Europa Metals Ltd
Lead, Zinc and Silver, Spain
Annual Report
For the year ended 30 June
2021
A.C.N. 097 532 137
Contents
01 Chairman’s Statement
02 Chief Executive Officer’s operational and financial review
06 Corporate information
07 Directors’ report
24 Corporate governance statement
30 Consolidated statement of profit or loss and
other comprehensive income
31 Consolidated statement of financial position
32 Consolidated statement of cash flows
33 Consolidated statement of changes in equity
34 Notes to the consolidated financial statements
55 Directors’ declaration
56 Independent auditor’s report
59 Auditor’s independence declaration
60 Additional JSE information
Europa Metals is a lead-zinc exploration company focused exclusively on European projects. We believe Europe, and in particular Spain, is an unrealised region for modern mine development and that the opportunity to create new mines within a best practice social and environmental framework, near first class infrastructure, is significant.Currently, the Company is progressing its Toral Lead, Zinc and Silver project towards the mine development phase. In summary:• 1st world jurisdiction, Province of León, established mining region• Ready access to provincial expertise and world class underground experience• Excellent road, rail & power infrastructure, all are located near to Toral• Grants often available from Spain and the EU for development• Toral located in one of the world’s best regions for base metals exploration and miningEuropa Metals is quoted/listed on AIM and AltX of the JSE under the ticker code EUZ and is an Australian registered Company. Chairman’s Statement
I think it is a reflection of the Europa Metals team’s
professionalism and capability that not a single
case of COVID-19 infection was reported within the
Group during the period whilst a series of significant
operational and corporate milestones were delivered
Dear Fellow Shareholders,
As a responsible natural resource development company,
workforce and stakeholder safety are of principal importance
to us as a Board of Directors. During the reporting period
full health security measures, based on Spanish, UK and
Australian best practice, were maintained and monitored as
the Coronavirus (COVID-19) pandemic continued.
I think it is a reflection of the Europa Metals team’s
professionalism and capability that not a single case of
COVID-19 infection was reported within the Group during the
period whilst a series of significant operational and corporate
milestones were delivered. We have continued to advance
our understanding of our wholly owned Toral lead, zinc and
silver project (the “Toral Project” or “Toral”) as a potential
future low capex, high margin lead, zinc and silver mine
located within the EU.
During 2020, a clear strategy was pursued to complete all
the requisite work for a revised (from the 2018 Scoping
Study), independent preliminary economic study to be
commissioned and its findings published. Such report,
compiled by Bara Consulting and Addison Mining Services
Limited (“AMS”) and published on schedule in November
2020, encompassed an indicated resource estimate for the
first time, the results of a series of metallurgical test work
programmes including an initial ore sorting analysis, and
both geotechnical and hydrogeological studies. The report’s
findings were significant with a substantial increase in run-of-
mine (“ROM”) tonnes to 700,000 tonnes per annum (“tpa”)
with an all-in cost of US$63.56/t, US$79m upfront capex
to production and project payback in year four realising an
NPV of US$156m at an 8% discount rate with a 31.3% IRR.
Importantly, the study identified that the 12 year mine life
“ends” in the highest zinc grades for production consequently
highlighting the expansion potential at depth and to the east
once Toral achieves future production, thereby affording the
possibility for a longer term and larger mining operation than
originally envisaged and outlined.
For the last four years, Europa Metals has progressed Toral,
situated in the province of Castilla y León, north west Spain,
as a realisable project, with potential for robust margins in
a safe jurisdiction. The abovementioned updated economic
study, enables us to seek to progress our corporate
objectives to secure a pathway forward for the Company that
delivers equity value through project development, including
partnerships or a potential substantial transaction. In support
of our corporate objectives, the Company proposed a series
of resolutions to shareholders at a general meeting held in
July 2020 in order to, inter alia, strengthen Europa Metals’
capital structure and governance. All such resolutions
were duly passed including a 500:1 share consolidation,
the implementation of more UK market standard pre-
emption rights and approval of an options package to align
the directors’ incentivisation with equity value growth.
Subsequently, Europa Metals secured £2m (before expenses)
via a market fundraising at a premium to the six month
pre-consolidation volume weighted average shareprice
(“VWAP”).
At the time of writing, Europa Metals has recently succesfully
concluded its upper zone drilling campaign and announced a
significant resource upgrade.
Corporately, we continue to progress and are actively
involved in a number of initiatives that we believe could
ultimately lead to a potential major value event for all Europa
Metals’ shareholders in due course. Further updates will be
made as and when appropriate.
Myles Campion
Executive Chairman
29 October 2021
Annual Report 2021
Europa Metals Ltd
01
Chief Executive Officer’s operational
and financial review
Following the recent completion of the
resource update, we are now commencing
a new stage of metallurgical testwork with
Wardell Armstrong International, to look at
increasing efficiencies and earlier payback
options within the upper zone of Toral.
First of all, I would like to add to our Chairman’s
comments regarding Europa Metals’ operations during
the ongoing Coronavirus (COVID-19) pandemic. Safety
always sits at the heart of our decision-making process
and I am pleased to confirm no incidents of COVID-19
amongst our workforce during the reporting period and
to date. The diligence of our Spanish team on the ground
is to be commended in terms of both implementing
and communicating best practice protocols regarding
social distancing, hygiene and all other guidance from
the relevant authorities during this global health crisis.
In light of our prioritisation of worker and stakeholder
safety, we continue to be mindful of not providing any
guidance to the market on workflow timing as we wish to
avoid setting any metrics that could lead to inappropriate
decisions being made at any level within the Company.
What is very evident though is the significant amount of
operational and development work achieved during the
financial year and to date.
Following the appropriate governance and share capital
related changes being approved by Europa Metals’
shareholders in July 2020, the Company signed a product
marketing agreement with Conrad Partners (“Conrad”),
a leading Hong Kong based concentrate agent within
the industrial metals space. Conrad’s review of the Toral
Project’s dataroom contributed to the marketing section
of the updated independent preliminary economic study
undertaken by Bara Consulting and AMS, the key findings
of which were announced on schedule in November
2020, and the Group has begun actively marketing the
project to potential future customers.
During August 2020, the Company announced a 40%
increase in the project’s indicted resource at an average
grade of 8.3% zinc equivalent (including Pb credits) and
30g/t Ag; a significant average grade above cut-off. The
Phase III metallurgical and ore sorting results were also
announced, further to work undertaken by Wardell
Armstrong International, which showed significant grade
and recoveries including the following from hole TOD-
025H: 83.9% Pb recovery to a 79.2% Pb concentrate;
87.7% Ag recovery to 512ppm Ag within Pb concentrate;
and 87.7% Zn recovery to a 60.0% Zn concentrate.
The ore sorting results were incorporated into the
independent economic study and contributed to an uplift
in the potential margins and scale outlined within the new
financial model.
Europa Metals also secured a €466,801.50 interest free
loan by way of a grant (the “Grant”) from the Spanish
Governmental agency, CDTI. Such interest free loan is an
innovation grant further to our established partnership
with the University of Salamanca (Air Institute), SPI drilling
and Soluciones Generales de Ingenieria S.L. (“SGI”),
with the funds drawn down to be allocated towards
the development of R&D technologies relating to the
recording and correction of drillhole deviation at the
Toral Project. The Grant comprises up to three tranches,
drawable with the prior agreement of the CDTI, with
the initial tranche, comprising an amount of €163,380,
duly received by the Company. The second and third
tranches are scheduled to be drawn down over a period
of approximately 18 months subject to certain, defined,
operational milestones being achieved. In addition to
being able to secure asset level funding, the importance
of partnering with such key regional stakeholders cannot
be over emphasised.
Following the CDTI Grant, Europa Metals secured a
new, three-year Investigation Permit for Toral, until 15
November 2023, from the Junta of Castilla y León. The
application was made further to consultation with, and
feedback from, the Junta and the Company will continue
to work towards fulfilling all the requisite criteria in
preparation for a formal mining licence application
in due course. One of the benefits of working within
the region is that, due to its long history of mining
activity, the processes to be undertaken and completed
towards a mine development decision are clear, well
informed and well established. With increasing focus
on supply chain transparency, stakeholder engagement
and environmental best practice, we believe that the
robust regulatory structure within Castilla y León stands
us in good stead against a changing investment and
commodity markets’ backdrop.
At the time of writing, our latest 2021 drill campaign
has been successfully concluded with eight new parent
02
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Chief Executive Officer’s operational
and financial review
continued
exploration drill holes, TOD-028 to TOD-035, and six
successful new daughter drill holes completed. The
results were significantly in advance of our initial
expectations with the drilling focused in the upper zone
area of Toral typically characterised as having lower grade
ore. Following this campaign, a new independent JORC
(2012) resource estimate was commissioned showing a
55% increase in the indicated category to 5.9Mt @ 7.1%
Zn Equivalent (including Pb credits) and 27g/t Ag. This
represents a meaningful increase in metal within the
indicated resource with a 55% increase in the indicated
tonnes, 39% increase in contained zinc, 30% increase
in contained lead and a 40% increase in contained
silver ouces. The overall resource has now reached
approximately 20Mt @ 6.3% Zn Equivalent (including Pb
credits), 3.9% Zn, 2.7% Pb and 22g/t Ag, giving a metals
content of 790,000 tonnes of zinc, 550,000 tonnes of lead
and 14 million ounces of silver.
Copper was also repeatedly reported within the assays
but is not currently at a significant enough level to be
brought into the resource. Our operational focus will
therefore remain on derisking the lead, zinc and silver
mining profile within the established resource as the
current area looks to be highly economic with a ten year
plus mine life. The Company is assessing various avenues,
including potential technical partnerships, to look further
at the copper content and for expansion possibilities.
With the last 12 months of the mining schedule (Year 12)
set out by Bara Consulting showing the highest grade
of zinc recovery, we believe that Toral has significant
potential to be expanded at depth and to the East.
The grade level of intersections encountered during the
2021 drill campaign enabled us to commence a series
of metallurgical daughter holes which have provided us
with a high level of material for use in processing and
production testwork. Following the recent completion
of the resource update, we are now commencing a new
stage of metallurgical testwork with Wardell Armstrong
International, to look at increasing efficiencies and earlier
payback options within the upper zone of Toral. Such
work will include further ore sorting analysis for the
upper zones as well as waste processing testing for a
dry stack/backfill storage process that utilises low levels
of water.
A hydrogeological testing campaign was also undertaken
during the financial year and we await the independent
report from the borehole and tracer programme in
order to assess both potential water conditions within
the planned future mining area and to benchmark the
local area.
Group Highlights
Corporate
–
The Company has diligently followed all instructions
and best practice guidance issued by the relevant
authorities with regards to maintaining the safety of its
work force in Spain, the UK and Australia with a series
of operational procedures and monitoring initiatives
being implemented. Europa Metals puts the safety of
its workforce ahead of all other considerations and
continues to operate strictly within the parameters of
social distancing and adhere to guidelines.
–
Following receipt of shareholder approval at last
year’s AGM, a series of measures to strengthen
shareholder rights and align Europa Metals with AIM
best practice were implemented. A 500 to 1 share
consolidation was also effected thereby significantly
reducing the number of ordinary shares in issue
– Myles Campion appointed as Executive Chairman and
Laurence Read as CEO following the resignation of
Colin Bird as Chairman in August 2020.
–
–
£2,000,000 (gross) fundraising completed via the issue
of, in aggregate, 15,686,274 new ordinary shares of no
par value at an issue price of 12.75 pence per share
in order to undertake the key components of a pre-
feasibility study (“PFS”) for the Toral Project including
resource/geotechnical and metallurgical drilling
and testing work, a hydrogeological campaign and
metallurgical/waste assessment work.
Adam Habib appointed as corporate adviser to
the Board in January 2021. The appointment has
subsequently been terminated with effect from
1 November 2021.
Operational – Toral Pb, Zn & Ag Project, Spain
–
Environmental studies continued throughout the
reporting period; Company undertaking long term
baseline studies and monitoring to requisite PFS and
Mining Licence application levels.
–
Resource update in August 2020; 40% increase in the
project’s indicted resource at an average grade of
8.3% zinc equivalent (including Pb credits) and 30g/t
Ag; a significant average grade above cut-off.
– Metallurgical and ore sorting results from work
undertaken by Wardell Armstrong International
– significant grade and recoveries including the
following from hole TOD-025H: 83.9% Pb recovery
to a 79.2% Pb concentrate; 87.7% Ag recovery to
Annual Report 2021
Europa Metals Ltd
03
Chief Executive Officer’s operational
and financial review
continued
512ppm Ag within Pb concentrate; and 87.7% Zn
recovery to a 60.0% Zn concentrate.
–
Toral’s Investigation Permit renewed by the Junta of
Castilla y León until November 2023 in November
2020.
– Non-exclusive concentrate marketing agreement
signed with Conrad in August 2020.
–
In October 2020, €466,801.50 innovation grant
awarded by the CDTI towards exploration work
assessing a correctional algorithm for drilling
deviation at Toral with its partners. The CDTI is a
Public Business Entity in Spain, under the auspices of
the Ministry of Science and Innovation, which fosters
the technological development and innovation of
Spanish companies.
–
In November 2020, updated independent preliminary
economic study for Toral demonstrated a US$156m
NPV and 31.3% IRR with a 49% operating margin.
– Drilling campaign commenced in January 2021:
Post period end
–
2021 upper zone drilling campaign successfully
concluded; high grade Zn, Pb & Ag intersections
consistently intersected. Copper assays also returned.
• 8 new parent exploration drill holes, TOD-028 to
TOD-035, and six successful new daughter drill
holes (for metallurgical/geotechnical data).
•
Intersections/assays considerably ahead of
management’s expectations.
• Development of fault models.
• Development of new lithological facies domain
models.
–
Further independent updated Mineral Resource
Estimate commissioned and findings reported in
October 2021:
–
Indicated resource estimate of approximately
5.9Mt @ 7.1% Zn Equivalent (including Pb credits)
and 27g/t Ag, representing an approximate:
•
•
Focused on assessing upper material zone that
would potentially host the early years of future
production.
Targeted gaps within the project’s JORC
(2012) resource model in order to enhance
understanding of the block model, retrieve
geotechnical information for mine design
and identify opportunities to gather further
metallurgical samples from within the
substantive intersections encountered.
• Collating of data to inform development plans
for the early years of Toral’s future production
and refine the economic model within a 4-year
payback period.
– Drilling data provided to the abovementioned
innovation partnership with the University of
Salamanca (Air Institute), SPI and SGI. Milestone I
work successfully completed and submitted to CDTI
post the reporting period end.
– Hydrogeological bore holes and testing commenced
in order to test water levels/conditions within the
proposed future mining area and piezometer work
to monitor local water conditions. Operations
concluded, post the reporting period end, and
independent results/report awaited.
–
In June 2021, Wardell Armstrong International
appointed as PFS Manager.
• 55% increase in Indicated resource tonnes;
• 39% increase in Indicated contained tonnes
of zinc to approximately 251,000 tonnes;
• 30% increase in Indicated contained tonnes
of lead to approximately 196,000 tonnes;
and
• 40% increase in Indicated contained ounces
of silver to approximately 5.2 million ounces.
–
A total resource of approximately 20Mt @ 6.3%
Zn Equivalent (including Pb credits), 3.9% Zn,
2.7% Pb and 22 g/t Ag, including:
• 790,000 tonnes of zinc, 550,000 tonnes of
lead and 14 million ounces of silver.
– Outlook: Company seeking to make further
operational progress with additional metallurgical
and waste analysis to de-risk the project’s future
production and processing design, especially within
the early years of mining. Continuing to persue and
assess a number of initiatives and opportunities with
discussions aimed at delivering a potential value
accretive event.
04
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Chief Executive Officer’s operational
and financial review
continued
Post the period end, the mineral resource estimate was
updated to, at the time of writing:
–
Indicated resource estimate of approximately 5.9Mt
@ 7.1% Zn Equivalent* (including Pb credits) and
27g/t Ag, representing an approximate:
• 55% increase in Indicated resource tonnes;
• 39% increase in Indicated contained tonnes of
zinc to approximately 251,000 tonnes;
• 30% increase in Indicated contained tonnes of
lead to approximately 196,000 tonnes; and
• 40% increase in Indicated contained ounces of
silver to approximately 5.2 million ounces.
–
A total resource of approximately 20Mt @ 6.3% Zn
Equivalent (including Pb credits), 3.9% Zn, 2.7% Pb
and 22 g/t Ag, including:
• 790,000 tonnes of zinc, 550,000 tonnes of lead
and 14 million ounces of silver.
*
Zn price of US$2,516/t, Pb price of US$1,961/t and Ag price of
US$19.4/Oz
** RNS Announcement 1.10.21, AMS Consulting.
Laurence Read
CEO
29 October 2021
Toral Project Summary
As of 30 June 2021
US$156m NPV at an 8% discount rate
–
–
–
–
–
–
31.3% IRR
17Mt @ 6.7% ZnEq (including Pb credits) resource
(JORC 2012) including indicated resource of 3.8Mt @
8.1% ZnEq (including Pb and Ag credits) – 4% cut off
grade
Sub-Level Longhole Stoping (“SLOS”) mining method
selected
700k tonnes per annum operation with a 7.6% ZnEq
mined grade:
•
SLOS with ramp/raise-bore shaft access;
• 10% dilution;
3.5m average mined mineralised widths
Processing comprises an ore sorting front-end using
X-ray Transmission (“XRT”) followed by grinding and
flotation
– Grade/recovery: 3.3% Pb/87%; 4.2% Zn/86%; 26.7g/t
Ag/85%
– US$79m upfront Capex
–
3-year trailing average metals prices of US$2,668/t
for zinc, US$2,099/t for lead and US$16.5/oz for silver
– US$963m Revenue over Life of Mine (“LOM”)
– US$477m Opex over LOM
– US$471m EBITDA over LOM
–
–
–
49% Operating Margin (US$63.56/t all-in cost)
12-year LOM scenario
Conceptual LOM production schedule incorporates
100% of the Indicated resource in the early years,
ending with elevated zinc grades in the deep Inferred
zones
– Deposit open to the east and at depth for potential
production expansion during the mine’s life
–
Project’s 3-year Investigation Permit renewed until 15
November 2023
Annual Report 2021
Europa Metals Ltd
05
Corporate Information
Directors:
Myles Campion
Laurence Read
Evan Kirby
Daniel Smith
Company Secretary:
Daniel Smith
Auditor:
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008 AUSTRALIA
Telephone:
Facsimile:
(+61 8) 6382 4600
(+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
UK Lawyer:
Joelson JD LLP
30 Portland Place
London W1B 1LZ, United Kingdom
Telephone: +44 20 7580 5721
Share Registry:
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone:
Facsimile:
(+61 8) 9323 2000
(+61 8) 9323 2033
Registered and Principal Office:
c/- Minerva Corporate Pty Limited
Level 8, 99 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone:
Facsimile:
Website:
Email:
(+61 8) 9486 4036
(+61 8) 9486 4799
www.europametals.com
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).
06
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
The Directors of Europa Metals Ltd (“Europa” or the “Company”) (the “Directors”) present their report for the financial
year ended 30 June 2021.
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 70), BSc (Hons) Metallurgy, PhD Metallurgy, Non-Executive Director
Experience and expertise
Dr Kirby is a metallurgist with over 40 years of 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 Director of Bezant Resources plc (AIM: BZT)
Director of Jubilee Metals Group plc (AIM: JLP)
Director of Anglo Tanzania Gold Limited
Former directorships over
the past 3 years
Director of New Energy Minerals (ASX: NXE) and Director of Nyota Minerals Limited
(ASX & AIM: NYO)
Special responsibilities
Non-Executive Director
Chairman of the Remuneration Committee
Chairman of the Nominations Committee
Member of the Audit and Risk Management Committees
Member of the Technical Committee (Informal)
Interests in shares
and options
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
25,858
345,000
Mr Laurence Read (Age 44), BA (Hons), Executive Director & Chief Executive Officer
Experience and expertise
Mr Read brings over 20 years’ of experience to the Board working with quoted and
private companies within the natural resources sector. During his career he has worked
with companies in most key natural resources regions operating across a wide range of
commodities, often working on behalf of professional investment groups.
Within the publicly quoted company arena Mr Read has significant experience working
within the regulatory frameworks of the UK exchanges, TSX, JSE, ASX, Oslo and Hong Kong.
Other current directorships None
Former directorships over
the past 3 years
Chief Executive Officer of Bezant Resources plc (AIM: BZT)
Director of Capital Metals Ltd
Director of Tomco Energy plc (AIM: TOM)
Director of Mowbrai Ltd
Director of Anglo Tanzania Gold Limited
Special responsibilities
Interests in shares
and options
Chief Executive Officer
Member of the Audit Committee
Member of Nominations Committee
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
Annual Report 2021
Europa Metals Ltd
126,257
1,525,000
07
Directors’ Report
continued
Myles Campion (Age 52), BSc Geology (Hons), MSc Mineral Exploration, Executive Chairman/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.
Other current directorships Director of Katoro Gold Plc (AIM: KAT)
Former directorships over
the past 3 years
Special responsibilities
Director of Virico Limited
Director of Torrum Limited
Director of Energy Minerals Investments Limited
Executive Chairman/Technical Director
Member of the Remuneration Committee
Chairman of the Technical Committee (Informal)
Interests in shares
and options
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
248,794
1,591,667
08
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
Daniel Smith (Age 37), BA (International Relations), FGIA , GradDip ACG, Non-Executive Director, Company Secretary
Experience and expertise
Mr Smith is a Fellow of the Governance Institute of Australia and has over 13 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/or
company secretary of a number of companies listed on ASX, NSX and AIM. He holds a
BA in International Relations from Curtin University, Western Australia.
Other current directorships Director of Lachlan Star Limited (ASX:LSA)
Director of QX Resources Limited (ASX:QXR)
Director of Artemis Resources Limited (ASX:ARV)
Director of White Cliff Minerals Limited (ASX:WCN)
Director of Alien Metals Ltd (AIM:UFO)
Former directorships over
the past 3 years
None
Special responsibilities
Company Secretary
Member of the Remuneration Committee
Member of the Nominations Committee
Chairman of Audit and Risk Committee
Interests in shares
and options
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
–
180,000
Annual Report 2021
Europa Metals Ltd
09
Directors’ Report
continued
Corporate
Capital Raising
On 19 August 2020, the Company announced that it had
raised £2,000,000 (before expenses) via the issue of, in
aggregate, 15,686,274 (post-consolidation) new ordinary
shares at an issue price of 12.75 pence per share to
certain existing and new investors.
Shareholder Meetings
At the Annual General Meeting of the Company held on
30 November 2020, all resolutions were duly approved by
shareholders by way of a poll.
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
(2020: Nil).
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 Project, Spain
Following the completion of the Scoping Study
announced by the Company in December 2018,
workstreams have focused on additional resource
drilling, geotechnical drilling, metallurgical testwork and
environmental baseline studies.
Updated Resource Estimate
On 1 October 2021, the Company announced an updated
independent mineral resource estimate (“MRE”) for
Toral. The updated MRE showed a 55% increase in the
indicated resource to 5.9 million tonnes (“Mt”) @ 7.1%
zinc equivalent (“ZnEq”) (including Pb credits) and 27g/t
Ag. In summary, the updated MRE showed a:
• 55% increase in indicated resource tonnes;
• 39% increase in indicated contained tonnes of zinc to
approximately 251,000 tonnes;
• 30% increase in indicated contained tonnes of lead to
approximately 196,000 tonnes; and
• 40% increase in indicated contained ounces of silver
to approximately 5.2 million ounces.
A total resource was reported of approximately 20Mt @
6.3% zinc equivalent (including Pb credits), 3.9% Zn, 2.7%
Pb and 22g/t Ag, including:
–
790,000 tonnes of zinc, 550,000 tonnes of lead
and 14 million ounces of silver
The MRE incorporated data obtained from, inter alia:
–
172 diamond (including wedges) and 4 reverse
circulation (RC) drill holes totalling 59,658.73
metres of drilling (including environmental
drillholes); and
–
19 underground channels for 18.75 metres.
*
Zn Eq % is the calculated Zn equivalent incorporating lead credits;
(Zn Eq (Pb)% = Zn + Pb*0.867). Zn Eq (PbAg)% is the calculated
Zn equivalent incorporating silver credits as well as lead; (Zn Eq
(PbAg)% = Zn + Pb*0.867 + Ag*0.027). Zn equivalent calculations
were based on 3-year trailing average price statistics obtained from
the London Metal Exchange and London Bullion Market Association
giving an average Zn price of US$2,516/t, Pb price of US$1,961/t
and Ag price of US$19.4/oz.
10
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
Image 3: showing AMS’ resource block model for Toral as a 3D view looking north, by resource category
Metallurgical work programme
Objectives of the Phase III metallurgical testwork and
ore sorting analysis
During the period under review, the Company reported
the results of ongoing metallurgical testwork at Toral.
Wardell Armstrong International (WAI) conducted tests
on metallurgical samples, representing the expected ore
types from Toral, in order to develop a flowsheet for the
potential economic feasible beneficiation of Toral ores to
produce marketable concentrates, as well as establishing
basic processing data for input into engineering studies.
Such work built on the positive results from WAI’s two
previous metallurgical programmes, with the design
based on its previous recommendations. Work was also
undertaken with Bara Consulting regarding an analysis of
the potential for ore sorting at the Toral Project, in order
to refine a potential future production process for the
discrete treatment of different areas of the resource with
increased metal recovery.
Three samples were submitted to WAI for testing,
representing different ore types likely to be encountered
within Toral during potential future production, with all of
the ore sorting samples firstly subjected to an ore sorting
process followed by flotation testing. The representative
samples were as follows:
1.
2.
High-grade intersection from drill hole TOD-025
(TOD-025H), which was subjected to flotation tests.
Low-grade fresh sample from drill hole TOD-025
(TOD-025L) for determining the use of XRT ore
sorting technology.
3.
Weathered, low-grade, sample from drill hole TOD-
024, also subjected to XRT analysis.
Annual Report 2021
Europa Metals Ltd
11
Directors’ Report
continued
Summary of ore sorting
Ore sorting has been identified as having the potential
to unlock value in the shallower, lower grade zones
previously not considered to be economically mineable
in the 2018 Scoping Study. Testing was therefore
undertaken to investigate the potential of pre-
concentrate material from the Toral deposit by means of
sensor-based sorting. If successful, pre-concentration of
the ore could provide a number of potential benefits for
the project including:
• Reducing the size of the requisite process plant
(crushing, grinding and dewatering circuits) whilst
maintaining the same overall throughput;
• Enabling ore that may otherwise be sub-economic
based on grade to be processed; and
• Allowing higher mining rates without necessarily
having to increase the size of the processing plant.
Overall, the sorting results for both the TOD-024 and
TOD-025L samples were considered to be excellent, with
between 45% – 50% of the mass rejected at, for the TOD-
024 sample, 98% Pb recovery, 97% Zn recovery and 92%
Ag recovery, and at, for the TOD-025L sample, 98% Pb
recovery, 94% Zn recovery and 82% Ag recovery.
The increasing head assay was also pleasing with the
TOD-024 sample increasing from 1.04% Pb and 1.01% Zn
in the feed to 2.34% Pb and 2.15% Zn and an approximate
doubling of the grade in the sorter product. In the TOD-
025L sample the increase in grade was more pronounced
with uplifts in the Pb grade from 1.13% Pb to 4.03% and
Zn grade from 0.62% Zn in the feed to 2.06% Zn in the
sorter product.
Ore sorting process
Ore sorting by means of XRT is an established process for
sorting Pb/Zn ores by way of rejecting waste dilution from
ores at low cost prior to more conventional processing
by flotation. Sensor-based sorting was selected for
WAI’s investigation as it offers a number of benefits
over alternative pre-concentration methods, such as
Dense Media Separation (DMS), including the ability
to change the sorting criteria depending on the feed
material and target specific metals/minerals of interest
along with the added flexibility of not having to be
continuously operated.
Toral ore sorting analysis
Based on the minerals of interest in the feed (galena/
sphalerite) and the predominant host mineralisation
(calcite/dolomite), sorting by means of XRT sensing was
selected for investigation as part of the study as it allows
detection of the minerals of interest both on the surface
and within the particle being sorted.
Two low grade samples were taken and submitted for
analysis to WAI for sorting testwork alongside TOMRA,
a leading provider of ore sorting technology based in
Germany and overseen by Bara Consulting. The objective
of the work was to identify the potential economic
benefits of processing low-grade and weathered material
through beneficiation circuits during the future mine
life of Toral alongside the central, high-grade core of
the project. The samples analysed were TOD-025L and
TOD-024.
The results, presented in Table 1 below, showed lead and
zinc stage recoveries in excess of 94.5% for the TOD-024
sample and in excess of 89.2% for the TOD-025L sample.
Overall, taking into account the metal contained within
the -10.0mm “fines” fraction, the data showed that in
excess of 94% of the overall lead and zinc in the feed
could be recovered through the ore sorting process whilst
rejecting a minimum of 40% of the original mass.
12
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
Table 1: Summary of ore sorting results from the TOD-024 and TOD-025L samples:
TOD-024 (Sort+Float) Sorter Test Results
Size Fraction
(mm)
Product
-25.0+10.0
Stage 1 Product
Stage 2 Product
Stage 2 Waste
-10.0
Feed
Fines
—
(kg)
5.21
2.16
9.06
6.48
22.76
9.41
39.54
28.29
22.90
100.00
Mass
Assay
Sorter Recovery (%)
Overall Recovery (%)
(%)
Pb (%)
Zn (%)
Pb
Zn
Pb
Zn
2.34
0.08
0.03
1.73
1.04
2.15
0.07
0.05
1.75
1.01
96.43
94.52
51.08
48.23
1.40
2.17
—
—
1.33
4.15
—
—
0.74
1.15
0.68
2.12
47.03
48.98
100.00
100.00
TOD-025 (Sort+Float) Sorter Test Results
Size Fraction
(mm)
Product
-25.0+10.0
Stage 1 Product
Stage 2 Product
Stage 2 Waste
-10.0
Feed
Fines
—
Mass
Assay
Sorter Recovery (%)
Overall Recovery (%)
(kg)
3.91
2.73
8.59
12.20
27.42
(%)
Pb (%)
Zn (%)
Pb
Zn
Pb
Zn
14.24
9.96
31.31
44.49
100.00
4.03
0.13
0.03
1.20
1.13
2.06
0.18
0.06
0.66
0.62
96.08
89.22
50.81
46.97
2.24
1.68
—
—
5.52
5.27
—
—
1.19
0.89
2.90
2.77
47.11
47.36
100.00
100.00
Investigation Permit Renewal
On 8 June 2020, the Company announced that it had
submitted an application to the Junta of Castilla y León
for a new three year investigation permit (“Investigation
Permit”) in respect of the Toral Project.
The Company was granted an initial Investigation Permit
for Toral in 2017, which was due to expire in November
2020 following conclusion of the customary three year
period. An Investigation Permit provides a company with
the right to pursue exploration activities at a project. As
such, since 2017, as permitted under the Investigation
Permit, the Company has commissioned and conducted a
significant amount of work on the Toral Project, including,
inter alia, drilling, commissioning of several independent
JORC mineral resource estimates, a detailed scoping
study, hydrogeological analysis, geotechnical studies,
environmental monitoring, social engagement and
several phases of metallurgical test work.
On 12 November 2020, the Company announced that
the Investigation Permit had been successfully renewed,
following, inter alia, a consultation process conducted by
the relevant bodies of the Junta of Castilla y León, for a
further three years until 15 November 2023.
During the period to 15 November 2023, Europa Metals will
seek to prioritise the completion of all necessary tasks in
order to enable application to be made for a Mining Licence
in respect of the Toral Project, in pursuit of an appropriate,
sustainable, mining development project at Toral.
Economics Update
On 18 November 2020, the Company announced the
results from an independent Preliminary Economic Study
(the “Study”) in respect of Toral. The Study, inter alia,
updated the economics from the previous Scoping Study
undertaken by Addison Mining Services Limited (“AMS”)
in late 2018 (the “2018 Scoping Study”), and incorporated
the positive findings generated from the workstreams
conducted by the Company and its consultants over
the previous 12-18 months, including the results from
ore-sorting undertaken by Bara Consulting, metallurgical
testwork by WAI, as well as reflecting a change in
the selected future mining method and a general
improvement in metal prices since 2018.
Annual Report 2021
Europa Metals Ltd
13
Directors’ Report
continued
CDTI Loan Funding
On 19 October 2020, the Company announced that
following an extensive submission process, an interest-
free loan by way of a grant of €466,801.50 (the “Grant”)
had been awarded to the Company by the Centre for
the Development of Industrial Technology (CDTI) for use
towards research and development (“R&D”) at Toral.
The CDTI is a Public Business Entity in Spain, under the
auspices of the Ministry of Science and Innovation, which
fosters the technological development and innovation of
Spanish companies. The Grant is categorised as a partly
refundable loan (with a nil per cent. interest rate) with the
funds received to be allocated towards the development
of R&D technologies relating to the recording and
correction of drillhole deviation at the Toral Project.
Application for the Grant was made further to ongoing
work by Europa Metals and the AIR Institute, linked to the
Salamanca University, and drilling contractors Sondeos y
Perforaciones Industriales de Bierzo SA (“SPI”).
The Grant monies can be drawn down in up to three
tranches, with the prior agreement of the CDTI, with the
initial tranche of €163,380 received and utilised by the
Company during the reporting period. The second and
third tranches are scheduled to be drawn down over a
period of approximately 18 months subject to certain,
defined, operational milestones. The core objectives of
the Innovation Programme are to retrieve and process
data from the 2021 Toral drilling campaign in order to
develop algorithmic software for use in exploration
campaigns to correct drilling deviation. Biannual
repayments of €21,822 begin in 2024, running for 7 years
until 2031, with a fixed interest rate of nil per cent.
Once the funds have demonstrably been spent on
appropriate R&D exploration activity at the Toral Project
by the Company, 70 per cent. of the total Grant will
be repayable with the balancing 30 per cent. then not
required to be repaid.
Coronavirus (COVID-19) impact on
operations
The Board is actively monitoring the impact of COVID-19
on the group’s operations on an ongoing basis.
There does not currently appear to be any material
impact on the Company or any significant uncertainties
with respect to events or conditions which may
impact the Company unfavourably as at the reporting
date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
Competent Person’s Statement
The information above that relates to Exploration Results
is based on information compiled by Mr J.N. Hogg, MSc.
MAIG Principal Geologist for AMS, an independent
Competent Person within the meaning of the JORC
(2012) code and qualified person under the AIM Note for
Mining and Oil & Gas Companies. Mr Hogg has reviewed
and verified the technical information that forms the
basis of, and has been referred toin the preparation of
this annual report including all analytical data, diamond
drill hole logs, QA/QC data, density measurements, and
sampling, diamond drilling and analytical techniques.
Mr Hogg consents to the inclusion in this annual report
of the matters based on the information, in the form and
context in which it appears. Mr Hogg has also reviewed
and approved the technical information in his capacity as
a qualified person under the AIM Rules for Companies.
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 2020 to 30 June 2021 of $3,258,664
(2020: loss of $2,362,660). The Group had net assets
of $2,428,852 (2020: $2,499,370) as set out in the
Consolidated 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:
The Company’s response to the global coronavirus
(COVID-19) health event has been to safeguard all key
personnel at all sites and limit all travel, including to work
at its sites, further to the advice and guidance issued
by all relevant health authorities and the Spanish and
UK governments.
On 19 July 2021, the Company announced that it had
completed the requisite work and collated and submitted
all the relevant documentation to the CDTI in relation
to the Stage 1 milestone of its €466,801.50 innovation
grant, further details of which were announced on
19 October 2020.
14
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
On 7 September 2021, the Company announced the
results of further drill assays from the Toral Project,
including high-grade intersection of lead, zinc and silver.
On 1 October 2021, the Company announced the
abovementioned independent updated mineral resource
estimate for Toral.
•
Identification and evaluation of potential
transactional opportunities for the Toral Project and
the Group as a whole in order to seek to increase
shareholder value and the Group’s asset portfolio.
•
Seeking to secure EU backed grants for project
progression.
On 26 October 2021, the Company announced that
it had raised, in aggregate, gross proceeds of £1.5
million through the placing of 19,527,920 Placing
Shares to certain institutional and other investors and
a subscription by certain other investors directly with
the Company of a further 10,472,080 Subscription
Shares in each case at a price of 5 pence per share (the
“Fundraising”).
The Fundraising is being conducted in two tranches
with the initial tranche of new Ordinary Shares being
issued under the Company’s pre-existing share
capital authorities and the second tranche subject to
shareholder approval at the Company’s forthcoming 2021
Annual General Meeting.
No other matters or circumstances have arisen since the
end of the financial 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 progress its business plan and
work programmes, including:
• Completing certain of the key elements of a Pre-
Feasability Study for the Toral Project, namely:
–
–
–
A hydrogeological drilling and monitoring report
to confirm the findings of independent analysis
in 2020 that water levels at Toral are within
acceptable boundaries for future development.
Combined resource and metallurgical drilling
campaigns to improve surety in the resource and
processing design/concentrate characteristics.
Further community, geotechnical, waste
management and environmental work.
• Continued engagement with third parties via the
Group’s engagement through concentrate marketing
partners and directly by the Board to seek to
establish value accretive pathways forward for the
Toral Project.
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,
and be secured by, 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.
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.
Annual Report 2021
Europa Metals Ltd
15
Directors’ Report
continued
Similarly, the indemnity does not extend to liability for
legal costs and expenses:
(a)
in defending proceedings in which the officer is found
to have a liability described in paragraph (a), (b) or (c)
above;
(b) in proceedings successfully brought by the Australian
Securities and Investments Commission or a
liquidator; or
(c)
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:
– tax compliance services
– corporate finance (valuation of options)
2021
$
8,110
—
8,110
2020
$
7,460
3,200
10,660
The Board of Directors are satisfied that the provision of non-audit services by the auditor is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of the
non-audit services provided do not compromise the independence of the auditor.
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
16
Board Meetings
Remuneration Committee
Eligible
Attended
Eligible
Attended
10
10
10
1
10
9
10
10
1
10
2
—
2
-
2
2
—
2
-
2
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
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
10. Voting of Shareholders at last year’s annual general meeting.
1. Individual key management personnel disclosures
(i)
Directors:
Name
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Role
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Executive Technical Director
Executive Chairman
Non-Executive Chairman
Non-Executive Director
Company Secretary
(ii) Executives:
Name
Role
Laurence Read
Chief Executive Officer
Myles Campion
Executive Chairman
Appointed
31 March 2016
25 January 2017
4 August 2020
17 October 2017
4 August 2020
11 January 2018
16 January 2018
16 January 2018
Appointed
4 August 2020
4 August 2020
Resigned
—
—
—
4 August 2020
—
Annual Report 2021
Europa Metals Ltd
17
Directors’ Report
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.
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.
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 2021 no
Directors or executives participated (2020: 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.
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.
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.
18
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
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 $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 $3,000 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 22 for details of options previously granted.
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 for the last five financial years:
2021
$
2020
$
2019
$
2018
$
2017
$
Net (loss) from continuing operations
after income tax
Basic (loss) per share in cents
Share Price in cents
(3,258,664)
(2,362,660)
(2,392,170)
(1,883,446)
(11,286,803)
(7.03)
0.18
(7.67)
0.11
(16.34)
0.21
(30.62)
0.20
(455.69)
0.10
6. Executive contractual arrangements
Laurence Read – Chief Executive Officer
Salary
Term
Termination
£112,000 per annum
Ongoing
6 months notice period by either party
Myles Campion – Executive Chairman/Technical Director
Salary
Term
Termination
£112,000 per annum
Ongoing
6 months notice period by either party
Annual Report 2021
Europa Metals Ltd
19
Directors’ Report
continued
Remuneration of key management personnel of the Company and the Consolidated Entity
Table 1: Remuneration for the years ended 30 June 2020 and 30 June 2021
Short-term
benefits
Post-
employment
Long-term
benefits
Share-based
payments
Total
Performance
related
Salary
& fees
$
Cash
bonus
$
Super-
annuation
$
Cash
Incentives
$
Long
Service
Leave
$
Options
$
Shares
$
$
%
Non-executive
directors
Evan Kirby
Colin Bird
Daniel Smith
Subtotal
Non-executive
directors
Subtotal
Non-executive
directors
Executive
directors
2021
2020
2021
2020
2021
2020
30,075
32,615
4,435
65,649
30,400
23,200
2021
64,910
2020
124,464
Laurence Read 2021
171,556
2020
134,277
Myles Campion 2021
178,495
2020
182,966
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
5,875
—
5,425
—
Subtotal
executive
directors
Subtotal
executive
directors
Total KMP
Total KMP
2021
350,051
— 11,300
2020
2021
2020
317,243
414,961
438,707
—
—
— 11,300
—
—
Refer to Page 17 for all appointment dates.
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
— 18,039
—
—
— 23,680
—
—
—
—
8,117
—
— 48,114
— 32,615
— 28,115
— 65,649
— 38,517
— 23,200
— 49,836
— 114,746
—
—
— 121,464
— 69,885
—
—
— 69,885
—
—
— 247,316
— 134,277
— 253,805
— 182,966
— 139,770
— 501,121
—
—
— 189,606
—
—
— 317,243
— 615,867
— 438,707
37
—
84
—
21
—
—
—
28
—
28
—
—
—
—
—
20
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
7. Equity instrument disclosures
Table 2: Share holdings
2021
Directors
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Shares
Balance
1 July 2020
Rights
Exercised
On Exercise
of Options
Consolidation
500:1
Net Change
Other
Balance
30 June 2021
12,929,158
23,913,043
85,181,159
1
313,833,191*
—
435,856,551
—
—
—
—
—
—
— (12,903,300)
— (23,865,217)
— (85,010,796)
—
78,431
78,431
— (313,205,525)
(627,666)*
2
—
—
—
25,858
126,257
248,794
—
—
— (434,984,838)
(470,804)
400,909
Includes 130,499,858 shares in which he has an indirect interest via his directorship of African Pioneer plc.
1
2 On his resignation on 4 August 2020.
Table 3: Option holdings
Balance
1 July
2020
Consolidation
500:1
Granted
Received as
Remuneration
Net
Change
Other
Balance
30 June
2021
Vested &
Exercisable
30 June
2021
Vested & Not
Exercisable
30 June
2021
Options
22,500,000
(22,455,000)
Laurence Read
112,500,000 (112,275,000)
Myles Campion 145,833,334 (145,541,667)
Colin Bird
171,666,666 (171,323,333)
Daniel Smith
10,000,000
(9,980,000)
—
300,000
— 1,300,000
— 1,300,000
—
—
—
345,000
1,525,000
245,000
925,000
1,591,667
991,667
—
—
300,000
1
(643,333)*
—
—
160,000
—
180,000
100,000
462,500,000 (461,575,000)
— 3,360,000
(643,333)
3,641,667
2,261,667
1 On his resignation on 4 August 2020.
—
—
—
—
—
—
Fair value of options granted
The value of the above services could not be reliably measured so the fair value of the options issued was used instead.
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 the 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.
Annual Report 2021
Europa Metals Ltd
21
2021
Directors
Evan Kirby
Directors’ Report
continued
The tables below summarise the model inputs for options granted during the financial year ended 30 June 2021:
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
Underlying security spot price at grant date (GBP)
Expected price volatility of the Company’s shares
Expected dividend yield
Expected life (years)
Risk-free interest rate
Black-Scholes model valuation per option (AUD cents per share)
Total fair value
Expensed during the period
Directors – July 2020
Tranche 1
300,000
0.075
24/07/20
24/07/23
0.065
125%
0%
3
0.14%
0.0821
$24,622
$24,622
Tranche 2
1,400,000
0.090
24/07/20
24/07/23
0.065
125%
0%
3
0.14%
0.0789
$110,507
$110,507
Tranche 3
300,000
0.106
24/07/20
24/07/23
0.065
125%
0%
3
0.14%
0.0762
$22,849
$22,849
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
Underlying security spot price at grant
date (GBP)
Expected price volatility of the Company’s
shares
Expected dividend yield
Expected life (years)
Risk-free interest rate
Black-Scholes model valuation per option
(AUD cents per share)
Total fair value
Expensed during the period
Directors – December 2020
Executive Directors
Non-executive
directors
Tranche 2
400,000
0.089
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1249
$49,974
$10,468
Tranche 3
400,000
0.089
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1249
$49,974
$10,468
Tranche 2
180,000
0.129
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1158
$20,851
$4,054
Tranche 1
400,000
0.089
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1249
$49,974
$10,468
Vesting Conditions for the December 2020 options
Tranche 1: vests on the delineation, by an independent third
party, of greater than a 4.5Mt Indicated Resource estimate at
the Toral Project, reported in accordance with JORC (2012).
Tranche 2: vests on the delivery of a positive Pre-
Feasibility Study for the Toral Project with an independent
recommendation for the Company to continue advancing
the project.
Tranche 3: vests on the submission of an application for a
Mining Licence at the Toral Project.
The Directors consider the probability of the above
Tranches vesting within their three year term to be 100%.
Therefore, the fair value of the options is expensed over
three years to 18 December 2023.
22
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Report
continued
8. 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 2021
(2020: Nil).
9. Transactions with Key Management Personnel and their Related Parties
The following transactions were undertaken between the Company, executive officers and director-related entities
during 2021 and 2020.
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 Mr D Smith is a director. Fees were paid at arms length and on
commercial terms.
Mr L Read, an executive director of the Company, was formerly a director of
Mowbrai Ltd. During the 2020 financial year, Mowbrai Ltd received fees for
consulting services. These fees were based on normal commercial terms and
conditions.
Mr M Campion, an executive director of the Company, is also a director of Virico
Limited. During the year, Virico Limited received fees for consulting services. These
fees were based on normal commercial terms and conditions.
2021
$
—
2020
$
27,370
84,000
84,000
—
134,277
140,256
224,256
182,966
428,613
10. Voting of Shareholders at last year’s
annual general meeting (AGM)
Europa Metals Ltd received 99.71% votes in favour of
its remuneration report for its 2020 financial year. The
Company did not receive any specific feedback at the
AGM or through the year on its remuneration practices.
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 56 and forms part of this report.
This report is made in accordance with a resolution of the
Directors.
End of audited Remuneration Report
Daniel Smith
Non-Executive Director
Perth
29 October 2021
Annual Report 2021
Europa Metals Ltd
23
Coporate Governance Statement
STATEMENT REGARDING COMPLIANCE
WITH THE QCA CORPORATE GOVERNANCE
CODE
Chairman’s Corporate Governance Statement
The Board of the Company, which is responsible for
the direction and oversight of its activities, believes
that a sound corporate governance policy, involving a
transparent set of procedures and practices, is essential
to the Company’s success both in the medium and long
term. As announced on 12 June 2020, the Company
has therefore adopted the Quoted Companies Alliance
Corporate Governance Code (the “QCA Code”) as its
benchmark for governance matters. The application
of such principles enables key decisions to be made by
the Board as a whole, and for the Company to function
in a manner that takes into account all stakeholders
in the Company, including employees, suppliers and
business partners.
My role as Executive Chairman effectively combines the
roles of chairman and an executive director although,
in practice, much of the day-to-day running of the
Company’s operations is delegated to key executives
who are not directors of the Company. Whilst this does
not satisfy the QCA guidance that the “chair must have
adequate separation from the day-to-day business to
be able to make independent decisions”, this reflects
the size, nature and early stage of development of the
Company and its business and the continued combination
of the two roles will be regularly reviewed as the business
develops further.
The Board currently comprises an Executive Chairman,
one other executive director and two non-executive
directors. It is the main decision-making body of
the Company, being responsible for: a) the overall
direction and strategy of the Company; b) monitoring
performance; c) understanding risk; and d) reviewing
controls. It is collectively responsible for the success
of the Company. The Board is satisfied that it has a
suitable balance between independence and knowledge
of the business to allow it to discharge its duties and
responsibilities effectively.
Due to the relatively small size and scale of the Company
and its Board, the Directors do not consider it appropriate
to appoint a Senior Independent Director. However,
the Company operates Audit, Remuneration and
Nominations Committees.
Daniel Smith, a non-executive director of the Company, is
also employed as its Company Secretary and assists with
the preparation of its accounts. The Board considers that
this does not impair his judgement as an independent
director of the Company.
The Company does not currently undertake a formal
annual evaluation of the performance of the Board or
individual Directors but will consider doing so at an
appropriate stage in its development in accordance with
general market practice.
The Board maintains a regular dialogue with Strand
Hanson Limited, its nominated adviser, and obtains legal,
financial and other professional advice as required to
ensure compliance with the AIM Rules for Companies and
other governance requirements.
We continue to review our approach to governance and
how the views of stakeholders are represented in our
oversight of the business.
The Company’s corporate governance policies and
procedures will continue to be reviewed regularly
and may change further as its business develops and
in response to any additional regulatory or other
relevant guidance.
Myles Campion
Executive Chairman
29 October 2021
24
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Coporate Governance Statement
continued
Adoption of the QCA Corporate Governance Code
As a company quoted on AIM, Europa Metals is required
to comply with a recognised corporate governance code.
At this stage of its development and with its primary
market quotation being in the UK, the Board believes it
appropriate for Europa Metals to adopt the QCA Code,
which is specifically designed for growing companies.
This statement summarises how Europa Metals currently
complies or otherwise with each of the ten core principles
of the QCA Code. Europa Metals will report further on its
compliance with the QCA Code on an annual basis.
Principle 1: Establish a strategy and business model
which promote long-term value for shareholders
Europa Metals has a clearly articulated strategy and
business plan as a European focused exploration and
development company, with its wholly owned Toral lead-
zinc-silver project in northern Spain (the “Toral Project”).
Our business model is centred on the continued
advancement of the Company’s Toral Project located
in the province of Castilla y León, north west Spain. We
are pursuing our efficient and cost effective approach to
exploration and development including the prosecution
of several drilling campaigns designed to extract
maximum value and information from each drill hole. This
approach has seen Europa Metals successfully complete
a number of workstreams that will ultimately feed into a
Pre-Feasibility Study.
Principle 2: Seek to understand and meet shareholder
needs and expectations
The Board considers that good communication with
shareholders, based on the mutual understanding of
objectives, is important. In addition to the information
included in the Company’s annual and interim reports
and required public announcements, there is regular
dialogue between the Board and senior management and
shareholders including regular presentations to investors,
including one-to-one meetings with major shareholders
in addition to specific meetings with shareholders relating
to major transactions.
An up to date information flow is also maintained on
the Company’s website (www.europametals.com)
which contains all press announcements and financial
reports as well as operational information on the
Company’s activities.
The Board also encourages shareholders to attend the
Annual General Meeting, at which members of the Board
are available to answer questions and present a summary
of each year’s activity and the corporate outlook for
the Company.
Principle 3: Take into account wider stakeholder and
social responsibilities and their implications for long-
term success
The Board believes that long-term success relies upon
good relations with a range of different stakeholder
groups, both internal and external. Most importantly,
however, we act with utmost respect for people,
communities and the environment.
As part of our business model, we identify the
relationships on which the Company relies, including
suppliers, customers, partners and other stakeholders,
and seek to maintain and improve these relationships in
a number of ways. We regularly seek to obtain, and take
action on, feedback from our employees, our suppliers
and other parties with whom we transact, as to how we
can best maintain and improve our dealings with each
other. We have also embarked on a formal stakeholder
engagement process with respect to the planned
eventual securing of an exploitation licence for the
Toral Project.
Principle 4: Embed effective risk management,
considering both opportunities and threats,
throughout the organisation
Financial controls
The Board is responsible for reviewing and approving
overall Company strategy, approving budgets and
plans, and for determining the financial structure of the
Company including treasury, tax and dividend policy.
Budgeting and planning is undertaken by management in
conjunction with the Executive Chairman.
Non-financial controls
The Board recognises that maintaining sound controls
and discipline is critical to managing the downside
risks to the Company’s plans. The Board has ultimate
responsibility for the Company’s system of internal
control and for reviewing its effectiveness. However,
any such system of internal control can provide only
reasonable, but not absolute, assurance against material
misstatement or loss.
Annual Report 2021
Europa Metals Ltd
25
Coporate Governance Statement
continued
The Board considers that the internal controls in place
are appropriate for the size, complexity and risk profile of
the Company. The principal elements of the Company’s
internal control system include:
• Close management of the day-to-day activities of the
Company by the Executive Directors;
• A forecast budget is utilised to track actual
performance on a regular basis, including detailed
periodic reporting of performance against budget;
and
• Central control over key areas such as capital
expenditure authorisation and banking facilities.
The Company continues to review its system of internal
control to ensure compliance with best practice, while
also having regard to its size and the resources available.
Other areas subject to regular ongoing review as the
Company grows, include regulatory compliance, business
integrity, health and safety, risk management, business
continuity and corporate social responsibility (including
ethical trading, supplier standards, environmental
concerns and employment diversity).
Risk management policies
As part of its Corporate Governance Plan, the Company
has a number of policies that directly or indirectly serve
to reduce and/or manage risk. These include, but are not
limited to:
• Corporate Code of Conduct
•
•
Share Dealing Code/Trading Policy
Shareholder Communications Strategy
• Audit and Risk Committee Charter
• Risk Management Processes
• Anti-Bribery Policy
• Whistleblower Policy
satisfying itself that the Company has a sound system
of risk management and internal control that is
operating effectively.
Risk management and other policies will be reviewed
annually.
Principle 5: Maintain the board as a well-functioning,
balanced team led by the chair
The Board currently comprises an Executive Chairman,
one executive director/CEO and two non-executive
directors. All directors retire by rotation with at least one
third submitting themselves for re-election each year at
the Company’s Annual General Meeting.
Executive directors of the Company are required to work
such hours as are required to fulfil their obligations to
the Company and have service contracts with a 6-month
notice period. They are not precluded from having other
outside business commitments.
Non-executive directors have letters of appointment with
a 1-month notice period and are required to be available
to attend Board meetings and to deal with both regular
and ad hoc matters. Their letters of appointment provide
no indicative time commitment, but they are required to
devote sufficient time as may reasonably be necessary for
the proper performance of their duties.
The Board considers that both of the non-executive
directors, are independent in character and judgement.
The Board is satisfied that it has a suitable balance
between independence and knowledge of the
business to allow it to discharge its duties and
responsibilities effectively.
During the financial year ended 30 June 2021 the number
of Board meetings held and those attended by each
Director were as follows:
Roles and responsibilities
The risk management and other policies listed above
describe the roles and responsibilities for managing risk.
This includes, as appropriate, details of responsibilities
allocated to the Board.
The Board is responsible for reviewing and approving
changes to the risk management policies and for
Director
Myles Campion
Laurence Read
Evan Kirby
Daniel Smith
No. of Board
meetings eligible to
attend
No. of Board
meetings attended
10
10
10
10
10
10
9
10
26
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Coporate Governance Statement
continued
In addition to the formal meetings of Directors above,
the Board has held regular and frequent discussions
throughout the year and passed circular resolutions on all
material matters.
The Board maintains a regular dialogue with Strand
Hanson Limited, its nominated adviser, and obtains legal,
financial and other professional advice as required to
ensure compliance with the AIM Rules for Companies and
other governance requirements.
Principle 6: Ensure that between them the Directors
have the necessary up-to-date experience, skills and
capabilities
Experience and capabilities
The Board is satisfied that, between its Directors, it has
an effective balance of skills and experience including
technical and commercial mining industry knowledge
and expertise and experience in sales, operations,
performance improvement, finance, commercial law
and capital markets. Each Board member brings a mix of
different capabilities which blend well into a successful
and effective team.
Board members maintain their skillsets through practice
in day-to-day roles enhanced with continuing professional
development and specific training where required.
Biographies for each Board member are published on the
Company’s website and in the Directors’ Report.
Internal Advisory Responsibilities
Due to the relatively small size and scale of the Company
and its Board, the Directors do not consider it appropriate
to appoint a Senior Independent Director.
All Directors have access to the advice and services
provided by the Company Secretary whose appointment
and removal is a matter reserved for the Board. Daniel
Smith, a non-executive director of the Company, fulfils
the role of Company Secretary by, amongst other things,
carrying out the following functions:
• preparing board packs, agendas and minutes and
facilitating the flow of Board information between
senior executives and non-executive Directors;
•
•
•
implementing Board policies and procedures;
liaising with the Company’s nominated adviser and
other professional advisers;
advising the Board, on corporate governance matters,
the application of the Company’s Constitution, and
other applicable laws; and
•
inducting new Directors.
Principle 7: Evaluate Board performance based on
clear and relevant objectives, seeking continuous
improvement
The Company does not currently undertake a formal
annual evaluation of the performance of the Board or
individual Directors but will consider doing so at an
appropriate stage in its development in accordance with
general market practice.
Given its relatively small size, the Company has no formal
succession planning process in place. Recommendations
for Board-level and other senior appointments are put to
the Board for approval by the Executive Chairman.
Principle 8: Promote a corporate culture that is based
on ethical values and behaviours
The Board believes that a healthy corporate culture
both protects and generates value for the Company. We
therefore seek to operate within a corporate culture
that is based on sound ethical values and behaviours.
We do this using certain rule based procedures (such
as our formal Corporate Code of Conduct) and, more
importantly, by the behavioural example of individual
Board members and senior managers. These values,
which we seek to instil throughout the Company, include
integrity, respect, honesty and transparency. As a small
company, these characteristics are far more visible to
staff than might otherwise be the case. We also hold
internal meetings at which Directors and staff discuss
matters, both formally and informally.
The Company operates a well-defined organisational
structure through which we seek to determine that
these ethical values and behaviours are recognised and
respected, in addition to which every employee is aware
of our established whistleblowing procedures.
Annual Report 2021
Europa Metals Ltd
27
Coporate Governance Statement
continued
Principle 9: Maintain governance structures and
processes that are fit for purpose and support good
decision-making by the Board
The Board
The Board is responsible for the long-term performance
of the Company. There is a formal schedule of matters
specifically reserved for the Board, in addition to the
formal matters required to be considered by the Board
under the Corporations Act. This list includes matters
relating to: a) appointing executive directors and
determining their remuneration; b) determining strategy
and policy; c) reviewing and ratifying risk management
and compliance systems and controls; d) approving
major capital expenditure, acquisitions and disposals;
e) approving and monitoring budgets and the integrity
of financial reporting; f) approving interim and annual
financial reports; g) approving significant changes to
the organisational structure; h) approving any issues of
shares or other securities; i) ensuring high standards of
corporate governance and regulatory compliance; j) the
appointment of the Company’s auditors.
The Executive Chairman’s role involves both the
leadership of the Board (including responsibility for the
establishment of sound corporate governance principles
and practices) and leading the Company’s executive
management team in the execution of its strategy. He
also plays a pivotal role in developing and reviewing such
strategy in consultation with the Board.
Notwithstanding the QCA Code’s recommendation that
the role of Chairman and an Executive Director are not
combined, Europa Metals’ use of an Executive Chairman
reflects the size, nature and early stage of development
of its business. The Board anticipates that the continued
combination of the two roles will be regularly reviewed as
the business develops further.
The Executive Directors are responsible for implementing
and delivering the strategy and operational decisions
agreed by the Board, making operational and
financial decisions required in day-to-day operations,
providing executive leadership to managers,
championing the Company’s core values and promoting
talent management.
The Independent Non-Executive Directors contribute
independent thinking and judgement through the
application of their external experience and knowledge
and are tasked with scrutinising the performance of
management, providing constructive challenge to the
executive directors and ensuring that the Company is
operating within the governance and risk framework
approved by the Board.
Board Committees
The Company’s Board Charter requires it to establish
Audit, Remuneration and Nominations Committees to
assist the Board in fulfilling its duties once the Board has
determined that it is of a sufficient size and structure.
The Company has established and operates an
Audit Committee, a Remuneration Committee and
a Nominations Committee. The Company has also
established an (informal) technical committee.
Evolution of the Corporate Governance Framework
During 2020, a number of changes were introduced to
the Company’s corporate governance procedures which
should serve to improve ongoing compliance with the
QCA Code as far as practicable and appropriate.
The Company’s corporate governance policies and
procedures will continue to be reviewed regularly
and may change further as its business develops and
in response to any additional regulatory and other
relevant guidance.
Principle 10: Communicate how the company is
governed and is performing by maintaining a dialogue
with shareholders and other relevant stakeholders
The Company communicates with shareholders through
its annual report and accounts, half yearly results and
other updates, its annual general meeting and one-
to-one meetings with certain existing and potential
new shareholders.
The Company’s website contains, inter alia, the outcomes
of shareholder votes cast at such Annual General
Meetings and historic annual accounts, half-year reports
and AGM notices.
In formally adopting the QCA Code as its corporate
governance framework, the Board has reviewed all
aspects of compliance and has taken action to improve
disclosures in its annual report and accounts and on its
website.
This corporate governance statement is dated 29 October
2021 and has been approved by the Board.
28
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Coporate Governance Statement
continued
Website disclosures
In accordance with AIM Rule 26, the Company is required
to maintain on its website details of the QCA Code,
how the Company complies with the QCA Code and
an explanation of any deviations from such code. This
information is required to be reviewed annually and 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 on the Company’s
website at: www.europametals.com, under the section
titled Corporate Governance.
Annual Report 2021
Europa Metals Ltd
29
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2021
Revenue
Other income
Administration expenses
Occupancy expenses
Exploration expenditure
Foreign exchange gain/(loss)
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
Net exchange (loss)/gain on translation of foreign operation
Other comprehensive income for the year, net of tax
Total comprehensive loss for the year
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
Loss 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
Note
3(a)
3(b)
3(c)
5
7
7
2021
$
—
147,537
2020
$
3
—
(1,357,427)
(1,000,227)
—
(2,824)
(2,044,095)
(1,375,442)
(4,679)
15,830
(3,258,664)
(2,362,660)
—
(3,258,664)
(3,258,664)
—
(2,362,660)
(2,362,660)
(383,469)
(383,469)
171,072
171,072
(3,642,133)
(2,191,588)
(3,642,133)
(3,642,133)
(2,191,588)
(2,191,588)
(3,642,133)
(3,642,133)
(2,191,588)
(2,191,588)
Cents per share
Cents per share
(7.03)
(7.03)
(7.67)
(7.67)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes
30
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Consolidated Statement of Financial Position
As at 30 June 2021
Assets
Current assets
Cash and short term deposits
Trade and other receivables
Total current assets
Non-current assets
Plant and equipment
Other receivables
Right of use assets
Capitalised exploration expenditure
Total non-current assets
Total assets
Liabilities and equity
Current liabilities
Trade and other payables
Lease liability
Total current liabilities
Non-current liabilities
Lease liability
Borrowings
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
Note
2021
$
2020
$
8
9
9
10
11
12
13
16
15
1,180,768
84,720
1,265,488
66,718
190,523
29,277
1,276,964
1,563,482
2,828,970
261,886
16,505
278,391
—
121,727
121,727
400,118
700,642
210,866
911,508
24,073
193,096
39,035
1,577,953
1,834,157
2,745,665
207,462
22,328
229,790
16,505
—
16,505
246,295
2,428,852
2,499,370
45,695,303
42,489,962
(46,380,604)
(43,121,940)
3,114,153
2,428,852
3,131,348
2,499,370
This Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
Annual Report 2021
Europa Metals Ltd
31
Consolidated Statement of Cash Flows
For the year ended 30 June 2021
Cash flows used in operating activities
Interest received
Exploration and evaluation expenditure
Payments to suppliers and employees
Net cash flows used in operating activities
Cash flows used in investing activities
Payments for plant and equipment
Net cash flows used in investing activities
Cash flows from financing activities
Lease principal repayments
Proceeds from issue of shares
Transaction costs on issue of shares
Proceeds from borrowings
Net cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents held
Net foreign exchange difference
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
Note
20
2021
$
—
2020
$
3
(1,959,132)
(1,135,162)
(3,094,294)
(1,507,897)
(828,272)
(2,336,166)
(28,056)
(28,056)
(5,953)
(5,953)
(25,879)
3,633,082
(253,101)
258,513
3,612,615
490,265
(10,139)
700,642
8
1,180,768
(49,096)
2,212,254
(183,506)
—
1,979,652
(362,468)
10,699
1,052,411
700,642
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
32
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Consolidated Statement of Changes in Equity
For the year ended 30 June 2021
Attributable to the equity holders of the Parent
At 1 July 2019
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
Issued
capital
$
Accumulated
losses
$
40,572,924 (40,759,280)
— (2,362,660)
—
—
— (2,362,660)
1,917,038
—
—
—
Employee
share
incentive
reserve
$
491,577
—
Option
reserve
$
Foreign
exchange
reserve
$
Total
equity
$
2,087,837
—
314,445
2,707,503
— (2,362,660)
—
—
—
—
—
—
171,072
171,072
171,072
(2,191,588)
—
66,417
— 1,917,038
—
66,417
At 30 June 2020
At 1 July 2020
Loss for the year
42,489,962 (43,121,940)
491,577
2,154,254
485,517
2,499,370
42,489,962 (43,121,940)
— (3,258,664)
491,577
—
2,154,254
—
485,517
2,499,370
— (3,258,664)
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 to directors and
management
—
—
— (3,258,664)
3,205,341
—
—
—
—
—
—
—
—
—
—
—
—
(383,469)
(383,469)
(383,469)
(3,642,133)
—
174,639
191,635
— 3,205,341
—
—
174,639
191,635
At 30 June 2021
45,695,303 (46,380,604)
491,577
2,520,528
102,048
2,428,852
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Annual Report 2021
Europa Metals Ltd
33
Notes to the consolidated financial statements
For the year ended 30 June 2021
Note 1: Corporate information
The consolidated financial statements of Europa Metals
Ltd and its subsidiaries (collectively, the “Group”) for
the year ended 30 June 2021 were authorised for issue
in accordance with a resolution of the directors on
29 October 2021.
Europa Metals Ltd, the parent, is a for profit company
limited by shares incorporated in Australia whose shares
are publicly traded on the London Stock Exchange (AIM)
and the AltX of the Johannesberg Stock Exchange.
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 the 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 $3,258,664 for the year ended 30 June 2021 (2020:
$2,362,660). In addition, the Group had net current
assets of $987,097 (2020: $681,718), and shareholders’
equity of $2,428,852 (2020: $2,499,370) as at
30 June 2021.
There does not currently appear to be any material
impact on the Company or any significant uncertainties
with respect to events or conditions which may
impact the Company unfavourably as at the reporting
date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
The Group’s forecast cash flow requirements for the
15 months ending 30 September 2022 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 continued to pursue a strategy to
reduce costs.
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.
34
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 2: Summary of significant accounting
policies continued
(d) Adoption of new and revised standards
Europa Metals Ltd 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 2020.
(e) Accounting standards issued but not yet effective
The Directors have also reviewed all new Standards and
Interpretations that have been issued but are not yet
effective for the year ended 30 June 2021. As a result of
this review, the Directors have determined that there is
no material impact of the new and revised Standards and
Interpretations on the Group and, therefore, no change is
necessary to Group accounting policies.
(f) Basis of consolidation
The consolidated financial statements comprise the
financial statements of the Group and its subsidiaries
as at 30 June 2021. 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.
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 profit or loss in the period in which the operation
is disposed.
Annual Report 2021
Europa Metals Ltd
35
Notes to the consolidated financial statements
continued
Note 2: Summary of significant accounting
policies continued
(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.
Exploration and evaluation costs carried forward
The Group’s main activity is exploration and evaluation
for minerals. The nature of exploration activities are such
that it requires interpretation of complex and difficult
geological models in order to make an assessment of
the size, shape, depth and quality of resources and their
anticipated recoveries. The economic, geological and
technical factors used to estimate mining viability may
change from period to period. In addition, exploration
activities by their nature are inherently uncertain.
Changes in all these factors can impact exploration asset
carrying values.
Discount rates
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of
the borrowings using the effective interest rate method.
Share-based payment transactions
Where the fair value of the goods or services provided by
employees or consultants cannot be reliably determined
the Group measures the cost of equity-settled
transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The
fair value is determined by an external valuer using the
Black-Scholes model, using the assumptions detailed in
Note 17.
Non-current assets
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. VAT receivable is recognised as non-current to
the extent that the timing of the refund is uncertain.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts
that the Coronavirus (COVID-19) pandemic has had, or
may have, on the Company based on known information.
This consideration extends to the nature of the products
and services offered, customers, supply chain, staffing
and geographic regions in which the Company operates.
Other than as addressed in specific notes, there does not
currently appear to be either any significant impact upon
the financial statements or any significant uncertainties
with respect to events or conditions which may
impact the Company unfavourably as at the reporting
date or subsequently as a result of the Coronavirus
(COVID-19) pandemic.
(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.
36
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 2: Summary of significant accounting
policies continued
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.
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, the 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.
Annual Report 2021
Europa Metals Ltd
37
Notes to the consolidated financial statements
continued
Note 2: Summary of significant accounting
policies continued
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
•
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 any 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.
38
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 2: Summary of significant accounting
policies continued
(q) Loss per share
Basic loss per share is calculated as the 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 17.
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 transaction 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.
(u) Borrowings
Borrowings are initially recognised at fair value, net of
transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the
proceeds (net of transaction costs) and the redemption
amount is recognised in profit or loss over the period of
the borrowings using the effective interest rate method.
(v) Grant income
Grant income is recognised in profit or loss over the periods
in which the Company recognises expenses for the related
costs for which the grants are intended to compensate.
Annual Report 2021
Europa Metals Ltd
39
Notes to the consolidated financial statements
continued
Note 3: Revenue and expenses
Revenue and expenses from continuing operations
(a) Revenue
Interest received
(b) Other Income
Grants received
(c) Profit or loss
Other expenses include the following:
Depreciation
Consulting services
Employment related
– Directors’ fees
– Share Based Payments
Corporate
Travel
Other
2021
$
—
—
147,537
147,537
2021
$
35,843
299,488
426,261
191,635
219,078
—
185,122
1,357,427
2020
$
3
3
—
—
2020
$
75,000
186,736
436,073
—
172,278
7,857
122,283
1,000,227
Note 4: Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors.
Europa Metals Ltd 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 in a
“whole of entity” manner without dissemination to any separately identifiable segments.
The Group’s management operates 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.
40
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 5: Income tax expense
Reconciliation of income tax expense to the pre-tax net loss
Loss before income tax
Income tax calculated at 30% (2020: 30%) on loss before income tax
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
Analysis of deferred tax balances
Deferred tax liabilities
Assessable temporary differences
Prepayments
Other
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
2021
$
2020
$
(3,258,664)
(977,599)
828,914
83,670
65,015
—
2021
$
(6,381)
—
6,381
—
1,773
8,460
—
5,630,623
5,640,856
(2,362,660)
(708,798)
501,232
61,143
146,423
—
2020
$
(5,422)
(5,169)
10,591
—
2,660
19,611
—
5,395,222
5,417,493
(5,634,475)
(5,406,902)
6,381
(6,381)
—
10,591
(10,591)
—
Unused tax losses set out above have not been recognised due to the uncertainty of future taxable profit streams.
Annual Report 2021
Europa Metals Ltd
41
Notes to the consolidated financial statements
continued
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 (valuation of options for Notice of Meeting)
BDO (WA) Pty Ltd – Taxation services
Note 7: Loss per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
Loss used in calculating basic loss per share
Adjustments to basic loss used to calculate dilutive loss per share
Loss used in calculating dilutive loss per share
Weighted average number of ordinary shares used in the
calculation of basic loss per share
Weighted average number of ordinary shares used in the
calculation of diluted loss per share
2021
$
2020
$
48,452
48,452
—
8,110
56,562
2021
$
(7.03)
(7.03)
41,382
41,382
3,200
7,460
52,042
2020
$
(7.67)
(7.67)
(3,258,664)
(2,362,660)
—
—
(3,258,664)
(2,362,660)
Number
Number
46,375,623
30,803,822
46,375,623
30,803,822
15,116,087 share options outstanding as at 30 June 2021 (30 June 2020: 11,388,166) have not been included in the
calculation of dilutive loss per share as these are anti-dilutive.
The comparative figures have been amended to reflect the share consolidation of 500:1 effected on 15 July 2020.
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 23 for the risk exposure analysis for cash and cash equivalents.
2021
$
1,180,768
2020
$
700,642
42
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 9: Trade and other receivables
Current
Sundry debtors
GST/VAT
Prepayments
Non-current
GST/VAT(1)
2021
$
22,014
35,059
27,647
84,720
2020
$
4,418
185,274
21,174
210,866
190,523
193,096
(1) VAT is considered recoverable but is not expected to be received within 12 months.
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
Foreign exchange movement
At 30 June
Note 11: Trade and other payables
Current
Trade payables and other payables
2021
$
1,577,953
(300,989)
1,276,964
2020
$
1,423,943
154,010
1,577,953
2021
$
261,886
261,886
2020
$
207,462
207,462
Trade and other payables are non-interest bearing and are normally settled on 30-day terms.
Note 12: Borrowings
Opening balance
Loan received
Closing balance
2021
$
—
121,727
121,727
2020
$
—
—
—
On 19 October 2020, the Company announced that following an extensive submission process, an interest-free loan by
way of a grant of €466,801.50 (the “Grant”) had been awarded to the Company by the Centre for the Development of
Industrial Technology (CDTI) for use towards research and development (“R&D”) at the Company’s wholly owned Toral
lead, zinc and silver project (“Toral” or the “Toral Project”) situated in the region of Castilla y León, north-west Spain.
Annual Report 2021
Europa Metals Ltd
43
Notes to the consolidated financial statements
continued
Note 12: Borrowings continued
The CDTI is a Public Business Entity in Spain, under the auspices of the Ministry of Science and Innovation, which
fosters the technological development and innovation of Spanish companies. The Grant is categorised as a partly
refundable loan (with a nil per cent. interest rate) with the funds received to be allocated towards the development of
R&D technologies relating to the recording and correction of drillhole deviation at the Toral Project. Application for the
Grant was made further to ongoing work by Europa Metals and the AIR Institute, linked to the Salamanca University,
and drilling contractors Sondeos y Perforaciones Industriales de Bierzo SA (“SPI”).
The Grant monies are drawable in up to three tranches, with the prior agreement of the CDTI, with the initial tranche,
comprising an amount of €163,380 (AUD $261,872), received by the Company during the reporting period. The second
and third tranches are scheduled to be drawn down over a period of approximately 18 months subject to certain,
defined, operational milestones. The core objectives of the Innovation Programme are to retrieve and process data
from the latest Toral drilling campaign in order to develop algorithmic software for use in exploration campaigns to
correct drilling deviation. Biannual repayments of €21,822 begin in 2024, running for 7 years until 2031, with a fixed
interest rate of nil per cent.
Once the funds have demonstrably been spent on appropriate R&D exploration activity at the Toral Project by the
Company, 70 per cent. of the total Grant will be repayable with the balancing 30 per cent. then not required to
be repaid.
In accordance with AASB 120 Accounting for Government Grants the above loan has been fair valued using a discount
rate of 12%. The discounted loan balance is recognised as a loan with the remaining amount of $144,362 recognised as
other income over the period the related expenditure is incurred.
The loan will accrue interest at a deemed interest rate over the life of the loan and be unwound as the loan repayments
are made.
Note 13: Contributed Equity
(a) Share Capital
Ordinary Shares
Ordinary shares fully paid
Employee share incentive plan shares
2021
No. of
shares
2020
No. of
shares
2021
$
2020
$
49,130,649 16,722,209,651
(2,300,000)
(4,600)1
45,960,605
42,755,264
(265,302)
(265,302)
49,126,049 16,719,909,651
45,695,303
42,489,962
Capital management
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 2021, nil (2020: nil) shares were issued back to the market from the Employee Incentive
Share Plan.
44
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 13: Contributed Equity continued
(b) Movements in ordinary share capital
Date
Details
30 June 2019
Closing Balance
27 August 2019
28 August 2019
Exercise of warrants
Exercise of warrants
04 September 2019
Exercise of warrants
06 September 2019
Exercise of warrants
09 October 2019
Exercise of warrants
11 October 2019
17 October 2019
Placing shares
Exercise of warrants
5 November 2019
Placing shares
Cost associated with share issues
30 June 2020
15 July 2020
Closing Balance
Share consolidation 500:1
19 August 2020
Placing shares
Cost associated with share issue
Less:
Employee share plan shares on issue
Number of shares
$
11,976,876,317
40,838,226
212,000,000
133,333,334
83,333,334
83,333,333
66,666,667
57,737
60,779
37,382
37,453
30,242
3,400,000,000
1,582,223
166,666,666
600,000,000
—
78,530
282,615
(249,923)
16,722,209,651
(16,688,765,276)
42,755,264
—
15,686,274
3,633,082
—
(427,741)
49,130,649
45,960,605
(4,600)
(265,302)
49,126,049
45,695,303
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.
(c) Movements in employee share plan shares issued with limited recourse employee loans
Date
Details
30 June 2020
Opening balance
Cancelled during 2020
Issued during 2020
Closing balance
Opening balance
Cancelled during 2021
Issued during 2021
30 June 2021
Closing balance
No employee share plan shares were issued in 2021 (2020: Nil).
Number of shares
$
2,300,000
(265,302)
—
—
—
—
2,300,000
2,300,000
(265,302)
(265,302)
—
—
—
—
2,300,000
(265,302)
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.
Annual Report 2021
Europa Metals Ltd
45
Notes to the consolidated financial statements
continued
Note 14: Options
The following table illustrates the movements in share options during the period:
Outstanding at 1 July 2020
Consolidation 500:1
Issued during the period
Expired during the period
Exercised during the period
Outstanding at 30 June 2021
Exercisable at 30 June 2021
30 June 2021
Number
30 June 2020
Number
5,627,416,568
4,199,416,595
(5,616,161,747)
—
11,254,821
4,199,416,595
4,331,765
2,240,000,000
(470,499)
—
— (812,000,027)
5,627,416,568
15,116,087
13,716,087
5,627,416,568
The table in note 17 summarises the model inputs (post consolidation) for options granted during the year ended 30 June 2021.
Note 15: Reserves
At 30 June 2019
Options issued to Brokers(1)
Currency translation differences
At 30 June 2020
Options issued to Brokers(1)
Options issued to Directors
Currency translation differences
At 30 June 2021
Employee
share incentive
reserve
$
491,577
—
—
491,577
—
—
—
Options
reserve
$
2,087,837
66,417
—
2,154,254
174,639
191,635
—
491,577
2,520,528
Foreign
exchange
reserve
$
314,445
—
171,072
485,517
—
—
(383,469)
102,048
Total
$
2,893,859
66,417
171,072
3,131,348
174,639
191,635
(383,469)
3,114,153
(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.
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.
46
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 16: 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
2021
$
2020
$
(43,121,940)
(40,759,280)
(3,258,664)
(2,362,660)
(46,380,604)
(43,121,940)
Note 17: Share based payments
Expenses arising from share-based payment transactions
Total costs arising from share-based payment transactions recognised during the year were as follows:
Options issued to Brokers as part of capital raising (included in Equity)
Options issued to directors/management – July 2020
Options issued to directors/management – December 2020
2021
$
174,639
157,979
33,656
366,274
2020
$
66,417
—
—
66,417
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 for options granted during the financial year ended 30 June 2021:
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
Underlying security spot price at grant date (GBP)
Expected price volatility of the Company’s shares
Expected dividend yield
Expected life (years)
Risk-free interest rate
Black-Scholes model valuation per option (AUD cents per share)
Total fair value
Expensed during the period
Directors – July 2020
Tranche 1
300,000
0.075
24/07/20
24/07/23
0.065
125%
0%
3
0.14%
0.0821
$24,622
$24,622
Tranche 2
1,400,000
0.090
24/07/20
24/07/23
0.065
125%
0%
3
0.14%
0.0789
$110,507
$110,507
Annual Report 2021
Europa Metals Ltd
Tranche 3
300,000
0.106
24/07/20
24/07/23
0.065
125%
0%
3
0.14%
0.0762
$22,849
$22,849
47
Notes to the consolidated financial statements
continued
Note 17: Share based payments continued
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
Underlying security spot price at grant date (GBP)
Expected price volatility of the Company’s shares
Expected dividend yield
Expected life (years)
Risk-free interest rate
Black-Scholes model valuation per option (AUD
cents per share)
Total fair value
Expensed during the period
Directors/Management – December 2020
Executive Directors
Non-executive
directors/
management
Tranche 1
400,000
0.089
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1249
$49,974
$10,468
Tranche 2
400,000
0.089
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1249
$49,974
$10,468
Tranche 3
400,000
0.089
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1249
$49,974
$10,468
Tranche 2
200,000
0.129
18/12/20
18/12/23
0.095
125%
0%
3
0.14%
0.1158
$23,168
$2,252
Vesting Conditions for the December 2020 options
Tranche 1: vests on the delineation, by an independent third party, of greater than a 4.5Mt Indicated Resource estimate
at the Toral Project, reported in accordance with JORC (2012).
Tranche 2: vests on the delivery of a positive Pre-Feasibility Study for the Toral Project with an independent
recommendation for the Company to continue advancing the project.
Tranche 3: vests on the submission of an application for a Mining Licence at the Toral Project.
The Directors consider that the probability of the above Tranches vesting within their three year term to be 100%.
Therefore, the fair value of the options is expensed over three years to 18 December 2023.
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
Underlying security spot price at grant date (GBP)
Expected price volatility of the Company’s shares
Expected dividend yield
Expected life (years)
Risk-free interest rate
Black-Scholes model valuation per option (AUD cents per share)
Total fair value
Debited to equity during the period
Options issued
to Brokers
931,765
0.1275
19/08/2020
19/08/2023
0.14
125%
0%
3
0.14%
0.187
$174,639
$174,639
48
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 18: Commitments and contingencies
There are no material contingent liabilities or assets of the Group at the reporting date.
Note 19: Related party transactions
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share based payments
2021
$
426,261
—
189,606
615,867
2020
$
438,707
—
—
438,707
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 Ltd and the subsidiaries listed
in the following table.
Name
Ferrum Metals Pty Ltd
Country of Incorporation
Australia
Europa Metals Iberica S.L. (Formally GoldQuest Iberica S.L.)
Spain
% Beneficial Equity Interest
2021
100
100
2020
100
100
Europa Metals Ltd is the ultimate Australian parent entity and the ultimate parent of the Group. Transactions between
Europa Metals Ltd and its controlled entities during the year consisted of loan advances by Europa Metals Ltd. All
intergroup transactions and balances are eliminated on consolidation.
Minerva Corporate Pty Ltd(i)
Mowbrai Ltd(ii)
Virico Limited(iii)
Income
from Related
Parties
$
Expenditure
to Related
Parties
$
Amounts Owed by
Related Parties at
year end
$
Amounts Owed to
Related Parties at
year end
$
—
—
—
—
—
—
84,000
84,000
—
134,277
140,256
182,966
—
—
—
—
—
—
11,067
9,525
—
8,523
—
6,819
2021
2020
2021
2020
2021
2020
(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, was formerly a director of Mowbrai Ltd. During 2020, Mowbrai Ltd received the above fees
for consulting services. These fees were based on normal commercial terms and conditions.
(iii) Mr M Campion, an executive director of the Company, is also a director of Virico Limited. During the year, Virico Limited received the above
fees for consulting services. These fees were based on normal commercial terms and conditions.
Annual Report 2021
Europa Metals Ltd
49
Notes to the consolidated financial statements
continued
Note 19: Related party transactions continued
The following transactions were undertaken between the Company, executive officers and director-related entities
during 2021 and 2020.
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
Mr L Read, an executive director of the Company, was formerly also a director of
Mowbrai Ltd. During 2020, Mowbrai Ltd received the above fees for consulting
services. These fees were based on normal commercial terms and conditions.
Mr M Campion, an executive director of the Company, is also a director of Virico
Limited. During the year, Virico Limited received fees for consulting services. These
fees were based on normal commercial terms and conditions.
Note 20: Cash flow information
2021
$
—
2020
$
27,370
84,000
84,000
—
134,277
140,256
224,256
182,966
428,613
2021
$
2020
$
Reconciliation of cash flow from operations with loss from ordinary activities after
income tax
Loss from ordinary activities after income tax
(3,258,664)
(2,362,660)
Other income
Depreciation
Interest on unwinding of lease
Net foreign exchange differences
Changes in assets and liabilities
(Increase)/decrease in receivables
(Decrease)/increase in payables and provisions
Cash flows used in operations
Note 21: Non-cash investing and financing activities
Share issue costs (settled through issue of options)
(147,537)
35,843
11,180
4,679
(57,656)
317,861
75,000
7,485
(15,830)
(205,013)
164,852
(3,094,294)
(2,336,166)
2021
$
174,639
2020
$
66,417
50
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 22: Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2019
Acquisition of leases
Balance at 30 June 2020
Repayment of lease liabilities
Borrowings – gross amount received
Borrowings – non-cash discount
Balance at 30 June 2021
Loans
$
Lease liability
$
—
—
—
—
209,862
(88,135)
121,727
—
38,833
38,833
(22,328)
—
—
16,505
Note 23: 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.
Annual Report 2021
Europa Metals Ltd
51
Notes to the consolidated financial statements
continued
Note 23: Financial risk management objectives and policies continued
Weighted
Average
Effective
Interest Rate
%
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non
Interest
Bearing
$
Total
$
2021
Financial Assets
Cash
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Lease liabilities
Borrowings
Total Financial Liabilities
2020
Financial Assets
Cash
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Lease liabilities
Total Financial Liabilities
0.01%
12.5%
12%
0.05%
12.5%
4,032
—
4,032
— 1,176,736
1,180,768
—
275,243
275,243
— 1,451,979
1,456,011
—
—
—
—
741
—
741
—
—
—
—
—
—
—
—
—
261,885
16,505
121,727
400,117
261,885
16,505
121,727
400,117
699,901
403,962
700,642
403,962
— 1,103,863
1,104,604
—
—
—
207,465
38,833
246,298
207,465
38,833
246,298
(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.
Borrowings are repayable between 2 to 6 years with the total amount of €163,380 (AUD $261,872) discounted to
30 June 2021. The contractual maturities of borrowings is as follows:
Borrowings
52
Less than
12 months
$
—
Between 1 to
2 years
$
Between 2 and
5 years
$
—
209,862
Over 5 years
$
52,010
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Notes to the consolidated financial statements
continued
Note 23: 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 procedure 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 National Australia Bank, Banco Popular and Unicaja Banco of Spain, 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:
Great British Pounds (GBP)
South African Rand (ZAR)
Euro (EUR)
Liabilities
Assets
2021
$
(12,456)
(1,627)
(191,760)
2020
$
(107,257)
(3,557)
(43,085)
2021
$
958,637
10
168,396
2020
$
686,414
9
3,933
Foreign currency sensitivity analysis
The Group is exposed to Great British Pound (GBP) and Euro (EUR) currency fluctuations.
A sensitivity analysis has not been disclosed as the impact of any reasonable fluctuation in exchange rates is not
considered to be material to the Group.
(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.
Annual Report 2021
Europa Metals Ltd
53
Notes to the consolidated financial statements
continued
Note 24: Parent Entity Information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated Losses
Reserves
Total shareholders’ equity
Loss of the parent entity
2021
$
1,402,200
2,583,682
154,830
154,830
2020
$
1,481,961
2,663,748
164,379
164,379
50,008,226
46,802,885
(51,030,621)
(47,388,489)
3,451,247
2,428,853
3,084,972
2,499,368
(3,642,132)
(2,191,588)
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 2021 (2020: Nil).
Note 25: Significant events after the reporting date
There are subsequent events to report, as follows:
On 19 July 2021, the Company announced that it had completed the requisite work and collated and submitted all the
relevant documentation to the CDTI in relation to the Stage 1 milestone of its €466,801.50 innovation grant, further
details of which were announced on 19 October 2020.
On 7 September 2021, the Company announced the results of further drill assays from its Toral Project, including high-
grade intersection of lead, zinc and silver.
On 1 October 2021, the Company announced an updated independent Mineral Resource Estimate in accordance with
JORC (2012) for the Toral Pb, Zn & Ag project.
On 26 October 2021, the Company announced that it had raised, in aggregate, gross proceeds of £1.5 million through
the placing of 19,527,920 Placing Shares to certain institutional and other investors and a subscription by certain other
investors directly with the Company of a further 10,472,080 Subscription Shares in each case at a price of 5 pence per
share (the “Fundraising”).
The Fundraising is being conducted in two tranches with the initial tranche of new Ordinary Shares being issued under
the Company’s pre-existing share capital authorities and the second tranche subject to shareholder approval at the
Company’s forthcoming 2021 Annual General Meeting.
No other matters or circumstances have arisen since the end of the financial year, other than as noted above, that may
significantly affect the operations of the Company, the results of these operations, or the state of its affairs in future
financial years.
54
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Directors’ Declaration
In the opinion of the directors of Europa Metals Ltd:
(c)
(a)
the financial statements and notes set out on pages
34 to 54 are in accordance with the Corporations Act
2001, including:
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.
(i)
giving a true and fair view of the financial
position of the Group as at 30 June 2021 and of
its performance, as represented by the results
of its operations and its cash flows, for the year
ended on that date; and
(ii)
complying with Accounting Standards in
Australia and the Corporations Regulations 2001,
professional requirements and other mandatory
requirements;
(b) the financial statements and notes also comply
with International Financial Reporting Standards as
disclosed in Note 2(b); and
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 2021.
This declaration is made in accordance with a resolution
of the directors.
D Smith
Non-Executive Director
Perth
29 October 2021
Annual Report 2021
Europa Metals Ltd
55
Independent auditor’s 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 2021, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, and notes to the financial 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 2021 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 (including
Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We 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 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.
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.
56
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Independent auditor’s report
continued
Recoverability of Capitalised Exploration Expenditure
Key audit matter
As disclosed in Note 10 to the financial report, the
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.
How the matter was addressed in our audit
Our procedures included, but were not limited to:
•
•
•
•
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 2021, 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
Annual Report 2021
Europa Metals Ltd
57
Independent auditor’s report
continued
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:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.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 2021.
In our opinion, the Remuneration Report of Europa Metals Limited, for the year ended 30 June 2021, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley
Director
Perth, 29 October 2021
58
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
Auditor’s independence declaration
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF EUROPA METALS LIMITED
As lead auditor of Europa Metals Limited for the year ended 30 June 2021, 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.
Ashleigh Woodley
Director
BDO Audit (WA) Pty Ltd
Perth, 29 October 2021
Annual Report 2021
Europa Metals Ltd
59
Additional JSE Information
Headline earnings reconciliation
2021
$
2020
$
Loss attributable to ordinary equity holders of the parent entity
(3,258,664)
(2,362,660)
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
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)
—
—
—
—
—
—
(3,258,664)
(2,362,660)
(3,258,664)
(2,362,660)
46,375,623
30,803,822
(7.03)
(7.67)
(3,258,664)
(2,362,660)
46,375,623
30,803,822
(7.03)
(7.67)
60
Europa Metals Ltd
Annual Report 2021
EUROPAEUROPAMETAMETALSLS
www.europametals.com
Registered and Principal Office:
c/- Minerva Corporate Pty Limited
Level 8, 99 St Georges Terrace
Perth WA 6000 AUSTRALIA