Europa Metals Ltd
A.C.N. 097 532 137
Annual Report
For the year ended
30 June 2019
Europa Metals Ltd
A.C.N. 097 532 137
Contents
Chairman’s Letter
Corporate information
Directors’ report
Corporate governance statement
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
Auditor’s independence declaration
Additional JSE information
Page No.
3
4
6
26
34
35
36
37
38
58
59
62
63
2 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Chairman's Letter
Dear Shareholders,
The first half of 2019 saw Europa Metals adapt to challenging equity market conditions and lay the foundations
for what has been a successful exploration programme, and at the time of writing the Company has recently
completed, and announced assay results in respect of its latest drill campaign into the high-grade area of its
Toral lead, zinc and silver project located in the province of Castilla y León, north west Spain (the “Toral
Project” or “Toral”). The Company is targeting its first independent Indicated JORC (2012) resource estimate
and awaiting metallurgical testwork results in order to make an initial determination of potential future
concentrate products to enable preliminary marketing discussions to occur with third party concentrate buyers
such as smelters and trading houses.
At the start of 2019, the Board took the decision to delist the Company from the ASX and move to AltX from
the Main Board of the Johannesburg Stock Exchange (“JSE”), a process that was concluded in March 2019,
with Europa Metals’ primary listing now being on AIM, with a secondary listing on the junior, AltX, exchange in
South Africa. While Europa Metals remains an Australian incorporated and registered company, the vast
majority of its shareholders were, and still are, registered in the UK with approximately 83 per cent. of its listed
securities being traded on AIM at the time of the delisting process, which along with the Company’s focus on
European project opportunities and limited operations and institutional or retail investor interest in Australia, led
to the decision to remove unnecessary administrative costs and regulatory processes for a junior resources
company.
Subsequently, the Company announced the full economics from its independent scoping study for Toral
showing an economically robust project with deliverable capex focused on a high grade zone within a 400-
1,000 metre horizon below surface. As an experienced mining engineer, I look forward to progressing our
team’s understanding of Toral as I believe there are a number of areas where efficiencies and cost savings
can be identified, thereby improving the overall project economics.
As noted above, the initial part of the year was not without its challenges, with some of the worst equity market
conditions for mining companies that I have encountered in my career, reflecting a combination of factors
including uncertainty within the UK investor community over the domestic political situation and wider, industry
issues, such as the US-China trade discussions continuing to drag on without resolution. This regrettably
culminated in Europa Metals raising funds at a sizeable discount to the prevailing market share price towards
the end of March 2019, albeit introducing a new strategic investor into the Company.
The additional funds raised enabled the Company to, inter alia, prosecute a highly efficient diamond drilling
campaign into the centre of the Toral Project. Whilst the first drill hole deviated significantly, subsequent drilling
has returned a pattern of promising assay results which we believe should deliver the project’s first Indicated
resource in early Q4 2019, thereby increasing confidence in the initial scoping study economics. More
importantly, a 58kg core sample was retrieved for metallurgical testwork, as per our stated campaign
objectives, which is currently being undertaken by Wardell Armstrong LLP in the UK.
Why are such impending project milestones important though? In essence, there is no point in drilling for the
sake of it and each hole we complete in Toral is carefully considered. Generating what will hopefully be a good
initial Indicated resource serves to demonstrate to stakeholders that the project’s resource and grade stacks
up, particularly for potential funders, as we look to progress Toral towards a development decision, and we
firmly believe that Toral looks like a project that can potentially be developed in a comparatively short time
frame and on a manageable amount of capital expenditure. The forthcoming metallurgical results will provide
us with: (i) a better defined production flow sheet, and assist the team in optimisation work and the
identification of efficiencies versus the initial scoping study findings; and (ii) an initial indication of the kind of
future saleable products that can be produced. In all likelihood, potential future products will comprise a zinc
concentrate and a lead-silver concentrate, and by determining the separation characteristics and make-up of
the products available from Toral the Company can assess the most likely sales channels in a market that is
currently seeing strong performances in zinc, lead and silver pricing.
Over a longer time horizon, I am also interested to see copper again being identified from drilling activity, but
this time at depth. With a resource open at around 1,000-1,200 metres depth, future exploration outside of the
existing resource area would potentially seek to understand if thickening of mineralisation occurs and whether
there is a significant copper presence in the deposit from a separate thermal event.
3 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Chairman's Letter
The period under review also saw beneficial changes to the local mining law dividing the development
permisions for projects into two groups; energy related (coal and uranium) and all other mining activity (which
covers lead, zinc and silver, being Toral’s focus). Our expectation is that mining activities involving well known
lead, zinc and silver commodities will have fewer legislative issues surrounding them than project’s within the
energy grouping. The results of our exploration activities will be communicated to all stakeholders within our
local area, in addition to the wider community and offtake groups, and our next phase of work for Toral will see
us progress our formal stakeholder engagement process and move towards a potential mining licence
application and development decision.
I would like to take this opportunity to thank all of our shareholders, advisers and other stakeholders for their
support and interest in our activities and look to reporting further progress in due course.
Yours faithfully,
Colin Bird
Non-Executive Chairman
4 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Information
Directors:
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Company Secretary:
Daniel Smith
Auditor:
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008 AUSTRALIA
Telephone: (+61 8) 6382 4600
Facsimile: (+61 8) 6382 4601
Banker:
National Australia Bank
Perth Central Business Banking Centre
UB13.03, 100 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: 13 22 65
Lawyer:
Atkinson Corporate Lawyers
Level 8, 99 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 6263 1161
Share Registry:
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 9323 2000
Facsimile: (+61 8) 9323 2033
Registered and Principal Office:
c/- Minerva Corporate Pty Limited
Level 8, 99 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 9486 4036
Facsimile: (+61 8) 9486 4799
Website: www.europametals.com
Email: info@europametals.com
Stock Exchange Listings:
Europa Metals Ltd’s ordinary shares are quoted on the AIM market of the London Stock Exchange plc
(AIM:EUZ) and also listed on AltX (AltX:EUZ).
5 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
The Directors of Europa Metals Ltd (“Europa” or “the Company”) (the “Directors”) present their report for the
financial year ended 30 June 2019.
Directors
The names and details of the Directors in office during the financial year and at the date of this report are set
out below:
Each Director was in office for the entire reporting period unless otherwise stated.
Dr Evan Kirby (Age 68), BSc (Hons) Metallurgy, PhD Metallurgy, Non-Executive Director
Experience and
expertise
Dr Kirby is a metallurgist with over 31 years of international experience in the
mining sector. He has held senior management positions with Impala Platinum,
Rand Mines and Rustenburg Platinum Mines and worked as a director and
technical consultant for a number of mining companies.
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Director of Bezant Resources plc (AIM: BZT)
Director of New Energy Minerals (ASX: NXE) Director of Nyota Minerals Limited
(ASX & AIM: NYO)
Non-Executive Director
Chairman of the Remuneration Committee
Chairman of the Nominations Committee
Member of the Audit and Risk Management Committees
Interests in shares
and options
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
12,929,158
22,500,000
Mr Laurence Read (Age 42), BA (Hons), Executive Director
Experience and
expertise
Mr Read is a UK resident, and has sixteen years experience working with public
and private companies in particular within the natural resources sector.
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
Chief Executive Officer of Bezant Resources plc (AIM: BZT)
None
Executive Director
Member of the Audit Committee
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
23,913,043
112,500,000
6 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Myles Campion (Age 50), BSc Geology (Hons), MSc Mineral Exploration, Technical Director
Experience and
expertise
Mr Campion served as a Fund Manager of Oceanic Asset Management Pty Ltd,
Australian Natural Resources OEIC and Global Connections Funds plc - Junior
Resources Fund. Mr Campion has 24 years' experience in the natural resources
sector, including as a Resource analyst, Fund Manager, equities research and
project and debt financing. He has over 10 years experience as a field geologist
that includes success at the Emily Ann Nickel Sulphide Mine. He was based in
London for five years working at Barclays Capital in their natural resources team
and as a Senior Resource Analyst at WH Ireland. He also served as Fund Manager
of CF Global Resources Fund.
He held the role of Project Geologist at LionOre responsible for the exploration,
discovery and BFS completion of the Emily Ann Nickel Sulphide Mine. Mr
Campion's financial experience ranges from Australian and UK equities research
through to project and debt financing in London, covering the entire spectrum of
mining companies with an extensive knowledge of the global resources market
covering the three main bourses, the Toronto Stock Exchange, AIM and the ASX.
He holds a Graduate Diploma of Business (Finance) and is an Associate of the
Royal School of Mines. Mr Campion earned an M.Sc. in Minerals Exploration from
the Royal School of Mines in London and B.Sc. Honours in Geology from
University of Wales College Cardiff.
Director of Katoro Gold Plc (AIM: KAT)
Director of Taruga Minerals Limited (ASX: TAR)
Technical director
Member of the Nomination Committee
Chairman of the Technical Committee
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
85,181,159*
145,833,334
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
* - Mr Campion also has an indirect interest in a further 333,333,333 ordinary shares and 166,666,666 options via his
directorship/shareholding of Energy Minerals.
Colin Bird (Age 75), Higher National Diploma in Mining Engineering (Trent Polytechnical College,
United Kingdom), Non-Executive Chairman
Experience and
expertise
Mr Bird is a Fellow of the Institute of Materials, Minerals and Mining and a UK
Chartered Engineer. He also holds a UK and South African Mine Managers
Certificate for coal mines. The formative part of his career was spent in the UK coal
mining industry and thereafter he moved to the Zambian copper belt and then to
South Africa to work in a management position with Anglo Coal and BP Coal. On
his return to the UK he was Technical and Operations Director of Costain Mining
Ltd, which involved responsibility for Costain’s interests in the UK, Latin-America
and Spain. Mr Bird has senior technical and operational experience in a number of
commodities including coal, nickel, gold, copper and industrial minerals.
After his extensive operational and technical career, he became involved in
corporate finance and has been the prime mover in a number of public listings,
mainly on the UK’s AIM market.
Director of Bezant Resources plc (AIM: BZT)
Director of Jubilee Metals Group Plc (AIM: JLP)
Director of African Pioneer Plc (ISDX: APPP)
Chairman of Galileo Resources Plc (AIM: GLR)
Executive Chairman of Xtract Resources Plc (AIM: XST)
Director of BMR Group Plc (LSE: BMR)
Director of Orogen Gold Plc (AIM: ORE)
Non-executive Chairman
Member of the Audit, Remuneration, Nomination, and Technical Committees
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
183,333,333**
171,666,666
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
** - Mr Bird also has an indirect interest in a further 130,499,858 ordinary shares via his directorship of African Pioneer Plc.
7 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
Corporate
Daniel Smith (Age 35), BA (International Relations), GIA (Cert), Non-Executive Director, Company
Secretary
Experience and
expertise
Mr Smith is a member of the Australian Institute of Company Directors and the
Governance Institute of Australia and has over 10 years’ primary and secondary
capital markets expertise. As a director of Minerva Corporate, he has advised on, and
been involved in, a significant number of IPOs, RTOs and capital raisings on both the
ASX and NSX. His key focus is on corporate governance and compliance,
commercial due diligence and transaction structuring, as well as ongoing investor and
stakeholder engagement. Mr Smith is currently a director and company secretary of
ASX-listed Lachlan Star Limited and Hipo Resources Limited, non-executive
chairman of White Cliff Minerals Limited and Alien Metals Ltd, and is Company
Secretary for Taruga Minerals Limited and Vonex Limited. He holds a BA in
International Relations from Curtin University, Western Australia.
Director of Lachlan Star Limited (ASX:LSA)
Director of Hipo Resources Limited (ASX:HIP)
Director of Artemis Resources Limited (ASX:ARV)
Director of White Cliff Minerals Limited (ASX:WCN)
Director of Alien Metals Ltd (AIM:UFO)
Director of Taruga Minerals Limited (ASX:TAR)
Director of PLC Financial Solutions Limited (ASX:PLC)
Director of CoAssets Limited (ASX:CA8)
Company Secretary
Member of Remuneration Committee
Chairman of Audit Committee
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
-
10,000,000
On 25 January 2019, the Company announced that it had submitted a formal application to the ASX requesting
the removal of the Company from the Official List pursuant to ASX Listing Rule 17.11, which became effective
on 8 March 2019. In addition, the Company successfully applied to move from the Main Board of the
Johannesburg Stock Exchange (“JSE”) to the AltX. The Company’s securities commenced trading on the AltX
with effect from 1 March 2019. Accordingly, Europa Metals’ primary listing became the AIM market operated by
London Stock Exchange plc (“AIM”) with a secondary listing on the AltX.
8 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Capital Raisings
On 10 August 2018, the Company announced that it had completed a fundraising of £563,516 (approximately
A$0.98m) before expenses through a placing arranged by the Company’s joint broker, Turner Pope Investments
(TPI) Limited (“Turner Pope”), of, in aggregate, 727,118,650 new ordinary shares of no par value each in the
capital of the Company (the “Placing Shares”) at a price of 0.0775 pence per new ordinary share (the “Placing”).
The Placing Shares were issued to certain new and existing investors utilising the remainder of the Company’s
then existing placement capacity under ASX Listing Rule 7.1.
On 29 March 2019, the Company announced that it had raised, in aggregate, £960,000 (before expenses),
through a placing of, and subscription for, in aggregate, 6,400,000,000 new ordinary shares of no par value each
in the capital of the Company (“Ordinary Shares”) at an issue price of 0.015 pence per share (the “Issue Price”)
(the “Fundraising”). The Fundraising comprised a placing of 6,200,000,000 new Ordinary Shares via the
Company’s joint broker, Turner Pope, as agent of the Company, and a subscription for a further 200,000,000
new Ordinary Shares at the Issue Price, with certain existing and new investors, including Brandon Hill Capital
Limited (“Brandon Hill Capital”), which invested in a principal capacity. Colin Bird and Myles Campion, Non-
Executive Chairman and Techical Director of the Company respectively, also participated in the Fundraising on
the same terms as the other investors.
In addition, one warrant exercisable for a period of 3 years from the date of admission of the new Ordinary
Shares to trading on AIM (“Admission”) at a subscription price of 0.025p per Ordinary Share were issued to all
participants in the Fundraising for every two new Ordinary Shares subscribed (the “Warrants”). Accordingly,
3,200,000,000 Warrants were issued pursuant to the Fundraising. Both Turner Pope and Brandon Hill Capital
were also issued with 300,000,000 and 50,000,000 warrants respectively to subscribe for new Ordinary Shares
at the Issue Price, exercisable for a period of three years from Admission.
Options/Warrants
On 30 July 2018, the Company announced that 205,949,134 unlisted options exercisable at £0.003 per share
on or before 29 July 2018, had lapsed unexercised.
Shareholder Meetings
At the Annual General Meeting of the Company held on 5 November 2018, shareholders approved, inter alia, the
re-election of Messrs Kirby, Bird and Smith as directors, and ratified the Company’s abovementioned capital
raising of approximately A$0.98 million completed on 10 August 2018.
Joint Broker
On 29 March 2019, the Company announced the appointment of Brandon Hill Capital as the Company’s joint
broker on AIM with immediate effect.
Registered Office
On 24 September 2018, the Company announced a change to its registered office and principal place of
business to c/o Minerva Corporate, Level 8, 99 St Georges Terrace, Perth WA, 6000.
Dividends
No dividend has been paid or declared since the start of the financial year and the Directors do not
recommend the payment of a dividend in respect of the financial year (2018: Nil).
9 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Principal activities
The principal activity of the entities within the consolidated entity during the financial year was that of
exploration for minerals.
Review of operations and activities
Lead-Zinc-Silver Exploration Projects, Spain
On 16 July 2018, the Company announced that it had secured a combined Reverse Circulation (“RC”) and
Diamond drilling rig (the “Combination rig”) for mobilisation to its wholly owned Toral lead-zinc-silver project
located in the Province of Leόn, northern Spain (“Toral” or the “Toral Project”), during August 2018. The
Combination rig and associated operating crew was supplied by Sondeos y Perforaciones Industriales de
Bierzo SA overseen by the Company’s on-site exploration team. The Combination rig is one of only a few of its
type in Spain and had been deployed on a series of successful drilling programmes for other parties.
The Combination rig was successfully mobilised to site in late August 2018 to commence a Phase I drilling
campaign to initially ascertain the potential continuation of the mineralised structure outside of the current
defined JORC (2012) resource area at Toral. With a significant inferred resource estimate already established
for the main Toral project area, the extension drilling to the East sought to identify the presence of further
mineralisation/hosting structures. On 28 August 2018, the Company also announced that it had successfully
completed the relogging of certain priority intersections from the historical drill core from Toral stored at the
National Litoteca in Andalucía, Spain.
On 13 September 2018, the Company announced that the Board had decided to initiate the Change of Land
Use processes needed for the potential full future development of a mine at Toral and had engaged a
specialist consultancy, MAGMA Soluciones Ambientales SL, to progress the requisite applications across the
three distinct municipalities overlapping the project’s licence area. The process was estimated to take
approximately 18 months.
On 20 September 2018, the Company announced that the abovementioned re-logging of the historical drill
core held at the National Litoteca had resulted in significantly higher bulk density measurements than those
used for the maiden JORC (2012) resource estimate completed by Addison Mining Services Limited (“AMS”)
between November 2017 and January 2018, as announced by the Company on 6 February 2018. The
increase in bulk density values applied to samples and their spatial distribution resulted in a material change in
the updated estimation of the inferred resource estimate for the project. Ore tonnages were calculated by
volume estimated from solid models developed from mapping and drilling information multiplied by rock
density.
On 4 October 2018, the Company announced that, following the successful mobilisation to site of the
Combination rig, all of the planned Phase I RC drilling at the Toral Project had been completed with samples
being sent to external laboratories for independent assay. As noted above, the RC extension drilling was
designed to identify new areas of mineralisation stepping out from the existing defined JORC (2012) resource
area. A Phase II diamond infill drilling programme subsequently commenced targeting key areas situated
within the existing resource area with the objective of increasing and enhancing the Company’s understanding
and confidence in the existing resource in areas that currently contain Inferred mineralisation as defined under
the JORC (2012) code.
On 31 October 2018, the Company announced the results of its Phase I RC extension drilling campaign which
had intersected lead, zinc and silver mineralisation in each of the four holes drilled to the east of the existing
resource. Accordingly, structural continuity was confirmed to the east of the existing deferred resource area,
with each RC drill hole encountering limestone/slate contact containing mineralisation, and drill hole TOR-14,
in particular, assayed unexpectedly high-grade results near to surface. The cost effective RC drilling campaign
had targeted areas all within 300 metres of surface.
On 31 October 2018, the Company also announced that it had relinquished all rights to the permits the Group
previously held in respect of its Lago lead-zinc exploration project (Lago II 6.056 and Lago III 6.058) in the
province of Galicia, Spain. Whilst the Company continues to believe that the area is highly prospective for
10 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
lead-zinc, both the size and location of the Lago permit areas did not justify and support incurring further
maintenance and exploration expenditure.
On 20 December 2018, the Company announced the results of the first stage of the abovementioned Phase II
diamond drilling programme conducted at Toral. The diamond drilling provided the following information for
Europa Metals’ geological team:
o confirmation of block model grade and thickness;
o progress with regard to drilling strategy to remove ‘gaps’ within the known resource (all within 300m of
topographic surface); and
o
further information on geotechnical characteristics and structural controls.
Significant results from the diamond drilling included:
o Drill hole TOD-018 which returned 3.8m @ 5.87% Zn Equivalent (Zn, Pb); and
o
reportable copper mineralisation intercepted within 280 metres of surface (drill hole TOD-020) - further
investigation ongoing following 0.68% Cu @ 3m, including 1m @ 1.34% Cu.
Scoping Study
On 10 December 2018, the Company announced the results of an independent scoping study completed by
AMS in accordance with JORC (2012) for the Toral Project (the “Scoping Study” or “Study”). The findings of
the Study were positive with a recommendation that the Toral Project should be progressed towards a
feasibility study to determine full economics, technical and environmental parameters for an underground
mining operation focused on near-term recovery of the higher-grade mineralised zones.
The Scoping Study considered three conceptual underground mining development and production scenarios.
The conceptual scenario selected (being Conceptual Scenario 2a) progresses decline access ramp with a high
grade focus; a proposed Mechanised Cut and Fill (MCAF) mining method; entry to the mine via a principal
decline reaching various levels; and a series of internal mining inclined ramps constructed to access levels.
Further key elements of the Scoping Study include:
o 4x4 metre mine standard development size
o Mining method and production schedule over estimated mine life
o Efficient mining block sequence identified
o
Identification of optimum plant locations (see Figure 1)
o Key Recommendations: Infill drilling campaign to convert resources to the Indicated category (JORC
2012), metallurgical and geotechnical test work and progression to a full feasibility study.
11 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Figure 1: Conceptual Plant Layout for Chantin and Peon Sites, and conceptual tailings sites
Economic Analysis
Europa Metals commissioned AMS to undertake a financial modelling exercise for the Toral Project, based on
a number of different processing scenarios and mining methods. The results of this exercise, as well as the
overall positive outcomes of the Scoping Study, support the commencement of a full feasibility study. However,
since 100% of the Mineral Resources at Toral are currently in the Inferred resource category, in accordance
with Section 8.5 of ASX Guidance Note 31, the Company was not able to publish a production target or
forecast financial information in December 2018.
Following the Company’s removal from the official list of the ASX Limited on 8 March 2019, the Company
subsequently announced the economics of the Scoping Study on 11 March 2019.
Estimated economic forecasts for the Toral Project, based on the current level of work (+/-30%), for the
Conceptual Scenario 2a comprised:
o US$110 million net present value (NPV) using a discount rate of 8%;
o 24.4% internal rate of return (IRR);
o Estimated US$33 million CAPEX for a proposed 450ktpa design capacity plant, including associated
auxiliary costs, with infrastructure being situated near portal entrance on the north side of the deposit.
o Estimated total CAPEX of US$110 million.
o US$25 per tonne indicative OPEX processing cost at steady state conditions.
o US$36 per tonne indicative OPEX mining cost utilising mechanised cut and fill.
o 15-year production plan, with significant potential for extension.
Updated Mineral Resource
As part of the Scoping Study’s licence tenure and permitting investigative work and verification checks, an
identified permit location shift prompted the requirement to revise the previously reported mineral resource
estimate for the Toral Project within Europa Metals’ licence 15.199 and update the input mineral resource
block model used for the purposes of the Scoping Study.
The issue arose due to a legacy discrepancy between the historical and current coordinate systems used in
the mining and permitting industry in Spain. The Mineral Resource estimate was consequently updated due to
a coordinate discrepancy and, as such, the block model was also updated to reflect this change. The reduction
in the reported resource through the tenement shift in no way affected the Scoping Study and economic
potential of the project.
12 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
The portion of the deposit affected by the boundary issue, containing approximately 3 million tonnes of
mineralisation, is in the north-western extension of the deposit, a very narrow area not currently considered to
be of interest in terms of future mining. The adjustment to the input block model in no way affects the technical
and economic findings of the Scoping Study at this stage.
Under Spanish mining law the area concerned can be secured by Europa Metals at the point the Company
converts its exploration licence to a mining licence, as it cannot be claimed by third parties, except for the very
far western extension, due to the presence of a limestone quarry that operates at surface. It is envisaged that
the quarry will attract little interest due to the elements on surface including a national road and a river;
accordingly, the quarry area can only be mined by underground methods for high value minerals, if determined
economically viable.
Apart from the area under the limestone quarry, which will require direct negotiation with its owner, the other
areas are subject to a defined procedure set out under Spanish mining law and it is currently anticipated that
such areas will be incorporated into Europa Metals’ Toral property upon the future grant of a mining licence.
The Board believes that there are no competitors in relation to securing this further acreage.
The above mentioned reduction in the licence area led to a temporary loss of approximately 3 million tonnes of
resource as set out in Table 1 below.
Table 1: Comparison Between the September 2018 and December 2018 Reduced Licence Area
4% Zn Eq
(PbAg)%
Tonnes
(Millions)
Density
g/cm3
Zn Eq
(Pb)%
Zn Eq
(PbAg)%
Zn
%
Pb
%
Ag
g/t
Contained
Zn Tonnes
(000s)
Contained
Pb Tonnes
(000s)
Ag Troy
Oz
(Millions)
September
2018 Resource
December
2018 Resource
19
2.8
6.9
7.4
3.9
3.1
24
720
570
14
16
2.8
7
7.5
3.9
3.1
24
640
510
13
On 13 May 2019, the Company announced that a diamond drilling rig had been mobilised to site at Toral. The
core objectives of the drilling campaign were as follows:
1. Drill into the high grade core of the Toral Project, as defined within the existing inferred JORC (2012)
resource;
2. Target high grade areas within the defined resource to further the Company's understanding of the Toral
Project, with the aim of increasing confidence in the resource estimate and attain the indicated resource
category; and
3. Obtain a significant sample for metallurgical testwork by independent consultants to determine the
potential Zn, Pb and Ag concentrate composition from Toral which will provide additional data to assist
process plant design and discussions with potential offtake parties.
On 15 May 2019, the second stage of the Phase II diamond drilling programme commenced at Toral, with the
Company subsequently announcing on 13 June 2019 that the first diamond hole, TOD-021, had been
terminated at a depth of 652.90 metres, as a result of a substantial deviation in the trajectory of the hole during
drilling operations away from its designated target, being the high-grade zone of the existing defined resource.
The deviation took the hole above its planned high-grade zone target such that it was not suitable to be used
to secure a metallurgical sample.
13 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Financial Position
In carrying out its operations during the reporting period, the Group has incurred a loss after income tax for the
period from 1 July 2018 to 30 June 2019 of $2,392,170 (2018: loss of $1,883,446). The Group had net assets
of $2,707,503 (2018: $2,484,371) as set out in the Statement of Financial Position.
Significant changes in the Group’s state of affairs
There have been no significant changes in the state of affairs of the consolidated entity to the date of this
report that have not otherwise been disclosed elsewhere in the Annual Report.
Significant events after the reporting date
There are subsequent events to report, as follows:
• On 11 July 2019, the Company provided a drilling update in respect of the three-hole programme that had
commenced on 15 May 2019. The second hole, TOD-022, had been completed having reached a depth of
761.3m, with core processed and sent to ALS Laboratories for independent analysis.
• On 9 August 2019, the Company announced that it had submitted an initial document (the “ID”) for formal
review by all key administration stakeholders, including the department of the environment, Castilla y León
region, Northwest Spain, and private stakeholders consulted by such administration, in connection with the
process for obtaining an exploitation license for Toral.
• On 15 August 2019, the Company announced the completion of the third hole, TOD-023, having reached a
depth of 713m. Commenced on 8 July 2019, TOD-023 had encountered a single significant intersection of
12 metres (down hole width) of visible mineralisation and two additional sub-ordinate hanging wall zones of
mineralisation.
• On 2 September 2019, the Company announced that it had completed a ‘daughter hole’ (TOD-023D) with
core samples collected and sent to Wardell Armstrong LLP (“WA”) to commence its independent
metallurgical testwork.
• On 4 September 2019, the Company announced that it had received notices of exercise in respect of
certain pre-existing warrants to subscribe for 212,000,000 new ordinary shares at a price of 0.015p per
share and 133,333,334 new ordinary shares at a price of 0.025p per share. In aggregate, the exercise of
these warrants amounted to a cash subscription of approximately £65,133.
• On 13 September 2019, the Company announced that it had received notices of exercise in respect of
certain pre-existing warrants to subscribe for 166,666,667 new ordinary shares at a price of 0.025p per
share. The exercise of these warrants amounted to a cash subscription of approximately £41,666.
• On 25 September 2019, the Company announced assay results for the second stage of its Phase II
diamond drilling programme at Toral. Additional mineralisation had been identified in the hanging wall zone
(TOD-023D; distinct to the main metallurgical sample zone), with its potential influence on the resource
estimate being assessed by Europa Metal’s technical team. Copper traces identified within mineralisation at
640m downhole and is also being assessed. All of the assay results have been submitted to the Company's
independent consultants, AMS, to enable them to update the mineral resource models and provide a JORC
(2012) technical report which is expected to be received in early Q4 2019. Metallurgical testing is also
underway by WA with completion targeted for Q4 2019.
• On 30 September 2019, the Company had raised, in aggregate, £1,000,000 (before expenses), through a
placing of, and subscription for, in aggregate, 4,000,000,000 new ordinary shares of no par value each in
the capital of the Company (“Ordinary Shares”) at an issue price of 0.025 pence per share (the “Issue
Price”) (the “Fundraising”). The Fundraising comprised a placing of 3,400,000,000 new Ordinary Shares via
the Company’s joint broker, Turner Pope, as agent of the Company, and a subscription for a further
600,000,000 new Ordinary Shares at the Issue Price, with certain existing and new investors, including
Brandon Hill Capital Limited (“Brandon Hill Capital”), which invested in a principal capacity.
14 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
•
In addition, one warrant exercisable for a period of 2 years from Admission at a subscription price of 0.0375
pence per Ordinary Share will be issued to all participants in the Placing for every two new Ordinary Shares
subscribed (the “Placing Warrants”). Accordingly, 2,000,000,000 Placing Warrants will be issued pursuant
to the Placing. Further, Turner Pope and Brandon Hill have been issued with 204,000,000 warrants and
36,000,000 warrants respectively to subscribe for new Ordinary Shares at the Issue Price, exercisable for a
period of three years from Admission.
No other matters or circumstances have arisen since the end of the year, other than as noted above, that may
significantly affect the operations of the Company, the results of these operations, or the state of affairs in
future financial years.
Likely developments and expected results
The Group will continue to carry out its business plans, by:
•
•
•
•
Obtaining an updated independent JORC (2012) resource estimate, targetting resources in the Indicated
category, and a new geological model for the Toral Project which will inform the next phase of work, in
combination with the forthcoming metallurgical results, in order to move the project towards a potential
mining licence application and the development phase;
Progressing its stakeholder programme and other core work around mine development.
Seeking and evaluating further strategic acquisition opportunities within the exploration and mining
industry to potentially enter into additional advanced projects that will add value to the Group; and
Continuing to meet its statutory commitments relating to its exploration tenement and carrying out work
programmes in accordance with its stated strategy, whilst carefully conserving the Group’s cash
reserves in order to be able to take advantage of any potential value adding opportunities.
There can be no guarantee either that further exploration of the Group’s existing project will result in
exploration or development success or that any potential additional strategic acquisitions considered by the
Directors to be likely to add value to the Group will become available to the Group.
Environmental regulation and performance
The Group’s activities are subject to Spanish legislation relating to the protection of the environment. The
Group is subject to significant environmental legal regulations in respect to its exploration and evaluation
activities. The Group is in compliance with the NGER Act 2007.
There have been no known breaches of these regulations and principles.
Competent Person’s Statement
The Scoping Study and JORC (2012) resource estimate for Toral therein was prepared by Mr J.N. Hogg, MSc.
MAIG Principal Geologist for Addison Mining Services Limited ("AMS"), Mr J. Bennett BSc (Hons). ARSM,
FIMMM CEng Associate Principal Mining Engineer for AMS, Dr N. Holloway, CEng, FIMMM Associate
Processing Engineer for AMS, and Dr S. Struthers CEnv, FIMMM, Associate Environmental Consultant for
AMS together being independent Competent Persons within the meaning of the JORC (2012) code and
qualified persons under the AIM Note for Mining and Oil & Gas Companies. The Scoping Study was aided by
Mr R. J. Siddle, MSc, MAIG Senior Resource Geologist for AMS, under the guidance of the competent
persons. Mr Hogg, Mr Bennett, Mr Holloway and Ms Struthers have reviewed and verified the technical
information that forms the basis of, and has been used in the preparation of, the Scoping Study and these
accounts, including all analytical data, assumed and acquired technical and economic inputs, diamond drill
hole logs, QA/QC data, density measurements, and sampling, diamond drilling and analytical techniques, and
consent to the inclusion in these accounts of the matters based on the information, in the form and context in
which it appears. Mr Hogg, Mr Bennett, Mr Holloway and Ms Struthers have also reviewed and approved the
technical information in their capacities as qualified persons under the AIM Rules for Companies.
15 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Indemnification and Insurance of Directors and officers
The Group has entered into deeds of access and indemnity with the officers of the Group, indemnifying them
against liability incurred, including costs and expenses in defending any legal proceedings. The indemnity
applies to a liability for costs and expenses incurred by the Director or officer acting in their capacity as a
director or officer.
Except in the case of a liability for legal costs and expenses, it does not extend to a liability that is:
(a) owed to the Group or a related body corporate of the Group;
(b) for a pecuniary penalty order under section 1317G or a compensation order under section 1317H or
section 1317HA of the Corporations Act 2001; or
(c) owed to someone other than the Group or a related body corporate of the Company where the liability did
not arise out of conduct in good faith.
Similarly, the indemnity does not extend to liability for legal costs and expenses:
(d) in defending proceedings in which the officer is found to have a liability described in paragraph (a), (b) or
(c) above;
(e) in proceedings successfully brought by the Australian Securities and Investments Commission or a
liquidator; or
(f)
in connection with proceedings for relief under the Corporations Act 2001 in which the court denies the
relief.
During or since the financial year end, the Company has paid premiums in respect of a contract insuring all the
Directors and officers. The terms of the contract prohibit the disclosure of the details of the insurance contract
and premiums paid.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, BDO Audit (WA) Pty Ltd, as
part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for
an unspecified amount). No payment has been made to indemnify BDO Audit (WA) Pty Ltd during or since the
financial year end.
Non-audit services
The Group may decide to employ the auditor on assignments additional to its statutory audit duties where the
auditor’s expertise and experience with the Group are important.
Details of the amounts paid or payable to the Group’s auditors, BDO International for non-audit services
provided during the financial year are set out below.
Remuneration of the auditor, BDO International for Group
and subsidiary statutory reporting:
-
other assurance related services
2019
$
2018
$
-
-
1,750
1,750
16 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Directors’ meetings
Meetings of directors held and their attendance during the financial year were as follows:
Director
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Board Meetings
Remuneration Committee
Eligible
Attended
Eligible
Attended
6
6
6
6
6
6
6
6
6
6
1
-
-
1
1
1
-
-
1
1
Remuneration Report (audited)
This Remuneration Report outlines the Director and executive remuneration arrangements of the Company
and the consolidated entity in accordance with the requirements of the Corporations Act 2001 and its
Regulations. For the purpose of this report, Key Management Personnel (KMP) of the consolidated entity are
defined as those persons having authority and responsibility for planning, directing and controlling the major
activities of the Company and the Group, directly or indirectly, and includes Directors of the Company.
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
The Remuneration Report is presented under the following sections:
1. Individual KMP disclosures
2. Remuneration at a glance
3. Board of Directors (the “Board”) oversight of remuneration
4. Non-executive director remuneration arrangements
5. Executive remuneration arrangements
6. Directors and KMP contractual arrangements
7. Equity instruments disclosures
8. Loans to KMP and their related parties
9. Transactions with KMP and their related parties
1.
Individual key management personnel disclosures
(i) Directors:
Name
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
(ii) Executives:
Name
Laurence Read
Myles Campion
Role
Non-Executive Director
Non-Executive Director
Executive Director
Executive Technical Director
Non-Executive Chairman
Non-Executive Director
Company Secretary
Role
Executive Director
Technical Director
Appointed
31 March 2016
30 January 2017
26 September 2017
17 October 2017
11 January 2018
16 January 2018
16 January 2018
Appointed
26 September 2017
17 October 2017
17 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Remuneration Report (audited) continued
2.
Remuneration at a glance
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group
must attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
▪
▪
▪
Provide competitive rewards to attract high calibre executives;
Link executive rewards to shareholder value; and
Provide significant portions of executive remuneration “at risk” through participation in incentive plans
Shares and options issued under incentive plans provide an incentive to stay with the Group. At this stage,
shares and options issued do not have performance criteria attached. This policy is considered to be
appropriate for the Group, having regard to the current state of its development.
The Company has established a directors’ and executives’ salary sacrifice plan, pursuant to which individuals
may elect for a nominated fixed period to sacrifice all or an agreed percentage of their salary or fees to be
applied in the subscription for on-market purchase of shares in the Company. As such shares may not be
purchased or subscribed for during periods that are close periods or when individuals are in possession of
inside information, the entitlement to subscribe for shares is determined by calculating the number of shares
using the market price for the month concerned. The plan was established to allow for the subsequent
settlement of salary or fees from 1 April 2012. Directors and executives have previously elected to participate
in the plan with effect from that date. During the period to 30 June 2019 no Directors or executives participated
(2018: Nil) in the salary sacrifice plan. Shares listed under the plan are not subject to performance conditions.
Shareholder approval for the plan and for the issue of shares under the plan was obtained on 8 August 2012.
The Company also recognised that, at this stage in its development, it is most economical to have only a few
employees and to draw, as appropriate, upon a pool of consultants selected by the Directors on the basis of
their known management, geoscientific, engineering and other professional and technical expertise and
experience. The Company will nevertheless seek to apply the principles described above to its Directors and
executives, whether they are employees of or consultants to the Company.
3.
Board oversight of remuneration
Remuneration Committee Responsibilities
A Remuneration Committee was established on 14 January 2010 and reconstituted on 15 October 2010 and
again on 9 March 2015.
The Committee assesses the appropriateness of the nature and amount of remuneration of Directors and
senior executives on a periodic basis by reference to relevant employment market conditions, with the overall
objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive
team.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive and executive director
remuneration is separate and distinct.
18 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Remuneration Report (audited) continued
4.
Non-Executive Director remuneration arrangements
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to
attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Company’s constitution specifies that the aggregate remuneration of Non-Executive Directors must be
determined from time to time by shareholders of the Company in a general meeting. An amount not exceeding
the amount determined is then divided between the Non-Executive Directors as agreed. The current aggregate
limit of remuneration for non-executive directors is $250,000 as approved at the 2010 Annual General Meeting
of Shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Non-Executive Directors is reviewed annually. The Board may consider advice from
external consultants, as well as the fees paid to Non-Executive Directors of comparable companies, when
undertaking the annual review process. No remuneration or external consultants were used during the financial
year.
Each Non-Executive Director receives a fee for being a Director of the Company. No additional fee is paid for
participating in Board Committees.
Non-Executive Directors may participate in the Company’s share and option plans as described in this report.
Mr Evan Kirby is on a contract dated 31 March 2016, which provides for a fixed fee of $2,500 per month. Mr
Colin Bird is on a contract dated 11 January 2018, which provides for a fixed fee of £3,000 per month. Mr
Daniel Smith (through Minerva Corporate Pty Ltd) is on a contract dated 15 January 2018 which provides for a
fixed fee of $2,000 per month.
5.
Executive remuneration arrangements
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Group and so as to:
•
•
•
reward executives for Group, business team and individual performance;
align the interests of executives with those of shareholders; and
ensure total remuneration is competitive by market standards.
Structure
•
•
•
At this time, the cash component of remuneration paid to executive Directors, the Company Secretary
and other senior managers is not dependent upon the satisfaction of performance conditions.
It is current policy that some executives be engaged by way of consultancy agreements with the
Company, under which they receive a contract rate based upon the number of hours of service supplied
to the Company. There is provision for yearly review and adjustment based on consumer price indices.
Such remuneration is hence not dependent upon the achievement of specific performance conditions.
This policy is considered to be appropriate for the Company, having regard to the current state of its
development.
The Executive Directors may also participate in the Company’s share and option plans as described in
this report, including the salary sacrifice share plan. Refer to page 23 for details of options previously
granted.
19 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors' Report
Performance table
The following table details the net profit / (loss) of the Company from continuing operations after income tax,
together with the basic earnings / (loss) per share since the incorporation of the parent:
Net (loss) from continuing operations after
income tax
Basic (loss) per share in cents
Share Price in Cents
2019
$
2018
$
2017
$
2016
$
(2,392,170)
(0.03)
0.21
(1,883,446)
(0.06)
0.20
(11,286,803)
(0.91)
0.10
(1,573,533)
(0.22)
0.40
5.
Executive contractual arrangements
Laurence Read – Executive Director
£75,000 per annum
Salary
Ongoing
Term
6 months notice period by either party
Termination
Myles Campion – Technical Director
£100,000 per annum
Salary
Ongoing
Term
6 months notice period by either party
Termination
20 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Remuneration report (audited) continued
Remuneration of key management personnel of the Company and the Consolidated Entity
Table 1: Remuneration for the years ended 30 June 2018 and 30 June 2019
Short-term benefits
Post-employment
Long-term benefits
Share-based
payments
Total
Performance
related
Options
Salary &
fees
Cash
bonus
Superannuation
Cash
Incentives
Long
Service
Leave
Options
Shares
$
$
$
$
$
$
$
$
%
Non-executive directors
Evan Kirby
Colin Bird
Daniel Smith
Grant Button
Executive directors
Laurence Read
Myles Campion
Justin Tooth
Subtotal
Subtotal
Total KMP
Total KMP
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
30,000
15,000
64,891
15,276
24,000
11,000
-
31,964
135,549
73,249
180,484
52,782
-
119,522
434,924
318,793
434,924
318,793
Refer to Page 17 for all appointment dates.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,037
-
-
-
-
-
-
-
3,037
-
3,037
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,931
15,648
-
77,977
-
9,747
-
9,747
-
-
-
-
-
-
-
-
109,655
28,966
-
-
109,655
22,427
-
-
-
-
-
-
30,000
52,579
64,891
93,253
24,000
20,747
-
44,748
135,549
211,870
180,484
184,864
-
119,522
434,924
338,712
67,041
727,583
-
-
434,924
338,712
67,041
727,583
%
-
42%
-
84%
-
47%
-
22%
-
52%
-
59%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Remuneration report (audited) continued
Table 2: Share holdings
2019
Directors
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Balance
1-July-18
Rights
Exercised
Shares
On
Exercise
of Options
Net Change
Other (i)
Balance
30-Jun-19
12,929,158
23,913,043
18,514,492
180,499,858
-
235,856,551
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66,666,667
133,333,333
-
12,929,158
23,913,043
85,181,159
313,833,191*
-
200,000,000
435,856,551
* - includes 130,499,858 shares in which he has an indirect interest via his directorship of African Pioneer plc.
2018
Directors
Evan Kirby
Laurence Read
Myles Campion (1)
Colin Bird (2)
Daniel Smith (3)
Justin Tooth(4)
Grant Button (5)
Balance
1-July-17
Rights
Exercised
Shares
On
Exercise
of Options
Net Change
Other (i)
Balance
30-Jun-18
10,900
-
-
-
-
326,650
5,356,300
5,693,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,918,258
23,913,043
18,514,492
180,499,858
-
(326,650)
(5,356,300)
12,929,158
23,913,043
18,514,492
180,499,858*
-
-
-
230,162,701
235,856,551
(i)
Net change other includes:
issued in settlement of fees
subscribed in share issue
subscription for options
sales / transfers
• acquisitions and disposals on market
•
•
•
•
• appointment / resignation as director
• exchange of options for shares
•
salary sacrifice share scheme shares issued
(1) Appointed 17 October 2017
(2) Appointed 11 January 2018
(3) Appointed 16 January 2018
(4) Resigned 26 September 2017
(5) Resigned 31 January 2018
22 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Table 4: Option holdings
2019
Options
Balance
Granted
Received as
Options
Net Change
Balance
Vested &
Exercisable
Vested &
Not
Exercisable
1-July-2018
Remuneration
Expired
Other (ii)
30-Jun-19
30-Jun-19
30-Jun-19
Directors
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
22,500,000
112,500,000
112,500,000
105,000,000
10,000,000
362,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,500,000
22,500,000
112,500,000
112,500,000
33,333,334
145,833,334
145,833,334
66,666,666
171,666,666
171,666,666
-
10,000,000
10,000,000
100,000,000
462,500,000
462,500,000
-
-
-
-
-
-
2018
Options
Balance
Granted
Received as
Options
Net Change
Balance
Vested &
Exercisable
Vested &
Not
Exercisable
1-July-2017
Remuneration
Expired
Other (i)
30-Jun-18
30-Jun-18
30-Jun-18
Directors
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Justin Tooth
Grant Button
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,500,000
112,500,000
112,500,000
80,000,000
10,000,000
-
-
$337,500,000
-
-
-
-
-
-
-
-
-
-
-
22,500,000
22,500,000
112,500,000
112,500,000
112,500,000
112,500,000
25,000,000
105,000,000
105,000,000
-
-
-
10,000,000
10,000,000
-
-
-
-
25,000,000
362,500,000
362,500,000
-
-
-
-
-
-
-
-
(i) options issued relate to a November 2017 placement.
(ii) Options issued relate to participations in the March 2019 fundraising.
Refer to Page 17 for all appointment dates.
Executive Share Incentive Plan (ESIP)
Under the plan, eligible employees are offered shares in the Company at prices determined by the Board. The Board
has the ultimate discretion to impose special conditions on the shares issued under the ESIP and can grant a loan to a
participant for the purposes of subscribing for plan shares. Shares issued under loan facilities are held on trust for the
benefit of the participant and will only be transferred into the participant’s name once the loan has been fully repaid.
ESIP participants receive all the rights associated with the ordinary shares.
Loans granted to participants are limited recourse and interest free unless otherwise determined by the Board. The
loans are to be repaid via the application of any dividends received from the shares and/or the sale of the plan shares.
Where the loan is repaid by the sale of shares, any remaining surplus on sale is remitted to the participant while any
shortfall is borne by the Group.
During the 2018 and 2019 reporting period no new shares were issued under the ESIP.
If, at any time during the exercise period an employee ceases to be an employee, all options held by that employee
vest immediately and will lapse one month after their employment end date. As such, there is not considered to be any
service conditions attaching to the grant of shares under the ESIP, and the full expense is recognised at the grant
date.
23 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Remuneration report (audited) continued
Fair value of award granted
Shares granted under the ESIP are accounted for as “in-substance” options due to the limited recourse nature of the
loan between the employees and the Company to finance the purchase of ordinary shares. The fair value at grant date
for the various tranches of rights issued under the ESIP is determined using a binomial model.
(ii)
Loans to Key Management Personnel and their Related Parties
There were no loans to Directors or other key management personnel at any time during the year ended 30 June 2019
(2018: Nil).
(iii)
Transactions with Key Management Personnel and their Related Parties
The following transactions were undertaken between the Company, executive officers and director-related entities during
2019 and 2018.
Rental fees were paid to Lion Mining Finance, a company of which
Colin Bird is a director. Fees were paid at arms length and on
commercial terms.
Company secretarial and accounting fees were paid to Minerva
Corporate Pty Ltd, a company of which Daniel Smith is a director. Fees
were paid at arms length and on commercial terms.
2019
$
2018
$
24,551
89,000
113,551
-
-
-
(iv)
Voting of Shareholders at last year’s annual general meeting (AGM)
Europa Metals Ltd received 100% votes in favour of its remuneration report for its 2018 financial year. The Company
did not receive any specific feedback at the AGM through the year on its remuneration practices.
End of audited Remuneration Report
24 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 60 and forms part of this report.
This report is made in accordance with a resolution of the Directors.
Daniel Smith
Non-Executive Director
Perth
30 September 2019
25 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
Introduction
This corporate governance statement is dated 30 September 2019 and has been approved by the Board.
The Board recognises the importance of maintaining appropriately high standards of corporate governance
and has made it a priority to adopt systems of control and accountability as the basis for the administration
of corporate governance and put in place governance structures that would be expected in light of the
Group’s size, stage of development and resources. Some of these policies and procedures are
summarised in this statement. In accordance with the AIM Rules for Companies (the “AIM Rules”), the
Board has reviewed which recognised corporate governance code to apply to the Company on a comply or
explain basis, as required by AIM Rule 26. Accordingly, the Board has decided to continue to adhere to the
ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, third
edition (the “Principles & Recommendations” or the “Code”), and has followed each recommendation to
the extent considered appropriate for the Company’s corporate governance practices. Where the
Company’s corporate governance practices follow a recommendation, the Board has made appropriate
statements reporting on the adoption of the recommendation. Where, after due consideration, the
Company's corporate governance practices depart from a recommendation, the Board has made full
disclosure and reasoning for the adoption of its own practice, in compliance with the ASX “if not, why not”
regime and the comply or explain basis required by AIM Rule 26.
DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES
Summary statement
Recommendation 1.1
Recommendation 1.2
Recommendation 1.3
Recommendation 1.4
Recommendation 1.5
Recommendation 1.6
Recommendation 1.7
Recommendation 2.1
Recommendation 2.2
Recommendation 2.3
Recommendation 2.4
Recommendation 2.5
Recommendation 2.6
Recommendation 3.1
Recommendation 4.1
ASX P & R1
If not, why
not2
ASX P & R1
If not, why
not2
Recommendation 4.2
Recommendation 4.3
Recommendation 5.1
Recommendation 6.1
Recommendation 6.2
Recommendation 6.3
Recommendation 6.4
Recommendation 7.1
Recommendation 7.2
Recommendation 7.3
Recommendation 7.4
Recommendation 8.1
Recommendation 8.2
Recommendation 8.3
1
2
Indicates where the Company has followed the Principles & Recommendations.
Indicates where the Company has provided “if not, why not”/comply or explain disclosure.
Website disclosures
In accordance with AIM Rule 26, the Company is required to maintain on its website details of the Code,
how the Company complies with the Code and an explanation of any deviations from such Code. This
information is required to be reviewed annually and going forward it is intended that it will be reviewed at
the same time as the Company’s Annual Report is prepared.
Further information about the Company’s charters, policies and procedures may be found at the Company's
website at www.europametals.com, under the section titled Corporate Governance.
26 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Disclosure – Principles & Recommendations
The Company reports below on how it has followed (or otherwise departed from) each of the Principles &
Recommendations during the year ending 30 June 2019 (the “reporting period”).
Principle 1 – Lay solid foundations for management and oversight
Recommendation 1.1:
Companies should disclose the respective roles and responsibilities of the board and management and
those matters expressly reserved to the board and those delegated to management.
Disclosure:
The Company has established the functions reserved to the Board and has set out these functions in its
Board Charter. The Board is collectively responsible for promoting the success of the Company through its
key functions of overseeing the management of the Company, providing overall corporate governance of
the Company, monitoring the financial performance of the Company, engaging appropriate management
commensurate with the Company’s structure and objectives, involvement in the development of corporate
strategy and performance objectives and reviewing, ratifying and monitoring systems of risk management
and internal control, codes of conduct and legal compliance.
The Company has established the functions delegated to management and has set out these functions in
its Board Charter. Senior executives are responsible for supporting the executive officers and assisting the
executive officers in implementing the running of the general operations and financial business of the
Company, in accordance with the delegated authority of the Board.
Senior executives are responsible for reporting all matters which fall within the Company's materiality
thresholds at first instance to the executive officers or, if the matter concerns the executive officers, then
directly to the Chairman or the lead independent director, as appropriate.
Recommendation 1.2:
Companies should undertake appropriate checks before appointing a person, or putting a person forward
for election to shareholders, as a director.
Disclosure:
The Company does undertake appropriate checks in accordance with this recommendation.
Recommendation 1.3:
Companies should have written agreements with each director and senior executive setting out the terms of
their appointment.
Disclosure:
The Company does have written agreements with each director and senior executive in accordance with
this recommendation.
Recommendation 1.4:
The company secretary should be accountable directly to the board, through the chairman, on all matters to
do with the proper functioning of the board.
Disclosure:
The company secretary is accountable directly to the board, through the chairman, on all matters to do with
the proper functioning of the board.
27 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Recommendation 1.5:
The Company should:
(a)
(b)
(c)
have a diversity policy which includes requirements for the board or a relevant committee of the
board to set measurable objectives for achieving gender diversity and to assess annually both the
objectives and the Company’s progress in achieving them;
disclose that policy or a summary of it; and
disclose as at the end of each reporting period the measurable objectives for achieving gender
diversity set by the board or a relevant committee of the board in accordance with the Company’s
diversity policy and its progress towards achieving them, and the respective proportions of men and
women on the board, in senior executive positions and across the whole organisation (including
how the Company has defined “senior executive” for these purposes).
Disclosure:
The Company has established a Diversity Policy a copy of which is published on the Company’s website.
The Company has not yet established measurable objectives for achieving gender diversity. The Company
operates with a very small team of professionals, whose services are provided on the basis of their
experience and professional qualifications. Establishing such measurable objectives will be addressed by
the Board when the Company’s operations require the expansion of its personnel numbers
The respective proportions of men and women on the board and in senior executive positions (that term
meaning a position having senior management responsibilities as set out in the Company’s delegated
authorities manual) are set out in the following table:
Gender
Total
Female
Male
% Female
0
5
0%
Senior
Management
0
2
0%
Board
0
5
0%
Recommendation 1.6:
The Company should:
(a)
(b)
have and disclose a process for periodically evaluating the performance of the board, its
committees and individual directors; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in
the reporting period in accordance with that process.
Disclosure:
The Company periodically evaluates the performance of the board, its committees and individual directors.
A performance evaluation was undertaken during the reporting period.
Recommendation 1.7:
The Company should:
(a)
(b)
have and disclose a process for periodically evaluating the performance of senior executives; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in
the reporting period in accordance with that process.
Disclosure:
The Company periodically evaluates the performance of senior executives. A performance evaluation was
not undertaken during the reporting period.
28 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Principle 2 – Structure the Board to add value
Recommendation 2.1:
The Board should establish a Nomination Committee.
Disclosure:
The Company has established a separate Nomination Committee. The Committee comprises Dr Evan
Kirby (chairman of the committee), Mr Myles Campion and Mr Colin Bird.
Recommendation 2.2:
The Company should have and disclose a board skills matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its membership.
Disclosure:
The Company has a skills matrix setting out the skills and diversity of the board. Its members have a
mixture of experience and corporate, technical, financial and management skills that are considered
appropriate for the Company’s present situation.
Recommendation 2.3:
The Company should disclose:
(a)
(b)
the names of the directors considered by the board to be independent directors;
if directors have a prescribed interest, position, association or relationship with the Company, why
they are regarded as independent directors; and
(c)
the length of service of each director.
Disclosure:
The independent directors of the Company are Mr Daniel Smith, Dr Evan Kirby and Mr Colin Bird. The
length of service of each director is as follows: Mr Smith – 1 year and 8 Months; Dr Kirby – 3 years; Mr Bird
– 1year and 8 months.
Recommendation 2.4:
A majority of the board of the Company should be independent directors.
Disclosure:
There are five directors, three of whom are independent.
Recommendation 2.5:
The chairman of the board of the Company should be an independent director and, in particular, should not
be the same person as the CEO of the Company.
Disclosure:
Mr Colin Bird was appointed as the independent Chairman on 11 January 2018.
Recommendation 2.6:
The Company should have a programme for inducting new directors and provide appropriate professional
development opportunities for directors to develop and maintain the skills and knowledge needed to
perform their role as directors effectively.
29 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Disclosure:
The Company will induct new directors at an appropriate time when suitable individuals are identified and
available and as the Company’s business requires adjusted skills sets on the board. Directors will be
provided appropriate professional development opportunities to develop and maintain the skills and
knowledge needed to perform their role as directors effectively as and when required.
Principle 3 – Act ethically and responsibly
Recommendation 3.1:
The Company should:
(a)
(b)
have a code of conduct for its directors, senior executives and employees; and
disclose that code or a summary of it.
Disclosure:
The Company has established a Code of Conduct applying to directors, senior executives and employees
as to the practices necessary to maintain confidence in the Company’s integrity, practices necessary to
take into account their legal obligations and the expectations of their stakeholders and responsibility and
accountability of individuals for reporting and investigating reports of unethical practices. The Code of
Conduct is available for scrutiny on the Company’s website.
Principle 4 – Safeguard integrity in financial reporting
Recommendation 4.1:
The board should:
(a)
(b)
have an audit committee that has at least three members, all of whom are non-executive directors
and a majority of whom are independent, and be chaired by an independent director who is not
chairman of the board; and
disclose the committee’s charter, its members and the relevant qualifications and experience of the
committee members and the number of times it met during the reporting period.
Disclosure:
The Company has established an Audit Committee with a formal charter. The committee comprises three
directors, being Mr Daniel Smith (chairman of the committee), Mr Colin Bird and Mr Laurence Read. It
meets the stipulations set out in recommendation 4.1, and the relevant qualifications and experience of its
members are set out in the Directors’ Report. All of the Audit Committee members consider themselves to
be financially literate and have industry knowledge.
Recommendation 4.2:
The board should, before it approves the Company’s financial statements for a financial period, receive
from its CEO and CFO a declaration that, in their opinion, the financial records of the Company have been
properly maintained and that the financial statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and performance of the Company and that the opinion
has been formed on the basis of a sound system of risk management and internal control which is
operating effectively.
Disclosure:
The board meets the stipulations set out in recommendation 4.2.
Recommendation 4.3:
The Company should ensure that its external auditor attends its AGM and is available to answer questions
from security holders relevant to the audit.
30 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Disclosure:
The Company meets the stipulations set out in recommendation 4.3.
Principle 5 – Make timely and balanced disclosure
Recommendation 5.1:
The Company should have a written policy designed to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior executive level for that compliance and disclose
those policies or a summary of those policies.
Disclosure:
[The Company has established a written policy designed to ensure compliance with listing rule disclosure
requirements and accountability at a senior executive level for that compliance. The policy is available for
scrutiny on the Company’s website.
Principle 6 – Respect the rights of security holders
Recommendation 6.1:
The Company should provide information about itself and its governance to investors via its website.
Disclosure:
The Company complies with recommendation 6.1.
Recommendation 6.2:
The Company should design and implement an investor relations programme to facilitate effective two-way
communication with investors.
Disclosure:
The Company has designed a communications policy for promoting effective communication with
shareholders.
Recommendation 6.3:
The Company should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders.
Disclosure:
The Company gives adequate notice to security holders of meetings of security holders and encourages
attendance at such meetings.
Recommendation 6.4:
The Company should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
Disclosure:
The Company meets the requirements of recommendation 6.4.
31 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Principle 7 – Recognise and manage risk
Recommendation 7.1:
The board should:
(a)
(b)
have a risk management committee that has at least three members, a majority of whom should be
independent, and be chaired by an independent director; and
disclose the committee’s charter, its members and the relevant qualifications and experience of the
committee members and the number of times it met during the reporting period.
Disclosure:
The Company does not currently have a risk management committee. The Board has required
management to design, implement and maintain risk management and internal control systems to manage
the Company’s material business risks. The Board also requires management to report to it confirming that
those risks are being managed effectively. Further, the Board has received a report from management as to
the effectiveness of the Company’s management of its material business risks.
Recommendation 7.2:
The board or a committee of the board should:
(a)
review the Company’s risk management framework at least annually to satisfy itself that it
continues to be sound; and
(b)
disclose, in relation to each reporting period, whether such a review has taken place.
Disclosure:
The Board has required management to design, implement and maintain risk management and internal
control systems to manage the Company’s material business risks. The Board also requires management
to report to it confirming that those risks are being managed effectively. Further, the Board has received a
report from management as to the effectiveness of the Company’s management of its material business
risks.
During the reporting period the Company had an informal risk management system in place, including the
policies and systems referred to in the disclosure in relation to recommendation 7.2. Although the system
was not fully documented, management acting through the Executive Directors was able to form the view
that management of its material business risks during the reporting period was effective.
Recommendation 7.3:
The Company should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and what role it performs; or
if it does not have an internal audit function, that fact and the processes it employs for evaluating
and continually improving the effectiveness of its risk management and internal control processes.
Disclosure:
The Company does not have an internal audit function. The Board has required management to design,
implement and maintain risk management and internal control systems to manage the Company’s material
business risks. The Board also requires management to report to it confirming that those risks are being
managed effectively. Further, the Board has received a report from management as to the effectiveness of
the Company’s management of its material business risks.
Recommendation 7.4:
The Company should disclose whether it has any material exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or intends to manage those risks.
32 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Disclosure:
The Company does not have any material exposure to economic, environmental or social sustainability
risks, other than the risks that are common to all minerals explorers in relation to commodity prices and the
availability of venture capital.
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.1:
The board should:
(a)
(b)
have a remuneration committee that has at least three members, a majority of whom should be
independent, and be chaired by an independent director; and
disclose the committee’s charter, its members and the relevant qualifications and experience of the
committee members and the number of times it met during the reporting period.
Disclosure:
The Company throughout the financial year had a separate remuneration committee that meets the
requirements of recommendation 8.1. The committee comprised Dr Evan Kirby (chairman of the
committee), Mr Colin Bird and Mr Daniel Smith. The relevant qualifications and experience of its members
are set out in the Directors’ Report. The committee met once during the reporting period.
Recommendation 8.2:
The Company should separately disclose its policies and practices regarding the remuneration of non-
executive directors and the remuneration of executive directors and other senior executives.
Disclosure:
Non-executive directors are remunerated at market rates for time, commitment and responsibilities.
Remuneration for non-executive directors is not linked to individual performance. Given the Company's
stage of development and the financial restrictions placed on it, the Company may consider it appropriate to
issue unquoted options to non-executive directors, subject to obtaining the relevant approvals. This policy
is subject to annual review. All of the directors' option holdings are fully disclosed.
Pay and rewards for executive directors and senior executives consist of a base pay and benefits (such as
superannuation) as well as long term incentives through participation in employee share and option plans.
Executives are offered a competitive level of base pay at market rates and which is reviewed annually to
ensure market competitiveness.
Recommendation 8.3:
If the Company has an equity-based remuneration scheme, it should:
(a)
have a policy on whether participants are permitted to enter into transactions (whether through the
use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b)
disclose that policy or a summary of it.
Disclosure:
Though the Company has a Share Plan and an Option Plan in place in order to provide incentives and
directors and employees have from time to time participated in such plans, any participation in such plans is
not regarded as equity-based remuneration, and in any event the Plan rules themselves would prevent the
entry into transactions that limit the economic risk of such participation.
33 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2019
Note
3(a)
3(b)
3(c)
16
5
Revenue from continuing operations
Revenue
Other income
Administration expenses
Occupancy expenses
Exploration expenditure
Foreign exchange (loss)/ gain
Share based payments
Loss before taxation
Income tax benefit / (expense)
Loss after income tax for the year from continuing
operations
Net loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
2019
$
2018
$
42
7,212
(974,577)
(32,489)
(1,390,379)
(1,979)
-
9
71,310
(1,296,518)
(27,655)
(413,393)
121,513
(338,713)
(2,392,170)
(1,883,446)
-
-
(2,392,170)
(1,883,446)
(2,392,170)
(1,883,446)
Net exchange gain on translation of foreign operation
Other comprehensive income for the year, net of
tax
62,293
62,293
230,474
230,474
Total comprehensive loss for the year
(2,329,877)
(1,652,972)
Net loss for the year attributable to:
Equity holders of the Parent
Total comprehensive loss for the year attributable to:
Equity holders of the Parent
(2,329,877)
(2,329,877)
(1,652,972)
(1,652,972)
(2,329,877)
(2,329,877)
(1,652,972)
(1,652,972)
Loss per share
Cents per share
Cents per share
Basic loss for the year attributable to ordinary equity
holders of the Parent
Diluted loss for the year attributable to ordinary equity
holders of the Parent
7
7
(0.03)
(0.03)
(0.06)
(0.06)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes
34 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Financial Position
As at 30 June 2019
Assets
Current assets
Cash and short term deposits
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Note
8
9
Capitalised exploration expenditure
10
Total non-current assets
2019
$
2018
$
1,052,411
291,201
1,343,612
31,657
1,423,943
1,455,600
1,272,327
77,510
1,349,837
20,192
1,344,013
1,364,205
Total assets
2,799,212
2,714,042
Liabilities and equity
Current liabilities
Trade and other payables
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
11
12
15
14
91,709
91,709
229,671
229,671
91,709
229,671
2,707,503
2,484,371
40,572,924
(40,759,280)
2,893,859
2,707,503
38,079,499
(38,367,110)
2,771,982
2,484,371
This Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
35 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Cash Flows
For the year ended 30 June 2019
Note
2019
$
2018
$
Cash flows used in operating activities
Interest received
Exploration and evaluation expenditure
Payments to suppliers and employees
Net cash flows used in operating activities
19
Cash flows used in investing activities
Payments for plant and equipment
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs on issue of shares
Net cash flows from financing activities
Net (decrease)/ increase in cash and cash equivalents
held
Net foreign exchange difference
Cash and cash equivalents at 1 July
1,709
(1,387,317)
(1,339,040)
(2,724,648)
9
(404,017)
(1,031,775)
(1,435,783)
-
-
(22,008)
(22,008)
2,684,170
(184,832)
2,499,338
(225,310)
5,394
1,272,327
2,294,676
(135,819)
2,158,857
701,066
67,370
503,891
Cash and cash equivalents at 30 June
8
1,052,411
1,272,327
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
36 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Changes in Equity
For the year ended 30 June 2019
Attributable to the equity holders of the Parent
At 1 July 2017
Loss for the year
Other Comprehensive Income (net of tax)
Total comprehensive loss (net of tax)
Transactions with owners in their capacity as
owners:
Shares issued during the year net of transaction costs
Options issued to Brokers
Options issued under Employee Option Plan
At 1 July 2018
Loss for the year
Other Comprehensive Income (net of tax)
Total comprehensive loss (net of tax)
Transactions with owners in their capacity as
owners:
Shares issued during the year net of transaction costs
Options issued to Brokers
At 30 June 2019
Issued capital
$
35,931,732
-
Accumulated
losses
$
(36,483,664)
(1,883,446)
Employee
share incentive
reserve
$
491,577
-
Option reserve
$
1,609,070
-
-
-
-
(1,883,446)
2,147,767
-
-
-
-
-
-
-
-
-
-
38,079,499
(38,367,110)
38,079,499
-
(38,367,110)
(2,392,170)
491,577
491,577
-
-
-
-
(2,392,170)
2,493,425
-
-
-
-
-
-
-
-
-
-
80,470
338,713
2,028,253
2,028,253
-
-
-
-
59,584
Foreign
exchange
reserve
$
Total equity
$
21,678
-
230,474
230,474
-
-
-
252,152
252,152
-
62,293
1,570,393
(1,883,446)
230,474
(1,652,972)
2,147,767
80,470
338,713
2,484,371
2,484,371
(2,392,170)
62,293
62,293
(2,329,877)
-
-
2,493,425
59,584
40,572,924
(40,759,280)
491,577
2,087,837
314,445
2,707,503
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
37 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 1: Corporate information
The consolidated financial statements of Europa Metals Ltd and its subsidiaries (collectively, the “Group”) for the
year ended 30 June 2019 were authorised for issue in accordance with a resolution of the directors on 27
September 2019.
Europa Metals Ltd, the parent, is a for profit company limited by shares incorporated in Australia whose shares
are publicly traded on the AltX of the Johannesberg Stock Exchange and the London Stock Exchange (AIM).
Domicile:
Australia
Registered Office:
c/o Minerva Corporate Pty. Ltd, Level 8, 99 St Georges Terrace, Perth, WA, 6000.
Note 2: Summary of 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 Interpretations and complies
with other requirements of Australian law.
The accounting policies detailed below have been consistently applied to all of the years presented unless
otherwise stated. The financial statements are for the consolidated entity consisting of Europa Metals Ltd and its
subsidiaries.
The Financial Report has also been prepared on a historical cost basis.
All amounts are presented in Australian dollars, unless otherwise stated.
(b)
Statement of compliance
The Financial Report complies with Australian Accounting Standards, as issued by the Australian Accounting
Standards Board, and complies with International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board.
(c)
Going concern
The Annual Report has been prepared on a going concern basis and this basis is predicated on a number of
initiatives being undertaken by the Group with respect to ongoing cost reductions and funding as set out below.
The Group incurred an operating loss after income tax of $2,392,170 for the year ended 30 June 2019 (2018:
$1,883,446). In addition, the Group had net current assets of $1,251,903 (2018: $1,120,166), and shareholders’
equity of $2,707,503 (2018: $2,484,371) as at 30 June 2019.
The Group’s forecast cash flow requirements for the 15 months ending 30 September 2020 reflect cash outflows
from operating and investing activities, which take into account a combination of committed and uncommitted but
currently planned expenditure. The ability of the Group to continue as a going concern is dependent on raising
additional funds to meet the Group’s ongoing working capital requirements when required.
These conditions indicate a material uncertainty which may cast significant doubt as to whether the Group will be
able to meet its debts as and when they fall due and thus continue as a going concern.
This Annual report has been compiled on a going concern basis. In arriving at this position the Directors are
satisfied that the Group will have access to sufficient cash as and when required to enable it to fund
administrative and other committed expenditure. The Directors are satisfied that they will be able to raise
additional funds either through implementation of strategic joint ventures or via a form of debt and/or equity
raising. In addition, the Directors have embarked on a strategy to reduce costs.
38 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 2: Summary of significant accounting policies (continued)
Should the Group not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business and at amounts that differ from those stated
in the financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should the
Group not be able to continue as a going concern.
(d)
Adoption of new and revised standards
Europa Metals Limited and its subsidiaries (‘the Group’) has adopted all new and amended Australian Standards
and Interpretations mandatory for reporting periods beginning on or after 1 July 2018, including:
• AASB 9 - Financial Instruments
• AASB 15 - Revenue from Contracts with Customers
The adoption of these standards and interpretations did not have any material effect on the financial position or
performance of the Group.
(e)
Accounting standards issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the year ended 30 June 2019. Relevant Standards and
Interpretations are outlined in the table below. Management have assessed the impact of each standard and
considered there to be no material impact to the group.
Reference
Title
Summary
AASB16
Leases
This Standard sets out the principles for the recognition, measurement,,
presentation and disclosure of leases, The objective is to ensure that lessees and
lessors provide relevant information in a manner that faithfully represents those
transactions, This information gives a basis for users of financial statements to
assess the effect that leases have on the financial position, financial performance
and cash flows of the entity.
Application
date of
standard*
Application
date for
Group
1 January
2019
1 July 2019
(f)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at
30 June 2019. Control is achieved when the Group is exposed, or has 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.
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.
39 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 2: Summary of significant accounting policies (continued)
(f)
Basis of consolidation (continued)
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 statement of
profit or loss and other comprehensive income 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 parent 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 intra-group 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 the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
• De-recognises the assets (including goodwill) and liabilities of the subsidiary;
• De-recognises the carrying amount of any non-controlling interests;
• De-recognises the cumulative translation differences recorded in equity;
• Recognises the fair value of the consideration received;
• Recognises the fair value of any investment retained;
• Recognises any surplus or deficit in profit or loss; and
• Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
• Exchange differences arising on translation of foreign operations are transferred directly to the group's
foreign currency translation reserve in the statement of financial position. These differences are recognised in
the profit or loss in the period in which the operation is disposed.
(g)
Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying
values of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the
period in which the estimate is revised if it affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer using
the Black Scholes model, using the assumptions detailed in Note 16.
Business combination vs assets acquisition
The Company has determined that the acquisition of GoldQuest Iberica, S.L. in 2016 has taken the form of an
asset acquisition and not a business combination. In making this decision, the Company determined that the
nature of the exploration and evaluation activities by GoldQuest did not constitute an integrated set of activities
and assets that are capable of being conducted and managed for the purpose of providing a return in the form of
dividends, lower costs or other economic benefits directly to investors or other owners, members or participants.
40 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 2: Summary of significant accounting policies (continued)
(g)
Critical accounting estimates and judgements (continued)
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a
carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise
in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax
under AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be
included in the capitalised cost of the asset.
(h)
Foreign currency translation
Both the functional and presentation currency of the Company and its Australian controlled entity is Australian
dollars (A$). Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency.
The functional currency of the foreign operations is Euro (EUR), and United States dollars (USD).
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 ruling at the reporting date.
All exchange differences in the parent Company’s financial statements are taken to profit or loss unless they
relate to the translation of subsidiary related loans and borrowings which are considered part of the net
investment value taken directly to equity until the disposal of the net investment, at which time they are
recognised in profit or loss.
As at the reporting date the assets and liabilities of foreign subsidiaries are translated into the presentation
currency of the Company at the rate of exchange ruling at the reporting date and their statements of profit or loss
and other comprehensive income are translated at the weighted average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular
foreign operation is recognised in profit or loss.
(i)
Exploration and evaluation expenditure
Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which
are carried forward where right of tenure of the area of interest is current. The future recoverability of exploration
and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit
the related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation assets
through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, which could impact the cost of mining, future legal changes (including changes to
environmental restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which this determination is made.
(j)
Income tax
Current tax assets and liabilities for the current period and prior periods are measured at amounts expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates
and tax laws used for computations are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
41 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 2: Summary of significant accounting policies (continued)
(j)
Income tax (continued)
Current tax assets and liabilities for the current period and prior periods are measured at amounts expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates
and tax laws used for computations are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
•
where the deferred income tax liability arises from the initial recognition of goodwill 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
where the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
credits and unused tax losses, 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 assets and unused tax losses can be
utilised except:
•
•
where the deferred income 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
where the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income 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 income
tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to 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
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of
profit or loss and other comprehensive income.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
(k)
Goods & Services Tax/Value Added Tax
Revenues, expenses and assets are recognised net of the applicable amount of GST/VAT except:
• where the GST/VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
42 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 2: Summary of significant accounting policies (continued)
(k)
Goods & Services Tax/Value Added Tax (continued)
•
receivables and payables are stated with the amount of GST/VAT included.
The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST/VAT component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to,
the taxation authority.
(l)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and on hand and short-
term deposits with an original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(m) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have
been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(n) Revenue recognition
Interest Income
Interest income is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net
carrying amount of the financial asset.
(o) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
The Company’s own shares, which are re-acquired for later use in the employee share based payment
arrangements, are deducted from equity.
(p)
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
43 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 2: Summary of significant accounting policies (continued)
(q)
Loss per share
Basic loss per share is calculated as net loss attributable to members of the Company adjusted to exclude any
costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted loss per share is calculated as net loss attributable to members of the Company adjusted for:
•
•
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
•
(r)
Other Financial Assets
Other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is determined
based on both the business model within which such assets are held and the contractual cash flow
characteristics of the financial asset.
(s)
Share-based payment transactions
The Company provides benefits to its employees and consultants (including key management personnel (“KMP”)
in the form of share-based payments, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions).
Equity settled transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black Scholes
model, further details of which are given in Note 16.
In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked
to the price of the shares of the Company if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity on the
date the equity right is granted. The statement of profit or loss and other comprehensive income charge or credit
for a period represents the movement in cumulative expense recognised as at the beginning and end of that
period.
If the terms of an equity-settled transactions are modified, as a minimum an expense is recognised as if the
terms had not been modified. An additional expense is recognised for any modification that increases the total
fair value of the share based 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 it is granted, the cancelled and
new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
diluted loss per share (see note 7).
(t)
Comparatives figures
When required by Accounting Standards, comparative figures have been restated to conform to changes in
presentation for the current financial year.
44 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 3: Revenue and expenses
Revenue and expenses from continuing operations
(a) Revenue
Interest received
(b) Other Income
Other Income
(c) Profit or loss
Other expenses include the following:
Depreciation
Consulting services
Employment related
- Directors fees
- Wages
- Superannuation
Corporate
Travel
Other
Note 4: Segment reporting
2019
$
2018
$
42
42
7,212
7,212
9
9
71,310
71,310
2019
$
2018
$
12,252
7,952
153,237
426,227
434,924
-
-
237,009
46,500
90,655
974,577
341,322
55,498
8,309
240,476
34,314
182,420
1,296,518
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board of Directors.
Europa Metals Limited operates in the mineral exploration industry in Spain.
Given the nature of the Group, its size and current operations, management does not treat any part of the Group
as a separate operating segment. Internal financial information used by the Group’s decision makers is
presented on a “whole of entity” manner without dissemination to any separately identifiable segments.
The Group’s management operate the business as a whole without any special responsibilities for any
separately identifiable segments of the business.
Accordingly the financial information reported elsewhere in this financial report is representative of the nature
and financial effects of the business activities in which it engages and the economic environments in which it
operates.
45 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 5: Income tax expense
Reconciliation of income tax expense to the pre-tax net loss
Loss before income tax
2019
$
2018
$
(2,392,170)
(1,883,446)
Income tax calculated at 30% (2018: 27.5%) on loss before income tax
(717,651)
(517,948)
Add tax effect of: non-deductible expenses
Difference in tax rate of subsidiaries operating in other jurisdictions
Unused tax losses and temporary differences not brought to account
Income tax (profit) / expense
230,897
(69,250)
556,004
-
332,014
(8,622)
194,556
-
Analysis of deferred tax balances
Deferred tax liabilities
Assessable temporary differences
Prepayments
Deferred tax liabilities offset by deferred tax assets
Net deferred tax liabilities
Deferred tax assets
Share issue expenses
Payables and provisions
Other
Unused tax losses
Total unrecognised deferred tax assets
Deferred tax assets
Deferred tax assets offset by deferred tax liabilities
Net deferred tax assets
2019
$
2018
$
(4,745)
4,745
-
(4,578)
4,578
-
-
11,175
4,600
5,313,714
5,329,489
(5,324,744)
4,745
(4,745)
109,140
12,531
-
4,439,954
4,561,625
(4,557,047)
4,578
(4,578)
-
-
Unused tax losses set out above have not been recognised due to the uncertainty of future taxable profit
streams.
Note 6: Auditors’ remuneration
Remuneration of the auditor of the Company for:
-auditing or reviewing the financial statements
BDO Audit (WA) Pty Ltd
-other assurance related services
BDO Corporate Finance (WA) Pty Ltd
2019
$
2018
$
28,025
28,025
-
28,025
40,313
40,313
1,750
42,063
46 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 7: Loss per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
2019
$
2018
$
(0.03)
(0.03)
(0.06)
(0.06)
Loss used in calculating basic loss per share
(2,392,170)
(1,883,446)
Adjustments to basic loss used to calculate dilutive loss per share
-
-
Loss used in calculating dilutive loss per share
(2,392,170)
(1,883,446)
Weighted average number of ordinary shares used in the
calculation of basic loss per share
Number
Number
7,125,884,907
3,075,844,119
Weighted average number of ordinary shares used in the
calculation of diluted loss per share
7,125,884,907
3,075,844,119
4,199,416,595 share options outstanding at 30 June 2019 (30 June 2018: 855,365,729) have not been included
in the calculation of dilutive loss per share as these are anti-dilutive.
Note 8: Cash and cash equivalents
Cash at the end of the financial year as shown in the statement of
cash flows is reconciled to items in the statement of financial
position as follows:
Cash at bank
See note 20 for the risk exposure analysis for cash and cash equivalents.
Note 9: Trade and other receivables
Current
Sundry debtors
GST / VAT
Prepayments
2019
$
2018
$
1,052,411
1,272,327
2019
$
2018
$
77,541
196,492
17,168
291,201
23,825
37,037
16,648
77,510
Non-trade debtors are non-interest bearing and are generally on 30-90 days credit terms. The carrying amounts
of these receivables represent fair value and are not considered to be impaired.
Note 10: Capitalised exploration expenditure
At 1 July
Capitalised exploration expenditure
Foreign exchange movement
At 30 June
2019
$
1,344,013
-
79,930
1,423,943
2018
$
1,180,488
-
163,525
1,344,013
47 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 11: Trade and other payables
Current
Trade payables and other payables
2019
$
2018
$
91,709
91,709
229,671
229,671
Trade and other payables are non-interest bearing and are normally settled on 30-day terms.
Note 12: Contributed Equity
(a)
Share Capital
Ordinary Shares
Ordinary shares fully paid
Employee share incentive
plan shares
Capital management
2019
No. of shares
2018
No. of shares
2019
$
2018
$
11,976,876,317
4,849,757,667
40,838,226
38,344,801
(2,300,000)
11,974,576,317
(2,300,000)
4,847,457,667
(265,302)
40,572,924
(265,302)
38,079,499
When managing capital (which is defined as the Company’s total equity), management’s objective is to ensure
the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for
other stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital
available to the entity. As the equity market is constantly changing management may issue new shares to
provide for future exploration and development activity. The Company is not subject to any externally imposed
capital requirements.
During the year ended 30 June 2019, nil (2018: nil) shares were issued back to the market from the Employee
Incentive Share Plan.
(b)
Movements in ordinary share capital
Date
Details
Number of
shares
$
30 June 2017
Closing Balance
2,469,999,055
36,197,034
14 September 2017
8 November 2017
22 May 2018
22 May 2018
Placing shares – Peterhouse Corporate
Placing shares – Beaufort Securities
Shares issued in lieu of directors fees
Placing shares
Costs associated with share issues
214,782,526
370,499,858
55,345,793
1,739,130,435
321,590
317,187
69,381
1,655,898
(216,289)
30 June 2018
Closing Balance
4,849,757,667
38,344,801
10 August 2018
29 March 2019
Placing shares
Placing shares
Costs associated with share issues
Employee share plan shares on issue
30 June 2019
727,118,650
6,400,000,000
11,976,876,317
(2,300,000)
987,490
1,750,351
(244,416)
40,838,226
(265,302)
11,974,576,317
40,572,924
If, at any time during the exercise period, an employee ceases to be an employee, all share options held by that
employee will lapse one month after their employment end date. Therefore, employee shares above are only
recognised in issued capital when issued to the employees concerned.
48 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 12: Contributed Equity (continued)
(c)
Movements in employee share plan shares issued with limited recourse employee loans
Date
Details
Number of
shares
$
30 June 2018
30 June 2019
Opening balance
Cancelled during 2018
Issued during 2018
Closing balance
Opening balance
Cancelled during 2019
Issued during 2019
Closing balance
2,300,000
-
-
2,300,000
2,300,000
-
-
2,300,000
(265,302)
-
-
(265,302)
(265,302)
-
-
(265,302)
No employee share plan shares were issued in 2019 (2018: Nil).
This account is used to record the value of shares issued under the Executive Share Incentive Plan (ESIP). The
ESIP is accounted for as an “in-substance” option plan due to the limited recourse nature of the loan between
employees and the Company to finance the purchase of ordinary shares. The total fair value of the “in
substance” options issued under the plan is recognised as a share-based payment expense over the vesting
period, with a corresponding increase in equity.
Note 13: Options
Options
At year end the following options were on issue:
2019
2018
No. of Options No. of Options
- 29 July 2018 options exercisable at GBP0.003 per share
-
205,949,134
- 22 May 2020 options exercisable at GBP0.00075 per share
66,666,666
66,666,666
- 22 November 2020 options exercisable at GBP0.00075 per share
185,249,929
185,249,929
- 22 November 2020 options exercisable at GBP0.00075 per share
- 22 May 2021 options exercisable at GBP0.00075 per share
50,000,000
10,000,000
50,000,000
10,000,000
- 22 May 2023 options exercisable at GBP0.000575 per share
337,500,000
337,500,000
- 30 April 2022 options exercisable at GBP0.00025 per share
- 30 April 2022 options exercisable at GBP0.00015 per share
3,200,000,000
350,000,000
-
-
4,199,416,595
855,365,729
The table in note 16 summarises the model inputs (post consolidation) for options granted during the year ended
30 June 2019.
49 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 14: Reserves
Employee
share
incentive
reserve
$
Options
reserve
$
Foreign
exchange
reserve
$
Total
$
At 30 June 2017
Options issued to Brokers(1)
Options issued under Employee
Option plan
Currency translation differences
At 30 June 2018
Options issued to Brokers(1)
Currency translation differences
491,577
1,609,070
21,678
2,122,325
-
-
80,470
338,713
-
-
-
230,474
80,470
338,713
230,474
491,577
2,028,253
252,152
2,771,982
-
-
59,584
-
-
62,293
59,584
62,293
At 30 June 2019
491,577
2,087,837
314,445
2,893,859
(1) The value of the service could not be reliably determined and therefore, the options were valued using the Black Scholes Model.
Nature and purpose of reserves
Employee share incentive reserve
This reserve is used to record the value of equity benefits provided to employees, consultants and directors as
part of their remuneration under the Executive Share Incentive Plan.
Options reserve
This reserve is used to record the value of options issued, other than share-based payments to directors,
employees and consultants as part of their remuneration.
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.
Equity reserve
The Equity reserve is used to record the acquisition of the non-controlling interest by the Group and to record
differences between the carrying value of non-controlling interests and the consideration paid / received, where
there has been a transaction involving non-controlling interests that do not result in a loss of control.
The reserve is attributable to the equity of the parent.
Note 15: Accumulated losses
Accumulated losses at the beginning of the financial year
Net loss for the year
Accumulated losses at the end of the financial year
2019
$
(38,367,110)
2018
$
(36,483,664)
(2,392,170)
(1,883,446)
(40,759,280)
(38,367,110)
50 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 16: Share based payments
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the year were as follows:
2018
$
2019
$
Options issued under Employee Option Plan (Included in Expenses)
Options issued to Brokers (included in Equity)
-
59,584
59,584
338,713
80,470
419,183
Fair value of options granted
The value of the above services was unable to be reliably measured so the fair value of the options issued was
used.
The fair value at the grant date of options issued is determined using the Black Scholes model that takes into
account the exercise price, the term of the option, the impact of dilution, the non-tradable nature of the option,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield
and the risk-free interest rate for the term of the option.
1. The tables below summarise the model inputs (post consolidation) for options granted prior to the year
ended 30 June 2019:
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
Underlying security spot price at grant
date (GBP)
Expected price
Company’s shares
Expected dividend yield
Expected life
Risk-free interest rate
Black Scholes model valuation per
option (AUD cents per share)
Total fair value
volatility of
the
350,000,000
0.00015
22 May 2018
22 May 2023
0.00015
100%
0%
2
2.0%
0.000170
$59,584
Equity
Movements
The following table illustrates the movements in share options during the year:
Outstanding at 1 July
Issued during the year
Cancelled during the year
Outstanding at 30 June
Exercisable at 30 June
2019
2018
Number
855,365,729
3,550,000,000
(205,949,134)
4,199,416,595
4,199,416,595
Number
413,360,261
649,416,595
(207,411,127)
855,365,729
855,365,729
51 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 17: Commitments and contingencies
(i) At this stage the Company has no minimum obligations with respect to tenement expenditure requirements.
(ii) Operating lease commitment to rental payments on office premises in Spain is as follows:
Within 1 year
2 to 5 years
Total
2019
$
2018
$
26,252
-
26,252
25,545
-
25,545
There are no material contingent liabilities or assets of the Group at the reporting date.
Note 18: Related party transactions
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share based payments
Termination benefits
2019
$
434,924
-
-
-
2018
$
318,793
3,037
405,753
-
434,924
727,583
Transactions between related parties are on normal commercial terms and conditions and no more favourable
than those available to other parties unless otherwise stated.
Subsidiaries
The consolidated financial statements include the financial statements of Europa Metals Limited and the
subsidiaries listed in the following table.
Name
Country of Incorporation
2019
2018
Ferrum Metals Pty Ltd
Europa Metals Iberica S.L. (Formally
GoldQuest Iberica S.L.)
Australia
Spain
100
100
100
100
Europa Metals Limited is the ultimate Australian parent entity and the ultimate parent of the Group. Transactions
between Europa Metals Limited and its controlled entities during the year consisted of loan advances by Europa
Metals Limited. All intergroup transactions and balances are eliminated on consolidation.
% Beneficial Equity
Interest
Trade payable
Minerva Corporate Pty Ltd (i)
Mowbrai Ltd (ii)
Income
from
Related
Parties
$
-
-
-
-
Expenditure
to Related
Parties
Amounts
Owed by
Related
Parties at
year end
Amounts
Owed to
Related
Parties at
year end
$
89,000
38,500
135,549
-
$
-
-
-
-
$
9,000
9,000
8,534
-
2019
2018
2019
2018
52 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 18: Related party transactions (continued)
(i)
Mr D Smith, a non-executive director and company secretary for the Company, is also a director of
Minerva Corporate Pty Ltd. During the year, Minerva Corporate Pty Ltd received the above fees for
company secretarial and accounting services. These fees are based on normal commercial terms and
conditions. Mr D Smith was appointed on 16 January 2018.
(ii) Mr L Read, an executive director of the Company, is also a director of Mowbrai Ltd. During the year,
Mowbrai Ltd received the above fees for consulting services. These fees are based on normal commercial
terms and conditions.
The following transactions were undertaken between the Company, executive officers and director-related
entities during 2019 and 2018.
Rental fees were paid to Lion Mining Finance, a company of which
Colin Bird is a director
Company secretarial and accounting fees were paid to Minerva
Corporate Pty Ltd, a company of which Daniel Smith is a director
Note 19: Cash flow information
Reconciliation of cash flow from operations with loss from ordinary
activities after income tax
Loss from ordinary activities after income tax
Depreciation
Share based payment compensation
Net foreign exchange differences
Changes in assets and liabilities
(Increase) / decrease in receivables
(Decrease) / increase in payables and provisions
2019
$
24,551
89,000
113,551
2018
$
-
-
-
2019
$
2018
$
(2,392,170)
(1,883,446)
12,252
-
(1,750)
(213,691)
(129,289)
7,952
338,713
(67,370)
43,719
124,649
Cash flows used in operations
(2,724,648)
(1,435,783)
Note 20: Financial risk management objectives and policies
The Group’s principal financial instruments comprise cash and short term deposits.
The main purpose of the financial instruments is to finance the Group’s operations. The Company also has other
financial instruments such as receivables and payables which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency
risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are
summarised below:
(a)
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a
result of changes in market interest rates, and the effective weighted average interest rate for each class of
financial assets and financial liabilities, is set out in the following table. The effect on profit and equity after tax if
interest rates at that date had been 10% higher or lower with all other variables held constant would result in an
immaterial difference.
The Group has not entered into any hedging activities to manage interest rate risk. In regard to its interest rate
risk, the Group continuously analyses its exposure. Within this analysis, consideration is given to potential
renewals of existing positions, alternative investments and the mix of fixed and variable interest rates.
53 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 20: Financial risk management objectives and policies (continued)
Weighted
Average Effective
Interest Rate
%
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non
Interest
Bearing
$
Total
$
0.05%
0.05%
736
736
-
-
728
728
-
-
-
-
-
-
-
-
-
-
1,051,675
1,051,675
1,052,411
1,052,411
91,709
91,709
91,709
91,709
1,271,599
1,271,599
1,272,327
1,272,327
229,669
229,669
229,669
229,669
2019
Financial Assets
Cash
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
2018
Financial Assets
Cash
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
(b)
Liquidity Risk
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities required to
meet the current exploration and administration commitments, through the continuous monitoring of actual cash
flows.
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and long
term funding and liquidity management requirements.
Less than
1 month
1 – 3
months
3 months
– 1 year
1 – 5
years
5+ years
%
$
$
$
$
Total
contractual
cash flow
$
Total
$
2019
Financial assets:
Cash
Receivables
Financial liabilities:
Non-interest bearing
Net cash inflow /
(outflow)
2018
Financial assets:
Cash
Receivables
Financial liabilities:
Non-interest bearing
1,052,411
-
1,052,411
-
-
-
-
291,201
291,201
-
(91,709)
(91,709)
1,052,411
199,492
1,272,327
-
1,272,327
-
60,863
60,863
-
-
-
-
(229,669)
(229,669)
Net cash inflow /
(outflow)
1,272,327
(168,806)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,052,411
291,201
1,343,612
1,052,411
291,201
1,343,612
-
(91,709)
(91,709)
-
(91,709)
(91,709)
1,251,903
1,251,903
1,272,327
60,863
1,333,190
-
(229,669)
(229,669)
1,272,327
60,863
1,333,190
-
(229,669)
(229,669)
1,103,521
1,103,521
54 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 20: Financial risk management objectives and policies (continued)
(c)
Credit Risk
Credit risk arises in the event that a counterparty will not meet its obligations under a financial instrument leading
to financial losses. The Company is exposed to credit risk from its operating activities and, financing activities
including deposits with banks and investments with insurance companies. The credit risk control procedures
adopted by the Company is to assess the credit quality of the institution with whom funds are deposited or
invested, taking into account its financial position and past experiences.
The maximum exposure to credit risk on financial assets of the Company which have been recognised in the
statement of financial position is generally limited to the carrying amount.
Cash is maintained with Westpac, Banco Popular and Unicaja Banco of Spain and the Standard Bank of South
Africa, with ratings from Standard & Poors of AA or above (long term).
(d)
Foreign Exchange Risk
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. The carrying amount of the Group’s foreign currency denominated monetary assets and
monetary liabilities at the reporting date is as follows,
Liabilities
2019
$
2018
$
Assets
2019
$
2018
$
Great British Pounds (GBP)
South African Rand (ZAR)
Euro (EUR)
-
(1,767)
(41,447)
(110,886)
(2,539)
(15,774)
908,511
3,099
135,418
1,240,078
3,036
9,297
Foreign currency sensitivity analysis
The Group is exposed to Great British Pound (GBP), and Euro (EUR) currency fluctuations.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian Dollar (AUD)
against the relevant currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to
key management personnel and represents management’s assessment of the possible change in foreign
exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items
and adjusts their translation at the period end for a 10% change in foreign currency rates.
The sensitivity analysis includes cash balances held in GBP and EUR which give rise to a foreign currency gain
or loss on revaluation. A positive number indicates an increase in profit and other equity where the AUD
strengthens against the EUR. In relation to cash balances held in GBP a positive number indicates an increase
in profit and other equity where the Australian Dollar strengthens against the respective currency. For a
weakening Australian Dollar against the respective currency there would be an equal and opposite impact on the
profit and other equity and the balances below would be negative.
(d)
Foreign Exchange Risk
2019
2018
Profit / (loss)
$
Equity increase
/ (decrease)
$
Profit / (loss)
$
Equity increase /
(decrease)
$
AUD strengthens
10%
AUD weakens
10%
- ZAR
- GBP
- EUR
- ZAR
- GBP
- EUR
133
90,851
9,397
(133)
(90,851)
(9,397)
(133)
(90,851)
(9,397)
133
90,851
9,397
558
135,096
2,507
(558)
(135,096)
(2,507)
(558)
(135,096)
(2,507)
558
135,096
2,507
55 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 20: Financial risk management objectives and policies (continued)
(e)
Fair value
The fair values of cash, trade and other receivables and trade and other payables approximate their carrying
values, as a result of their short maturity or because they carry floating rates.
Note 21: Parent Entity Information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated Losses
Reserves
Total shareholders’ equity
Loss of the parent entity
2019
$
2018
$
1,575,573
1,302,088
2,757,765
2,706,239
50,262
50,262
221,868
221,868
44,885,847
42,789,056
(45,196,901)
(42,867,023)
3,018,556
2,562,338
2,707,502
2,484,371
(2,717,672)
(1,538,302)
There have been no guarantees entered into by the parent entity in relation to any debts of its subsidiaries.
The parent entity has no contingent liabilities as at 30 June 2019 (2018: Nil).
Note 22: Significant events after the reporting date
There are subsequent events to report, as follows:
• On 11 July 2019, the Company provided a drilling update in respect of the three-hole programme that had
commenced on 15 May 2019. The second hole, TOD-022, had been completed having reached a depth of
761.3m, with core processed and sent to ALS Laboratories for independent analysis.
• On 9 August 2019, the Company announced that it had submitted an initial document (the “ID”) for formal
review by all key administration stakeholders, including the department of the environment, Castilla y León
region, Northwest Spain, and private stakeholders consulted by such administration, in connection with the
process for obtaining an exploitation license for Toral.
• On 15 August 2019, the Company announced the completion of the third hole, TOD-023, having reached a
depth of 713m. Commenced on 8 July 2019, TOD-023 had encountered a single significant intersection of 12
metres (down hole width) of visible mineralisation and two additional sub-ordinate hanging wall zones of
mineralisation.
• On 2 September 2019, the Company announced that it had completed a ‘daughter hole’ (TOD-023D) with
core samples collected and sent to Wardell Armstrong LLP (“WA”) to commence its independent metallurgical
testwork.
• On 4 September 2019, the Company announced that it had received notices of exercise in respect of certain
pre-existing warrants to subscribe for 212,000,000 new ordinary shares at a price of 0.015p per share and
133,333,334 new ordinary shares at a price of 0.025p per share. In aggregate, the exercise of these warrants
amounted to a cash subscription of approximately £65,133.
56 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2019
Note 22: Significant events after the reporting date (contineud)
• On 13 September 2019, the Company announced that it had received notices of exercise in respect of certain
pre-existing warrants to subscribe for 166,666,667 new ordinary shares at a price of 0.025p per share. The
exercise of these warrants amounted to a cash subscription of approximately £41,666.
• On 25 September 2019, the Company announced assay results for the second stage of its Phase II diamond
drilling programme at Toral. Additional mineralisation had been identified in the hanging wall zone (TOD-
023D; distinct to the main metallurgical sample zone), with its potential influence on the resource estimate
being assessed by Europa Metal’s technical team. Copper traces identified within mineralisation at 640m
downhole and is also being assessed. All of the assay results have been submitted to the Company's
independent consultants, AMS, to enable them to update the mineral resource models and provide a JORC
(2012) technical report which is expected to be received in early Q4 2019. Metallurgical testing is also
underway by WA with completion targeted for Q4 2019.
• On 30 September 2019, the Company had raised, in aggregate, £1,000,000 (before expenses), through a
placing of, and subscription for, in aggregate, 4,000,000,000 new ordinary shares of no par value each in the
capital of the Company (“Ordinary Shares”) at an issue price of 0.025 pence per share (the “Issue Price”) (the
“Fundraising”). The Fundraising comprised a placing of 3,400,000,000 new Ordinary Shares via the
Company’s joint broker, Turner Pope, as agent of the Company, and a subscription for a further 600,000,000
new Ordinary Shares at the Issue Price, with certain existing and new investors, including Brandon Hill
Capital Limited (“Brandon Hill Capital”), which invested in a principal capacity.
•
In addition, one warrant exercisable for a period of 2 years from Admission at a subscription price of 0.0375
pence per Ordinary Share will be issued to all participants in the Placing for every two new Ordinary Shares
subscribed (the “Placing Warrants”). Accordingly, 2,000,000,000 Placing Warrants will be issued pursuant to
the Placing. Further, Turner Pope and Brandon Hill have been issued with 204,000,000 warrants and
36,000,000 warrants respectively to subscribe for new Ordinary Shares at the Issue Price, exercisable for a
period of three years from Admission.
57 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Declaration
In the opinion of the directors of Europa Metals Limited:
(a)
the financial statements and notes set out on pages 34 to 57 are in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position of the Group as at 30 June 2019 and of
its performance, as represented by the results of its operations and its cash flows, for the
year ended on that date; and
complying with Accounting Standards in Australia and the Corporations Regulations 2001,
professional requirements and other mandatory requirements;
(b)
(c)
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 2 (b); and
subject to the matters discussed in Note 2(c), there are reasonable grounds to believe that the
Group will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with section 295A of the Corporations Act 2001 for the year ending 30 June 2019.
This declaration is made in accordance with a resolution of the directors.
D Smith
Non-Executive Director
Perth
30 September 2019
58 | P a g e
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S AUDIT REPORT
To the members of Europa Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Europa Metals Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2019, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, 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:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Recoverability of Capitalised Exploration Expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 10 to the financial report, the
Our procedures included, but were not limited to:
carrying value of capitalised exploration and evaluation
expenditure represents a significant asset of the
Group.
In accordance with relevant accounting standards, the
recoverability of exploration and evaluation
expenditure required significant judgement by
management in determining whether there are any
facts or circumstances that exist to suggest the
carrying amount of this asset may exceed its
recoverable amount. As a result, this is considered a
key audit matter.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
rights to tenure of those areas of interest
remained current at balance date;
Considering the status of the ongoing
exploration programmes in the respective areas
of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, AIM announcements and
directors’ minutes;
Considering whether any such areas of interest
had reached a stage where a reasonable
assessment of economically recoverable
reserves existed; and
Assessing the adequacy of the related disclosure
in Note 10 to the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2019, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 17 to 24 of the directors’ report for the
year ended 30 June 2019.
In our opinion, the Remuneration Report of Europa Metals Limited, for the year ended 30 June 2019,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 30 September 2019
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF EUROPA METALS LIMITED
As lead auditor of Europa Metals Limited for the year ended 30 June 2019, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Europa Metals Limited and the entities it controlled during the period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2019
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation.
JSE Limited Requirements
Headline earnings reconciliation
2019
$
2018
$
Loss attributable to ordinary equity holders of the parent
entity
(2,392,170)
(1,883,446)
Add back IAS 16 loss on the disposal of plant and equipment
Less profit on sale of available for sale investments
Total tax effects of adjustments
-
-
-
-
-
-
Headline loss
(2,392,170)
(1,883,446)
Basic loss per share
Weighted average shares in issue
Basic loss per share (cents)
Headline loss
Weighted average shares in issue
Headline loss per share (cents)
(2,392,170)
7,125,884,907
(0.03)
(1,883,446)
3,075,844,119
(0.06)
(2,392,170)
7,125,884,907
(0.03)
(1,883,446)
3,075,844,119
(0.06)
63 | P a g e