash flows from investing activities
Exploration expenditure
Payments for property, plant and equipment
Payment for property bond
Proceeds from property and other bonds
Proceeds from sale of property, plant and equipment
Cash acquired upon acquisition of asset
Costs associated with acquisition of subsidiary
(25,888,923)
(2,027,507)
(2,640)
316,224
17,767
16,690,657
(7,147,125)
(7,549,951)
(711,222)
(348,824)
-
-
-
-
11
Net cash used in investing activities
(18,041,547)
(8,609,997)
Cash flows from financing activities
Proceeds from the issue of shares
Payment of lease liabilities
16,986
(242,571)
25,055,551
(186,851)
Net cash (used in)/from financing activities
(225,585)
24,868,700
Net (decrease)/increase in cash and cash equivalents
Effects on cash of foreign exchange
Cash and cash equivalents at the beginning of the financial year
(23,496,952)
(657,252)
64,924,350
12,517,431
(41,355)
52,448,274
Cash and cash equivalents at the end of the financial year
12
40,770,146
64,924,350
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
Deep Yellow Limited
Annual Report 2023
45
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 1 Corporation Information
The Consolidated Financial Statements of Deep Yellow Limited and its subsidiaries (the Group) for the year ended 30 June
2023 were authorised for issue in accordance with a resolution of Directors on 26 September 2023, subject to minor
typographical changes.
Deep Yellow Limited is a “for profit” company limited by shares incorporated and domiciled in Australia whose shares are
publicly traded on the Australian Securities Exchange.
Information on the nature of the operations and principal activities of the Group are described in the Directors’ Report.
Information on the Group’s structure is provided in Note 6 and information on other related party relationships is provided in
Note 24.
Note 2
Significant Accounting Policies
(a)
Basis of Preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the requirements of
the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board. The financial report also complies with International Financial reporting Standards (IFRS) as
issued by the International Accounting Standards Board.
The financial report has been prepared on a historical cost basis. The financial report is presented in Australian dollars and
all values are rounded to the nearest dollar.
The Group has prepared the financial statements on the basis that it will continue to operate as a going concern. The
Consolidated Financial Statements provide comparative information in respect of the previous period. There has been no
retrospective application of accounting policies as a result of the adoption of new accounting standards therefore no
restatement of financial statements required for the previous period.
(b)
Basis of Consolidation
The Consolidated Financial Statements comprise the financial statements of Deep Yellow Limited and its subsidiaries as at
and for the year ended 30 June 2023 (the Group). Control is achieved when the Group is exposed, or has the rights, to variable
returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
►
►
►
power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the
investee);
exposure, or rights, to variable returns from its involvement with the investee; and
the ability to use its power over the investee to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption, and when
the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
►
►
►
the contractual arrangement with the other vote holders of the investee;
rights arising from other contractual arrangements; and
the Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the
subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary
acquired or disposed of during the year are included in the Consolidated Financial Statements from the date the Group gains
control until the date the Group ceases to control the subsidiary.
Profit or loss and each component of Other Comprehensive Income (OCI) are attributed to the equity holders of the Group
and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. When
necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
A change in ownership interest in a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group
loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and
other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is
recognised at fair value, except for when the retained investment is an interest in a joint operation. Where the group loses
control over a subsidiary but retains an interest in a joint operation the retained investment is measured based on the carrying
value of the investment in the subsidiary.
Deep Yellow Limited
Annual Report 2023
46
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
(i)
Summary of Significant Accounting Policies
Business Combinations and Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the
aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-
controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling
interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-
related costs are expensed as incurred and included in administrative expenses.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a
substantive process that together significantly contribute to the ability to create outputs. The acquired process is considered
substantive if it is critical to the ability to continue producing outputs, and the inputs acquired include an organised workforce
with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to
continue producing outputs and is considered unique or scarce or cannot be replaced without significant cost, effort, or delay
in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of AASB 9
Financial Instruments, is measured at fair value with the changes in fair value recognised in the statement of profit and loss
in accordance with AASB 9. Other contingent consideration that is not within the scope of AASB 9 is measured at fair value
at each reporting date with changes in fair value recognised in profit or loss.
Where the acquisition of an asset or a group of assets does not constitute a business, the Group accounts for the acquisition
as follows:
•
it identifies the individual identifiable asset acquired and liabilities assumed that it recognises at the date of the
acquisition;
it determines the individual transaction price of each identifiable asset and liability by allocating the cost of the group
based on the relative fair values of those assets and liabilities at the date of the acquisition; and then
it applies the initial measurement requirements in applicable IFRSs to each identifiable asset acquired and liability
assumed. The Group accounts for any difference between the amount at which the asset or liability is initially
measured and its individual transaction price applying the relevant requirements.
•
•
(ii)
Current Versus Non-current Classification
The Group presents assets and liabilities in the Statement of Financial Position based on current/non-current classification.
An asset is current when it is:
•
•
•
•
expected to be realised or intended to be sold or consumed in the Group’s normal operating cycle;
held primarily for the purpose of trading;
expected to be realised within twelve months after the reporting period; or
cash or a cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.
The Group classifies all other assets as non-current.
A liability is current when:
•
•
•
•
it is expected to be settled in the Group’s normal operating cycle;
it is held primarily for the purpose of trading;
it is due to be settled within twelve months after the reporting period; or
there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments
do not affect its classification.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Deep Yellow Limited
Annual Report 2023
47
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of significant accounting policies (continued)
(iii) Revenue from Contracts with Customers
The Group manages the Nova JV to which they provide administration services and the right to use the Group’s assets for
exploration-related activities.
Asset Recharges and Administration Fee Earned
Revenue from asset recharges and administration fee is recognised over time. The output method is used to recognise revenue
as that looks at the measure of progress of the service being transferred with the Group recognising revenue based on the
amount to which the Group has a right to invoice. This signifies complete satisfaction of the service as the benefits were
received and consumed throughout the month.
The consideration on the contract includes a fixed amount per asset category made available for use throughout a service
month. It is also entitled to a fixed percentage of administration fee based on the monthly direct costs of operations to which
the administration service is provided.
The normal credit term is usually 30 days from complete satisfaction of the service, i.e.. last day of the month. This results in
a receivable that represents the Group’s right to an amount that is unconditional. Refer Note 2(c)(x) Financial instruments –
Financial assets.
Contract Balances
Trade receivables – A receivable is recognised if an amount of consideration that is unconditional is due from the customer
(i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial
assets in Note 2(c)(x).
(iv) 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.
When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and
released to profit or loss over the expected useful life of the asset, based on the pattern of consumption of the benefits of the
underlying asset by equal annual instalments.
(v)
Interest Income
Interest income is recognised as it accrues using the effective interest method. This is a method of calculating the amortised
cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is
the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net
carrying amount of the financial asset.
(vi)
Taxes
Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at
the reporting date in the countries where the Group operates and generates taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and assess if appropriate provisions are required.
Deferred Tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognised for
all taxable temporary differences, except:
•
•
when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable
profit or loss except for transactions that, on initial recognition, give rise to equal taxable and deductible temporary
differences such as recognition of a right-of-use asset and lease liability; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in
joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future.
Deep Yellow Limited
Annual Report 2023
48
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any
unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can
be utilised, except:
•
•
when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests
in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become
probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are
recognised in correlation to the underlying transaction either in Other Comprehensive Income or directly in equity.
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.
Tax Consolidation
(1) Members of the Tax Consolidated Group and the Tax Sharing Arrangement
Deep Yellow Limited and its 100% owned Australian resident subsidiaries formed a tax consolidated group with effect from
2 February 2007. Deep Yellow Limited is the head entity of the tax consolidated group.
Members of the Group have entered into a tax sharing agreement that provides for the allocation of income tax liabilities
between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the
financial statements in respect of this agreement on the basis that the possibility of default is remote.
The amounts receivable or payable under the tax funding agreement are due upon receipt of the funding advice from the
head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require
payment of interim funding amounts to assist with its obligations to pay tax instalments.
(2)
Tax Effect Accounting by Members of the Tax Consolidated Group
Measurement Method Adopted Under UIG 1052 Tax Consolidated Accounting
The head entity and the controlled entities in the tax consolidated group continue to account for their own current and
deferred tax amounts. The Group has applied the group allocation approach in determining the appropriate amount of
current taxes and deferred taxes to allocate to members of the tax consolidated group. The current and deferred tax amounts
are measured in a systematic manner that is consistent with the broad principles in AASB 112 Income Taxes.
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 which case it is recognised as part of the cost of
acquisition of the asset or as a part of the expense; or
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 Statement of Financial Position.
Deep Yellow Limited
Annual Report 2023
49
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
(vii) Foreign Currencies
The Group’s Consolidated Financial Statements are presented in Australian dollars being the functional currency of the parent
entity. For each entity, the Group determines the functional currency and items included in the financial statements of each
entity are measured using that functional currency. The Group uses the direct method of consolidation and on disposal of a
foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.
Transactions and Balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange prevailing at balance date. Exchange differences arising from these procedures are recognised in profit and loss
for the year. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Group Companies
On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate prevailing
at the reporting date and their statements of profit or loss are translated at the average exchange rate for the year. The
exchange differences arising on translation for consolidation purposes are recognised in Other Comprehensive Income. On
disposal of a foreign operation, the component of Other Comprehensive Income relating to that particular foreign operation
is recognised in profit or loss.
(viii) Property, Plant and Equipment
Construction in progress is stated at cost, net of accumulated impairment losses, if any. Property, plant and equipment is
stated at historical cost less accumulated depreciation and impairment losses, if any. Such cost includes the cost of replacing
part of the plant and equipment if the recognition criteria are met. When significant parts of plant and equipment are required
to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major
inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the
recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.
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.
Depreciation of property, plant and equipment is calculated using the diminishing balance method or straight-line method
to allocate their cost over their estimated useful lives using the following depreciation rates:
Office equipment and fittings
Motor vehicles
12.5% – 33% of cost
25% of cost
Site equipment
Buildings
25% of cost
5% of cost
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at each balance 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 (Note 2 (c)(xii)).
An item of property, plant and equipment is derecognised on disposal or when no further future economic benefits are
expected from its use. Any gain or loss arising on derecognition of an asset (calculated as the difference between net
disposal proceeds and the carrying amount of the asset) is included in profit and loss in the year the asset is derecognised.
(ix)
Leases
The Group assesses at contract inception whether a contract is, or contains, a lease i.e. if the contract conveys the right to
control use of an identified asset for a period of time in exchange for consideration.
Group as a Lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the
right to use the underlying assets.
Deep Yellow Limited
Annual Report 2023
50
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
Right-of-use Assets
(1)
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the
estimated useful lives of the assets. If ownership of the leased asset transfers to the Group at the end of the lease term or
the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The
right-of-use assets are also subject to impairment. Refer Note 2(c)(xii) Impairment of non-financial assets.
Lease Liabilities
(2)
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts
expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option
reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term
reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are
recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement
date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease
liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a
change in the assessment of an option to purchase the underlying asset. (see Note 17).
Short-term Leases and Leases of Low-value Assets
(3)
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e.,
those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option).
It also applies the lease of low-value assets recognition exemption to leases of office equipment that are 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.
Financial instruments – Financial Assets
(x)
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
Initial Recognition and Measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through Other
Comprehensive Income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow
characteristics and the Group’s business model for managing them. The Group initially measures a financial asset at its fair
value plus transactions costs. Trade receivables that do not contain a significant financing component or for which the Group
has applied the practical expedient are measured at the transaction price determined under AASB 15. Refer to the accounting
policies in Note 2(c)(iii) Revenue from Contracts with Customers. They are measured, at initial recognition, at fair value plus
transaction costs, if any.
In order for a financial asset to be classified and measured at amortised cost, it needs to give rise to cash flows that are
‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the
SPPI test and is performed at an instrument level.
Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified at amortised cost (debt instrument), fair value
through OCI with recycling of cumulative gains and losses (debt instruments), designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition (equity instruments) or at fair value through profit or loss.
Other receivables are measured at amortised cost if both of the following conditions are met:
•
•
it is held within a business model with the objective to collect contractual cash flows; and
the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding, where applicable.
It is subsequently measured using the effective interest (EIR) method and are subject to impairment with gains and losses
recognised in profit and loss when the asset is derecognised, modified or impaired.
Deep Yellow Limited
Annual Report 2023
51
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the Group’s Consolidated Statement of Financial Position) when:
•
•
the right to receive cash flows from the asset have expired; or
the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a)
the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither
transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,
it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor
retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group continues to
recognise the transferred asset to the extent of its continuing involvement. In that case, the Group also recognises an
associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and
obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Impairment of Financial Assets
The Group recognises an allowance for expected credit losses (ECL) 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).
For other receivables, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors
specific to the debtors and the economic environment.
The Group considers a financial asset in default when contractual payments are 90 days past due, excluding amounts owed
from Australian and Namibian Government Departments where other information are also considered. However, in certain
cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the
Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements
held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.
(xi)
Financial Instruments – Financial Liabilities
Initial Recognition and Measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, financial
liabilities at amortised cost, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Group’s financial liabilities consist of trade and other payables.
Subsequent Measurement
For purposes of subsequent measurement, financial liabilities are classified at fair value through profit or loss or loans and
borrowings.
After initial recognition trade and other payables are subsequently measured at amortised cost using the effective interest
rate (EIR) method, if applicable. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well
as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on initial recognition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit or Loss. For more
information, refer to Note 21: Financial Assets and Liabilities.
Deep Yellow Limited
Annual Report 2023
52
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement
of Profit or Loss and Other Comprehensive Income.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial
position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a
net basis, to realise the assets and settle the liabilities simultaneously.
(xii)
Impairment of Non-Financial Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s
recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those
from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such
cases the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount
of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired
and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses
relating to continuing operations are recognised in the expense categories consistent with the function of the impaired asset.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated.
A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the
asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the
asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have
been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is
recognised in profit or loss. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s
revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
Further disclosures relating to impairment of non-financial assets are also provided in the following notes:
•
•
•
Disclosures for significant assumptions
Property, plant and equipment
Capitalised mineral exploration and evaluation expenditure
Note 3
Note 13
Note 15
(xiii) Cash and Cash Equivalents
For Cash Flow Statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with
financial institutions, other short term, highly liquid investments with original maturities of three months or less that are
readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank
overdrafts.
(xiv) Mineral Exploration and Evaluation Expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable Area of Interest. An Area of
Interest is generally defined by the Group as a number of geographically proximate exploration permits which could form the
basis of a project. These costs are only carried forward to the extent that the Group’s rights of tenure to that Area of Interest
are current and that the costs are expected to be recouped through the successful development of the area or where activities
in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable
reserves.
Accumulated costs in relation to an abandoned area of interest are written-off in full in the Statement of Profit or Loss and
Other Comprehensive Income in the year in which the decision to abandon the area is made.
A bi-annual review is undertaken of each Area of Interest to determine the appropriateness of continuing to carry forward
costs in relation to that Area of Interest or to reverse any previous impairment.
Deep Yellow Limited
Annual Report 2023
53
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
(xv)
Joint Arrangements
The Group has interests in joint arrangements that are joint operations. A joint operation is a type of joint arrangement
whereby the parties have a contractual agreement to undertake an economic activity that is subject to joint control. A joint
operation involves use of assets and other resources of the ventures rather than the establishment of a separate entity. The
Company recognises its interest in the joint operations by recognising its interest in the assets and liabilities of the joint
operation, including its share of any assets held any liabilities incurred jointly. The Group also recognises the expenses that
it incurs and its share of the income that it earns from the sale of goods and services by the joint operations, including any
expenses incurred and revenue received jointly. Details relating to the joint operations, are set out in Note 28.
(xvi) Provisions
General
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed,
for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the
reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit or Loss net of
any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of
time is recognised as a finance cost.
Wages, Salaries and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits, which are expected to be settled within 12 months of the
reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts
expected to be paid when the liabilities are settled. Expenses for non-accumulating sick leave are recognised when the leave
is taken and are measured at the rates paid or payable.
Long Service Leave and Annual Leave
The Group does not expect its long service leave or annual leave benefits to be settled wholly within 12 months of each
reporting date. The Group recognises a liability for long service leave and annual leave measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting date on
high quality corporate bonds with terms to maturity and currencies that match, as closely as possible, the estimated future
cash outflows.
Environmental Rehabilitation
The provision for future rehabilitation costs is the best estimate of the present value of the expenditure required to settle the
rehabilitation obligation at the end of the reporting period, based on current legal requirements and current technology.
Future rehabilitation costs are reviewed periodically, and any changes are reflected in the provision at the end of each
reporting period.
The initial estimate of the environmental rehabilitation provision relating to exploration activities is capitalised into the cost
of the related asset and depreciated/amortised on the same basis as the related asset. Changes in the estimate of the
provision for environmental rehabilitation are treated in the same manner, except that the unwinding of the effect of
discounting on the provision is recognised as a finance cost rather than being capitalised into the cost of the related asset.
(xvii) Issued Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity
as a deduction, net of tax, from the proceeds.
Deep Yellow Limited
Annual Report 2023
54
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(c)
Summary of Significant Accounting Policies (continued)
(xviii) Share-based Payments
Share-based compensation payments are made available to Directors, consultants and employees (Participants) of the
Group, whereby they render services in exchange for a share-based payment.
The fair value of these equity-settled transactions is recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date and recognised over the period during which the Participants
become unconditionally entitled to the award.
At each subsequent reporting date until vesting, the cumulative charge to the Statement of Profit or Loss and Other
Comprehensive Income or Statement of Financial Position where the cost is capitalised as mineral exploration and evaluation
expenditure is the product of:
i.
ii.
iii.
the grant date fair value of the award;
the current best estimate of the number of options, rights or shares that will vest, taking into account such factors as
the likelihood of employee turnover during the vesting period and the likelihood of non-market performance conditions
being met; and
the expired portion of the vesting period.
The charge to the Statement of Profit or Loss and Other Comprehensive Income or Statement of Financial Position as
capitalised mineral exploration and evaluation expenditure for the period is the cumulative amount as calculated above less
the amounts already charged in previous periods. There is a corresponding entry to equity.
Share-based compensation payments are granted by the parent company to Participants. The expense recognised by the
Group is the total expense associated with all such awards.
The fair value at grant date is independently determined using a binomial option pricing model or the Monte-Carlo simulation
model, as appropriate, that takes into account the exercise price, the term of the option, right or share, the impact of dilution,
the share price at grant date and expected price volatility of the underlying share, the risk-free interest rate, the expected
dividend yield and the probability of market based vesting conditions being realised.
The fair value of the award granted is adjusted to reflect market vesting conditions. Non-market vesting conditions are
included in assumptions about the number of awards that are expected to become exercisable. At each balance date, the
entity revises its estimate of the number of awards that are expected to become exercisable. The employee benefit expense
recognised each period, takes into account the most recent estimate.
Upon the exercise of awards, the balance of the share-based payments reserve relating to those awards is transferred to
share capital and the proceeds received, net of any directly attributable transaction costs, are credited to share capital.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only conditional upon a
market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any modification that increases the total fair value of the share-based
payment arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If 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 is granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options and rights is reflected as additional share dilution in the computation of
diluted earnings per share.
Deep Yellow Limited
Annual Report 2023
55
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(d)
(i)
Changes in Accounting Policies, Disclosures, Standards and Interpretations
Changes in Accounting Policies, New and Amended Standards and Interpretations
The Group applied for the first-time certain standards and amendments, which are effective for annual periods beginning on
or after 1 July 2022. The Group has not early adopted any other standard, interpretation or amendment that has been issued
but is not yet effective.
Application
Date of
Standard
Application
Date for
Group*
1 January 2022 1 July 2022
Reference
AASB 2020-3
Title and Summary
to Australian Accounting Standards – Annual
Amendments
Improvements 2018–2020 and Other Amendments
► Amendments to AASB 3, Reference to the Conceptual
Framework
► Amendment to AASB 9, Fees in the ‘10 per cent’ Test for
Derecognition of Financial Liabilities
► Amendments to AASB 116, Property, Plant and
Equipment:
Proceeds before Intended Use
► Amendments to AASB 137, Onerous Contracts –Cost of
Fulfilling a Contract
► Amendment to AASB 141, Taxation in Fair Value
Measurements
AASB 2021-7
Amendments to Australian Accounting Standards – Effective Date of
Amendments to AASB 10 and AASB 128 and Editorial Corrections
1 January 2022 1 July 2022
*
Designates the beginning of the applicable annual reporting period unless otherwise stated.
(d)
Changes in Accounting Policies, Disclosures, Standards and Interpretations
(ii)
Accounting Standards and Interpretations Issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective, up
to the date of issuance of the Group’s financial statements are disclosed below. Only those Standards and Interpretations
relevant to the Group have been included.
Reference
Title
AASB 2020-1 Amendments to Australian Accounting Standards – Classification of
Liabilities as Current or Non-current
AASB 2021-2 Amendments to Australian Accounting Standards – Disclosure of Accounting
Policies and Definition of Accounting Estimates Amendments to AASB 7,
AASB 101, AASB 108, AASB 134 and AASB Practice Statement 2
Application
Date of
Standard *
1 January 2023
Application
date for
Group *
1 July 2023
1 January 2023
1 July 2023
AASB 2021-5 Amendments to Australian Accounting Standards – Deferred Tax related to
1 January 2023
1 July 2023
Assets and Liabilities arising from a Single Transaction
AASB 2021-6 Amendments to Australian Accounting Standards - Disclosure of Accounting
Policies: Tier 2 and Other Australian Accounting Standards
AASB 2022-1 Amendments to AASs – Initial Application of AASB 17 and AASB 9 –
1 January 2023
1 July 2023
1 January 2023
I July 2023
Comparative Information
AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of
1 January 2022
1 July 2022
Assets between an Investor and its Associate or Joint Venture ***
AASB 2022-5 Amendments to Australian Accounting Standards – Lease Liability in a Sale
1 January 2024
I July 2024
and Leaseback
AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities
1 January 2023
I July 2023
AASB 2022-7
with Covenants
Editorial Corrections to Australian Accounting Standards and Repeal of
Superseded and Redundant Standards
1 January 2023
I July 2023
AASB 2023-1 Amendments to Australian Accounting Standards – Amendments to AASB
1 January 2024
I July 2024
107 and AASB 7 – Disclosures of Supplier Finance Arrangements
AASB 2023-2 Amendments to AASB 112 – International Tax Reform Pillar Two Model Rules
23 May 2023
1 July 2023
**
AASB 2023-3 Amendments to Australian Accounting Standards – Disclosure of Noncurrent
1 January 2024
I July 2024
Liabilities with Covenants: Tier 2
Deep Yellow Limited
Annual Report 2023
56
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
(d) Changes in Accounting Policies, Disclosures, Standards and Interpretations (continued)
(iii) Accounting Standards and Interpretations Issued but not yet Effective (continued)
*
**
***
Designates the beginning of the applicable annual reporting period unless otherwise stated.
The exception added to AASB 112 applies retrospectively and immediately. Disclosure requirements apply for annual
reporting periods beginning on or after 1 January 2023.
AASB 2021-7 Amendments to Australian Accounting Standards – Effective Date of Amendments to AASB 10 and
AASB 128 and Editorial Corrections deferred the effective date of AASB 2014-10 to annual reporting periods
beginning on or after 1 January 2025.
The Group has not yet determined the likely impact of each of the above amendments, if any, on the Group.
Note 3
Significant Accounting Judgements, Estimates and Assumptions
The preparation of the Group’s Consolidated Financial Statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying
disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in
outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The
Russia-Ukraine War has not impacted any of the Group’s key judgments or estimates.
Other disclosures relating to the Group’s exposure to risks and uncertainties includes:
•
•
•
Capital management
Financial risk management objectives and policies
Sensitivity analysis disclosures
Note 5
Note 21
Note 21
Deep Yellow Limited
Annual Report 2023
57
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 3
Significant Accounting Judgements, Estimates and Assumptions (continued)
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgments, which have the
most significant effect on the amount recognised in the Consolidated Financial Statements:
Determining the Lease Term of Contracts with Renewal and Termination Options – Group as Lessee
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an
option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the
lease, if it is reasonably certain not to be exercised.
The Group has property lease contracts that include an extension option. The Group applies judgement in evaluating whether
it is reasonably certain whether or not to exercise the option to renew the leases. That is, it considers all relevant factors
that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the
lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise
or not to exercise the option to renew. (e.g., operational requirements).
The Group included the renewal period of its most recent lease as part of the lease term of the property lease contract based
on its operational requirements, location of the lease property and recent leasehold improvements.
Lease – Estimating the Incremental Borrowing Rate
If the Group cannot readily determine the interest rate implicit in its leases, it uses its incremental borrowing rate (IBR) to
measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and
with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable
rates are available as the Group do not enter into financing transactions. The Group estimates the IBR using observable
inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.
Joint Arrangements
The Group must determine if the below key criteria are met for an arrangement to be classified as a joint arrangement:
•
•
the parties are bound by a contractual arrangement;
the contractual arrangement gives all the parties, or a group of the parties, control of the arrangement collectively;
and
decisions about the relevant activities that significantly affect the operations of the arrangement require unanimous
consent of all parties, or group of the parties, that collectively control the arrangement.
•
Upon consideration of the above criteria, the Group has determined that its Nova Energy JV arrangement is jointly controlled
therefore the arrangement is a joint arrangement.
For all joint arrangements structured in separate vehicles the Group must assess the substance of the joint arrangement in
determining whether it is classified as a joint venture or joint operation. This assessment requires the Group to consider
whether it has rights to the joint arrangement’s net assets (in which case it is classified as a joint venture), or rights to and
obligations for specific assets, liabilities, expenses, and revenues (in which case it is classified as a joint operation). Factors
the group must consider include:
•
•
•
•
structure;
legal form;
contractual agreement; and
other facts and circumstances
Upon consideration of these factors, the Group has determined that all of its joint arrangements structured through separate
vehicles give it rights to and obligations for specific assets, liabilities, expenses and revenues and are therefore classified as
joint operations.
Asset vs Business Acquisition
The Group must determine if a transaction or other event meets the definition of a business acquisition or the acquisition of
an asset or a group of assets that does not constitute a business. This is assessed in terms of AASB3, by applying the optional
concentration test, assessing that substantially all the fair value of the gross assets acquired is concentrated in a single
identifiable asset or group of similar identifiable assets.
•
•
a single identifiable asset must include any asset or group of assets that would be recognised and measured as a
single identifiable asset in a business combination; and
when assessing whether assets are similar, the Group considered the nature of each single identifiable asset and the
risk associated with managing and creating outputs from the assets, that is, the risk characteristics.
Deep Yellow Limited
Annual Report 2023
58
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 3
Significant Accounting Judgements, Estimates and Assumptions (continued)
On 4 August 2022, Deep Yellow Limited acquired Vimy Resources Ltd and its subsidiaries (collectively, the Vimy Group), with
the issue of shares as consideration. Directors’ judgment was required to be used in classifying this transaction as an asset
acquisition rather than a business combination. As the acquisition of the acquired asset is not deemed to be a business
combination, the transactions were accounted for as a share-based payment arrangement. Refer to Note 11 for further
details.
Estimates and Assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are described below. The Group based its assumptions and estimates on parameters available when the Consolidated
Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may
change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
Share-based Payments
The Group’s accounting policy is stated at Note 2(c)(xviii). The Group uses independent advisors to assist in valuing share-
based payments. Refer Note 22 for details of estimates and assumptions used.
Accounting for Capitalised Mineral Exploration and Evaluation Expenditure
The Group’s accounting policy is stated at Note 2(c)(xiv). A regular review is undertaken of each Project Area to determine
the reasonableness of the continuing carrying forward of costs in relation to that Project Area or reversal of previously
recognised impairment losses. Where there are impairment indicators or indicators of impairment reversal, the fair value of
the project is determined based on the mineral resource estimate multiplied by a resource multiple. Management makes
assumptions regarding the uranium resource multiple that should be used in calculating fair value of the expenditure to
determine if costs can continue to be carried forward.
Factors that could impact the uranium resource multiple and therefore the continuing carrying forward of costs include the
status of resources and exploration targets, changes in legal frameworks and sovereign risk in the countries where the Group
operates, changes to commodity prices and foreign exchange rates.
Rehabilitation Provision
Significant estimates and assumptions are made in determining the provision for rehabilitation of associated project areas
as there are numerous factors that will affect the ultimate liability payable.
These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes,
cost increases as compared to inflation rates, and changes in discount rates. These uncertainties may result in future actual
expenditure differing from the amounts currently provided.
Deep Yellow Limited
Annual Report 2023
59
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 4
Segment Information
An operating segment is a distinguishable component of an entity that engages in business activities from which it may earn
revenue and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker to
make decisions about how resources should be allocated to the segment and assess its performance and for which discrete
financial information is available.
Operating segments have been identified based on the information provided to the chief operating decision maker – being
the Group Managing Director and executive management team.
The Group has identified its operating segments based on internal reports that are used by the Group Managing Director and
executive management team in assessing performance and in determining the allocation of resources. The operating
segments are identified based on activities as this is the area that has the most effect on allocation of resources. The Group
conducts uranium exploration and pre-development activities in Namibia whilst Australia is responsible for capital raising
and corporate activities, including project evaluation and acquisition. Mauritius as country of operation has been aggregated
to form the reportable operating segment for Australia due to its corporate activities.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third
parties.
Year Ended 30 June 2023
Revenue and other income **
Unallocated
Interest income
Total revenue and other income
Expenses
Capitalised mineral exploration and evaluation
expenditure written off
Profit and Loss
Pre-tax segment loss
Unallocated
Interest income
Loss from continuing operations after income tax
Australia
$
Namibia
$
8,934
140,566
339,644
25,194
Total
$
149,500
1,781,421
1,930,921
364,838
(11,592,313)
(305,213)
(11,897,526)
1,781,421
(10,116,105)
Year Ended 30 June 2023
Segment Assets
Segment operating assets
Unallocated assets
Cash
Receivables
Total assets
292,117,262
55,101,028
347,218,290
40,770,146
3,680,058
391,668,494
Total additions to non-current assets*
16,638,016
11,652,303
28,290,319
Deep Yellow Limited
Annual Report 2023
60
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 4
Segment Information (continued)
Year Ended 30 June 2022
Revenue and other income **
Unallocated
Interest income
Total revenue and other income
Expenses
Capitalised mineral exploration and evaluation
expenditure written off
Profit and Loss
Pre-tax segment loss
Unallocated
Interest income
Loss from continuing operations after income tax
Australia
$
-
-
Namibia
$
161,799
42,953
Total
$
161,799
353,175
514,974
42,953
(6,812,001)
(366,484)
(7,178,485)
353,175
(6,825,310)
Year Ended 30 June 2022
Segment Assets
Segment operating assets
Unallocated assets
Cash
Receivables
Total assets
4,922,841
50,463,176
55,386,017
64,924,350
605,426
120,915,793
Total additions to non-current assets*
4,289,347
8,413,611
12,702,958
*Non-current assets for this purpose consist of right-of-use assets, property, plant and equipment and capitalised mineral
exploration and evaluation expenditure
**Includes revenue from the NJV of $38,459 (2022: $51,566) from services provided and Option Income of $101,800 (2021:
$109,905) in the Namibia segment.
Adjustments and Eliminations
The following items and associated assets and liabilities are not allocated to operating segments as the underlying
instruments are managed on a Group basis and are not considered as part of the core operations of both segments:
interest income; and
liabilities are not allocated to the segments as they are not monitored by the executive management team on a
segment-by-segment basis.
Note 5 Capital Management
The Group’s approach to capital management has not changed during the financial year. For the purpose of the Group’s
capital management, capital includes issued capital and all other equity reserves attributable to the equity holders of the
parent as disclosed in the Statement of Financial Position. The primary objective of the Group’s capital management is to
maximise the shareholder value.
The Board’s policy is to maintain an adequate capital base to maintain investor and creditor confidence, and to sustain future
development of the business. The Group does not actively issue dividends; repurchase its own shares or any other form of
capital return to shareholders at the current exploration stage of the Group’s activities. It does however from time to time
cancel ordinary shares issued under the Loan Share Plan where relevant vesting criteria are not met. The Group does not
monitor returns on capital or any other financial performance measure as the indicators of success are quantifiable by
physical results from operations. The Group manages its funding by way of issue of shares.
The Group does not have capital requirements imposed on it by any external party. It is, however, exposed to Namibian
Exchange Controls which has an influence on debt-to-equity ratios at the Namibian subsidiary level, which are monitored by
management and the treatment of investments or other advances for the funding of operations are executed within these
guidelines.
Deep Yellow Limited
Annual Report 2023
61
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 5 Capital Management (continued)
Unissued Shares Under Option
The outstanding balance of unissued ordinary shares under option at date of this report is 309,852 as follows:
•
•
•
•
•
92,593 zero exercise price options expiring at 1 July 2024;
83,926 zero exercise price options expiring at 1 July 2025;
44,444 zero exercise price options expiring at 1 July 2026;
44,444 zero exercise price options expiring at 1 July 2027; and
44,445 zero exercise price options expiring at 1 July 2028.
Each option entitles the holder to one fully paid ordinary share in the Company at any time up to expiry date.
Note 6
Information about Subsidiaries
The Consolidated Financial Statements of the Group include:
Name
Vimy Resources Ltd
Narnoo Mining Pty Ltd
Viva Resources Pty Ltd
Velo Resources Pty Ltd
Deep Yellow Namibia (Pty) Ltd
Superior Uranium Pty Ltd
Deep Yellow Custodian Pty Ltd
Reptile Mineral Resources and Exploration (Pty) Ltd
Reptile Uranium Namibia (Pty) Ltd
Omahola Uranium (Pty) Ltd
Shiyela Iron (Pty) Ltd
Sand and Sea Property Number Twenty Four (Pty) Ltd
Tarquin Investments (Pty) Ltd
QE Investments (Pty) Ltd
Yellow Dune Uranium (Pty) Ltd
Principal Activities
Uranium exploration
Uranium exploration
Uranium exploration
Uranium exploration
Investment
Uranium exploration
Trustee of Share Trust
Investment
Uranium exploration
Uranium exploration
Iron ore exploration
Property investment
Property investment
Property investment
Uranium exploration
Country of
incorporation
Australia
Australia
Australia
Australia
Mauritius
Australia
Australia
Namibia
Namibia
Namibia
Namibia
Namibia
Namibia
Namibia
Namibia
Equity interest %
2022
-
-
-
-
100
100
100
100
100
100
95
100
100
100
85
2023
100
100
100
100
100
100
100
100
100
100
95
100
100
100
85
Note 7 Revenue, Interest and Other Income
Interest and Other Operating Income
(a)
Interest received and receivable
Exclusivity agreement income
Other
Revenue from Contracts with Customers
(b)
Asset recharges and administration fee earned
Timing of revenue recognition
Services transferred over time *
Contract balances
Trade receivables
Consolidated
2023
$
1,781,421
101,800
9,241
1,892,462
38,459
2022
$
353,175
109,905
328
463,408
51,566
38,459
51,566
28,140
26,009
*Revenue relates to Namibia as a geographical market with services transferred over time
Key terms and conditions for revenue from contracts with customers are detailed in Note 2(c)(iii).
Deep Yellow Limited
Annual Report 2023
62
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 8
Expenses
Consolidated
Loss before income tax includes the following specific expenses:
Depreciation expense:
Buildings
Office equipment and fittings
Computers
Leasehold / Improvements
Motor vehicles
Site equipment
Right-of-use asset
Statement of Comprehensive Profit or Loss
Depreciation capitalised as Exploration and Evaluation Expenditure
Computers
Motor vehicles
Site equipment
Right-of-use asset
Total depreciation and amortisation expense reflected in Notes 13,17
Occupancy expenses
Variable expenses not capitalised under property lease
Other
Administrative expenses
Consultancy fees: Executive directors*
Technical and other consultants: Project evaluation
Professional fees
Insurance
IT expenses
Legal fees
Non-executive Directors’ fees
Corporate and listing costs
Other costs
included
in capitalised mineral exploration and
*Excludes costs
evaluation expenditure and project evaluation activities. Expenditure
relating to project evaluation activities forms part of Technical and other
consultants: Project evaluation.
Employee expenses
Wages, salaries and fees
Superannuation
Share-based payments
Finance costs:
Interest on lease liabilities
2023
$
26,849
70,540
68,502
123,083
37,147
42,624
449,388
818,133
4,902
2,334
88,881
75,284
171,401
989,534
192,507
126,564
319,071
575,672
323,569
625,632
303,606
372,311
234,262
414,284
797,445
933,434
4,580,215
2022
$
26,353
53,028
-
-
23,144
44,114
210,222
356,861
-
-
-
-
-
356,861
80,898
50,787
131,685
321,634
922,430
85,517
91,060
142,539
735,454
333,125
458,946
247,578
3,338,283
1,902,200
182,586
3,117,125
5,201,911
523,704
31,870
2,585,222
3,140,796
196,183
10,284
Deep Yellow Limited
Annual Report 2023
63
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 9
Income Tax
The major components of income tax expense for the years ended 30 June 2023 and 30 June 2022 are:
Income Tax Expense
(a)
Current income tax:
Current income tax charge/(benefit)
Adjustments in respect of current income tax of previous year
Deferred income tax:
Relating to origination and reversal of timing differences
Over provision in prior year
Carry forward tax losses not brought to account
Income tax expense reported in the Statement of Profit or Loss and Other
Comprehensive Income
Reconciliation of Income Tax Expense to Prima Facie Tax Payable
(b)
Loss before income tax expense
Tax at the Australian rate of 30% (2022: 30%)
Effect of tax rates in foreign jurisdictions*
Tax effect:
Non-deductible share-based payment
Other expenditure not deductible
Net deferred tax asset related to tax loss not recognised
Tax expense
Consolidated
2023
$
2022
$
-
-
-
-
-
-
-
-
-
-
-
-
(10,116,105)
(6,825,310)
(3,034,831)
(7,009)
(2,047,593)
(5,760)
923,476
254,508
1,863,856
-
776,186
39,907
1,237,260
-
*The Namibian subsidiaries operate in a jurisdiction with higher corporate tax rates.
Deferred Tax – Statement of Financial Position
(c)
Liabilities
Prepayments
Assets
Revenue losses available to offset against future taxable income
Accrued expenses
Deductible equity raising costs
Capitalised exploration and evaluation expenditure
Net deferred tax asset related to tax assets not recognised
Net deferred tax asset/(liability)
(d)
Deferred Tax – Statement of Profit or Loss and Other
Comprehensive Income
Liabilities
Prepayments
Assets
Increase in tax losses carried forward
Accruals
Deductible equity raising costs
Capitalised exploration expenses
Net deferred tax asset related to tax loss
Deferred tax expense/(benefit)
116,406
116,406
20,480,885
132,207
519,608
1,732,127
(22,748,421)
116,406
-
68,859
68,859
18,356,725
38,786
617,176
1,776,000
(20,719,828)
68,859
-
47,547
46,962
(2,124,160)
(93,421)
97,568
43,873
2,028,593
-
(495,306)
(5,501)
(240,778)
(56,689)
751,312
-
Deep Yellow Limited
Annual Report 2023
64
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 9
Income Tax (continued)
(e)
Unrecognised Temporary Differences
At 30 June 2023, there are temporary differences to the value of $1,732,127 in relation to capitalised exploration and
evaluation expenditure associated with subsidiaries. It represents a deferred tax asset which would be realised once the
subsidiary is in a tax paying position. (2022: $1,776,000).
Note 10 Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the net profit for the year attributable to ordinary equity holders of the
Company, excluding any costs of servicing equity other than dividends, by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity holders of the Company,
excluding any costs of servicing equity other than dividends, by the weighted average number of ordinary shares outstanding
during the financial year plus the weighted average number of ordinary shares that would be issued on conversion of all the
dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
(a)
Loss Attributable to Ordinary Equity Holders of the Company
•
Continuing operations
Consolidated
2023*
$
2022
$
(10,116,105)
(6,825,310)
(b) Weighted Average Number of Ordinary Shares for Basic EPS
710,990,970
370,069,286
Effects of dilution from:
Share Options
Performance Rights
Weighted average number of potentially dilutive shares not included as they
were anti-dilutive
*Diluted EPS is the same as basic EPS in 2023 as the Group was in a loss position.
459,915
670,533
584,230
591,295
1,130,448
1,175,525
Information Concerning the Classification of Securities
(c)
The weighted average number of ordinary shares includes 30,197,813 Loan Plan Shares that were issued under the Loan
Share Plan and are subject to short and long-term performance conditions.
Information Concerning Antidilutive Securities for the Periods
(d)
459,916 (2022: 459,916) Zero Exercise Price Options and 1,688,657 (2022:402,688) Performance Share Rights were anti-
dilutive in 2023 as the Group was in a loss position.
Note 11 Acquisition of Asset
On 4 August 2022, the Group completed the acquisition of 100% of the Vimy Group, for consideration of 344,343,348 shares
(valued at $258,257,511, based on the fair value of the shares at the date of purchase), together with capitalised transactions
costs of $13,494,706. The Vimy Group held several mining tenements and holds 100% in Narnoo Mining Pty Ltd (which holds
the Mulga Rock Project).
In line with relevant accounting standards, the Company has treated the acquisition of the Vimy Group as an asset acquisition
transaction through the payment of shares. Where an acquisition does not meet the definition of a business combination the
transaction is accounted for as an asset acquisition. The consideration transferred for the acquisition of an asset comprises
the fair values of the assets transferred, the liabilities incurred, and the equity interests issued by the Group. Acquisition
related costs with regards to the acquisition are capitalised. Identifiable assets acquired and liabilities assumed in the
acquisition are measured at their relative fair values at the acquisition date.
Deep Yellow Limited
Annual Report 2023
65
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 11 Acquisition of Subsidiary (continued)
Details of the purchase consideration and purchase price allocation to net identifiable assets and liabilities acquired are as
follows:
Exploration Assets
Cash & Cash Equivalents
Trade & Other Receivables
Prepayments
Fixed Assets
Security Deposits & Bonds
Trade & Other Payables
Right-of-use Asset Liability
Employee Liabilities
Provision for Rehabilitation
Consideration paid, inclusive of costs
Purchase consideration
Value of shares issued *
Add: Transaction costs
Total purchase consideration
4 August 2022
$
257,248,280
16,690,657
678,149
72,282
291,925
356,258
(722,281)
(15,367)
(380,109)
(2,467,577)
271,752,217
258,257,511
13,494,706
271,752,217
* As the acquisition of the acquired assets is not deemed a business combination, shares were issued for the value of the net
assets acquired, inclusive of transaction costs of the acquisition.
Note 12 Cash and Short-Term Deposits
Cash at bank and on hand
Short-term deposits
Consolidated
2023
$
7,747,693
33,022,453
40,770,146
2022
$
7,968,367
56,955,983
64,924,350
The carrying amounts of cash and cash equivalents represent fair value. See Note 21 for the Group’s fair value disclosures.
Cash at banks earns interest at floating rates based on daily bank notice deposit rates. Deposits are made for notice periods
of 30 and 90 days depending on the immediate cash requirements of the Group and earn interest at the respective deposit
rates. At 30 June 2023 the deposit rates on the 30-day and 90-day notice deposits were 4.35% and 4.85% respectively.
Cash flow reconciliation:
Loss after income tax
Depreciation and amortisation
(Profit)/Loss on sale of non-current assets
Capitalised mineral exploration and evaluation expenditure written off
Share-based payments' expense
Change in operating assets and liabilities:
Decrease/(Increase) in receivables
Increase in payables
Net cash flows used in operating activities
Consolidated
2023
$
(10,116,105)
818,133
(12,517)
364,839
3,117,125
297,913
300,792
(5,229,820)
2022
$
(6,825,310)
356,861
369
42,953
2,585,222
(5,398)
104,031
(3,741,272)
Non-cash Financing and Investing Activities
On 4 August 2022, Deep Yellow Limited acquired Vimy Resources Ltd and its subsidiaries with the issue of shares as
consideration. Refer to Note 11 for details.
Deep Yellow Limited
Annual Report 2023
66
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 13
Non-Current Assets – Property, Plant and Equipment
Office
Equipment
and
Fittings
$
Buildings
$
Motor
vehicles
$
Site
Equipment
$
Leasehold
Improvements
$
Construction
in progress
$
Total
$
520,403
14,589
-
(9,130)
387,417
56,947
-
(3,264)
198,409
43,674
-
(5,889)
518,458
35,558
(891)
(13,317)
-
-
-
-
-
408,570
-
-
1,624,687
559,338
(891)
(31,600)
525,862
128,016
441,100
425,071
236,194
92,459
539,808
617,037
-
1,064,320
408,570
2,151,534
83,211 2,410,114
-
-
-
62,866
(21,724)
(15,759)
4,801
(13,157)
-
224,258
(201,350)
-
-
-
424,329
-
-
(408,570)
291,925
(236,231)
-
(18,962)
(6,467)
(15,172)
(28,521)
(656)
-
(69,778)
Cost
At 1 July 2021
Additions
Disposals
Exchange
adjustment
At 30 June 2022
Additions
Vimy acquisition
(Note 11)
Disposals
Transfers
Exchange
adjustment
At 30 June 2023
634,916
885,087
305,125
1,151,232
1,487,993
83,211
4,547,564
Depreciation
At 1 July 2021
Depreciation
charge
Disposals
Exchange
adjustment
At 30 June 2022
Depreciation
charge
Disposals
Transfers
Exchange
adjustment
318,166
26,353
276,993
53,028
67,965
23,144
223,487
44,114
-
(277)
-
(311)
-
(241)
(525)
(460)
344,242
329,710
90,868
266,616
-
-
-
-
-
26,849
-
-
143,944
(21,656)
(6,044)
39,481
(5,676)
-
131,505
(11,820)
-
123,083
-
(6,044)
(162)
(192)
(224)
(247)
(8)
At 30 June 2023
370,929
445,762
124,449
386,054
129,119
Net book value
-
-
-
-
886,611
146,639
(525)
(1,289)
-
1,031,436
-
-
-
-
-
464,862
(39,152)
-
(833)
1,456,313
At 30 June 2022
181,620
111,390
145,326
273,192
-
408,570 1,120,098
At 30 June 2023
263,987
439,325
180,676
765,178
1,358,874
83,211
3,091,251
Construction in Progress
Included in property, plant and equipment at 30 June 2022 was an amount of $398,910 and $9,660 relating to expenditure
for an office fit-out and membrane testing unit in the course of construction. Both were completed during the financial year.
Included in property, plant and equipment at 30 June 2023 was an amount of $83,211 relating to expenditure for a backhoe
not yet in use.
Security
No items of property, plant and equipment have been pledged as security by the Group.
Deep Yellow Limited
Annual Report 2023
67
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 14 Current Assets – Receivables and Other Assets
Receivables
(a)
GST recoverable
Research and development incentive
Other receivables
Other Assets
(b)
Tenement and property bonds
Prepayments
Consolidated
2023
$
1,813,336
1,604,000
262,722
3,680,058
480,560
499,756
980,315
2022
$
366,329
-
239,097
605,426
438,149
296,248
734,397
GST recoverable relates to Australia and Namibia. Interest is not normally charged and collateral is not normally obtained.
Note 15 Non-Current Assets – Capitalised Mineral Exploration and Evaluation Expenditure
In the exploration and evaluation phase
Cost brought forward (net of accumulated impairment)
Acquisition of Vimy Resources Ltd (Note 11)
Exploration expenditure incurred during the year at cost
R&D tax incentive off-set against exploration expenditure
Payment of royalty deed termination
Exchange adjustment
Capitalised mineral exploration and evaluation expenditure written off
Cost carried forward (net of accumulated impairment)
Consolidated
2023
$
49,727,889
257,248,280
25,757,069
(1,604,000)
14,000,000
(5,171,479)
(364,839)
339,592,920
2022
$
43,420,220
-
8,291,137
-
-
(1,940,515)
(42,953)
49,727,889
The Group continues to hold tenure over all its mineral licences in Australia and Namibia.
Capitalised mineral exploration and evaluation expenditure written off relates to assets for which the expenditure is not
expected to be recouped through successful development and exploitation of the area of interest, or alternatively, by its sale.
The write-down relates to Namibia projects for which expenditure is not expected to be recouped and the Kingston project
in Australia in the process of being relinquished.
A summary of capitalised mineral exploration and evaluation expenditure by country of operation is as follows:
Australia
Namibia
Note 16 Current Liabilities - Trade and Other Payables
Trade payables
Accruals
Consolidated
2023
$
54,485,498
285,107,422
339,592,920
Consolidated
2023
$
2,543,261
7,611,508
10,154,769
2022
$
49,727,889
-
49,727,889
2022
$
1,481,197
216,330
1,697,527
Trade payables and other payables are non-interest bearing and normally settled on 30 day terms.
Accruals include an amount in relation to stamp duty and interest payable to WA Revenue of $6,944,332, settled during
August 2023. Other accruals are non-interest bearing and have an average term of one month.
There are no secured liabilities as at 30 June 2023.
Details of the Group’s exposure to interest rate risk and fair value in respect of its liabilities are set out in Note 21.
Deep Yellow Limited
Annual Report 2023
68
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 17 Leases
Group as a Lessee
The Group has a property lease contract and lease contracts for vehicles used in its operations. The office lease has a term
of 5 years with an option to renew for a further 5 years. The Group is restricted from subleasing the property without the
owner’s approval. The lease contains variable lease payments, which are further discussed below. The vehicles have lease
terms of three years. The Group’s obligations under its leases are secured by the lessor’s title to the leased assets.
The Group has leases of office equipment with low value. The Group applies the ‘lease of low-value assets’ recognition
exemptions for these leases. The expense recognised in profit or loss in relation to leases of low-value assets is $4,941.
Set out below are the carrying amounts of the right-of-use assets recognised and the movements during the period:
Right of Use Asset
At the beginning of the year
Derecognition – Lease period revised
Additions
Depreciation charge for the year (Note 8)
At the end of the year
2023
$
3,803,633
-
274,843
(524,672)
3,553,804
Set out below are the carrying amounts of lease liabilities and the movements during the period:
Lease liability
At the beginning of the year
Derecognition – Lease period revised
Additions
Accretion of interest
Payments
At the end of the year
Current
Non-current
2023
$
3,860,564
-
274,843
140,811
(442,390)
3,833,828
266,537
3,567,291
2022
$
503,105
(341,731)
3,852,482
(210,223)
3,803,633
2022
$
536,664
(341,731)
3,852,482
10,284
(197,135)
3,860,564
210,956
3,649,608
The maturity analysis of the lease liability are disclosed in Note 21.
The amount recognised in profit or loss in relation to variable lease payments not included in the measurement of the lease
liability is disclosed in Note 8.
The Group had total cash outflows for its leases of $634,897 in 2023 (2022: $278,033).
Deep Yellow Limited
Annual Report 2023
69
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 18
Issued Capital and Reserves
Share Capital
(a)
Issued and fully paid share capital
Share Movements During The Year
(b)
At the beginning of the year
Issued under acquisition of Vimy Resources
Ltd (Note 11)
Issued under payment of royalty deed
termination (Note 15)(iiI)
Issued on exercise of Performance Rights
Issued under Loan Share Plan (i)
Repayment of Loan under Loan Share Plan
Share buyback (ii)
Exercise of Options
Exercise of Zero price options
Issue
price
(cents)
0.50
Consolidated
Consolidated
2023
No.
2022
No.
2023
$
2022
$
758,206,208
387,374,725
594,396,624
321,796,741
387,374,725
331,746,708
321,796,741
296,373,482
344,343,348
-
258,257,511
-
19,444,444
520,515
6,694,009
-
(170,833)
-
-
-
583,819
6,259,529
-
(1,537,777)
50,088,456
233,990
14,000,000
325,386
-
16,986
-
-
-
-
267,245
-
11,323
-
25,044,228
100,463
At the end of the year
758,206,208
387,374,725
594,396,624
321,796,741
(i)
(ii)
(iii)
Shares issued under the Loan Share Plan to Managing Director, Executive Director, employees and contractors and
subject to performance conditions, continued employment and repayment of limited recourse loan made to the
participant to purchase the shares. The shares may not be traded until the shares have vested, any imposed dealing
restrictions have ended and the limited recourse loan in respect to those shares has been paid in full.
Ordinary shares previously issued under the Loan Share Plan were cancelled as relevant vesting criteria were not met.
19,444,444 consideration shares issued on 22 December 2022 at an agreed value of $0.72 for a total consideration of
$14,000,000 to terminate a royalty agreement with Resource Capital Fund VI LP (RCF) entered into by Narnoo Mining
Pty Ltd in 2015.
(c)
Ordinary Shares
The holding company, Deep Yellow Limited, is incorporated in Perth, Western Australia.
The holding company’s shares are limited and 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.
(d)
Other Reserves
2023
Balance at 1 July 2022
Loss for year
Transfer to issued capital in respect of Performance
Rights vested
Recognition of share-based payments
Movement for the year
Balance at 30 June 2023
Accumulated Losses
$
(204,906,849)
(10,116,105)
-
-
-
(215,022,954)
Consolidated
Employee Equity
Benefits’ Reserve
(i)
$
17,753,920
-
(325,386)
3,237,245
-
20,665,779
Foreign Currency
Translation Reserve
(ii)
$
(19,466,794)
-
-
-
(5,930,301)
(25,397,095)
Deep Yellow Limited
Annual Report 2023
70
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 18
Issued Capital and Reserves (continued)
2022
Balance at 1 July 2021
Loss for year
Transfer to issued capital in respect of Performance
Rights vested
Transfer to issued capital in respect of Zero price
options exercised
Recognition of share-based payments
Movement for the year
Balance at 30 June 2022
(i)
Employee Equity Benefits’ Reserve
Accumulated
Losses
$
(198,081,539)
(6,825,310)
-
-
-
-
(204,906,849)
Consolidated
Employee Equity
Benefits’ Reserve
(i)
$
15,444,255
-
(267,245)
(100,463)
2,677,373
-
17,753,920
Foreign Currency
Translation Reserve
(ii)
$
(17,440,454)
-
-
-
-
(2,026,340)
(19,466,794)
The previous Option Plan was replaced by an Awards Plan which allows the offer of either Options or Performance Rights.
Options over unissued shares are issued and Performance Rights are granted at the discretion of the Board. Information
relating to Options issued and Performance Rights granted are set out in Note 22.
The Group has a Loan Share Plan which allows the offer of Loan Plan Shares to qualifying directors, employees and/or
consultants. Loan Plan Shares are issued at the discretion of the Board. Information relating to Loan Plan Shares are set out
in Note 22.
(ii)
Foreign Currency Translation Reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries. The movement arises from the translation of foreign subsidiaries and opening balance of
equity.
Note 19
Provision for Rehabilitation
At the beginning of the year
Acquired through Vimy asset acquisition
Rehabilitation provided for during the year
At the end of the year
Consolidated
2023
$
-
2,467,577
-
2,467,577
2022
$
-
-
-
-
The Group has a provision for rehabilitation relating to the Mulga Rock and Alligator River Projects.
Note 20 Dividends
No dividends were paid or proposed during the financial year (2022: Nil).
The Company has no franking credits available at 30 June 2023 (2022: Nil).
Note 21 Financial Assets and Liabilities
Financial Assets
Financial assets at amortised cost
Cash and cash equivalents
Trade and other receivables (Note 14(a))
Total current
Consolidated
2023
$
40,770,146
3,680,058
44,450,204
2022
$
64,924,350
605,426
65,529,776
Deep Yellow Limited
Annual Report 2023
71
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 21 Financial Assets and Liabilities (continued)
Financial Liabilities: Lease Liabilities
Current liabilities
Lease liabilities
Lease liabilities
Lease liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Lease liabilities
Total non-current liabilities
Total liabilities
Other Financial Liabilities
Financial liabilities at amortised cost
Trade and other payables (Note 16)
Total current
Maturity Analysis of Financial Liabilities
As at 30 June 2023
Lease liabilities
Trade and other payables
As at 30 June 2022
Lease liabilities
Trade and other payables
Fair Values
Incremental
Borrowing
Rate
Maturity
2023
$
Consolidated
3.45%
4.00%
3.81%
2023
2022
2025
186,130
-
80,407
2022
$
163,734
47,222
-
266,537
210,956
3.45%
3.81%
2032
2025
3,474,727
92,564
3,649,608
-
3,567,291
3,649,608
3,833,828
3,860,564
Consolidated
2023
$
10,154,769
10,154,769
2022
$$
1,697,527
1,697,527
0-12 months
1-5 years
$
Total
$
266,537
10,154,769
3,567,291
-
3,833,828
10,154,769
210,956
1,697,527
3,649,608
-
3,860,564
1,697,527
Apart from lease liabilities, the fair value of financial assets and liabilities approximates their carrying amounts largely due
to the short-term maturities of these instruments.
Financial Instruments Risk Management Objectives and Policies
The Group’s financial liabilities comprise lease liabilities, and trade and other payables. The main purpose of these financial
liabilities is to finance the Group’s operations. The Group’s principal financial assets include trade and other receivables, and
cash and short-term deposits that derive directly from its operations.
The Group is exposed to market risk, credit risk and liquidity risk from its use of financial instruments which are summarised
below. This note presents information about the Group’s exposure to the specific risks, and the policies and processes for
measuring and managing those risks. The Board has the overall responsibility for the risk management framework while
senior management oversees the management of these risks.
Deep Yellow Limited
Annual Report 2023
72
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 21 Financial Assets and Liabilities (continued)
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity
price risk and commodity risk. The Group is only exposed to interest rate and currency risk.
The financial instrument affected by market risk is deposits. The sensitivity analyses in the following sections relate to the
position as at 30 June 2023 and 2022.
(a)
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group has cash assets which may be susceptible to fluctuations in changes in
interest rates. The Group requires the cash assets to be sufficiently liquid to cover any planned or unforeseen future
expenditure, which prevents the cash assets being committed to long term fixed interest arrangements. The Group
enters into notice deposit arrangements of between one and three months to obtain flexible liquidity whilst fixing
interest rate for a short period of time only. The Group does not employ interest rate swaps or enter into any other
hedging activity with regards to its interest-bearing investments.
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Cash at bank
Other short-term bank/notice deposits
Consolidated
2023
$
7,747,693
33,022,453
40,770,146
2022
$
7,968,367
56,955,983
64,924,350
Interest Rate Sensitivity
A change of 1% in interest rates at the reporting date as per management’s best estimate would have
increased/(decreased) other comprehensive income and profit and loss by the amounts shown below. This analysis
assumes all other variables remain constant. The same sensitivity analysis has been performed for the comparative
reporting date.
30 June 2023
Cash and cash equivalents
30 June 2022
Cash and cash equivalents
(b)
Currency Risk
Profit and Loss
Other Comprehensive Income
1%
Increase
1%
Decrease
1%
increase
1%
Decrease
406,601
(406,601)
649,243
(649,243)
-
-
-
-
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in foreign exchange rates. Financial assets in overseas Group companies are not generally material in the
context of financial instruments entered into by the Group as a whole, as they generally relate to funds advanced to
fund short term exploration and administration activities of the overseas operations. Once the funds are expended,
they are no longer classified as financial assets. Advancing of funds to overseas operations on a needs basis, is an
effective method for the management of currency risk. The Group’s investments in overseas subsidiary companies
are not hedged as they are considered to be long term in nature.
As a result of significant investment in Namibia, the Group’s Statement of Financial Position can be affected by
movements in the Namibian dollar/Australian dollar/US dollar exchange rates. The Group does not consider there to
be a significant exposure to the Namibian dollar or US dollar as they represent the functional currencies of controlled
entities.
Foreign Currency Sensitivity
The Group has no exposure to foreign currency changes as the Company and none of its subsidiaries carry financial
assets and/or liabilities in another currency other than their functional currency. The exposure on translating the
foreign subsidiaries’ financial statements into the presentation currency is not analysed for sensitivity.
Deep Yellow Limited
Annual Report 2023
73
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 21 Financial Assets and Liabilities (continued)
Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from transactions with customers. The Group is exposed to credit
risk from its operating activities and from its financing activities, including deposits with banks and foreign exchange
transactions.
•
•
Trade and Other Receivables
The majority of the receivables that materialise through the Group’s normal course of business is in relation to
the NJV, for which Reptile Mineral Resources and Exploration (Pty) Ltd, a controlled entity, is the appointed
Manager and has during the term of the Joint Venture always received funds timeously from the major funding
partner, JOGMEC. The risk of non-recovery of receivables is therefore considered to be negligible. The Board
does not consider there to be a significant exposure to credit risk in relation to trade and other receivables.
Cash at Bank
Credit risk from balances with banks and financial institutions is managed by the Group Financial Controller
and reviewed by the Board. Investments of surplus funds are made only with approved counterparties. The
Group’s bankers are Westpac Banking Corporation Limited (Westpac) and National Australia Bank (NAB). The
Board considers these financial institutions, which both have short-term credit ratings of A-1+ and long-term
ratings of AA- from Standard & Poor’s, to be appropriate for the management of credit risk. At reporting date
all current accounts are with these banks, other than funds transferred to Namibia to meet the working capital
needs of the controlled entity, Reptile Mineral Resources and Exploration (Pty) Ltd. The cash needs of the
controlled entity’s operations are monitored by the parent company and funds are advanced to the Namibian
operations as required.
The Directors believe this is the most efficient method of combining the monitoring and mitigation of potential
credit risks arising out of holding cash assets in overseas jurisdictions, and the funding mechanisms required
by the Group.
•
Deposits at Call
In addition, the Group has cash assets on notice (30 and 90-day) deposit with Westpac.
Except for the matters above, the Group currently has no significant concentrations of credit risk.
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Cash and cash equivalents
Other short-term bank/notice deposits
Other receivables
Consolidated
2023
$
7,637,693
33,022,453
1,866,722
42,526,868
2022
$
7,968,367
56,955,983
239,097
65,163,477
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s only
liabilities are short term trade and other payables and lease liabilities.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Management manages its liquidity risk by monitoring its cash reserves and forecast spending and is cognisant of the future
demands for liquid financial resources to finance the Group’s current and future operations, and consideration is given to the
liquid assets available to the Group before commitment is made to future expenditure or investment.
The Group’s expenditure commitments are taken into account before entering into notice deposit investments and short- and
medium-term exploration programs are tailored within current cash resources.
The Group’s trade and other payables of $10,154,769 (2022: $1,697,527) are settled on 30-day trading terms.
Deep Yellow Limited
Annual Report 2023
74
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 22 Share-based Payment Plans
(a)
Types of Share-Based Payments
Performance Rights
Under the Awards Plan, Performance Rights can be granted to qualifying personnel in order to align remuneration with
shareholder wealth over the long-term and assist in attracting and retaining talented employees. These are granted with a
nil exercise price and each right upon vesting entitles the holder to one fully paid ordinary share in the capital of the Company
if certain time and market price measures are met in the measurement period.
During the 2023 financial year, the Group continued to issue Performance Rights to some qualifying personnel which were
subject to the holder of the awards remaining employed with the Company during the measurement period with some
including market price vesting conditions which measures the increase in share price of the Company. Unvested Performance
Rights subject to the Market Price Condition will vest if, at the end of the measurement period, the share price of the Company
has reached a pre-determined market price.
If at any time prior to the Vesting Date an employee voluntarily resigns from employment with the Group or is terminated,
the Performance Rights automatically lapse and are forfeited, subject to the discretion of the Board. The Board can at any
time make a determination, including amended vesting conditions, that Performance Rights for which performance hurdles
have not been met, continue as Unvested Performance Rights. They will lapse, if they have not already lapsed or vested for
any other reason up to 4.5 years after the date of grant.
Loan Plan Shares
During the 2023 financial year shares were granted to qualifying under the Deep Yellow Limited Loan Share Plan (Loan Share
Plan). The Loan Share Plan rewards and incentivises personnel (Participant), where shareholder approval has been granted
(if required), through an arrangement where Participants are offered shares subject to long term performance conditions.
The shares are offered at market value such that the incentive is linked to the increase in value over and above the purchase
price and so aligns the Participants to the risks and rewards of a shareholder. The purchase price payable by the Participant
for the ordinary shares is lent to the Participant under an interest free limited recourse loan, with the loan secured against
the shares. A Participant may not trade shares acquired under the Loan Share Plan until the shares have vested, any imposed
dealing restrictions have ended and the limited recourse loan in respect to those shares has been paid in full. For so long as
there is an outstanding loan balance, the Participant irrevocably and unconditionally directs the Company to withhold all
after-tax dividends in respect of the Participant’s Loan Plans Shares and apply all amounts so withheld in repayment of the
outstanding loan balance. The loan can be repaid at any time, however, to avoid compulsory divestment of Loan Plan Shares,
the loan must be repaid on the earlier of periods ranging between 5-10 years (determined with each issue) after the issuance
of the shares and the occurrence of:
(a)
(b)
in the case of vested shares, the date being 12 months after cessation of employment or service contract for any
reason; or
pre-determined occurrences as per the Loan Share Plan including but not limited to a Control Event or material breach
by the Participant.
The shares vest if certain Company share price targets and clearly defined business goals (where applicable) covering non-
financial performance measures are met and the holder of the awards remains employed with the Company during the
measurement period. If these conditions are not met the shares are forfeited and the forfeited shares are treated as full
consideration for the repayment of the loan. The fair value at grant date is estimated using a Black Scholes option pricing
model for shares with non-market based vesting conditions and a Monte-Carlo model for those with market based vesting
conditions.
(b)
Summaries of Performance Rights and Loan Plan Shares Granted
The table below illustrates the number (No.) and weighted average exercise price (WAEP) of, and movements in, Loan Plan
Shares during the year:
Outstanding at the start of the year
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding at the end of the year
2023
2022
No.
35,197,813
6,694,009
(170,833)
(47,847)
41,673,142
WAEP (cents)
76.3
71.6
-
-
48.0
No.
30,441,807
6,331,705
(1,537,777)
(37,922)
35,197,813
WAEP (cents)
33.3
91.1
-
-
76.3
Deep Yellow Limited
Annual Report 2023
75
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 22 Share-based Payment Plans (continued)
The table below illustrates the number (No.) and weighted average share price (WASP) at vesting date, and movements in,
Performance Rights during the year:
Outstanding at the start of the year
Granted during the year
Expired during the year
Exercised during the year
Outstanding at the end of the year
2023
2022
No.
402,688
2,019,176
(21,834)
(520,515)
1,879,515
WASP (cents)
-
-
-
60.7
No.
775,809
210,698
(583,819)
402,688
WASP (cents)
-
-
-
85.2
(c)
Summaries of Loan Plan Shares Exercised During the Year
47,847 (2022: 37,992) Loan Plan Shares were exercised during the year. 6,694,009 (2022: 6,331,705) Loan Plan Shares were
granted and 7,467,150 (2022: 7,084,229) vested during the year. 21,882,305 (2022: 14,463,000) of the outstanding Loan Plan
Shares were exercisable at year end.
(d) Weighted Average Remaining Contractual Life
The Loan Plan Shares outstanding at the end of the year have exercise prices between 22.0 and 92.8 cents. The weighted
average remaining contractual life for the limited recourse loans outstanding in relation to Loan Plan Shares at 30 June 2023
is 3.9 years (2022: 4.37 years)
(e)
Recognised Share-based Payment Expenses
The weighted average remaining contractual life for the Performance Rights outstanding as at 30 June 2023 is 20.73 months
(2022: 9.78 months).
The expense recognised for employee services during the year, arising from equity-settled share-based payment transactions
in the form of Performance Rights and Loan Plan Shares is shown in the table below:
Amount recognised as employee expenses in the Consolidated Statement of
Profit or Loss and Other Comprehensive Income
Amount recognised as capitalised mineral exploration and evaluation
expenditure
Consolidated
2023
$
3,117,125
2022
$
2,585,222
120,120
92,150
3,237,245
2,677,372
There have been no modifications to share-based payment arrangements during the 2023 financial year.
Deep Yellow Limited
Annual Report 2023
76
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 22 Share-based Payment Plans (continued)
(f)
Performance Rights and Loan Plan Shares Pricing Models
The fair value of the Performance Rights and Loan Plan Shares granted under their respective plans are estimated as at the
grant date.
The following tables list the inputs to the models used for the years ended 30 June 2023 and 30 June 2022.
Pricing model
10-May-23
Monte-Carlo
simulation
using hybrid
pricing model
(ii)
Performance Rights
Grants
2023
16-Feb-23
N/A (i)
31-Jan-23
N/A (i)
21-Dec-22
N/A (i)
2022
11-Nov-21
N/A (i)
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected life of rights (years)
Closing share price at grant date (cents)
Fair value per right at grant date (cents)
Time-based vesting conditions
Time and market based vesting conditions
Zero
-
-
4.6
63.0
63.0
40.3
Zero
-
N/A
2.04
72.0
72.0
N/A
Zero
-
N/A
3.8
80.0
80.0
N/A
Zero
-
N/A
5
69.0
69.0
N/A
Zero
-
N/A
15
104.0
104.0
N/A
(i)
(ii)
Share-based payments subject to non-market based vesting conditions – Fair value equates to closing share price at
grant date; and
Share-based payments subject to market-based vesting conditions
Deep Yellow Limited
Annual Report 2023
77
Notes to the Consolidated Financial Statements for the Financial Year Ended 30 June 2023
Note 22 Share-based Payment Plans (continued)
Loan Plan Shares
Grants
2023
2022
10-May-23
15-Feb-23
19-Jan-23
25-Nov-22
25-Nov-22
25-Nov-22
16-Aug-21
6-Sep-21
6-Dec-21
6-Dec-21
Black Scholes
(i)
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
Black Scholes
(i)
Monte-Carlo
simulation
using hybrid
pricing model
(ii)
Nil
80
3.17
7.08
63.0
Nil
80
3.53
7.02
75.5
(ii)
Nil
80
3.04
7.1
76.0
(ii)
Nil
85
3.37
7.08
67.5
(ii)
(ii)
(ii)
(ii)
(ii)
(ii)
Nil
85
3.57
10.08
67.5
Nil
85
0.57
5
66.0
Nil
85
0.57
5
88.2
Nil
85
1.35
7
91.0
Nil
85
1.35
7
94.5
Nil
85
1.74
10
94.5
Pricing model
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
Expected repayment term of limited
recourse loan in relation to Loan Plan
Shares (years)
Closing share price at grant date
(cents)
Fair value per Loan Plan Share at grant
date (cents)
- Time-based vesting conditions
46.0
56.7
56.9
51.5
-
- Time and non-market based
vesting conditions
- Time and market based vesting
conditions
-
34.0
-
-
-
47.1
-
-
57.2
56.1
(i)
(ii)
Share-based payments subject to non-market based vesting conditions; and
Share-based payments subject to market-based vesting conditions.
Year 1: 46.2
Year 2: 48.7
Year 3: 51.2
Year 1: 64.4
Year 2: 67.7
Year 3: 71.0
-
39.9
-
55.9
68.2
71.3
79.2
-
56.5
-
-
79.2
63.0
The expected life of the limited recourse loan in relation to Loan Plan Shares is based on current expectations and is not necessarily indicative of repayment patterns that may occur. The expected
volatility reflects the assumption that the historical volatility over a period similar to the life of the Loan Plan Shares and repayment term of the limited recourse loan in relation to the Loan Plan
Shares is indicative of future trends, which may not necessarily be the actual outcome.
Deep Yellow Limited
Annual Report 2023
78
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 23 Commitments and Contingencies
(a)
Exploration
The Group has certain obligations to perform minimum exploration work on mineral leases held. These obligations may vary
over time, depending on the Group’s exploration programmes and priorities and may be reduced by the surrendering of
tenements. As at balance date, total exploration expenditure commitments on tenements held by the Group have not been
provided for in the financial statements The future commitments for exploration expenditure are $1,325,241 within one year
and $6,000,516 within two to five years (2022: Nil). These obligations are also subject to variations by farm-out arrangements
or sale of the relevant tenements.
(b)
Contractual Commitments
There are no contracted commitments other than those disclosed above.
(c)
Contingent Assets And Liabilities
There were no material contingent assets or liabilities as at 30 June 2023
Note 24 Related Party Disclosures
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Termination benefits
Share-based payment
Total compensation paid to Key Management Personnel
Consolidated
2023
$
1,601,487
52,539
210,000
1,665,800
3,529,826
2022
$
1,186,465
16,902
-
1,295,918
2,499,285
The amounts disclosed in the table are the amounts recognised as a cost during the reporting period related to Key
Management Personnel.
Other Transactions with Key Management Personnel
Scomac Management Services Pty Ltd as trustee for the Scomac Unit Trust (Scomac or Consultant) has been appointed on a
non-exclusive basis to provide the Group with management, strategic, technical and geological expertise and services
through the Consultant personnel they employ or have access to (Scomac agreement).
Consultant personnel who Scomac employ or have access to include Mr John Borshoff, who has offered himself as managing
director and/or chief executive officer of the Group. Where any of the Scomac personnel acts as an officer of the Group,
neither Scomac or the personnel receive any additional payment or increase in fee for discharging the duties and
responsibilities as an officer of the Group.
Mr Borshoff has a financial interest in Scomac. During the year ended 30 June 2023 Scomac billed the Company $1,563,021,
inclusive of GST and on-costs (2022: $1,411,868), for technical and geological services (excluding Mr Borshoff) on normal
commercial terms and conditions. These amounts are not included in the remuneration tables above. Fees paid to Scomac
in relation to services provided by Mr Borshoff as Managing Director are detailed in the Remuneration Report. An amount of
$126,777 was outstanding at 30 June 2023 (2022: $120,049). The amount for other services was recognised as non-current
asset: capitalised mineral exploration and evaluation expenditure.
There were no other related party transactions during the year other than those disclosed above in relation to Key
Management Personnel.
Note 25 Events Occurring After Balance Date
There have been no events or circumstances which materially affect the Annual Financial Statements of the Group between
30 June 2023 and the date of this report.
Deep Yellow Limited
Annual Report 2023
79
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 26 Remuneration of Auditors
The auditor of the Deep Yellow Limited Group is Ernst & Young
Fees to Ernst & Young (Australia)
Fees for auditing the statutory financial report of the parent covering the
group and auditing the statutory financial reports of any controlled entities
Fees required by legislation to be provided – ASIC audit levy
Fees for other services – Assurance and tax related
Total fees to Ernst & Young (Australia)
Consolidated
2023
$
2022
$
124,360
57,955
596
-
124,956
586
16,420
74,961
Fees to other overseas member firms of Ernst & Young (Australia)
Fees for auditing the financial report of any controlled entities
50,211
44,557
Fees for assurance services that are required by legislation to be provided
Fees for other services
Total fees to other overseas member firms of Ernst & Young (Australia)
Total auditor’s remuneration
Note 27 Parent Entity Information
Information relating to Deep Yellow Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Equity compensation reserve
Total shareholders’ equity
Loss of the parent entity
Total comprehensive loss of the parent entity
-
-
50,211
175,167
-
3,380
47,937
122,898
2023
$
39,325,575
394,806,344
(9,323,441)
(12,798,168)
594,396,624
(244,373,327)
20,665,779
368,008,176
(22,855,531)
(22,855,531)
2022
$
62,045,888
118,859,931
(1,862,237)
(5,511,845)
321,796,741
(223,521,676)
17,753,920
113,348,086
(6,269,611)
(6,269,611)
Contingent Liabilities of the Parent Entity
Deep Yellow Limited has entered into a Subordination Agreement on 31 March 2017. The agreement has subsequently been
updated with the last update on 8 August 2022. The effect of the agreement is that Deep Yellow Limited has agreed to assist
Reptile Uranium Namibia (Pty) Ltd, a Namibian subsidiary, by subordinating subject to certain terms and conditions, its non-
current claims against Reptile Uranium Namibia (Pty) Ltd and in favour and for the benefit of other creditors of Reptile
Uranium Namibia (Pty) Ltd. No liability is expected to arise.
Deep Yellow Limited
Annual Report 2023
80
Notes to the Consolidated Financial Statements for the
Financial Year Ended 30 June 2023
Note 28
Interests in Joint Operations
During FY21 and as part of Japan Oil, Gas and Metals National Corporation (JOGMEC) completing its farm-in and earning the
right to acquire a 39.5% interest in Nova Energy Namibia (Pty) Ltd (Nova Energy) the Group no longer controlled Nova Energy
and instead under the contractual arrangements jointly controls Nova Energy. The Group accounts for its retained interest in
Nova Energy as a Joint Operation as the Group has both rights to the assets and obligations for the liabilities of the joint
arrangement.
No gain or loss was recognised upon loss of control of Nova Energy as the Group has made an accounting policy choice to
measure retained interest in the joint operation at its carrying amount.
Reptile Mineral Resources and Exploration (Pty) Ltd is the manager of the Nova joint arrangement, incurs expenditure on
behalf of the joint arrangement and cash calls each participant of the joint operation for their share of the expenditure.
As at 30 June 2023, the Group’s interest in joint operations is as follows:
Principal Place
of Business
Ownership
Voting rights
2023
$
2022
$
Total Assets
Nova Energy Exploration Project
Namibia
39.5%
39.5%
1,532,881
1,241,951
Deep Yellow Limited
Annual Report 2023
81
Directors’ Declaration
In accordance with a resolution of the Directors of Deep Yellow Limited (the Company), I state that:
1.
In the opinion of the Directors:
(a)
the financial statements and notes of the consolidated entity for the financial year ended 30 June 2023
are in accordance with the Corporations Act 2001, including:
(i)
(ii)
complying with Australian Accounting Standards
Interpretations) and the Corporations Regulations 2001; and
(including
the Australian Accounting
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2023 and of
its performance for the year ended on that date;
(b)
(c)
2.
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 2; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
This declaration has been made after receiving the declarations to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2023.
On behalf of the Board
JOHN BORSHOFF
Managing Director/CEO
Dated this day 27 September 2023
Deep Yellow Limited
Annual Report 2023
82
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Deep Yellow Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Deep Yellow Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30
June 2023, the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of changes in equity and consolidated cash flow statement for the year then
ended, notes to the financial statements, including a summary of significant accounting policies, and
the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2023
and of its consolidated financial performance for the year ended on that date; and
b. Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
83
1. Carrying value of capitalised exploration and evaluation assets
Why significant
How our audit addressed the key audit matter
As disclosed in Note 15 to the financial
statements, at 30 June 2023, the Group held
capitalised exploration and evaluation assets of
$339.6 million.
The carrying value of exploration and evaluation
assets are assessed for impairment by the Group
when facts and circumstances indicate that the
carrying value may exceed their recoverable
amount. Previously recognised impairment
write-downs on capitalised exploration and
evaluation assets are also required to be
assessed for reversals of impairment.
During the year the Group determined there had
been no indicators of impairment or the reversal
of any previous impairment, on its capitalised
exploration and evaluation assets.
The determination as to whether there are any
indicators to require an exploration and
evaluation asset to be assessed for impairment
or for reversals of impairment, involves a
number of judgments including whether the
Group has tenure, will be able to perform
ongoing expenditure and whether there is
market evidence to indicate that the fair value of
the exploration and evaluation asset has
changed substantially from when previous
impairment write-downs were recognised.
Given the size of the balance relative to the
Group’s total assets and the judgmental nature
of identifying indicators of impairment or
reversals of impairment associated with
exploration and evaluation assets, we
considered this a key audit matter.
We evaluated the Group’s assessment as to
whether there were any indicators of
impairment or impairment reversal to require
the carrying value of exploration and evaluation
assets to be tested for impairment or, where
applicable, the reversal of any previous
impairment.
Our audit procedures included the following:
➢ Considered the Group’s right to explore
in the relevant exploration area which
included obtaining and assessing
supporting documentation such as
license agreements and correspondence
with relevant government agencies.
➢ Considered the Group’s intention to
carry out significant exploration and
evaluation activities in the relevant
exploration area which included
assessing whether the Group’s cash-flow
forecasts provided for expenditure for
planned exploration and evaluation
activities, and enquiring with senior
management and Directors as to the
intentions and strategy of the Group.
➢ Assessed whether exploration and
evaluation data existed to indicate that
the carrying amount of capitalised
exploration and evaluation is unlikely to
be recovered through development or
sale.
➢ Considered the Group’s assessment of
internal and external evidence
underpinning its assessment of whether
any triggers were present to suggest
previous impairment of certain
exploration and evaluation assets may
have reversed.
➢ Assessed the adequacy of the disclosure
contained in Note 15 of the financial
report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
84
2. Acquisition of Vimy Resources Limited
Why significant
On 4 August 2022, the Group completed the
acquisition of Vimy Resources Limited (“Vimy”)
through a Scheme of Arrangement.
The Group determined the transaction was an
asset acquisition under Australian Accounting
Standards, as the transaction did not meet the
definition of a business under AASB 3 Business
Combinations.
The details of the Asset Acquisition accounting
are disclosed in Note 11 of the financial report.
In undertaking the acquisition accounting for the
Vimy assets, the Group is required to measure
the identifiable assets and liabilities acquired
based on recognition criteria in the relevant
Accounting Standards for that asset or liability,
and then allocate any residual transaction price
to the remaining identifiable assets and liabilities
based on their relative fair values at the date of
acquisition.
The consideration paid for the Vimy acquisition
is significant for the Group and judgement and
estimation is required by the Group to identify
and measure the relative fair values of the
assets acquired and liabilities assumed.
As a result, we considered the Group’s asset
acquisition accounting and the related
disclosures in the financial statements to be a
key audit matter.
How our audit addressed the key audit matter
Our audit procedures included the following:
➢ Assessed the Group’s determination of
the acquisition date.
➢ Considered the appropriateness of the
Group’s accounting for the acquisition
including:
➢ Evaluated the Group’s
determination of the purchase
consideration with reference to
the Australian Accounting
Standards
➢ Assessed the Group’s conclusion
that Vimy did not constitute a
business
➢ Evaluated the qualifications,
competence and objectivity of external
experts used by the Group to determine
the relative fair value of the exploration
assets acquired and tested the allocation
of the purchase price across these
assets.
➢ Tested the working capital balances
acquired, including cash, trade and
other receivables and payables at the
acquisition date.
➢ Assessed the adequacy of the financial
report disclosure contained in Note 11
of the financial report.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2023 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
85
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
► Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
86
► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
► Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2023.
In our opinion, the Remuneration Report of Deep Yellow Limited for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
87
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Gavin Buckingham
Partner
Perth
27 September 2023
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
88
ASX Additional Information
Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as
follows. The information is current as at 20 September 2023.
(a)
Distribution of Equity Securities
Ordinary Share Capital
758,387,933 fully paid ordinary shares are held by 15,059 individual shareholders.
In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands whereby
each member present in person or by proxy shall have one vote and upon a poll, each share will have one vote. All issued
ordinary shares carry the rights to dividends.
The number of shareholders, by size of holding, are:
Distribution
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001- 100,000
More than 100,000
Totals
Holding less than a marketable parcel
(b)
Substantial Shareholders
Fully Paid Ordinary Shares
4,210
5,021
2,036
3,314
478
15,059
1,959
Shareholder Name
PARADICE INVESTMENT MANAGEMENT PTY LTD
Fully paid ordinary shares
Number
61,005,183
Percentage
8.07
The above shareholdings are disclosed pursuant to section 671B (3) of the Corporations Act 2001 but the relevant interests
shown do not necessarily represent the beneficial interest in the share capital of the Company for the parties concerned.
The information above is in accordance with the Form 604 as lodged by the shareholder.
(c)
Twenty Largest Shareholders
The names of the twenty largest holders of ordinary shares are listed below:
Shareholder Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
Continue reading text version or see original annual report in PDF format above