Europa Metals Ltd
A.C.N. 097 532 137
Annual Report
For the year ended
30 June 2023
Europa Metals Ltd
A.C.N. 097 532 137
Contents
2 | P a g e
Page No.
Chairman and Interim-CEO’s Statement
3
Corporate Information
5
Directors’ Report
6
Corporate Governance Statement
33
Consolidated Statement of Profit or Loss and Other Comprehensive Income
40
Consolidated Statement of Financial Position
41
Consolidated Statement of Cash Flows
42
Consolidated Statement of Changes in Equity
43
Notes to the Consolidated Financial Statements
44
Directors’ Declaration
67
Independent Auditor’s Report
68
Auditor’s Independence Declaration
72
Additional JSE Information
73
Europa Metals Ltd
A.C.N. 097 532 137
Chairman and Interim-CEO’s Statement
3 | P a g e
Dear Fellow Shareholders,
During the financial year ended 30 June 2023 and subsequently, Europa Metals Ltd (“Europa Metals” or the
“Company”) has secured funding for Toral via a third party agreement, conducted additional highly successful
drilling campaigns and combined with additional metallurgical work, facilitated an update to the independent
Indicated resource estimate. The resources at the Toral Project, effective as of 30th November 2022 contain an
Indicated Resource of 7 Mt @ 8.1% ZnEq (including Pb credits) within a total resource of approximately 20 Mt
@ 6.8% ZnEq (including Pb credits). This represented a substantial, approximate 19%, increase in the indicated
resource tonnage and a 14% increase in grade. The updated resource estimate can be utilised in calculations
for feasibility studies and to support future mine planning.
Towards the close of 2022 Europa confirmed the signing of a definitive agreement, a US$6m farm-in
arrangement with Denarius Metals Corp. (TSXV: DSLV; OTCQB: DNRSF) (“Denarius”), involving a two stage
option and joint venture, pursuant to which Denarius will be afforded the right to acquire up to an 80% ownership
interest in Toral.
The Option Agreement entered into with Denarius pursuant to which it has been granted an initial option (the
"First Option") to subscribe for 51 percent of the share capital of Europa Metals Iberia S.L. (EMI), the 100 percent
owned Spanish subsidiary of Europa Metals which holds the Toral Project, and a further option (the "Second
Option") to potentially acquire an additional 29 percent of EMI's share capital from Europa Metals.
The First Option is for an initial exercise period of three years may be exercised by Denarius conditional upon,
inter alia:
•
it assuming operatorship and making expenditures on the Toral Project of US$4,000,000;
•
completion of a preliminary economic assessment ("43-101 PEA") compliant with National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI 43- 101") on the Toral Project.
•
Expenditures to include the completion and submission of a mining licence application in respect of Toral
to the local Junta. This was completed in October 2023.
The Second Option may be exercised by Denarius within a period of one year from the date of closing of the
First Option conditional upon:
•
exercise of the First Option;
•
completion of a NI 43-101 compliant pre-feasibility study (the "PFS") on the Toral Project at its own cost;
•
and payment of US$2,000,000 cash to Europa Metals.
This investment by Denarius represents a significant step forward with respect to the advancement of Toral and
is the culmination of a strategy the board has employed in seeking a long term partnership for the project. As
part of the agreement the parties have also signaled the ambition to secure potential further concessions in the
surrounding Northern Spain region therefore expanding the footprint around Toral.
The 2022 drill campaign focused on expanding the known existing indicated resource area, with the objective of
extending the pre-existing indicated resource estimate at depth towards the east of the current zone and thereby
link up a known area of encouraging data. This campaign was the most successful to date for Europa with the
highest grade intersection being drilled on the project, TOD-042 intersecting 5.25m@23.24% ZnEq(Pb+Ag),
including 2.5m@44.55% ZnEq(Pb+Ag)
With the successful drilling finished, the results combined with the recently completed metallurgical test work
from earlier in the year were inputted into a new resource calculation. Indicated Resource of 7 Mt @ 8.1% ZnEq
(including Pb credits) within a total resource of approximately 20 Mt @ 6.8% ZnEq (including Pb credits). This
represented a substantial, approximate 19%, increase in the indicated resource tonnage and a 14% increase in
grade,
The campaign also completed our R&D collaboration project with the University of Salamanca supported by
Spain’s Centre for the Development of Industrial Technology (CDTI), with the final payment being received during
2023.
Over the coming period, the Board will continue with its endeavours to capitalise on the potential of Toral for the
profitable future development of Toral in a stable and secure first world jurisdiction. In addition, we have
Europa Metals Ltd
A.C.N. 097 532 137
Chairman and Interim-CEO’s Statement
4 | P a g e
continued to pursue our stated business development strategy and identify promising complimentary
opportunities for portfolio expansion. As at the end of the reporting period, the management team had reviewed
further projects, with 3 being discussed and evaluated at Board level, and we intend to continue such activity
and to identify, investigate and assess additional opportunities of potential interest. Further updates will be
provided as and when appropriate.
In conclusion, the Europa Metals team has worked diligently and very successfully on the technical aspects of
Toral, increasing both resource size and grade and we have also brought in a dedicated partner in Denarius.
The funding that is now in place will enable the de-risking process to continue and has facilitated the submission
of a Mining Licence Application to the relevant authorities with a subsequent Pre-Feasibility Study to follow.
Myles Campion
Executive Chairman and Interim-CEO
31 October 2023
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Information
5 | P a g e
Directors:
Myles Campion
Evan Kirby
Daniel Smith
Company Secretary:
Daniel Smith
Auditor:
BDO Audit (WA) Pty Ltd
Level 9, Mia Yellagonga Tower
5 Spring Street
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 6382 4600
Facsimile: (+61 8) 6382 4601
Nominated Advisor (Nomad)
Beaumont Cornish Limited
Building 3
566 Chiswick High road
London, W4 5YA
JSE Sponsor
Questco Corporate Advisory Proprietary Limited
Ground Floor, Block C, Investment Place
10th Road, Hyde Park, 2196
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 17, 221 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 9323 2000
Facsimile: (+61 8) 9323 2033
Registered and Principal Office:
c/o Minerva Corporate Pty Limited
Level 8, 99 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 9486 4036
Facsimile: (+61 8) 9486 4799
Website: www.europametals.com
Email: info@europametals.com
Stock Exchange Listings:
Europa Metals Ltd’s ordinary shares are quoted on the AIM market of the London Stock Exchange plc
(AIM:EUZ) and are also listed on JSE AltX (AltX:EUZ).
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
6 | P a g e
The Directors of Europa Metals Ltd (“Europa Metals” or the “Company”) (the “Directors”) present their report for
the financial year ended 30 June 2023.
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 72), 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 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)
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
318,723
Options held in Europa Metals Ltd
345,000
Myles Campion (Age 54), BSc Geology (Hons), MSc Mineral Exploration, Executive Chairman /
Interim-CEO / 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 Virico (IOM) Limited
Director of DY6 Metals Ltd (ASX:DY6)
Former directorships
over the past 3 years
None
Special
responsibilities
Executive Chairman / Interim-CEO / Technical Director
Member of the Remuneration Committee
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
7 | P a g e
Chairman of the Technical Committee (Informal)
Interests in shares
and options
Ordinary Shares in Europa Metals Ltd
2,108,182
Options held in Europa Metals Ltd
2,591,667
Daniel Smith (Age 39), 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 15 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.
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 Nelson Resources (ASX:NES)
Director of DY6 Metals Ltd (ASX:DY6)
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
1,180,000
Corporate
Definitive Agreement with Denarius Metals Corp. (“Denarius”)
On 23 November 2022, the Company announced that, further to its announcement of 5 October 2022, it had
entered into a definitive option agreement (the "Option Agreement ") with Denarius.
Pursuant to the Option Agreement, conditional on, inter alia, the approval of Europa Metals' shareholders (which
was obtained at a general meeting held on 30 December 2022), Denarius has the right to acquire in two stages
up to an 80 per cent. ownership interest in the Company's wholly owned Spanish subsidiary, EMI, which holds
the Toral Project.
Key Terms of the Definitive Agreement
Option Agreement entered into with Denarius pursuant to which it has been granted an initial option (the "First
Option") to subscribe for 51 per cent. of the share capital of EMI, the 100 per cent. owned Spanish subsidiary of
Europa Metals which holds the Toral Project, and a further option (the "Second Option") to potentially acquire
an additional 29 per cent. of EMI's share capital from Europa Metals.
The First Option is for an initial exercise period of three years and may be exercised by Denarius conditional
upon, inter alia:
•
it assuming operatorship and making expenditures on the Toral Project of US$4,000,000;
•
completion of a preliminary economic assessment ("43-101 PEA") compliant with National Instrument
43-101 - Standards of Disclosure for Mineral Projects ("NI 43- 101") on the Toral Project.
•
Expenditures to include the completion and submission of a mining licence application in respect of Toral
to the local Junta. This was completed in October 2023.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
8 | P a g e
The Second Option may be exercised by Denarius within a period of one year from the date of closing of the
First Option conditional upon:
•
exercise of the First Option;
•
completion of a NI 43-101 compliant pre-feasibility study (the "PFS") on the Toral Project at its own cost;
and
•
payment of US$2,000,000 cash to Europa Metals.
Capital Raising
On 8 August 2022, the Company issued 906,265 shares at a blended issue price of approximately 3.64 pence
per share to settle deferred/accrued remuneration for certain of the Company’s directors totaling A$55,351.
On 23 November 2022, the Company announced that it had raised, in aggregate, gross proceeds of £0.58 million
(A$1.03 million) through the subscription of 12,888,888 new ordinary shares by certain institutional and other
investors at a price of 4.5 pence per share (the “Subscription”). The Subscription price represented a 60.7 per
cent premium to the then last traded price of the Company’s shares on AIM.
Shareholder Meetings
At the 2022 Annual General Meeting of the Company held on 30 November 2022, 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 (2022 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
The Toral Project is situated in northwest Spain in a world class mining jurisdiction which provides the opportunity
to create new mines within well established environmental and mining frameworks and with access to first class
power and transport infrastructure. Toral represents a limestone hosted, structurally controlled deposit with the
Pb, Zn, Ag mineralisation situated within the limestone close to the boundary between footwall slates and
hanging wall limestones and dolomites. The mineralisation occurs as semi-massive vein, breccia and carbonate
replacement styles of mineralisation.
The Company is progressing Toral towards potential mine development with the aim of completing and
submitting a mining license application in Q3 2023.
The Toral deposit currently has a JORC (2012) compliant indicated mineral resource estimate of approximately
7Mt @ 8.1% Zn Equivalent (including Pb credits), 5% Zn, 3.7% Pb and 29g/t Ag, containing approximately
349,000 tonnes of zinc, 260,000 tonnes of lead and 6.6 million ounces of silver. This is contained within a total
mineral resource of 20Mt @ 6.8% Zn Equivalent (including Pb credits), 4.4% Zn, 2.8% Pb and 23 g/t Ag.
During the reporting period, Europa Metals was pleased to announce the signing of a definitive option agreement
with Canadian explorer and mine developer Denarius Metals Corp (TSXV:DSLV; OTCQB: DNSRF) (“Denarius”)
whereby Denarius will spend US$4m to earn a 51% stake in Europa Metals Iberia S.L. (“EMI”), Europa Metals’
wholly-owned Spanish subsidiary and owner of the Toral Project.
During the reporting period, Europa Metals’ team has completed several important work programmes to enhance
our understanding of Toral, namely:
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
9 | P a g e
•
completion of metallurgical test work in conjunction with the completed ore-sorting programme;
•
a targeted resource drilling campaign with the highest grade drill results to date; and
•
publication of an independent updated JORC (2012) mineral resource estimate.
Updated Mineral Resource Estimate
•
On 30 November 2022, the Company announced an updated independent mineral resource estimate
(“MRE”), for Toral. The updated MRE showed a 19% increase in the Indicated Mineral resource tonnes
and a 14% increase in grade. In summary, the updated MRE represented an approximate:19% increase
in Indicated Mineral Resource tonnes;
•
39% increase in Indicated contained tonnes of zinc to approximately 349,000 tonnes;
•
33% increase in Indicated contained tonnes of lead to approximately 260,000 tonnes; and
•
27% increase in Indicated contained ounces of silver to approximately 6.6 million ounces.
•
Image 1: 3-D Block Model looking North
Metallurgical work programme
On 4 August 2022, the Company announced further highly encouraging results from its comprehensive
metallurgical test work programme, summarised as follows:
•
Metallurgical test work results received from Wardell Armstrong International Ltd (“WAI”) in respect of locked
cycle flotation tests (“LCT”) on products from an ore sorted bulk siliceous sample:
o
Concentrate Grades
56.6% Zinc
69.6% Lead
o
Overall recovery (Sort & Float)
78.6% Zinc
80.7% Lead
•
Metallurgical results received for LCT from WAI on a further two carbonate samples from:
Hole TOD-025D:
o
Concentrate Grades
57.4% Zinc
75.2% Lead
o
Overall recovery (Sort & Float)
81.4% Zinc
94.4% Lead
Hole TOD-028:
o
Concentrate Grades
60.3% Zinc
64.1% Lead
o
Overall recovery (Sort & Float)
84.0% Zinc
87.3% Lead
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
10 | P a g e
Ore sorting process
Samples from Ore Sorting undertaken by Tomra GmbH, were submitted to WAI earlier in 2022. The samples
tested were a bulk sample of siliceous style mineralisation and two borehole composites of carbonate style
mineralisation. The siliceous sample was a composite of intersections from boreholes TOD-029, TOD-029D,
TOD-029D2, TOD-029D3, TOD-034 and TOD-034D (a total of 701.09 kg). The carbonate samples were taken
from boreholes TOD-025D and TOD-028 (96.36 kg and 50.7 kg respectively).
The ore sorting results announced previously by the Company in March 2022 were as follows:
Siliceous bulk sample
•
Recovery of 95.7% Pb and 94.3% Zn metal
•
43.7% mass rejection of waste
Carbonate composite from hole TOD-025D
•
Recovery of 98.9% Pb and 94.7% Zn metal
•
46.8% mass rejection of waste
Carbonate composite from hole TOD-028
•
Recovery of 96.6% Pb and 96.1% Zn metal
•
47.7% mass rejection of waste
The sorter products were the subject of a recently completed campaign of locked cycle flotation with the
metallurgical results received from WAI comprising:
•
Siliceous bulk sample
o
Flotation Recoveries
83.4% Zinc
84.3% Lead
o
Flotation Concentrate Grades
56.6% Zinc
69.6% Lead
o
Overall recovery (Sort & Float)
78.6% Zinc
80.7% Lead
•
Carbonate sample from hole TOD-025D
o
Flotation Recovery
85.9% Zinc
95.4% Lead
o
Flotation Concentrate Grades
57.4% Zinc
75.2% Lead
o
Overall recovery (Sort & Float)
81.4% Zinc
94.4% Lead
•
Carbonate sample from hole TOD-028
o
Flotation Recovery
87.4% Zinc
90.3% Lead
o
Flotation Concentrate Grades
60.3% Zinc
64.1% Lead
o
Overall recovery (Sort & Float)
84.0% Zinc
87.3% Lead
Comparison with the 2019 locked cycle flotation tests on carbonate drill core
Locked cycle flotation tests simulate a full-scale plant flowsheet. Each test at WAI’s facilities was conducted in
a series of six cycles using the flowsheet shown in
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
11 | P a g e
Figure 1 below. For the second and subsequent cycles, lead and zinc cleaner tailings products were combined
with the feed to the previous stage of flotation. For example, lead second cleaner tails were returned to first
cleaner feed. The final concentrates, zinc scavenger tailings and zinc rougher tailings from the final two cycles,
were weighed and sent for independent analysis. The results were then used to calculate recovery and
concentrate grades.
Figure 1:Locked Cycle Test Flowsheet
Results of the 2019 and 2022 test work programmes are summarised in Table 1 below. These results indicate
that Toral could clearly achieve excellent concentrate grades.
Table 1: Summarised Results of the 2019 and 2022 Test work
(Note: recovery and concentration data are from the original feed)
Test
Lead Concentrate
Zinc Concentrate
Lead
Recovery
(%)
CR
Conc
(% Pb)
Zinc
Recovery
(%)
CR
Conc
(% Zn)
2019 Carbonate
LCT1 Float
84.3
39.4
57.5
70.7
29.8
55.8
2019 Carbonate
LCT2 Float
83.7
34.9
60.0
77.0
24.9
59.1
2022
Carbonate 025D
Sort + Float
94.4
18.8
75.2
81.4
42.3
57.4
2022
Carbonate 028
Sort + Float
87.3
51.4
64.1
84.0
24.0
60.3
2022 Silicate Sort
+ Float
80.7
59.7
69.6
78.6
52.9
56.6
Ore sorting and froth flotation are processes that concentrate and recover metal values. The concentration ratio
(“CR”) is defined as the weight of feed divided by the weight of concentrate. Performance of an individual test
can be judged in terms of recovery and CR. For an operating plant, daily results for recovery and CR continually
vary. However, the results generally form a trend when plotted on axes of recovery versus CR. The same type
of plot can be useful in comparing locked cycle test results.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
12 | P a g e
Figure2: Zinc Recovery vs Concentration Ratio Plot of LCT Results
Overall results for zinc recovery (for 2022, sort & float and for 2019, just float) are shown in Figure 2. At any
given CR, higher recovery indicates improved performance, and figure 2 illustrates that the combined sort plus
float procedure has given better performance than flotation alone for the zinc concentrate.
In respect of the 2022 results, the best estimate of zinc recovery is the trendline shown in Figure 2, which is “a
least squares fit” for the three different test work data points. This line intersects the recovery axis at 89.7%.
This intercept incorporates for zinc metal losses during the sorting process of 3.9% and also a recovery loss
during the flotation process of a further 6.4% of zinc to lead concentrate.
The equation of the trend line is as follows:
Recovery % = 89.7 - (0.21 * CR)
In practice, when a full-scale plant and concentrator are in operation the aim is to produce a saleable zinc
concentrate grade of approximately 55% to 60% Zn. To achieve this target concentrate grade, the required
concentration ratio (and achievable recovery) depends mainly on the head grade from the deposit.
At Toral, the average resource grade (October 2021 Resource Estimate, @ 4% Zn equivalent cut off) is 3.9%
zinc, such that a future potential processing plant could operate at a CR of 17 to zinc concentrate, which would
achieve a zinc recovery of 86.1% and a concentrate grade of 57.1% zinc.
An approximate estimate of the zinc recovery improvement resulting from sorting can be made from Figure2.
Projecting the two points from the 2019 test work back to a CR of 17 and then comparing with the best estimate
of recovery trendline indicates a recovery improvement of approximately 4 percentage points.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
13 | P a g e
Figure 3: Lead Recovery vs Concentration Ratio Plot of LCT Results
Overall results for lead recovery (for 2022, sort & float and for 2019, just float) are shown in Figure 3, with the
combined sort plus float procedure again giving better performance than flotation alone.
In respect of the 2022 results, the best estimate of lead recovery is the trendline shown in Figure 3, which is “a
least squares fit” for the three test work data points, intersecting the recovery axis at 97.4%. This intercept allows
for the average loss of lead during sorting of 2.6% and the equation of the trend line is as follows:
Recovery % = 97.4 - (0.24 * CR)
In practice, a concentrator would seek to produce a saleable lead concentrate grade of approximately 70% lead.
The average resource grade at Toral (October 2021 Resource Estimate) is 2.7% lead, such that a CR of 29 to
lead concentrate would be required to achieve a lead recovery of 90.4% and a concentrate grade of 70.8% lead.
An approximate estimate of the lead recovery improvement resulting from sorting can be made from Figure2.
Projecting the two points from the 2019 test work back to a CR of 29 and then comparing with the best estimate
of recovery trendline indicates a recovery improvement of approximately 3 percentage points.
In summary, the Europa Metals’ team believes that ore sorting followed by flotation has significant cost,
performance and operational advantages compared with flotation alone.
The Company will now consider how best to utilise ore sorter rejects and flotation tailings. These waste products
will be valuable as potential cemented aggregate backfill and paste fill for underground mining operations. Some
tailings products could also be used as landfill for reclamation of an existing quarry.
Analysis of Final Concentrates Produced in the 2022 Locked Cycle Test work
Final zinc and lead concentrates from the 2022 test work were sent for detailed chemical analyses. The analyses
for commonly applied penalty elements are shown in Table 2 below. The concentrates were generally below
penalty levels except for mercury. High mercury levels are common for Spanish zinc concentrates and local
smelters are able to manage such feeds. As an alternative, a future plant at Toral could incorporate a
concentrate treatment process in order to reduce the mercury to below penalty levels.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
14 | P a g e
Table 2: Penalty Element Analyses of Concentrates Produced in the 2022 testwork
Concentrate
From Test
work
As
(ppm)
Bi
(pp
m)
Cd
(ppm)
Fe
(%)
Mg
(%)
Mn
(ppm)
Hg
(ppm)
F (ppm)
Siliceous
Lead Conc
513
2.6
87
4.32
0.08
80
234
120
Siliceous
Zinc Conc
104
0.2
1,325
2.72
0.06
120
2,970
40
Carbonate
025D Lead
Conc
80
2.6
60.8
1.04
0.29
60
96
<20
Carbonate
025D Zinc
Conc
33
0.1
1,445
1.83
0.28
70
1,745
30
Carbonate
028 Lead
Conc
212
7.9
177.5
5.6
0.17
60
197
30
Carbonate
028 Zinc
Conc
16
0.1
1,635
1.75
0.08
50
1,085
20
Penalty
Level for
Zinc Conc
2,000
200
2,500
8%
0.18%
5,000
50
200
2022 / 23 Drilling Results
The drilling parameters for the assay results reported are presented in the table below:
Drilling was carried out with a PQ-HQ-NQ diameter, with half of the core being sent for independent analysis at
ALS Laboratories. The assay results received are set out in the table below:
Hole_ID
From
To
Interval
(m)
Zn_%
Pb_%
Ag_ppm
Cu_%
ZnEq(PbAg)%*
TOD-042
866.35
871.6
5.25
17.87
4.46
55.69
0.03
23.24
TOD-042
(included)
868.7
871.2
2.50
36.82
5.77
101.01
0.05
44.55
TOD-044
490.85
498.80
7.95
2.56
1.73
14.65
0.04
4.46
HOLE_ID
EASTING
NORTHING
ELEVATION
LENGTH
COOR_SYS
TOD-042
681864
4710064
601.473
876.5
ETRS89utm29
TOD-044
681197
4710037
531.65
509
ETRS89utm29
TOD-045
681412
4710025
542.29
610.3
ETRS89utm29
TOD-046
681684
4709858
660.80
866.5
ETRS89utm29
TOD-047
681686
4709856
660.88
460.6
ETRS89utm29
TOD-048
681408
4710024
542.29
529
ETRS89utm29
TOD-049
681685
4709857
660.80
763
ETRS89utm29
TOD-050
681916
4709571
634.10
701.3
ETRS89utm29
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
15 | P a g e
TOD-044
(including)
490.85
495.10
4.25
3.93
2.06
16.79
0.04
6.17
TOD-044
(including)
492.65
494.20
1.55
8.35
2.76
24.31
0.05
11.40
TOD-045
592.00
596.95
4.95
7.31
12.77
160.52
0.10
22.71
TOD-046
845.50
847.00
1.50
8.30
3.45
12.80
0.04
11.64
TOD-046
(including)
845.50
846.50
1.00
11.08
4.91
18.75
0.06
15.84
TOD-047
442.00
442.60
0.60
15.20
3.30
10.50
0.17
18.34
TOD-047
453.10
455.50
2.40
1.61
1.57
27.69
0.20
3.72
TOD-048
505.25
509.95
4.70
3.53
2.81
26.34
0.31
6.68
TOD-048
(including)
508.30
509.95
1.65
7.94
5.78
53.95
0.51
14.41
TOD-048
513.05
519.70
6.65
4.01
2.75
63.60
0.31
8.12
TOD-048
(including)
515.90
519.70
3.80
6.35
4.14
97.92
0.44
12.58
TOD-049
745.00
750.00
5.00
1.17
6.14
15.63
0.07
6.91
TOD-049
(including)
745.85
747.10
1.25
2.01
20.45
43.96
0.23
20.93
TOD-050
675.00
678.90
3.90
2.24
8.05
40.24
0.03
10.30
TOD-050
(including)
677.45
678.9
1.45
5.76
14.39
91.04
0.07
20.69
TOD-050
680.10
682.50
2.40
1.71
2.67
35.44
0.01
4.98
* - ZnEq (PbAg)% is the calculated Zn equivalent incorporating lead and silver credits; (ZnEq (PbAg)% = Zn + Pb*0.926 + Ag*0.019).
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$2,680/t, Pb price of US$2,100/t and Ag price of US$16.2/oz.
Drilling operations remain ongoing, in line with the Company’s objective set out above, and further assay results
will be announced once processed and received.
The Company had been awaiting re-assays and re-confirmation of the results for several samples, sent to the
laboratory over the past several months, prior to releasing this announcement. In particular, one of the holes
reported an abnormally high silver value (hole TOD-045, average grade of 160.52 Ag g/t) and as part of the
Company’s standard operating procedures (SOP) when we receive abnormally high results for either zinc, lead
or silver, we re-submit the relevant sample for re-testing in order to confirm its veracity. We have now confirmed
this value.
In addition, as part of our SOP we regularly insert control samples into the batches that are submitted to the
laboratory, the results of which form part of our statistical analysis to confirm the reliability and consistency of
the results received. We have now received confirmation of these results over several holes and can confirm
their accuracy.
Mining Licence Application
Formal application for a mining licence has been completed in October 2023 over the Company’s 100% owned
Toral Pb, Zn & Ag project. All necessary studies have now been completed and lodged with the relevant
authorities and departments within the Castille and Leon regional government. Along with the application, the
following documents were submitted:
This application forms part of the 2023 exploration campaign agreed by Europa Metals Ltd (“Europa Metals” or
the “Company”) and Denarius Metals Corp (TSXV: DSLV; OTCQX: DNSRF) (“Denarius”) pursuant to the
definitive option agreement dated 22 November 2022, further details of which are set out in the Company’s
announcement of 23 November 2022.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
16 | P a g e
Highlights:
•
Submission to the “Junta of Castilla and Leon” completed.
•
All necessary documentation covering the exploitation, restoration and environmental impact study was
submitted.
•
The submission envisages a life of mine of 15 years, mining on average 700,000t of ore per year from
underground.
•
Including pre-production and closure plans, Toral’s 18 year operations will create over 360 direct local
employment opportunities and approximately 1,400 indirect jobs in the region.
•
This submission has been based on the deposit whose technical, economic and environmental feasibility
is in accordance with the laws and regulations of the region of Castilla y Leon.
•
Such project assessment will be formally reported on in the expected preliminary economic assessment
in accordance with the Canadian Institute of Mining Metallurgy and Petroleum (“CIM”) Definition
Standards incorporated by reference in National Instrument 43-101 expected to be prepared in 2024.
Exploitation Plan
Due to the subvertical geometry of the Toral deposit and its combination of depth and thickness, underground
mining is considered to be the most technically, economically, and environmentally viable development option.
Figure 1 General on surface facilities layout distribution
The basis for the development plan utilised the existing JORC resource from November 2022; since the
beginning of 2023 the Company’s Spanish engineering group, Mining Sense, has applied many factors to this
Resource such as commodity pricing, base load power costs, dilution factors and trade-off studies with the
objective of reviewing various development scenarios. Based on the work carried out, it was determined that the
extension, volume and ore grades have been duly estimated to define a mineable deposit whose technical,
economic and environmental feasibility is supported by the documentation and in accordance with the laws and
regulations of the region of Castille y Leon. Such project assessment will be formally reported on in the expected
preliminary economic assessment to national Instrument standards 43-101 expected to be published in 2024.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
17 | P a g e
Figure 3 Underground mine 3D view
This initial assessment, submitted together with the request for Certified Engineer (“CE”) approval, would
generate zinc and lead/silver concentrates over the mine's 15 years of production.
The mining project is composed of three phases:
1. Construction phase, in which the construction of the main facilities such as road access, treatment plant
and offices will be carried out, in addition to starting with the development of the access ramp for mine
exploitation. This stage will have a duration of one and a half years;
2. Exploitation phase, once the construction of the main facilities has been completed and the first
production level has been reached, the exploitation of the ore will begin. This stage will last 15 years
until the exhaustion of the current delineated mineralisation; and
3. Restoration phase, once the exploitation is completed, the area comprising the facilities will be restored
with the dismantling of the buildings, as well as the mine tailings dump.
The mining method selected is a combination of mechanised cut and fill (MCAF), in the upper narrower zone,
with sublevel mining method with backfill in the deeper and wider zone. The backfilling of the void created by the
mining of the ore will use part of the tailings obtained in the mine and the process tailings combined to form a
paste fill. This will have a very positive effect from an environmental point of view by reducing the amount of
waste to be deposited outside.
The ore will be treated by a first stage of ore sorting following by conventional flotation of lead and zinc, producing
the corresponding concentrates that carry other elements with economic value such as silver in the lead
concentrate. The ore treatment plant recirculates almost all its process water.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
18 | P a g e
Figure 3 Process plant and administration buildings
It is estimated that the Toral project will generate approximately 360 direct jobs and approximately 1,400 indirect
jobs.
Restoration Plan
The total area occupied by the project facilities is 33.2 hectares measured in plan, of which about 7 hectares are
currently the disused limestone quarry, La Estrella, which as part of Toral’s restoration plan is to be rehabilitated
by back filling with waste rock from the mine.
This is a focus and main objective of the rehabilitation plan, the existing quarry has a surface footprint of 7 Ha,
with the plan to restore the quarry to 13.7 hectares utilising the waste rock from underground mining to back fill
and rehabilitate the old quarry. This will not only remove an eyesore on the landscape but also provide new
viewpoints for El Bierzo landscape.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
19 | P a g e
Figure 4 Existing quarry and waste dump limits
The final topography of the backfilled quarry recovers the continuity of the trend of hills in the area.
Figure 5 3D view of the backfilled quarry.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
20 | P a g e
Environmental Impact Study (“EIS”)
The EIS includes a detailed characterisation of the area where the project will be developed. Specific studies
have been carried out, including:
•
Perceptual physical media:
o
Atmospheric dispersion study
o
Pre-operational acoustic study
o
Hydrological-hydrogeological study
o
Landscape integration study
•
Natural media:
o
Vegetation and community interest habitats study & survey
o
Aquatic animal species study & survey
o
Reptiles and amphibious study & survey
o
Birds study & survey
o
Mammals study & survey
o
Specific study and survey on bats
•
Social and economical study
•
Traffic on public roads study
•
Inventory of territory, spatial and urban planning and the cultural environment
The EIS includes the summary of the project, the alternatives considered before selecting the final project, a
detailed flora and fauna characterisation of the project, the envisaged impacts on the project and measures put
in place for protection, surveillance and monitoring the ongoing environmental program.
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 Europa Metals Iberia, 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 by Europa Metals and the AIR Institute, linked to the Salamanca
University, inconjunction with 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 (A$261,872), received by the Company towards the end of 2020.
The second tranche of €158,629 (A$241,554) was received during the previous reporting period. The Company
has submitted a request to drawdown the remaining third tranche, and awaits approval. The core objectives of
the Innovation Programme were to retrieve and process data from Toral’s drilling campaigns in order to develop
algorithmic software for use in exploration campaigns to correct drilling deviation. Biannual repayments of
€21,822 (A$33,230) begin in 2024, running for 7 years until 2031, with a fixed interest rate of nil per cent.
Accordingly, on 8 November 2021, the Company announced that the CDTI had approved the requisite work
documentation submitted in relation to the Stage 1 milestone and that the Company had therefore drawn down
and received the second tranche of the Grant being €158,629 (A$241,554).
Stage 2 involved Toral continuing to be used as a live testing environment by the partnership as the University
of Salamanca continued its analysis and any future commercial benefit from an eventual product will be shared
by the partners. The Stage 2 work was completed post the reporting period end such that the third, and final,
tranche of €144,792 (A$220,483) should be made available for draw down following a review by the CDTI and
its confirmation that the requisite criteria of the innovation programme have been met.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
21 | P a g e
On 25 July 2023, the Company announced that, further to the completion and submission last year of all relevant
documentation to the CDTI in respect of the final Stage 3 milestone, the sum of €137,572.34 (A$226,478) was
drawn down and received by Europa Metal Iberia from the CDTI.
Due to a reduced expenditure during the Stage 3 period, funds received from tranche 3 were reduced.
Once the funds advanced 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.
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 to in 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 2022 to 30 June 2023 of $3,380,397 (2022: loss of $2,463,069). The Group had net assets of
$558,267 (2022: $2,734,575) as set out in the Consolidated Statement of Financial Position.
Significant changes in the Group’s state of affairs
Deconsolidation of Europa Metals Iberia S.L.
On November 22, 2022, Europa Metals Ltd entered into a definitive option agreement (the “Toral Definitive
Agreement”) with Denarius Metals Corp. (“Denarius”) pursuant to which Europa has granted two options to
Denarius to acquire up to an 80% ownership interest in Europa Metals Iberia S.L. (“EMI”), a wholly-owned
Spanish subsidiary of Europa which holds the Toral Zn-Pb-Ag Project (the “Toral Project”), Leon Province,
Northern Spain.
Pursuant to the Toral Definitive Agreement, Denarius has been granted a First Option, exercisable until
November 22, 2025 (subject to a 90-day extension in certain circumstances), to subscribe for a 51% equity
interest in EMI by:
(i)
spending, as operator, a total of $4,000,000 on the Toral Project over the three-year period,
(ii)
completing a preliminary economic assessment, and
(iii)
completing and submitting a mining license application in respect of the Toral Project to the local
mining authority by July 31, 2023.
During the First Option period, Denarius has the right to appoint three of the four members of an operating
committee that will oversee the work programs carried out by the Company. This gives rise to a loss of control
of EMI as defined in AASB 10 Consolidated Financial Statements.
There have been no other significant changes in the state of affairs of the consolidated entity to the date of this
report that have not otherwise been disclosed elsewhere in the Annual Report.
Significant events after the reporting date
There are subsequent events to report, as follows:
On 9 October 2023, the Company advised of the appointment of Beaumont Cornish Limited as Nomad and
Broker.
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.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
22 | P a g e
Likely developments and expected results
If the Proposed Transaction proceeds as intended, Denarius and Europa Metals will jointly oversee the
development of the Toral project which will cover both the existing investigation permit (the “Permit”) area and
potentially the adjacent historic Antonina Mine area, the former licence for which is currently terminated by the
Junta de Castilla y León.
In the event that the Proposed Transaction does not proceed, 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:
o Updating of the independent resource estimate post the 2022 drilling campaign and hydrogeological
programmes.
o Combining and analysing the findings of the resource and metallurgical drilling campaigns to improve
surety in the resource and processing design/concentrate characteristics.
o Further community, geotechnical, waste management and environmental work.
•
Continued engagement with third parties to seek to establish value accretive pathways forward for the
Toral Project.
•
Identification and evaluation of potential additional transactional opportunities to seek to increase
shareholder value and expand the Group’s existing asset portfolio.
•
Seeking to secure EU backed grants for project progression.
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.
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
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
23 | P a g e
(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.
2023
2022
$
$
Remuneration of the auditor, BDO International for Group
and subsidiary statutory reporting:
-
tax compliance services
12,121
8,755
12,121
8,755
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:
Board Meetings
Remuneration Committee
Director
Eligible
Attended
Eligible
Attended
Evan Kirby
5
4
2
2
Myles Campion
5
5
1
1
Daniel Smith
5
5
2
2
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:
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
24 | P a g e
Remuneration Report (audited) continued
1. Individual KMP disclosures
2. Remuneration at a glance
3. Board of Directors (the “Board”) oversight of remuneration
4. Non-executive director remuneration arrangements
5. Executive remuneration arrangements
6. Directors and KMP contractual arrangements
7. Equity instruments disclosures
8. Loans to KMP and their related parties
9. Transactions with KMP and their related parties
1. Individual key management personnel disclosures
(i) Directors:
Name
Role
Appointed
Resigned
Evan Kirby
Non-Executive Director
31 March 2016
-
Myles Campion Executive Technical Director
Executive Chairman
Interim-CEO
17 October 2017
4 August 2020
2 February 2022
-
-
-
Daniel Smith
Non-Executive Director
Company Secretary
16 January 2018
16 January 2018
-
-
(ii) Executives:
Name
Role
Appointed
Myles Campion
Executive Chairman and interim Chief
Executive Officer
4 August 2020 and 2 February
2022
2.
Remuneration at a glance
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group
must attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
▪
Provide competitive rewards to attract high calibre executives;
▪
Link executive rewards to shareholder value; and
▪
Provide significant portions of executive remuneration “at risk” through participation in incentive plans
Shares and options issued under incentive plans provide an incentive to stay with the Group. At this stage,
shares and options issued do not have financial 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 2023 no Directors or executives participated (2022: Nil) in such 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.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
25 | P a g e
Remuneration Report (audited) continued
The Company also recognised that, at this stage in its development, it is most economical to have only a few
employees and to draw, as appropriate, upon a pool of consultants selected by the Directors on the basis of their
known management, geoscientific, engineering and other professional and technical expertise and experience.
The Company will nevertheless seek to apply the principles described above to its Directors and executives,
whether they are employees of or consultants to the Company.
3.
Board oversight of remuneration
Remuneration Committee Responsibilities
A Remuneration Committee was established on 14 January 2010 and reconstituted on 15 October 2010 and
again on 9 March 2015.
The Committee assesses the appropriateness of the nature and amount of remuneration of Directors and senior
executives on a periodic basis by reference to relevant employment market conditions, with the overall objective
of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive and executive director
remuneration is separate and distinct.
4.
Non-Executive Director remuneration arrangements
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Company’s Constitution specifies that the aggregate remuneration of Non-Executive Directors must be
determined from time to time by shareholders of the Company in a general meeting. An amount not exceeding
the amount determined is then divided between the Non-Executive Directors as agreed. The current aggregate
limit of remuneration for non-executive directors is $250,000 as approved at the 2010 Annual General Meeting
of Shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Non-Executive Directors is reviewed annually. The Board may consider advice from
external consultants, as well as the fees paid to Non-Executive Directors of comparable companies, when
undertaking the annual review process. No remuneration or external consultants were used during the financial
year.
Each Non-Executive Director receives a fee for being a Director of the Company. No additional fee is paid for
participating in Board Committees.
Non-Executive Directors may participate in the Company’s share and option plans as described in this report.
Mr Evan Kirby is on a contract dated 31 March 2016, which provides for a fixed fee of $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:
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
26 | P a g e
Remuneration Report (audited) continued
•
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 29 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:
2023
$
2022
$
2021
$
2020
$
2019
$
Net (loss) from continuing operations
after income tax
(3,380,397)
(2,463,069)
(3,258,664)
(2,362,660)
(2,392,170)
Basic (loss) per share in cents
(3.83)
(3.57)
(7.03)
(7.67)
(16.34)
Share Price in cents
0.05
0.05
0.18
0.11
0.21
6.
Executive contractual arrangements
Myles Campion – Executive Chairman / Interim-CEO / Technical Director
Salary
£130,000 (A$249,979) per annum
Term
Ongoing
Termination
6 months notice period by either party
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
27 | P a g e
Remuneration report (audited) continued
Remuneration of key management personnel of the Company and the Consolidated Entity
Table 1: Remuneration for the years ended 30 June 2022 and 30 June 2023
Short-term benefits
Post-employment
Long-term benefits
Share-based payments
Total
Performance
related
Salary &
fees
Cash
bonus
Superannuation
Cash
Incentives
Long
Service
Leave
Options
Shares2
Performance
Rights3
$
$
$
$
$
$
$
$
$
%
Non-executive directors
Evan Kirby
2023
26,412
-
-
-
-
3,861
9,000
-
39,273
-
2022
30,000
-
-
-
-
3,861
9,000
-
42,861
-
Daniel Smith
2023
36,000
-
-
-
-
24,403
-
14,776
75,179
20
2022
18,000
-
-
-
-
3,089
18,000
-
39,089
-
Subtotal Non-executive
directors
2023
62,412
-
-
-
-
28,264
9,000
14,776
114,452
-
Subtotal Non-executive
directors
2022
48,000
-
-
-
-
6,950
27,000
-
81,950
-
Executive directors
Laurence Read 1
2023
-
-
-
-
-
-
-
-
-
-
2022
220,583
-
9,178
-
-
10,411
-
-
240,172
-
Myles Campion
2023
171,096
-
9,220
-
-
46,301
66,790
88,657
382,064
23
2022
154,853
-
8,173
-
-
27,069
49,420
-
239,515
-
Subtotal executive
directors
2023
171,096
-
9,220
-
-
46,301
66,790
88,657
382,064
-
Subtotal executive
directors
2022
375,436
-
17,351
-
-
37,480
49,420
-
479,687
-
Total KMP
2023
233,508
-
9,220
-
-
74,565
75,790
103,433
496,516
-
Total KMP
2022
423,436
-
17,351
-
-
44,430
76,420
-
561,637
-
1 Resigned 2 February 2022.
2 50% of certain directors’ salaries and fees from 1 January 2022 were accrued/deferred and settled through the issue of new shares in July 2022 and January 2023.
3 3,500,000 performance rights issued in January 2023 expiring January 2025 (note 17).
4 Options issued to directors are expensed over the vesting period (note 17).
Refer to Page 19 for all appointment dates.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
28 | P a g e
Remuneration report (audited) continued
7.
Equity instrument disclosures
Table 2: Share holdings
2023
Shares
Balance
Rights
On
Exercise
Net Change
Balance
1-July-22
Exercised
of Options
Other
30-Jun-23
Directors
Evan Kirby
163,594
-
-
155,129
318,723
Myles Campion
1,017,323
-
-
1,090,859
2,108,182
Daniel Smith
-
-
-
-
-
1,180,917
-
-
1,245,988
2,426,905
Table 3: Option holdings
2023
Options
Balance
Granted
Received as
Net Change
Balance
Vested &
Exercisable
Vested & Not
Exercisable
1-July-2022
Remuneration
Other
30-Jun-23
30-Jun-23
30-Jun-23
Directors
Evan Kirby
345,000
-
-
-
345,000
245,000
-
Myles
Campion
1,591,667
-
1,000,000
-
2,591,667
1,991,667
-
Daniel Smith
180,000
-
1,000,000
-
1,180,000
1,100,000
-
2,116,667
-
2,000,000
-
4,116,667
3,336,667
-
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.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
29 | P a g e
Remuneration report (audited) continued
The tables below summarise the model inputs for options granted during the financial year ended 30 June 2023:
Directors – January 2023
Tranche 1
Tranche 2
Tranche 3
Options granted for no consideration
500,000
750,000
750,000
Exercise price (GBP)
0.0335
0.0402
0.0469
Issue date
24/01/23
24/01/23
24/01/23
Expiry date
24/01/26
24/01/26
24/01/26
Underlying security spot price at grant
date (GBP)
0.028
0.028
0.028
Expected price volatility of the
Company’s shares
80%
80%
80%
Expected dividend yield
0%
0%
0%
Expected life (years)
3
3
3
Risk-free interest rate
3.34%
3.34%
3.34%
Black-Scholes model valuation per
option (AUD cents per share)
0.0236
0.0215
0.0196
Total fair value
$11,817
$16,092
$14,720
Expensed during the period
$11,817
$16,092
$14,720
Details of the individual tranches are as follows:
(a) Tranche 1: exercisable at a price of 3.35 pence per share (being a 25% premium to the 30-day VWAP prior to
their date of issue) and expiring on or before 3 years from their date of issue;
(b) Tranche 2: exercisable at a price of 4.02 pence per share (being a 50% premium to the 30-day VWAP prior to
their date of issue) and expiring on or before 3 years from their date of issue; and
(c) Tranche 3: exercisable at a price of 4.69 pence per share (being a 75% premium to the 30-day VWAP prior to
their date of issue) and expiring on or before 3 years from their date of issue.
The tables below summarise the model inputs for options granted during the financial year ended 30 June 2021:
Directors - December 2020
Executive Directors
Non-
executive
directors
Tranche 1
Tranche 2
Tranche 3
Tranche 2
Options granted for no consideration
400,000
400,000
400,000
180,000
Exercise price (GBP)
0.089
0.089
0.089
0.129
Issue date
18/12/20
18/12/20
18/12/20
18/12/20
Expiry date
18/12/23
18/12/23
18/12/23
18/12/23
Underlying security spot price at grant
date (GBP)
0.095
0.095
0.095
0.095
Expected price volatility of the
Company’s shares
125%
125%
125%
125%
Expected dividend yield
0%
0%
0%
0%
Expected life (years)
3
3
3
3
Risk-free interest rate
0.14%
0.14%
0.14%
0.14%
Black-Scholes model valuation per
option (AUD cents per share)
0.1249
0.1249
0.1249
0.1158
Total fair value
$49,974
$49,974
$49,974
$20,851
Expensed during the period
$8,329
$8,329
$8,329
$6,950
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
30 | P a g e
Remuneration report (audited) continued
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) (vested in October 2021).
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.
Performance shares
On 24 January 2023, a total of 3,500,000 performance rights (“Performance Rights”) were issued to Myles Campion and
Daniel Smith. The Performance Rights are exercisable for nil consideration and are subject to the following performance
milestone conditions and expiry dates:
Tranche No. of Performance
Rights and
Recipient
Performance Milestone
Condition
Expiry Date
Value
Expensed
during year
1
1,500,000 to Myles
Campion (or his
nominee)
Completion of the Option
Agreement with Denarius Metals
Corp. and receipt of initial
US$550k cash payments
2 years from
the date of
issue
$72,982
$72,982
250,000 to Daniel
Smith (or his
nominee)
Completion of the Option
Agreement with Denarius Metals
Corp. and receipt of initial
US$550k cash payments
2 years from
the date of
issue
$12,164
$12,164
2
1,500,000 to Myles
Campion (or his
nominee)
Successful Mining Licence
Application for the Toral Project
2 years from
the date of
issue
$72,982
$15,675
250,000 to Daniel
Smith (or his
nominee)
Successful Mining Licence
Application for the Toral Project
2 years from
the date of
issue
$12,164
$2,612
The Tranche 1 performance milestone was achieved during the year therefore the performance rights were expensed
in full.
The Tranche 2 performance milestone is expected to be achieved prior to the expiry date therefore, the fair value of the
Tranche 2 performance rights is expensed over two years to January 2025.
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
2023 (2022: Nil).
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
31 | P a g e
Remuneration report (audited) continued
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 2023
and 2022.
2023
2022
$
$
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.
84,000
84,000
Mr M Campion, an executive director of the Company, is also a director
of Virico (IOM) Limited. During the year, Virico (IOM) Limited received
fees for consulting services. These fees were based on normal
commercial terms and conditions and are included in the remuneration
summary on page 23.
171,096
240,000
255,096
324,000
End of audited Remuneration Report
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
32 | P a g e
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 72 and forms part of this report.
This report is made in accordance with a resolution of the Directors.
Daniel Smith
Non-Executive Director
Perth
31 October 2023
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
33 | P a g e
STATEMENT REGARDING COMPLIANCE WITH THE QCA CORPORATE GOVERNANCE
CODE
Chairman and Interim-CEO’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 and Interim-CEO 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/Interim-CEO 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 Beaumont Cornish 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 and Interim-CEO
31 October 2023
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
34 | P a g e
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 Toral lead-zinc-silver project in northern Spain (the “Toral Project”).
Our business model is centred on the continued advancement of the 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.
Deconsolidation
On November 22, 2022, Europa Metals Ltd entered into a definitive option agreement (the “Toral Definitive
Agreement”) with Denarius Metals Corp. (“Denarius”) pursuant to which Europa has granted two options to
Denarius to acquire up to an 80% ownership interest in Europa Metals Iberia S.L. (“EMI”), a wholly-owned Spanish
subsidiary of Europa which holds the Toral Zn-Pb-Ag Project (the “Toral Project”), Leon Province, Northern Spain.
During the First Option period, Denarius has the right to appoint three of the four members of an operating
committee that will oversee the work programs carried out by the Company.
Upon the formation of the operating committee Denarius has the power over EMI and exposure or right to variable
returns from its involvement in EMI and has the ability to use its power to affect its returns. In accordance with
AASB 10 Consolidated Financial Statements 7 (a), (b) and (c) is deemed to result in a loss of control of EMI and
requires the deconsolidation of EMI from the financial statements of Europa Metals Limited.
On deconsolidation the Company de-recognised the assets and liabilities of the subsidiary and recognised the
subsequent loss on deconsolidation in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income.
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 requisite 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 any 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.
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
35 | P a g e
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 are undertaken by management in conjunction with the Executive Chairman and
Interim-CEO.
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.
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 Director;
•
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
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
36 | P a g e
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
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/Interim-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 2023 the number of Board meetings held and those attended by
each Director were as follows:
Director
No. of Board
meetings
eligible
to attend
No. of Board
meetings
attended
Myles Campion
5
5
Evan Kirby
5
4
Daniel Smith
5
5
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.
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 all Board members are published on the Company’s website and in the Directors’ Report.
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
37 | P a g e
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.
The Board maintains a regular dialogue with Beaumont Cornish 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 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.
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.
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
38 | P a g e
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; and 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 Director is 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 director 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.
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
39 | P a g e
This corporate governance statement is dated 31 October 2023 and has been approved by the Board.
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.
Europa Metals Ltd
A.C.N. 097 532 137
40 | P a g e
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2023
2023
2022
Note
$
$
Revenue
Other income
3(b)
177,279
168,268
Administration expenses
3(c)
(1,228,058)
(1,327,747)
Exploration expenditure
(990,477)
(1,224,860)
Foreign exchange gain/(loss)
44,724
(78,730)
Share of net loss of associate
10
(115,958)
-
Loss on deconsolidation
10
(1,267,907)
-
Loss before taxation
(3,380,397)
(2,463,069)
Income tax benefit / (expense)
5
-
-
Loss after income tax for the year from continuing
operations
(3,380,397)
(2,463,069)
Net loss for the year
(3,380,397)
(2,463,069)
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Net exchange (loss)/gain on translation of foreign
operation
-
(39,490)
Other comprehensive income for the year, net of
tax
-
(39,490)
Total comprehensive loss for the year
(3,380,397)
(2,502,559)
Net loss for the year attributable to:
Equity holders of the Parent
(3,380,397)
(2,502,559)
(3,380,397)
(2,502,559)
Total comprehensive loss for the year attributable to:
Equity holders of the Parent
(3,380,397)
(2,502,559)
(3,380,397)
(2,502,559)
Loss per share
Cents per share
Cents per share
Basic loss for the year attributable to ordinary equity
holders of the Parent
7
(3.83)
(3.57)
Diluted loss for the year attributable to ordinary equity
holders of the Parent
7
(3.83)
(3.57)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes
Europa Metals Ltd
A.C.N. 097 532 137
41 | P a g e
Consolidated Statement of Financial Position
As at 30 June 2023
2023
2022
Note
$
$
Assets
Current assets
Cash and short term deposits
8
653,990
1,650,056
Trade and other receivables
9
23,179
85,420
Total current assets
677,169
1,735,476
Non-current assets
Plant and equipment
-
46,877
Other receivables
9
-
63,018
Right of use assets
-
42,292
Capitalised exploration expenditure
10
-
1,229,196
Investment in associate
10
-
-
Total non-current assets
-
1,381,383
Total assets
677,169
3,116,859
Liabilities and equity
Current liabilities
Trade and other payables
11
118,902
139,119
Lease liability
-
22,796
Unearned income
-
20,937
Total current liabilities
118,902
182,852
Non-current liabilities
Lease liability
-
12,507
Borrowings
12
-
186,925
Total non-current liabilities
-
199,432
Total liabilities
118,902
382,284
Net assets
558,267
2,734,575
Equity
Contributed equity
13
49,391,945
48,227,649
Accumulated losses
16
(52,224,070)
(48,843,673)
Reserves
15
3,390,392
3,350,599
Total equity
558,267
2,734,575
This Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
Europa Metals Ltd
A.C.N. 097 532 137
42 | P a g e
Consolidated Statement of Cash Flows
For the year ended 30 June 2023
2023
2022
Note
$
$
Cash flows used in operating activities
Exploration and evaluation expenditure
(990,683)
(1,115,564)
Payments to suppliers and employees
(748,481)
(1,083,549)
Net cash flows used in operating activities
20
(1,739,164)
(2,199,113)
Cash flows used in investing activities
Payments for plant and equipment
-
(768)
Loan to associate
(212,330)
-
Cash on deconsolidation
(120,213)
-
Net cash flows used in investing activities
(332,543)
(768)
Cash flows from financing activities
Lease principal repayments
(16,601)
(34,783)
Proceeds from issue of shares
1,033,155
2,760,272
Transaction costs on issue of shares
-
(138,369)
Proceeds from borrowings
-
250,045
Net cash flows from financing activities
1,016,554
2,837,165
Net increase/(decrease) in cash and cash equivalents
held
(1,055,153)
637,284
Net foreign exchange difference
59,087
(167,996)
Cash and cash equivalents at 1 July
1,650,056
1,180,768
Cash and cash equivalents at 30 June
8
653,990
1,650,056
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Europa Metals Ltd
A.C.N. 097 532 137
43 | P a g e
Consolidated Statement of Changes in Equity
For the year ended 30 June 2023
Attributable to the equity holders of the Parent
Issued capital
$
Accumulated
losses
$
Employee
share incentive
reserve
$
Option reserve
$
Foreign
exchange
reserve
$
Total equity
$
At 1 July 2021
45,695,303
(46,380,604)
491,577
2,520,528
102,048
2,428,852
Loss for the year
-
(2,463,069)
-
-
-
(2,463,069)
Other Comprehensive Income (net of tax)
-
-
-
-
(39,490)
(39,490)
Total comprehensive loss (net of tax)
-
(2,463,069)
-
-
(39,490)
(2,502,559)
Transactions with owners in their capacity as
owners:
Shares issued during the year net of transaction costs
2,532,346
-
-
-
-
2,532,346
Shares to be issued (note 17)
-
-
76,420
-
-
76,420
Options issued to brokers and corporate advisors
-
-
-
154,313
-
154,313
Options issued to directors and management
-
-
-
45,203
-
45,203
At 30 June 2022
48,227,649
(48,843,673)
567,997
2,720,044
62,558
2,734,575
At 1 July 2022
48,227,649
(48,843,673)
567,997
2,720,044
62,558
2,734,575
Loss for the year
-
(3,380,397)
-
-
-
(3,380,397)
Other Comprehensive Income (net of tax)
-
-
-
-
-
-
Total comprehensive loss (net of tax)
-
(3,380,397)
-
-
-
(3,380,397)
Transactions with owners in their capacity as
owners:
Realisation of foreign exchange reserve on
deconsolidation of foreign operation
-
-
-
-
(62,558)
(62,558)
Shares issued during the year net of transaction costs
1,033,155
-
-
-
-
1,033,155
Shares issued to management
131,141
-
(76,420)
-
-
54,721
Performance shares issued
-
-
103,433
-
-
103,433
Options issued to directors and management
-
-
-
75,338
-
75,338
At 30 June 2023
49,391,945
(52,224,070)
595,010
2,795,382
-
558,267
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
44 | P a g e
Note 1: Corporate information
The consolidated financial statements of Europa Metals Ltd and its subsidiaries (collectively, the “Group”) for the
year ended 30 June 2023 were authorised for issue in accordance with a resolution of the directors on 31 October
2023.
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 Alternative Exchange (AltX) of the JSE Limited.
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.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance
with that Corporations Instrument to the nearest dollar.
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 which assumes the continuity of normal business
activities and the realisation of assets and the settlement of liabilities in the ordinary course of business. 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 $3,380,397 for the year ended 30 June 2023 (2022:
$2,463,069). In addition, the Group had net current assets of $558,267 (2022: $1,615,642), shareholders’ equity
of $558,267 (2022: $2,734,575) as at 30 June 2023 and operating cash outflows of $1,739,164 (2022: $2,199,113).
The Group’s forecast cash flow requirements for the 12 months ending October 2024 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 and planned exploration activities 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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
45 | P a g e
Note 2: Summary of significant accounting policies (continued)
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/a farm-in 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.
(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 2022.
(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 2023. 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 Company and its subsidiaries as at
30 June 2023. 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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
46 | P a g e
Note 2: Summary of significant accounting policies (continued)
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.
(g)
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the
profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is
recognised in other comprehensive income. Investments in associates are carried in the statement of financial
position at cost plus post-acquisition changes in the consolidated entity's share of net assets of the associate.
Goodwill relating to the associate is included in the carrying amount of the investment and is neither amortised nor
individually tested for impairment. Dividends received or receivable from associates reduce the carrying amount of
the investment.
When the consolidated entity's share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it
has incurred obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over the
associate and recognises any retained investment at its fair value. Any difference between the associate's carrying
amount, fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
(h)
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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
47 | P a g e
Note 2: Summary of significant accounting policies (continued)
Changes in all these factors can impact exploration asset carrying values. At each reporting period end date, the
Company is required to make a judgement as to whether any impairment indicators in respect of the exploration
asset are present.
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 including the consideration of the probability of non-market
performance conditions.
Deconsolidation
On November 22, 2022, Europa Metals Ltd entered into a definitive option agreement (the “Toral Definitive
Agreement”) with Denarius Metals Corp. (“Denarius”) pursuant to which Europa has granted two options to
Denarius to acquire up to an 80% ownership interest in Europa Metals Iberia S.L. (“EMI”), a wholly-owned Spanish
subsidiary of Europa which holds the Toral Zn-Pb-Ag Project (the “Toral Project”), Leon Province, Northern Spain.
During the First Option period, Denarius has the right to appoint three of the four members of an operating
committee that will direct the work programs carried out by the Company.
Upon the formation of the operating committee Denarius has the power over EMI and exposure or right to variable
returns from its involvement in EMI and has the ability to use its power to affect its returns. In accordance with
AASB 10 Consolidated Financial Statements 7 (a), (b) and (c) is deemed to result in a loss of control of EMI and
requires the deconsolidation of EMI from the financial statements of Europa Metals Limited.
On deconsolidation the Company de-recognised the assets and liabilities of the subsidiary and recognised the
subsequent loss on deconsolidation in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income
(i)
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).
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date.
All exchange differences in the parent Company’s financial statements are taken to profit or loss unless they relate
to the translation of subsidiary related loans and borrowings which are considered part of the net investment value
taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.
As at the reporting date the assets and liabilities of foreign subsidiaries are translated into the presentation currency
of the Company at the rate of exchange ruling at the reporting date and their statements of profit or loss and other
comprehensive income are translated at the weighted average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign
operation is recognised in profit or loss.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
48 | P a g e
Note 2: Summary of significant accounting policies (continued)
(j)
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. Exploration and evaluation assets are assessed for
impairment if sufficient data exists to determine the technical feasibility and commercial viability, and facts and
circumstances suggest that the carrying amount exceeds the recoverable amount.
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.
(k)
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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
49 | P a g e
Note 2: Summary of significant accounting policies (continued)
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of
profit or loss and other comprehensive income.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
(l)
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.
(m)
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.
(n)
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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
50 | P a g e
Note 2: Summary of significant accounting policies (continued)
(o)
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.
(p)
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.
(q)
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.
(r)
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 and consultants 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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
51 | P a g e
Note 2: Summary of significant accounting policies (continued)
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.
Note 3: Revenue and expenses
Revenue and expenses from continuing operations
2023
2022
$
$
(a) Revenue
Interest received
-
-
-
-
(b) Other Income
Grants received
-
168,268
Funds received from Joint Venture Partner
177,279
-
177,279
168,268
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
52 | P a g e
Note 3: Revenue and expenses (continued)
(c) Profit or loss
Other expenses include the following:
Depreciation
6,506
48,000
Consulting services
284,908
179,857
Employment related
- Directors’ fees
242,730
440,787
- Share Based Payments
254,560
186,379
Corporate
278,804
327,104
Other
160,550
145,620
1,228,058
1,327,747
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.
Note 5: Income tax expense
2023
2022
$
$
Reconciliation of income tax expense to the pre-tax net loss
Loss before income tax
(3,380,397)
(2,463,069)
Income tax calculated at 30% (2022 30%) on loss before income tax
(1,014,119)
(738,921)
Add tax effect of: non-deductible expenses
812,971
533,539
Difference in tax rate of subsidiaries operating in other jurisdictions
-
54,640
Unused tax losses and temporary differences not brought to account
201,148
150,742
Income tax (profit) / expense
-
-
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
53 | P a g e
Note 5: Income tax expense (continued)
Analysis of deferred tax balances
2023
2022
Deferred tax liabilities
$
$
Assessable temporary differences
Prepayments
(5,381)
(5,249)
Other
(13,052)
-
Deferred tax liabilities offset by deferred tax assets
18,433
5,249
Net deferred tax liabilities
-
-
Deferred tax assets
Share issue expenses
-
886
Payables and provisions
13,132
207
Loss on deconsolidation
354,146
-
Other
-
22,562
Unused tax losses
5,831,386
5,765,619
6,198,664
5,789,274
Total unrecognised deferred tax assets
(6,180,231)
(5,784,025)
Deferred tax assets
18,433
5,249
Deferred tax assets offset by deferred tax liabilities
(18,433)
(5,249)
Net deferred tax assets
-
-
Unused tax losses set out above have not been recognised due to the uncertainty of future taxable profit streams.
Note 6: Auditors’ remuneration
2023
2022
$
$
Remuneration of the auditor of the Company for:
-auditing or reviewing the financial statements
BDO Audit (WA) Pty Ltd
56,145
44,866
56,145
44,866
BDO (WA) Pty Ltd - Taxation services
12,121
8,755
68,266
53,621
Note 7: Loss per share
2023
2022
$
$
Basic loss per share (cents per share)
(3.83)
(3.57)
Diluted loss per share (cents per share)
(3.83)
(3.57)
Loss used in calculating basic loss per share
(3,380,397)
(2,463,069)
Adjustments to basic loss used to calculate dilutive loss per share
-
-
Loss used in calculating dilutive loss per share
(3,380,397)
(2,463,069)
Number
Number
Weighted average number of ordinary shares used in the
calculation of basic loss per share
88,207,380
68,906,286
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
54 | P a g e
Note 7: Loss per share (continued)
Weighted average number of ordinary shares used in the
calculation of diluted loss per share
88,207,380
68,906,286
8,931,764 share options outstanding as at 30 June 2023 (30 June 2022: 8,086,764) have not been included in
the calculation of dilutive loss per share as these are anti-dilutive.
Note 8: Cash and cash equivalents
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in the statement
of financial position as follows:
2023
2022
$
$
Cash at bank
653,990
1,650,056
See note 23 for the risk exposure analysis for cash and cash equivalents.
Note 9: Trade and other receivables
2023
2022
$
$
Current
GST / VAT
5,244
45,267
Prepayments
17,935
17,497
Other receivables
-
22,656
23,179
85,420
Non-current
CDTI Deposits
-
63,018
-
63,018
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
2023
2022
$
$
At 1 July
1,229,196
1,276,964
Foreign exchange movement to 31 December 2022
39,767
(47,768)
Balance on deconsolidation
(i)
(1,268,963)
-
At 30 June
-
1,229,196
Deconsolidation of subsidiary
On November 22, 2022, Europa Metals Ltd entered into a definitive option agreement (the “Toral Definitive Agreement”)
with Denarius Metals Corp. (“Denarius”) pursuant to which Europa has granted two options to Denarius to acquire up
to an 80% ownership interest in Europa Metals Iberia S.L. (“EMI”), a wholly-owned Spanish subsidiary of Europa which
holds the Toral Zn-Pb-Ag Project (the “Toral Project”), Leon Province, Northern Spain.
Pursuant to the Toral Definitive Agreement, Denarius has been granted a First Option, exercisable until November 22,
2025 (subject to a 90-day extension in certain circumstances), to subscribe for a 51% equity interest in EMI by:
(i)
spending, as operator, a total of $4,000,000 on the Toral Project over the three-year period,
(ii)
completing a preliminary economic assessment, and
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
55 | P a g e
Note 10: Capitalised exploration expenditure (continued)
(iii)
completing and submitting a mining license application in respect of the Toral Project to the local mining
authority. This was completed in October 2023.
Control
During the First Option period, Denarius has the right to appoint three of the four members of an operating committee
that will direct the work programs carried out by the Company. This gave rise to a loss of control of EMI as defined in
AASB 10 Consolidated Financial Statements and the deconsolidation of EMI from the Europa Metals Limited financial
statements.
Deconsolidation
Assets
$
Cash and Cash Equivalents
120,213
Trade & Other Receivables
376,476
Other Assets
22,924
Right of Use Assets
42,292
Capitalised Exploration Expenditure
1,267,907
PPE
37,270
Total Assets
1,867,082
Liabilities
Trade & Other Payables
253,743
Borrowings
205,216
Lease Liability
24,258
Total Liabilities
483,217
Net Assets/(liabilities)
1,383,865
Interest retained on loss of control
115,958
Less: net assets derecognised
(1,383,865)
Loss on deconsolidation
1,267,907
Investment in Associate
In accordance with AASB 128 Investments in Associates Europa Metals Iberia S.L. (EMI) is accounted for as an
Investment in Associate. EMI country of incorporation and principal please of business is Spain.
Europa Metals’ ownership interest in EMI at 30 June 2023 was 100%.
EMI’s assets and liabilities at 30 June 2023 are as follows:
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
56 | P a g e
Note 10: Capitalised exploration expenditure (continued)
Investment in Associate (continued)
31/12/2022
30/06/2023
$
$
Assets
Current assets
Cash and cash equivalents
120,213
70,808
Trade & other receivables
376,476
709,141
Total current assets
496,689
779,949
Non-current assets
Plant and equipment
37,270
79,222
Other non-current assets
65,216
66,198
Total non-current assets
102,486
145,420
Total assets
599,175
925,369
Liabilities
Current liabilities
Trade and other payables
253,743
952,658
Lease liability
24,258
12,506
Total current liabilities
278,001
965,164
Non-current liabilities
Borrowings
205,216
2,260,748
Total non-current liabilities
205,216
2,260,748
Total liabilities
483,217
3,225,912
Net assets/(liabilities)
115,958
(2,300,543)
Revenue
-
Loss after income tax for the year from continuing operations
(3,221,565)
Net loss for the year
(3,221,565)
Other comprehensive income for the year net of tax
-
Total comprehensive loss for the year
(3,221,565)
Carrying value of investment in associate
Carrying value on initial recognition
115,958
Share of net loss for the year
(115,958)
-
Investment in associate at 30 June 2023
-
Europa Metals recognises a share of loss of its associate during the period of $115,958 reducing the carrying value
to nil. The investment in associate is nil due to the net liability position at 30 June 2023.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
57 | P a g e
Note 11: Trade and other payables
2023
2022
$
$
Current
Trade payables and other payables
118,902
139,119
118,902
139,119
Trade and other payables are non-interest bearing and are normally settled on 30-day terms.
Note 12: Borrowings
30 June 2023
30 June 2022
$
$
CDTI Loan
-
186,925
Total borrowings
-
186,925
Note 13: Contributed Equity
2023
2022
2023
2022
No. of shares
No. of shares
$
$
(a)
Share Capital
Ordinary Shares
Ordinary shares fully paid
94,171,790
79,130,649
49,391,945
48,227,649
Employee share incentive
plan shares
(4,600)
(4,600)
-
-
94,167,190
79,126,049
49,391,945
48,227,649
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 2023, nil (2022: nil) shares were issued back to the market from the Employee
Incentive Share Plan.
(b)
Movements in ordinary share capital
Date
Details
Number of
shares
$
30 June 2022
Closing Balance
49,130,649
45,695,303
26 October 2021
Placement - Tranche 1
24,565,324
2,253,241
30 November 2021
Placement - Tranche 2
5,434,676
507,031
Cost associated with share issues
(227,926)
79,130,649
48,227,649
8 August 2022
Shares issued - Conversion of directors fees
906,265
55,351
23 November 2022
Placement
12,888,888
1,033,155
24 January 2023
Shares issued - Conversion of directors fees
1,245,988
75,790
94,171,790
49,391,945
Less:
Employee share plan shares on issue
(4,600)
-
94,167,190
49,391,945
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
58 | P a g e
Note 13: Contributed Equity (continued)
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
Number of
shares
$
Opening balance
4,600
-
30 June 2022
Closing balance
4,600
-
Opening balance
4,600
-
30 June 2023
Closing balance
4,600
-
No employee share plan shares were issued in 2023 (2022: Nil).
This account is used to record the value of shares issued under the Executive Share Incentive Plan (ESIP). The
ESIP is accounted for as an “in-substance” option plan due to the limited recourse nature of the loan between
employees and the Company to finance the purchase of ordinary shares. The total fair value of the “in substance”
options issued under the plan is recognised as a share-based payment expense over the vesting period, with a
corresponding increase in equity.
Note 14: Options
The following table illustrates the movements in share options during the period:
2023
Number
2022
Number
Outstanding at 1 July 2021
8,086,764
15,116,087
8,086,764
15,116,087
Issued during the period
2,000,000
3,000,000
Expired/cancelled during the period
(1,155,000)
(10,509,323)
Outstanding at 30 June 2022
8,931,764
8,086,764
Exercisable at 30 June 2022
7,531,764
6,673,431
The table in note 17 summarises the model inputs for options granted during the year ended 30 June 2023.
Note 15: Reserves
Employee
share
incentive
reserve
Options
reserve
Foreign
exchange
reserve
Total
$
$
$
$
At 30 June 2021
491,577
2,520,528
102,048
3,114,153
Options issued to Brokers
-
154,313
-
154,313
Options issued to Directors
-
45,203
-
45,203
Shares to be issued to Directors
76,420
-
-
76,420
Currency translation differences
-
-
(39,490)
(39,490)
At 30 June 2022
567,997
2,720,044
62,558
3,350,599
Options issued to Directors
-
75,338
-
75,338
Shares to be issued to Directors
(76,420)
-
-
(76,420)
Performance rights issued to directors
103,433
-
-
103,433
Realisation of foreign exchange reserve
on deconsolidation of foreign operation
-
-
(62,558)
(62,558)
At 30 June 2023
595,010
2,795,382
-
3,390,392
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
59 | P a g e
Note 15: Reserves (continued)
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.
Note 16: Accumulated losses
2023
2022
$
$
Accumulated losses at the beginning of the financial year
(48,843,673)
(46,380,604)
Net loss for the year
(3,380,397)
(2,463,069)
Accumulated losses at the end of the financial year
(52,224,070)
(48,843,673)
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:
2023
$
2022
$
Options issued to Brokers and consultants1
-
154,313
Options issued to directors/management - December 2020
32,709
45,203
Options issued to directors/management – January 2023
42,629
-
Performance Rights issued to directors – January 2023
103,433
-
Shares issued to directors in lieu of fees1
75,789
-
Shares to be issued to directors1
-
76,420
254,560
275,936
1 50% of certain directors’ salaries and fees from 1 January 2022 were accrued/deferred and settled through the
issue of new ordinary shares in July 2022 and January 2023.
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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
60 | P a g e
Note 17: Share based payments (continued)
The tables below summarise the model inputs for options granted during the financial year ended 30 June
2023:
Directors – January 2023
Tranche 1
Tranche 2
Tranche 3
Options granted for no consideration
500,000
750,000
750,000
Exercise price (GBP)
0.0335
0.0402
0.0469
Issue date
24/01/23
24/01/23
24/01/23
Expiry date
24/01/26
24/01/26
24/01/26
Underlying security spot price at grant
date (GBP)
0.028
0.028
0.028
Expected price volatility of the
Company’s shares
80%
80%
80%
Expected dividend yield
0%
0%
0%
Expected life (years)
3
3
3
Risk-free interest rate
3.34%
3.34%
3.34%
Black-Scholes model valuation per
option (AUD cents per share)
0.0236
0.0215
0.0196
Total fair value
$11,817
$16,092
$14,720
Expensed during the period
$11,817
$16,092
$14,720
Details of the individual tranches are as follows:
(a) Tranche 1: exercisable at a price of 3.35 pence per share (being a 25% premium to the 30-day VWAP
prior to their date of issue) and expiring on or before 3 years from their date of issue;
(b) Tranche 2: exercisable at a price of 4.02 pence per share (being a 50% premium to the 30-day VWAP
prior to their date of issue) and expiring on or before 3 years from their date of issue; and
(c) Tranche 3: exercisable at a price of 4.69 pence per share (being a 75% premium to the 30-day VWAP
prior to their date of issue) and expiring on or before 3 years from their date of issue.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
61 | P a g e
Note 17: Share based payments (continued)
Performance shares
On 24 January 2023, a total of 3,500,000 performance rights (“Performance Rights”) were issued to Myles
Campion and Daniel Smith. The Performance Rights are exercisable for nil consideration and are subject to
the following performance milestone conditions and expiry dates:
Tranche No. of Performance
Rights and
Recipient
Performance Milestone
Condition
Expiry Date
Value
Expensed
during year
1
1,500,000 to Myles
Campion (or his
nominee)
Completion of the Option
Agreement with Denarius
Metals Corp. and receipt
of initial US$550k cash
payments
2 years from
the date of
issue
$72,982
$72,982
250,000 to Daniel
Smith (or his
nominee)
Completion of the Option
Agreement with Denarius
Metals Corp. and receipt
of initial US$550k cash
payments
2 years from
the date of
issue
$12,164
$12,164
2
1,500,000 to Myles
Campion (or his
nominee)
Successful Mining
Licence Application for
the Toral Project
2 years from
the date of
issue
$72,982
$15,675
250,000 to Daniel
Smith (or his
nominee)
Successful Mining
Licence Application for
the Toral Project
2 years from
the date of
issue
$41,250
$2,612
The Tranche 1 performance milestone was achieved during the year therefore the performance rights were
expensed in full.
The Tranche 2 performance milestone is expected to be achieved prior to the expiry date therefore, the fair
value of the Tranche 2 performance rights is expensed over two years to January 2025.
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
2023
2022
$
$
Short-term employee benefits
233,508
423,436
Post-employment benefits
9,220
17,351
Share based payments
253,788
120,850
496,516
561,637
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.
% Beneficial Equity
Interest
Name
Country of Incorporation
2023
2022
Ferrum Metals Pty Ltd
Australia
100
100
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
62 | P a g e
Note 19: Related party transactions (continued)
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.
Income
from
Related
Parties
Expenditure
to Related
Parties
Amounts
Owed by
Related
Parties at
year end
Amounts
Owed to
Related
Parties at
year end
$
$
$
$
Minerva Corporate Pty Ltd (i)
2023
-
84,000
-
11,000
2022
-
84,000
-
11,067
Virico (IOM) Limited (ii)
2023
-
171,096
-
19,869
2022
-
240,000
-
-
(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 M Campion, an executive director of the Company, is also a director of Virico (IOM) Limited. During the
year, Virico (IOM) Limited received the above fees for consulting services. These fees were based on normal
commercial terms and conditions and are included in the remuneration summary on page 23.
Note 20: Cash flow information
2023
2022
$
$
Reconciliation of cash flow from operations with loss from ordinary
activities after income tax
Loss from ordinary activities after income tax
(3,380,397)
(2,463,069)
Other income
-
(168,268)
Depreciation
6,506
48,000
Interest on unwinding of lease
13,467
20,492
Net foreign exchange differences
(44,723)
78,731
Share based payments
254,560
186,379
Loss on deconsolidation of subsidiary
1,267,907
-
Share of loss of associate
115,958
-
Changes in assets and liabilities
(Increase) / decrease in receivables
125,259
126,804
(Decrease) / increase in payables and provisions
(97,701)
(28,182)
Cash flows used in operations
(1,739,164)
(2,199,113)
Note 21: Non-cash investing and financing activities
2023
2022
$
$
Share issue costs (settled through issue of options)
-
154,313
Borrowings - non-cash discount
-
176,356
-
330,669
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
63 | P a g e
Note 22: Changes in liabilities arising from financing activities
Loans
Lease liability
Consolidated
$
$
Balance at 30 June 2021
121,727
16,505
Additions
-
54,099
Repayment of lease liabilities
-
(35,302)
Borrowings - gross amount received
241,554
-
Borrowings - non-cash discount
(176,356)
-
Balance at 30 June 2022
186,925
35,302
Repayment of lease liabilities
-
(11,044)
Borrowings - non-cash discount
18,291
-
Balance on deconsolidation
(205,216)
(24,258)
Balance at 30 June 2023
-
-
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.
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
64 | P a g e
Note 23: Financial risk management objectives and policies (continued)
Weighted
Floating
Fixed
Non
Total
Average Effective
Interest Rate
%
Interest
Rate
$
Interest
Rate
$
Interest
Bearing
$
$
2023
Financial Assets
Cash
1.35%
3,764
-
650,226
653,990
Trade and other receivables
-
-
23,179
23,179
Total Financial Assets
3,764
-
673,405
677,169
Financial Liabilities
Trade and other payables
-
-
118,902
118,902
Total Financial Liabilities
-
-
118,902
118,902
2022
Financial Assets
Cash
0.01%
3,884
-
1,646,172
1,650,056
Trade and other receivables
-
-
85,674
85,674
Total Financial Assets
3,884
-
1,731,846
1,735,730
Financial Liabilities
Trade and other payables
-
-
139,119
139,119
Lease liabilities
12.5%
-
-
35,302
35,302
Borrowings
12%
-
-
186,925
186,925
Total Financial Liabilities
-
-
361,346
361,346
(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.
2023
Less than 12
months
$
Between 1 to
2 years
$
Between 2
and 5 years
$
Over 5 years
$
Trade and other payables
118,902
-
-
-
2022
Less than 12
months
$
Between 1 to
2 years
$
Between 2
and 5 years
$
Over 5 years
$
Borrowings
-
66,459
199,378
224,506
Trade and other payables
139,119
-
-
-
Lease liabilities
22,796
-
-
-
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
65 | P a g e
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:
Liabilities
Assets
2023
$
2022
$
2023
$
2022
$
Great British Pounds (GBP)
(40,406)
(29,890)
614,469
1,411,883
South African Rand (ZAR)
(14,370)
(14,847)
1
1
Euro (EUR)
-
(186,925)
-
210,317
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.
Note 24: Parent Entity Information
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 2023 (2022: Nil).
2023
2022
$
$
Current assets
677,169
1,652,676
Total assets
677,792
2,833,164
Current liabilities
118,902
98,588
Total liabilities
118,902
98,588
Issued capital
53,704,867
52,540,572
Accumulated Losses
(56,975,511)
(53,533,179)
Reserves
3,829,534
3,727,183
Total shareholders’ equity
558,890
2,734,576
Loss of the parent entity
(3,379, 805)
(2,502,558)
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2023
66 | P a g e
Note 25: Significant events after the reporting date
There are subsequent events to report, as follows:
On 9 October 2023, the Company advised of the appointment of Beaumont Cornish Limited as Nomad and
Broker.
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.
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Declaration
67 | P a g e
In the opinion of the directors of Europa Metals Ltd:
(a)
the financial statements and notes set out on pages 40 to 66 are in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the financial position of the Group as at 30 June 2023 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
(c)
subject to the matters discussed in Note 2(c), there are reasonable grounds to believe that the Group
will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with section 295A of the Corporations Act 2001 for the year ended 30 June 2023.
This declaration is made in accordance with a resolution of the directors.
D Smith
Non-Executive Director
Perth
31 October 2023
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation.
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth, WA 6000
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
INDEPENDENT AUDITOR'S REPORT
To the members of Europa Metals Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Europa Metals Ltd (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, 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 2023 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(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
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.
Deconsolidation of Europa Metals Iberica SL
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 10 to the financial statements, on
22 November 2022 the company entered into an option
agreement with Denarius Metals Corp. (“Denarius”)
pursuant to which the company has granted two options
to Denarius to acquire up to an 80% ownership interest
in the Europa Metals Iberica SL (“EMI”), a wholly owned
subsidiary of the company.
On the completion of the option agreement Denarius has
the right to appoint three of four members of the
operating committee that will direct the work
programmes carried out by EMI. This has given rise to a
loss of control of EMI as defined in AASB 10 Consolidated
Financial statements (“AASB10”).
This is considered a key audit matter due to the
significance of the transaction and the judgement
involved in the consideration of loss of control.
Our procedures included, but were not limited to:
•
Reviewing the relevant agreements to obtain an
understanding of the contractual terms and
conditions of the transaction;
•
Assessing management’s determination that the
transaction represented a loss of control in
accordance with AASB 10;
•
Considering the appropriateness of
management’s assessment of significant
influence over EMI and accounting for the
interest as an investment in associate;
•
Agreeing the assets and liabilities
deconsolidated to underlying financial data; 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 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
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 23 to 31 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Europa Metals Ltd, for the year ended 30 June 2023,
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
31 October 2023
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia
Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO
International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability
limited by a scheme approved under Professional Standards Legislation.
Level 9, Mia Yellagonga Tower 2
5 Spring Street
Perth WA 6000
PO Box 700 West Perth WA 6872
Australia
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
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 2023, 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
31 October 2023
73 | P a g e
Additional JSE Information
Headline earnings reconciliation
2023
2022
$
$
Loss attributable to ordinary equity holders of the parent
entity
(3,380,397)
(2,463,069)
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
(3,380,397)
(2,463,069)
Basic loss
(3,380,397)
(2,463,069)
Weighted average shares in issue
88,207,380
68,906,286
Basic loss per share (cents)
(3.83)
(3.57)
Headline loss
(3,380,397)
(2,463,069)
Weighted average shares in issue
88,207,380
68,906,286
Headline loss per share (cents)
(3.83)
(3.57)