Cashflow Statement
For the Year Ended 30 June 2023
1
ANNUAL REPORT 2024
ECOGRAF LIMITED
ABN 15 117 330 757
ANNUAL
REPORT
2024
Balance Sheet
For the Year Ended 30 June 2023
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ANNUAL REPORT 2024
ECOGRAF LIMITED
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ANNUAL REPORT 2024
ECOGRAF LIMITED
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ANNUAL REPORT 2024
ECOGRAF LIMITED
Battery anode
materials that
power a clean
energy future
Contents
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ANNUAL REPORT 2024
ECOGRAF LIMITED
CHAIRMAN'S LETTER
DIRECTORS' REPORT
FINANCIAL STATEMENTS
DIRECTORS' DECLARATION
SHAREHOLDER INFORMATION
MINERAL RESOURCES
AND ORE RESERVES
04
06
24
40
41
66
67
68
73
75
76
REVIEW OF OPERATIONS
AUDITOR'S INDEPENDENCE
DECLARATION
CONSOLIDATED ENTITY
DISCLOSURE STATEMENT
INDEPENDENT AUDITOR’S REPORT
SUMMARY OF TENEMENTS
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ANNUAL REPORT 2024
ECOGRAF LIMITED
We are all aware of the slowdown in
recent times in EV uptake and demand
for battery minerals but it is also clear
that this is a short term aberration with
medium and long term outlook remain
very positive with an electric future
locked in. It is this future that underpins
EcoGraf’s vertically integrated business
plan to supply high quality graphite
products for battery and EV production
and also superior flake graphite for
industrial
manufacturing,
with
the
timing of our developments in sync
with expected growth in demand.
Your company has one great strength
that gives it a major competitive
advantage. That is the quality of its
graphite products and processing.
As with all industrial minerals, quality
is fundamental to viability and is
synonymous
with
high
product
revenue and low production cost. This
quality is apparent in all aspects of our
integrated business.
It starts with the quality of the graphite
ore in the ground including its
favourable mineralogy and crystallinity,
its flake size distribution, grade, purity
and absence of deleterious minerals.
All this adds up to higher revenues
for superior flake material, ease of
extraction and low costs for the mineral
processing. The Epanko Ore has all of
this including 63% of large flake size
above 150 microns.
Then there is the quality of the deposit
from a mining perspective. The size,
the grade, the geometry, its width, its
depth, stripping ratio, ease and cost
of mining. With 290 million tonnes
of resource, Epanko is the largest
undeveloped graphite deposit in Africa.
With a strike length of 5.5 kilometres, a
width of 200 metres, near surface ore,
a minimal 0.3:1 waste to ore stripping
ratio, a low cost soft oxide cap and
recovery of a 98% purity concentrate
from simple flotation, this all makes
Epanko a quality low cost operation.
Many
excellent
orebodies
are
challenged by lack of infrastructure. This
is not the case at Epanko with excellent
infrastructure in place including low
cost and clean hydroelectric power,
good road and rail access with good
logistics for export of product.
The quality of the Epanko Project was
recognised early in its development
and has attracted offtake from blue
ribbon partners in Germany and
elsewhere and financing support from
the prestigious KfW IPEX -Bank ('KfW'),
the German state owned bank. KfW
is the world’s largest development
bank with access to long term, low
cost project financing and eligibility
for a UFK guarantee from the Federal
Republic of Germany. Epanko is
currently going through the approval
process.
To qualify for this favourable project
financing, the Epanko Project has been
subjected to the most rigorous and
stringent due diligence, covering every
aspect of the project from mining,
processing engineering, infrastructure
to capital, and operating costs as
well as special attention to social,
environmental and safety aspects.
This
independent
due
diligence
imposes a strict discipline on the
project team to ensure that all pre-
development
work
and
planning
is conducted to the very highest
standards and down to the last detail.
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ANNUAL REPORT 2024
ECOGRAF LIMITED
Robert Pett
Independent Non-Executive
Director and Chairman
LARGE FLAKE SIZE AT EPANKO
63% >150µm
CONCENTRATION GRADE
96 - 98%C
STRIP RATIO
0.3 : 1
Chairman’s
Letter
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ANNUAL REPORT 2024
ECOGRAF LIMITED
This process identifies any and all
shortcomings and significantly de-risks
the project. It is no surprise for example,
that 82% of mining Ore Reserves are
in the proven category, ensuring that
the tonnes, grade, metallurgy, flake
size of every block of ore is known
with precision. Epanko by a very large
margin has the highest percentage of
proven reserves compared to all of its
graphite peers.
This attention to detail come at a cost,
but the de-risking of the project is not
only essential for access to top quality
finance, but also provides a significant
competitive advantage.
A key component of your company’s
business plan is to further process the
Epanko graphite feedstock to produce
spherical battery graphite. This will
utilise the fine (minus 100 micron)
material leaving the high value large
flake graphite for industrial markets.
This is a two stage process; a mechanical
micronisation
and
spheronisation
process to produce unpurified spherical
graphite which is energy intensive.
Followed by a purification stage to
produce a 99.95% pure spherical
graphite, which is chemically intensive.
The major manufacturers of purified
spherical graphite, representing near
100% of global supply are in China
and with the two stage process, uses
toxic hydrofluoric acid for purification.
EcoGraf has developed and patented
its own process for this stage which
avoids the use of toxic chemicals and is
eco-friendly.
EcoGraf with its focus on efficient, low
cost production will separate these
two processes and build a mechanical
shaping plant in Tanzania close to its
mine site and where there is access to
cheap and sustainable hydroelectric
power and build smaller purification
plants close to customers in battery
hubs in Europe, North America and Asia
and where chemical costs are low. This
will not only enable the production and
export of unpurified spherical graphite,
the most energy intensive stage, using
the lowest cost hydroelectric power, but
also, because 40% of graphite is lost to
fines in this process, the freight costs of
moving this graphite product to markets
will be reduced.
All of these aspects taken together
deliver a graphite project with great
competitive advantage and renders
Epanko as one of the highest quality
projects globably. The fact that this
graphite can be produced with the
lowest carbon footprint and the highest
ESG standards is icing on the cake and
another major advantage.
While the electric future is locked in, and
remains fully supported by all the major
global economies, and is essential for
reducing the worlds carbon footprint,
a very obvious feature of the current
slowdown is that EV and battery
producers are focused not only on
secure and sustainable supply chains
but are also very conscious of the raw
materials costs, an aspect on which
EcoGraf can deliver.
The EcoGraf team have worked extremely hard this year to progress our
projects through the development stages and much has been achieved.
• KfW IPEX -Bank mandated for UFK loan of up to US$105m for
construction of the Epanko Graphite Project;
• 110% increase in Proven Ore Reserves to move 82% of Reserves to
Proven category;
• New mine design completed with phased expansion to 300,000 tpa;
• An oxide first strategy put in place whereby soft, near surface oxide ore is
mined first to reduce mining and process costs and increase throughput;
• Concerted engagement with financiers and offtake partners to advance
project finance approvals including due diligence site visits by KfW IPEX
bank and Euler Hermes in June 2024;
• Engineering study completed on establishment of a Tanzanian based
Mechanical Shaping Facility;
• Product Qualification Facility for purification successfully built and
commissioned in Perth;
• Collaboration with BASF on anode recycling to support BASF recycling in
Europe; and
• A$13.5m gold farm- in agreement secured with AngloGold Ashanti on
non-core tenements.
At the same time our team continued developing industry partnerships.
I would like to thank the EcoGraf team and our consultants for their hard work during the year and you, our shareholders,
for your continued support and patience.
Robert Pett
Chairman
Review of
Operations
The Business
EcoGraf
is
building
a
vertically
integrated battery anode materials
business to produce high purity
graphite products for the lithium-ion
battery and advanced manufacturing
markets. Over US$30 million has been
invested to date to create a highly
attractive graphite business which
includes:
• Epanko Graphite Mine in Tanzania;
• Mechanical Shaping Facility in
Tanzania; and
• EcoGraf
HFfree™
Purification
Facilities located in close proximity
to the electric vehicle, battery and
anode manufacturers.
In
Tanzania,
the
Company
is
developing the TanzGraphite natural
flake graphite business, commencing
with the Epanko Graphite Project, to
provide a long-term, scalable supply of
feedstock for EcoGraf™ battery anode
material processing facilities, together
with high quality large flake graphite
products for specialised industrial
applications.
In addition, the Company is finalising
its planned location for its Mechanical
Shaping Facility in Tanzania, which
will
manufacture
natural
flake
graphite
into
spherical
graphite
(SpG). This mechanical micronising
and spheronising is the first step in
the conversion of high-quality flake
graphite concentrate into battery
grade anode material used in the
production of lithium-ion batteries.
Using its environmentally superior
EcoGraf
HFfree™
purification
technology, the Company will upgrade
the SpG to produce 99.95%C high
performance battery anode material
to supply electric vehicle, battery and
anode manufacturers in Asia, Europe
and North America.
Battery recycling is critical to improving
supply chain sustainability and the
Company’s
successful
application
of the EcoGraf™ purification process
to recycle battery anode material
provides it with a unique ability to
support customers to reduce CO2
emissions and lower battery costs.
CIRCULAR
ECONOMY
SUSTAINABLE
RAW MATERIALS
Epanko Graphite Mine
Mining and mineral processing to
produce natural flake graphite
Anode Recycling
EcoGraf purification technology with
sector leading ESG credentials to
support battery recycling
EcoGraf Mechanical Shaping Facility
Micronising and spheronising of flake graphite
to produce spherical graphite
RECYCLE
UPSTREAM
MIDSTREAM
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ANNUAL REPORT 2024
ECOGRAF LIMITED
DOWNSTREAM
UPSTREAM
MIDSTREAM
DOWNSTREAM
RECYCLE
EcoGraf Business Pillars
EcoGraf HFfree™ Purification Facilities
HFfree Purification of Spherical Graphite(SPG) to produce Purified SpG
Building a vertically integrated battery anode materials
business to produce high purity graphite products for the
lithium-ion battery and advanced manufacturing markets
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ANNUAL REPORT 2024
ECOGRAF LIMITED
EcoGraf HFfree™ process advantages
Value proposition
Why
HFfree™
Low Cost
Competitive economics
compared to the other
purification methods
Minimum
impurities
Impurity levels to
less 100ppm
Versatility
Purification technology
successfully applied to
anode recycling
Eco-friendly
Low carbon footprint
with minimal waste
streams
Scalable
Process capable of being
located within battery
manufacturing hubs
ECOGRAF LIMITED
7
ANNUAL REPORT 2024
• Vertically integrated battery anode materials business
• Epanko Graphite Project is the largest development ready graphite project
in Africa
• Debt Financing program with German KfW IPEX-Bank
• Product qualification facility successfully commissioned,
ready for commercial scale expansion
• Strong ESG position with significant benefits to EcoGraf's HFfree™ patented
purification processing
Review of
Operations
Developing new supply lines is now a priority by governments.
1. Source: LMC
GLOBAL MONTHLY EV SALES (‘000 UNITS)1
The Graphite Market
Demand
The increase in demand for graphite continues to be driven by the global transition to electric vehicles (EV), which are powered
by lithium-ion batteries. Despite a recent slowdown in EV markets, long-term growth forecasts remain strong, with EV sales
growing year on year.
0
200
400
600
800
1,000
2022 2023 2024
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
NORTH
AMERICA
EUROPE
PLANNED BATTERY MANUFACTURING GIGAFACTORIES
8
ANNUAL REPORT 2024
ECOGRAF LIMITED
GIGAFACTORY LOCATIONS - PLANNED AND OPERATIONAL
ECOGRAF LIMITED
Supply
China’s dominance in the downstream
battery
supply
chain,
including
processing of the battery minerals,
cathode
and
anode
material
production, and battery cell and EV
production continues to be the major
determinant in the global graphite
supply. As the world undertakes to
reduce supply dependency on China,
legislation is being enacted to support
new supply chains.
The most significant of these is the
Inflation Reduction Act (IRA) legislated
in the United States which offers
funding programs, and incentives to
invest in domestic energy production
while promoting clean energy. In
addition
to
promoting
domestic
production, eligible tax credits for an
electric vehicle under the IRA are only
available if the supply source in the
manufacturing process is not derived
from a foreign entity of concern
(FEOC), which includes supply sources
from China.
In May 2024, the European Union
legislated the Critical Raw Materials
Act aiming to ensure a secure and
sustainable supply of critical raw
materials, which includes graphite, for
the EU.
To further support the need to diversify
the supply chain, China imposed
restrictions, effective 1 December
2023, on the export of certain types of
graphite, including natural graphite.
Global Legislation
US Legislation
IRA, MS, DoE, DoD have pushed development and funding into localised
resources in North America with tax credits supporting new supply
chains. Exemptions end 2027. New 25% tariff on FEOC (China) anode.
EU Legislation
The EU Green Deal and Critical Raw Materials Act support supply chains
that satisfy green targets for mining, manufacturing and recycling. CRMA
is now law with Strategic Projects focus. Battery passport, localisation
and CO2 targets will restrict foreign synthetic graphite imports.
Chinese Legislation
Chinese Government export licence controls implemented from
1 December 2023 for designated graphite and anode products. Current
anode manufacturing is heavily reliant on China.
9
ANNUAL REPORT 2024
10
ANNUAL REPORT 2024
ECOGRAF LIMITED
Review of
Operations
The Strategy
The Company continues to build its vertically integrated battery anode material
business and recognises this model optimises shareholder value. Activities within
the Company are set out below:
UPSTREAM
MIDSTREAM
DOWNSTREAM
RECYCLE
% Carbon
Grade/ Process1
96-98% C
Mining and Mineral
Processing
97-99% C
Mechanical
Shaping
>99.99% C
HFfree™ Purification
Technology
Anode
Recycling
Stage 1
Development1
Natural Flake
Graphite (73ktpa)
Spherical Graphite
(SPG)
Purified
SPG
TANZANIA
EUROPE, NORTH AMERICA AND ASIA
Significant value in each business development stream with value multiplier
expected on delivering the vertically integrated business.
Key advantages include:
• Vertically Integrated
• Cost Competitive
• ESG Position
• Expansion Potential
TANZANIA
ASIA
DEMAND
EU
DEMAND
US
DEMAND
AUSTRALIA
PQF
1 Refer to ASX Announcement “Updated Epanko Ore Reserve” on 25 July 2024
ECOGRAF LIMITED
Epanko Graphite Mine
Mechanical Shaping
Facility
EcoGraf HFfree™
Purification Facilities
Anode Recycling
Jumbo –
Natural Flake Graphite
Large –
Natural Flake Graphite
Medium –
Natural Flake Graphite
Fines –
Natural Flake Graphite
SpG
hdBAM - Purified
SpG
superBAM - Purified
SpG
Recycled Anode
Material
Blended - Purified
SpG
greenRECARB
UPSTREAM
MIDSTREAM
DOWNSTREAM
RECYCLE
LITHIUM-ION
BATTERIES
ADVANCED
MANUFACTURING
HIGH PURITY
INDUSTRIAL
PRODUCTS
11
FLAKE GRAPHITE
UNPURIFIED SPG
PURIFIED SPG
FINES
EcoGraf Products
The flagship Epanko Graphite Project will provide long-term, scalable supply of feedstock for the EcoGraf™ battery anode
material processing facility, together with high quality large flake graphite products for industrial markets.
The exceptional Epanko feedstock is processed using our EcoGraf HFfree™ purification processing technology - environmentally
sustainable graphite production with a low CO2 footprint. This downstream technology results in battery anode material meeting
physical and chemical properties with superior performance required by global customers.
R&D is underway for multiple by-products with a variety of end-uses, targeting a zero-waste operation.
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ANNUAL REPORT 2024
ECOGRAF LIMITED
Updated Mineral Resource and Ore Reserves
During the year, the Mineral Resource Estimate (MRE) was updated, reflecting
127% increase from the previous MRE announced on 2 March 2023 (refer to ASX
announcement dated 11 March 2024). The MRE incorporates the results of the
2023 drilling and trenching program, which includes record high assay results for
Epanko, including 43m at 20.8% Total Graphitic Carbon (‘TGC’) which demonstrates
the continuous high-grade nature.
The MRE was carried out by ERM Sustainable Mining Services team (previously
CSA Global), EcoGraf’s long-term Resource Consultant. The Mineral Resource has
been classified in accordance with the JORC (2012) Code as displayed below:
March 2024 Mineral Resource Estimate for the Epanko Deposit >5.5% TGC
JORC Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Measured
32.3
7.8
2,500
Indicated
55.7
7.5
4,200
Measured + Indicated
88.0
7.6
6,710
Inferred
202.8
7.2
14,310
Total
290.8
7.2
21,010
Notes for Table: Tonnage figures contained within the Table have been rounded to nearest 100,000.
% TGC grades are rounded to 1 decimal figure. Abbreviations used: Mt = 1,000,000 tonnes, Kt = 1,000
tonnes. Rounding errors may occur in the table.
The MRE update was focused on the conversion of the previously Inferred
northern and southern parts of the Epanko Western Zone to Indicated and
Measured, as well as the down-strike expansion of the Mineral Resource into the
southern extension of the Western Zone.
The Ore Reserve was also updated, which was announced on 25 July 2024,
reflecting 110% increase in Proven Ore Reserve. The Ore Reserve increased to
14.3Mt at 8.8% total graphitic carbon (TGC) for 1.25Mt of contained graphite.
The updated Ore Reserve confirms the geological potential of Epanko and
supports the proposed debt financing program with KfW IPEX-Bank for a UFK
loan of up to US$105m for the initial stage 1 development of Epanko (refer to ASX
announcement dated 29 November 2023).
Epanko Graphite Project
The Epanko Graphite Project (Epanko or the Project) is a long life, highly profitable
graphite project located approximately 370km from the city of Dar es Salaam in
Tanzania. In 2017, a pre-development program was completed resulting in an
extensive Bankable Feasibility Study, which was subject to a rigorous due diligence
process by bank appointed independent engineers, SRK Consulting (UK) Limited.
The results of the pre-development program positioned the project as a world
class new graphite development. It is forecast to initially produce 73,000 tonnes of
natural flake graphite products each year.
Review of
Operations
UPSTREAM
Mine and Mineral
Processing Facility to
Produce Natural Flake
Graphite
PRIORITIES
Debt financing program
Equator Principles 4.0 update
and RAP implementation
Front End Engineering Design
Expansion options to
300,000tpa
290.8Mt
TOTAL
MINERAL RESOURCE
ESTIMATE
82%
ORE RESERVE
CLASSIFIED PROVEN
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ANNUAL REPORT 2024
ECOGRAF LIMITED
Epanko Project Funding
On 29 November 2023, the Company
announced
that
the
German
Government
confirmed
Epanko
eligibility for cover in principle for
the Untied Loan Guarantee (“UFK”)
scheme based on the support of
German offtakers for the Company’s
initial 73,000tpa Epanko development.
The Company has mandated KfW
IPEX-Bank to obtain import credit
cover from the Federal Republic of
Germany and to arrange a senior debt
facility of up to US$105 million for the
development of Epanko.
The UFK program is provided by
the Federal Republic of Germany to
incentivise the development of key
projects that can provide a long-term
supply of critical minerals for the
German industry. Subject to satisfaction
of credit criteria, loan funding can be
provided under the program for terms
longer than is generally available from
commercial lenders, which provides
increased financial flexibility for new
developments during ramp-up and
operation.
There are four stages in the UFK
process; Eligibility for Cover in Principle,
Preliminary
Review,
Preliminary
Approval and Final Approval. Following
an initial review of the Epanko
Feasibility Study and confirmation
of
German
offtake
arrangements
in November last year, the German
Federal
Ministry
for
Economic
Affairs and Climate Action confirmed
Eligibility for Cover in Principle and
EcoGraf has subsequently submitted
the application for Preliminary Review.
Towards
the
end
of
the
year,
the
Company
hosted
technical,
environmental
and
social
due
diligence visits in Tanzania to support
the preparation of lender reports
and engage with key Government
and community stakeholders. The
visits provided an opportunity to
demonstrate the extensive planning
that’s
been
undertaken
by
the
Company to define and de-risk the
Epanko development, as well as the
strong stakeholder support for the
new mine.
In parallel, the Company is engaging
with
the
European
Commission
and its funding agencies in relation
to infrastructure development and
capacity building in Tanzania to
support the growth of the country’s
critical minerals sector for European
export markets.
Arusha
Dar es
Salaam
Merelani-Arusha
Graphite Project
Epanko
Graphite Project
Nyerere
Hydropower
Plant
200km
Morogoro
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73,000
TPA NATURAL
FLAKE GRAPHITE
PRODUCTS
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ANNUAL REPORT 2024
ECOGRAF LIMITED
The following activities have also been
completed during the year:
• Metallurgical testing of the drill
core samples from the drill program
conducted in the first half of the
financial year has confirmed the
2017 BFS process recoveries and
final concentrate grade results on
the oxide and fresh ore samples;
• An independent mine closure
planning specialist has been
engaged to incorporate mine
closure recommendations in
the current mine planning and
scheduling to ensure a robust
mine closure strategy is developed
and to prepare a conceptual Mine
Closure Plan and cost;
• Open pit lake salinity assessment
for the Mine Closure Plan
and updated the Project
hydrogeological model;
• Waste dump planning and
scheduling incorporating the
anticipated ARD encapsulation area
to north of the TSF wall; and
• Mine planning of the interim and
final pit designs and associated
haul roads for the Ore Reserve.
Mine Planning and Development
The Front-End Engineering Design (FEED) study commenced during the year to advance the design layout of the Project and
develop an overall control base for the execution of the Project.
Requests for Quotation were issued to the market for all major capital items and adjudications of the received responses are
currently underway for the process plant and related infrastructure.
The layout design for the 73,000tpa
graphite processing plant has been
developed by METC Engineering and
Construction (METC) with the project
managed by the METC-PaulSam JV,
their Tanzanian partner. The Company
has produced a 3D fly-over overview
of the proposed processing plant.
Review of
Operations
Cashflow Statement
For the Year Ended 30 June 2023
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ANNUAL REPORT 2024
ECOGRAF LIMITED
ECOGRAF LIMITED
Sector Leading ESG
Credentials
Epanko’s social and environmental
planning programs were independently
assessed in 2017 by KfW IPEX-Bank
appointed
SRK
Consulting
(UK)
Limited to comply with the Equator
Principles, a globally recognised risk
management
framework
adopted
by leading financial institutions for
assessing
and
managing
social
and environmental risks in new
developments. Achieving this standard
and satisfying International Finance
Corporation Performance Standards
and World Bank Group Environmental,
Health and Safety Guidelines is critical
to securing international financing
support.
A refresh of the Resettlement Action
Plan (“RAP”) is well advanced in
preparation for mine development.
During the year, land parcel delineation,
preliminary asset valuation and socio-
economic surveys, were completed
for the RAP area, a 2km buffer zone
around this area and the access road
to the site. The program involved
extensive engagement with the local
community and key stakeholders,
including Government officials.
The Resettlement Working Group
(RWG) continued to report the outcome
of technical suitability assessment
for proposed resettlement sites and
revision of the RAP report.
Community and Social Activities
The Company recognises the significant impact of its activities to the livelihood of individuals residing in and around the
Project and commits to create benefits for the communities through community development projects and support for viable
community initiatives, as well as maintaining regular communication with affected communities on progress.
The Company’s updated Corporate Social Responsibility plan was submitted to the Mining Commission as per the new Mining
(Corporate Social Responsibility) Regulations, 2023.
A number of activities and programs
were undertaken during the year
which included:
• Continuous stakeholder
engagement initiatives;
• Engagements with the Epanko
Village Assembly and School
Committee Meetings;
• Supporting the local Epanko
dispensary;
• Supporting the Epanko
Primary School tree planting
program to develop community
empowerment in environmental
conservation;
• Celebrating and supporting
International Women’s Day in
Mahenge, Ulanga District; and
• Empowering Epanko women
with a pilot farming program.
16
ANNUAL REPORT 2024
ECOGRAF LIMITED
Review of
Operations
Production targets and
financial information
Production
targets
and
forecast
financial
information derived from the production targets,
included in this report is extracted from ASX
announcements dated 21 June 2017, 28 April
2023 and 25 July 2024.
“Updated Bankable Feasibility Study” available at
www.ecograf.com.au and www.asx.com.au. The
Company confirms that all material assumptions
underpinning the production targets and forecast
financial information derived from the production
targets set out in the announcements released
on 21 June 2017, 28 April 2023 and 25 July
2024 continue to apply and have not materially
changed.
The production targets referred to in this report
are based on the updated Epanko Reserve (25
July 2024 announcement) which is comprised
of 82% Measured Resources and 18% Indicated
Resources for an initial 18-year life of mine. The
Measured Resources and Indicated Resources
underpinning the production target have been
prepared by a competent person in accordance
with the requirements in Appendix 5A (JORC
Code).
The Company has not used Inferred Mineral
Resources as part of the production target. The
Study includes some Inferred Resources which
are mined incidentally with the Measured and
Indicated Resources and treated as waste for
scheduling purposes.
N
Garnet Gneiss
(Footwall)
Graphitic Schist
(Mineralisation)
Biotite schist
(Hanging Wall)
Ore Reserve
14.3 Mt @ 8.8% TGC
(1.3km)
290.8 Mt @7.2% TGC for 21.0 Mt
Mineral Resource Estimate
(3.5km)
Mount Grafit
Peak -
1,400mRL
Interpreted Southern
Continuation within
the SML (2km)
2023
High-grade
Trenches
18.9km2
MINING AREA
50 yrs
MINING LICENCE
17
ANNUAL REPORT 2024
ECOGRAF LIMITED
Tanzanian Mechanical Shaping Facility
There are two processing steps necessary for the manufacture of spherical graphite
for battery anode production. Mechanical micronisation is the first step and then
followed by mechanical spheronisation in continuous mode in the conversion of
high-quality flake graphite concentrate into battery grade anode material used in
the production of lithium-ion batteries.
An engineering study was completed during the year to evaluate potential locations
for the development of a spherical graphite facility in Tanzania. The study identified
several locations with access to suitable transportation infrastructure, site services,
skilled personnel and containerised export facilities.
The proposed Mechanical Shaping Facility will benefit from Tanzania’s low-cost,
low CO2 hydropower, its central location to supply global battery markets and the
availability of investment incentives provided by the Tanzanian Export Processing
Zone Authority (EPZA).
Meetings were held with the Tanzanian Government and its key agencies, to
consider final locations and EPZA permits. The Company notes the Government
of Tanzania announced the initial supply and commencement of the 2,115MW
Julius Nyerere hydropower plant, which will provide a significant increase in
low-cost, renewable power into Tanzania's grid and support the Government’s
industrialisations plans. The dam is the fourth largest in Africa and located in the
Morogoro region.
MIDSTREAM
Mechanical shaping of
natural flake graphite
to produce Spherical
Graphite (SpG)
PRIORITIES
Finalise site engineering
studies on preferred locations
Secure offtake arrangements
17
ANNUAL REPORT 2024
MOROGORO
DODOMA
IFAKARA
MAHENGE
T A N Z A N I A
50Km
DAR ES
SALAAM
NYERERE
HYDROPOWER
PLANT
Roads
Roads
Epanko Graphite
Project
Four potential
Mechanical
Shaping Facility
locations
identified along a
transport corridor
18
ECOGRAF LIMITED
EcoGraf™ Battery Anode Material
The Company is developing a battery anode material business that will provide a
new supply of high quality purified spherical graphite for the high growth lithium-
ion battery market, using its HFfree purification process developed in Australia
and Germany. The EcoGraf HFfree™ purification process has been refined through
extensive testing and analysis conducted by EcoGraf in Australia, Europe and Asia,
with the Company also lodging patents and trademarks in key global lithium-ion
battery markets.
On 18 July 2023, the Company received notice from the US Patent and Trademark
Office that its patent application, filed on 1 November 2022, entitled “Method of
Producing Purified Graphite” was granted.
Review of
Operations
DOWNSTREAM
HFfree Purification of
Spherical Graphite (SPG)
to produce Purified SPG
PRIORITIES
Product qualification facility
successfully commissioned in
Perth, WA
Formalise strategic
partnerships for commercial
scale production
Evaluate development options
in Europe, North America and
Asia
EcoGraf HFfree™ proprietary purification process
A comparative independent benchmarking study of the EcoGraf HFfree™
proprietary purification process against alternative purification process routes for
the purification of natural spherical graphite in manufacturing of lithium-ion battery
anode material was completed.
The results of the benchmarking cost comparison indicates EcoGraf's purification
process has a lower operating and capital cost per tonne. The results of the study
confirm the efficiency of the Company’s US patented proprietary purification
process and build on the recent outstanding technical results of EcoGraf HFfree™
proprietary, purification achieving ultra-high purity 4N 99.99% carbon (refer ASX
announcements dated 9 April 2024 and 11 July 2024).
99.99%C
4N ULTRA-HIGH
PURITY ACHIEVED
ANNUAL REPORT 2024
ECOGRAF LIMITED
19
ANNUAL REPORT 2024
ECOGRAF LIMITED
Product Qualification Facility (PQF)
The new facility is jointly funded through the Australian Commonwealth Government’s Critical Minerals Development Program,
which is supporting the advancement of Australia’s critical minerals processing capabilities.
The successful commissioning of the PQF was announced on 17 July 2024, with reliability runs and first fills completed.
The commissioning activities included:
• Ensuring ancillary and supporting
systems are in place to establish
operational readiness for the
commercial campaigns;
• Operating procedures and
conducting personnel training;
• Completion of the first continuous
run using unpurified spherical
graphite concentrate.
The PQF now moves to the operational
campaign stage, which will operate
continuously on a 24 hour basis.
Successful completion of the PQF will
serve to validate the EcoGraf HFfree™
purification process for commercial
scale
production,
provide
product
samples for potential customers and
support funding processes.
Additionally,
the
technical
data
generated will be pivotal for the
preparation of engineering inputs into
single stage commercial scale facilities
and subsequent location studies with
prospective lithium-ion battery and
electric vehicle manufacturers in Europe,
North America and Asia.
Product Marketing and Development
The Company is continuing its working relationship with a range of
prospective battery anode and EV/HEV auto OEM customers in North
America, Asia and Europe. The Company continued to evaluate coating
technologies for production of active anode material for cell manufacturing
for lithium-ion batteries and has provided its HFfree proprietary purified
uncoated spherical graphite (SPG) product samples for trial anode
coating programs.
19
ANNUAL REPORT 2024
Review of
Operations
RECYCLE
EcoGraf™ purification
technology applied
to lithium-ion battery
recycling
PRIORITIES
Testwork programs with
feedstocks supplied by EV and
battery manufacturers
Collaboration with battery and
EV market participants
EcoGraf™ Anode Material Recycling
EcoGraf is leveraging its proprietary EcoGraf HFfree™ purification process to
recover and re-use spent anode materials, with an initial focus on production scrap
from anode cell and battery manufacturing.
Testwork with battery manufacturers and electric vehicle OEMs continued with
five product sample evaluations currently underway. The process flowsheet for
the treatment of recycled anode materials utilising EcoGraf’s HFfree™ purification
process is being developed.
During the year, a research program was undertaken in Germany, through a
collaboration between the Helmholtz Institute Freiberg for Resource Technology
(HIF) and the Helmholtz Institute Ulm (HIU). The research used the EcoGraf HFfree™
proprietary processing technology to purify graphite particles and the findings
were positive (refer to ASX announcement dated 27 February 2024).
In February 2024, the Company signed an agreement with BASF to collaborate
on anode recycling to support BASF’s recycling R&D in Europe with its anode
recycling capability to accelerate the objective of enabling a circular economy and
reducing CO2 emissions (refer to ASX announcement dated 21 February 2024).
The Company is developing plans to advance its anode recycling to a piloting
capability and is working with its partners to support this activity.
20
ANNUAL REPORT 2024
ECOGRAF LIMITED
PRODUCTION
SCRAP
BLACK
MASS
PARTNER
PROCESSING
LITHIUM-ION
BATTERY(NEW)
LITHIUM-ION
BATTERY
(END-OF-LIFE)
CLOSED LOOP
RECYCLING
ELECTRIC
VEHICLES
ECOGRAF
BAM
RECYCLING
21
ANNUAL REPORT 2024
ECOGRAF LIMITED
Value Drivers
Project Highlights
• Tanzania is Africa’s third largest
gold producer
• Project located in the world
class +70 Moz gold Lake Victoria
Goldfields1
• Area covers the direct interpreted
northeast continuation of the
Banded Iron Formation (BIF) that
hosts the high-grade Winston gold
deposit-16m @ 55.23g/t gold from
116m2
• AngloGold is one of the world’s
largest gold miners and owner of
Tanzania’s largest gold mine, the
9.9Moz Geita gold mine1
• Several highly prospective
untested gold prospects have
been identified
• EcoGraf holds further gold, nickel
and lithium exploration assets in
Tanzania
• Provides upside exposure to the
rising gold price
Under Construction
Standard Gauge
Railway
Golden Eagle
Epanko – 290.8MT
@ 7.2% TGC
Geita – 9.9Moz Au
A$13.5m
GOLD 5-YEAR
FARM-IN AGREEMENT
1 https://www.anglogoldashanti.com/portfolio/Africa/geita/
23 Refer Tanga Resources Limited ASX announcement 17 July 2017
GOLD PROJECTS
AngloGold Ashanti Gold
Farm-in Agreement
As announced on 23 May 2024,
AngloGold Ashanti (AngloGold) signed
a 5-year farm-in agreement for the
exploration of gold at EcoGraf’s wholly
owned Golden Eagle gold project
(the Golden Eagle Project) in the
Lake Victoria Goldfields of Tanzania.
The project is located on the eastern
margin of the world class +70 Moz
gold Archean Lake Victoria Goldfields,
which is in the same structural corridor
as the historical 3.4 Moz Golden Pride
gold mine operated by Resolute
Mining Limited.
Under the Agreement, AngloGold has
the right to earn 70% of the Golden
Eagle Project by spending US$8.9m
(approx. A$13.4m) over five years on
the licences, with EcoGraf retaining
30%.
22
ANNUAL REPORT 2024
SUSTAINABILITY
EcoGraf is committed to establishing
strong sustainability foundations and
credentials throughout its operations,
supported by a robust governance
system. We are contributing to the
global transition toward a cleaner
environment through our vertically
integrated battery anode materials
business which will produce high purity
graphite products for the lithium-ion
battery and advanced manufacturing
markets.
We recognise that environmental
and social risks exist in our role as a
clean energy technology contributor
and that we have a responsibility to
identify, prevent and mitigate as far as
is practicable, and to measure the risks
of our operations to the environment
and
people.
Through
our
risk
assessment processes, we balance
economic, environmental and social
considerations so that resources are
managed equitably and responsibly.
Integrity, respect and accountability
underpin the Company’s commitment
to sustainability. Demonstrating these
principles throughout the Company’s
operations from graphite extraction,
processing, purification and recycling
is essential for establishing and
maintaining a licence to operate.
Supporting Policies
• Code of Conduct
• Environment Policy
• Communities Policy
• Human Rights Policy
• Health and Safety Policy
• Responsible Procurement Policy
• Respect host communities, their culture and heritage
• Conduct operations in accordance with the International Bill of Human Rights
• Ensure the health and safety of our stakeholders
• Collaborate with host communities
• Establish culturally appropriate grievance mechanisms
• Deliver effective environmental stewardship throughout our operations
• Ensure responsible management of energy and emissions, water, waste,
tailings, biodiversity and land
• Implement climate adaptation and resilience planning once operational
• Identify, prevent, mitigate and measure impacts on the planet and people
• Achieve environmental and social best practices through continual improvement
• Implement appropriate environmental and social management systems
• Establish and maintain strong governance systems
• Comply with laws and regulations
INTEGRITY AND RESPECT FOR
THE PLANET AND PEOPLE
ACCOUNTABILITY
FOR OUR ACTIONS
Our Sustainability Framework
Review of
Operations
23
ANNUAL REPORT 2024
ECOGRAF LIMITED
ECOGRAF LIMITED
23
ANNUAL REPORT 2024
AngloGold Ashanti US$9.0m
(A$13.5m) Gold Farm-in
Agreement.
The PreIWD event was attended by high-level dignitaries
which included GoT Parliament, Ministry of Minerals,
Mining Commission and Industry leaders.
EcoGraf HFfree™ Proprietary Purification Achieves 4N
99.99% Carbon for producing active anode material for
lithium-ion battery and electric vehicle manufacturers.
Epanko Pre-Development Field
Programs, confirms increase in the
Mineral Resource estimate.
KfW IPEX-Bank Mandated for UFK
Loan of up to US$105m attended
Epanko site.
EcoGraf to support BASF’s
recycling R&D in Europe with its
anode recycling capability.
Epanko layout design completed
for the 73,000tpa Graphite
Processing Plant, Tailings Storage
Facility and Water Storage Facility.
EcoGraf attended Africa Down
Under conference and met with
Hon. Anthony Mavunde, Tanzania's
Minister of Minerals.
Product Qualification Facility
Successfully Commissioned ready
for operational campaign stage.
EcoGraf Australia-Korea Critical
Minerals
Roundtable
following
the successful AKBC-KABC 45th
annual joint meeting.
ACTIVITIES AND HIGHLIGHTS 2023-24
EcoGraf attended and featured at
Mining Indaba represented by our
Tanzanian team.
NOV
JUN
JUL
FEB
AUG
SEP
SEP
MAY
MAR
APR
FEB
24
ANNUAL REPORT 2024
ECOGRAF LIMITED
Directors’
Report
Board of Directors
Robert Pett Independent Non-Executive Director and Chairman
Robert Pett is a minerals economist with over 30 years’ experience working in exploration and
mining. During this time, he has worked internationally in the resources sector at senior levels
both in Australia and Africa. He has been involved with listed companies at all levels, from grass-
roots exploration through to mine development, production and financing of more than ten mining
projects globally including East and West Africa and the construction of the Golden Pride Gold Mine
in Tanzania.
He was founding Chairman of Resolute Mining Limited (gold mines and exploration in Africa and
Australia), Sapphire Mines Limited (gemstone mining and exploration), Reliance Mining Limited
(nickel mining in Kambalda), Senex Energy Limited (petroleum production and exploration) and
director of several other mining and exploration companies operating in Africa, Asia and Australia in
gold, base metals, petroleum and uranium.
Robert also had an active involvement in education and community activities including over 10
years’ service to Murdoch University Western Australia as Senator and Chairman of their Resources
(Finance) Committee.
Appointment date:
9 November 2015
Special responsibilities:
Chairman of the Board
Member of the Audit and Risk Committee
Member of the Nomination and Remuneration
Committee
Other current ASX listed directorships:
None
Former ASX listed directorships in last 3 years:
None
Andrew Spinks Managing Director
Andrew Spinks is a geologist with over 25 years’ professional experience in Australia, Asia and
Africa on a range of commodities including speciality and industrial minerals.
Andrew has worked in a range of diverse roles across exploration through to successful project
developments and has held a number of board positions on both ASX and TSX.V listed companies.
Andrew was co-founder of TanzGraphite Pty Ltd and has been a director of EcoGraf since its
acquisition.
Appointment date:
20 July 2012, appointed Managing Director on
22 April 2015
Special responsibilities:
None
Other current ASX listed directorships:
None
Former ASX listed directorships in last 3 years:
None
John Conidi Independent Non-Executive Director
John Conidi is a Certified Practicing Accountant. He has over 20 years’ experience developing,
acquiring and managing businesses in the technology and healthcare sectors. In his role as
Managing Director of Capitol Health Limited, he drove its sustained expansion, increasing its
market capitalisation significantly.
John has extensive interests in the graphite sector. He is an experienced investor specialising in
technology and resources and is the Chairman of 333D Limited.
25
ANNUAL REPORT 2024
ECOGRAF LIMITED
Appointment date:
4 May 2015
Special responsibilities:
Chairman of the Audit and Risk Committee
Member of the Nomination and Remuneration
Committee
Other current ASX listed directorships:
333D Limited, appointed 25 March 2015
Former ASX listed directorships in last 3 years:
None
Keith Jones Independent Non-Executive Director
Keith Jones is a Chartered Accountant with 40 years' experience in the financial markets and
resource industry in Australia.
He has worked across all levels in the corporate arena and acted as expert and advisor for
numerous resource companies in roles encompassing project analysis, valuation, transaction
advisory and governance.
Keith is the former Chairman of Deloitte Australia, current Chairman of ASX listed Coda Minerals
Limited and former Board member of Gindalbie Metals Limited and Ora Banda Mining Limited.
Appointment date:
23 May 2023
Special responsibilities:
Chairman of the Nomination and Remuneration
Committee
Member of the Audit and Risk Committee
Other current ASX listed directorships:
Coda Minerals Limited, appointed 26 April
2018
Former ASX listed directorships in last 3 years:
Ora Banda Limited, April 2019 – September
2022
Howard Rae Chief Financial Officer and Joint Company Secretary
Howard Rae is a Chartered Accountant with over 20 years’ experience in acquiring, developing,
financing and operating a range of businesses in Australia, Canada, Asia, Africa and Europe.
His career includes Chief Financial Officer roles with a number of successful ASX listed companies
active internationally in the precious and base metals, steel-making materials and industrial
minerals sectors, together with directorships of several unlisted and not-for-profit organisations.
During this time, he’s been responsible for new business development, joint ventures, structuring
and negotiating corporate, project and infrastructure funding transactions, sales and marketing,
risk management and implementing business improvement programs.
Shannon Coates Joint Company Secretary
Shannon Coates has over 25 years’ experience in corporate law and compliance. She is currently
Managing Director of Source Governance, a national company secretarial and governance service
provider, and has provided company secretarial and corporate advisory services to boards and
various committees across a variety of industries, including oil & gas, resources, manufacturing and
technology. She is a qualified lawyer, Chartered Secretary and graduate of the AICD’s Company
Directors course.
26
ANNUAL REPORT 2024
ECOGRAF LIMITED
Directors’ Meetings
The number of meetings of the Company’s Board and of each Board committee held during the year ended 30 June 2024, and
the number of meetings attended by each director were:
Director
Board of
Directors
Audit and Risk
Committee
Nomination and
Remuneration Committee
Number
eligible
to attend
Number
attended
Number
eligible
to attend
Number
attended
Number
eligible
to attend
Number
attended
Robert Pett
4
4
4
4
3
3
Andrew Spinks
4
4
-
-
-
-
John Conidi
4
4
4
4
3
3
Keith Jones
4
4
4
4
3
3
Operating and Financial Review
The information reported in this operating and financial review should be read in conjunction with the review of operations on
pages 6 to 23.
Principal Activities
EcoGraf is building a diversified battery anode material business to produce high purity graphite products for the lithium-ion
battery and advanced manufacturing markets. Over US$30 million has been invested to date to create a highly attractive
graphite mining and downstream business which include development plans for:
• The Epanko Graphite Mine in Tanzania;
• A Mechanical Shaping Facility in Tanzania; and
• EcoGraf HFfree™ Purification Facilities located in key global battery markets.
Operating Results and Financial Position
The loss after income tax incurred by the consolidated entity for the year ended 30 June 2024 was $5,705,000 (2023: loss
$7,299,000). This loss is largely attributable to downstream processing activities, net of research and development tax credits,
government grant and interest received.
The consolidated entity continued to undertake exploration and development activities at the Epanko Graphite Project, resulting
in the value of the exploration and evaluation assets increasing to $29,292,000 (2023: $22,975,000).
At 30 June 2024, net assets of the consolidated entity were $50,810,000 (2023: $58,896,000) with cash reserves of
$25,459,000 (2023: $38,606,000) and no debt.
Dividends
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a dividend to
the date of this report (2023: Nil).
Material Business Risks
The Company continually assesses and manages various business risks that could have a material impact on its operating and
financial performance. The following table summarises key areas of material business risk to which the Company is exposed
and the related mitigation strategies that it has adopted.
Directors’
Report
27
ANNUAL REPORT 2024
ECOGRAF LIMITED
Risks
Mitigation strategies
Market risk
The risk that changes in demand,
pricing and technology could
adversely impact the volume and
pricing for the Company’s natural
flake, battery anode material and
recycled battery anode products.
The Company evaluates each product market relevant to its planned project
developments, including commissioning independent market reviews and long-term
forecasts. This information is regularly updated and informs the Company’s product
development and placement strategies.
Development plans are based on securing long-term offtake agreements with
geographically diversified, tier 1 counterparties, underpinned by broader cooperation
on commercial and technical arrangements that build strong, long-term relationships
to maximise volume and pricing outcomes.
EcoGraf also engages in extensive research and development to refine its processing
technologies and develop new products. This work is conducted with leading research
organisations that have the expertise to assist the Company continually improve
product performance and production technologies to sustain value-in-use relative to
competing products.
Funding risk
The risk of delay and loss
of shareholder value due to
insufficient debt and equity
funding for the Company’s
business activities and
development plans.
The Company conducts robust business planning and has a reporting framework to
manage expenditures, which includes Board approval and oversight of the annual plan
and budget, together with an Audit and Risk Committee to monitor internal control,
reporting, external audit and risk management programs.
As part of assessing the feasibility of its project developments, the Company prepares
detailed financial models and determines its preferred mix of debt and equity funding
to support a final investment decision based on forecast project cash flows.
The process of securing debt capital is managed by EcoGraf personnel experienced
in corporate and project financing, with support from external financial advisors and
specialist consultants, who provide advice and transaction guidance to assist the
Company evaluate and progress various funding options.
During the year, the Company progressed the Epanko debt financing program,
whereby subsequent to 30 June 2024, the Company received notification regarding
the Preliminary Review of the German Government Inter-Ministerial Committee (IMC)
relating to import cover for the proposed loan of up to US$105 million.
The Company has also received 90% of the Australian Federal Government grant
under the Critical Mineral Development Program to complete the Product Qualification
Facility.
Environmental, social and governance risk
The risk of financial and
reputational loss, resulting
from business interruption,
delay, additional cost and
stakeholder action due to adverse
environmental, social and
governance incidents.
The Company maintains a strong commitment to high standards of environmental,
social and governance practice. In Tanzania it works closely with local communities and
the Government to ensure responsible development and has received independent
confirmation that its Epanko environmental and social planning meets the International
Finance Corporation Performance Standards and the World Bank Group Environmental,
Health and Safety Guidelines.
28
ANNUAL REPORT 2024
ECOGRAF LIMITED
Risks
Mitigation strategies
EcoGraf is currently completing additional Epanko environmental and resettlement
activities in compliance with Equator Principles 4 as part of its pre-development
program. The Resettlement Action Plan includes new and improved housing, upgraded
road infrastructure, a new school, medical dispensary and church, related community
infrastructure and assistance with the establishment of sustainable micro-enterprises
among village family groups. These programs are conducted with support from
leading Tanzanian and international environmental and social planning consultants,
together with independent review from consultants appointed by international financial
institutions engaged for the purposes of obtaining project finance.
Duma TanzGraphite Limited, in which the Government of Tanzania has a 16%
shareholding, actively engages with the community surrounding Epanko to support
health and social initiatives, whilst its employment, training and procurement programs
prioritize Tanzanian residents and service providers.
EcoGraf complies with its comprehensive Corporate Governance Plan and annually
releases a Corporate Governance Statement on its compliance with ASX Corporate
Governance Principles. Matters of corporate governance, code of conduct and
related policy implementation are a standing item at each Board meeting. The
Company’s Board and Board Committees are comprised of a majority of independent
non-executive directors, who regularly review the effectiveness of the Company’s
governance systems to protect the interests of shareholders and other stakeholders
as its business activities and external operating environment evolve over time.
Operating risk
The risk of accident, error or failure
in mining, processing, mechanical
shaping and purification activities
leading to potential health
and safety incidents, reduced
production levels and additional
costs, impacting personnel welfare
and financial performance.
EcoGraf undertakes comprehensive feasibility study and planning programs, using the
expertise of recognised specialists in various technical disciplines, prior to making a
decision to proceed with a project development.
At Epanko, following completion of the feasibility study, the Company has engaged
consultants to assist with project execution and operational readiness planning. During
the year, METC Engineering and Construction (METC) was appointed and commenced
the Front-End Engineering Design (FEED) study to advance the design of the Project,
which includes engineering designs , the baseline schedule and the control budget.
The EPCM approach has been selected for project delivery, which enables the
Company’s owner’s team to benefit from external expertise whilst retaining control
of the construction program and developing the internal systems and capabilities to
assist with commissioning and operation.
Operational readiness planning is focused on the development of operating
procedures, the selection of systems and the recruitment and training of skilled
personnel necessary to safely and successfully execute the operational phase at
Epanko.
Downstream purification to produce battery anode material was initially commenced
at benchtop scale with extensive research and development, prior to progressing to
small pilot scale, with input from leading Australian Government research organisations
and German graphite expertise. Scale-up risk is being mitigated through a Product
Qualification Facility which is jointly funded via a grant awarded to EcoGraf under the
Australian Federal Government’s Critical Minerals Development Program. The new
facility will enable testing at higher capacities to de-risk commercial phase planning
and to support product qualification programs and offtake discussions with prospective
anode, battery and electric vehicle manufacturers in Europe, North America and Asia.
Directors’
Report
29
ANNUAL REPORT 2024
ECOGRAF LIMITED
Risks
Mitigation strategies
Country risk
The risk of changes in political,
regulatory, economic and social
conditions that could adversely
impact the Company’s operating
activities.
EcoGraf is advancing towards development of new graphite mining operations in
Tanzania and is also evaluating the development of downstream purification facilities
for key global battery markets.
Tanzania has a long history of political and social stability, which has supported the
development of an active exploration and mining sector. However, in July 2017 a
range of changes were made to its mining legislation that have caused the Company
significant delay in commencing construction of Epanko due to regulatory uncertainty
and restrictions that impacted on its international project financing arrangements.
Following the appointment of current President Samia Suluhu Hassan in March 2021
Tanzania has revitalised its efforts to attract foreign investment in the mineral sector.
Epanko is owned by an incorporated joint venture, Duma TanzGraphite Limited, which
was formed under a Framework Agreement with the Government of Tanzania who
holds 16% in the joint venture. This aligns the interests of each party and provides
greater certainty for project financiers.
EcoGraf’s downstream purification operations are planned to be located in stable
jurisdictions that are actively expanding their critical mineral processing industries to
support the lithium-ion battery market. The Company is in discussions with prospective
partners who can co-develop these new facilities and provide additional operating and
technical expertise in each new market region to manage development risk. EcoGraf
has benefited from strong Australian Government support through Austrade, Export
Finance Australia and other foreign Government embassies, trade and investment
groups that are working to facilitate the establishment of new, more sustainable critical
mineral supply chains to support the global transition to clean energy.
Significant Changes in State of Affairs
Significant changes in the state of affairs of the consolidated entity during the year (if any) are contained in the review of
operations and financial statement sections of this report.
Significant Events After the Balance Date
No matters or circumstances have arisen since 30 June 2024 that have significantly affected or may significantly affect:
• the consolidated entity’s operations in future financial years;
• the results of those operations in future financial years; or
• the consolidated entity’s state of affairs in future financial years.
Future Developments, Prospects and Business Strategies
Likely future developments in the activities of the Company are referred to in the review of operations section of this report.
Environmental Issues
The Company’s operations are subject to environmental regulation under the laws of the Commonwealth of Australia and
Republic of Tanzania. The directors believe that the Company has adequate systems in place for environmental management
and are not aware of any breach of environmental requirements as they apply to the Company.
30
ANNUAL REPORT 2024
ECOGRAF LIMITED
Proceedings on Behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purposes of taking responsibility on
behalf of the Company for all or part of those proceedings.
Indemnifying Directors and Officers
The Company has entered into an agreement to indemnify all directors and officers against any liability arising from a claim
brought by a third party against the Company. The Company has paid premiums to insure each director and officer against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting
in the capacity of director and officer of the Company, other than as a result of conduct involving a willful breach of duty in
relation to the Company. The agreement contains a prohibition on disclosure of the amount of the premium and the nature of
the liabilities under the policy.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, RSM Australia Partners, as part of the
terms of its audit engagement agreement, against claims by third parties arising from the audit (for an unspecified amount). No
payments have been made to indemnify RSM Australia Partners to the date of this report.
Non-Audit Services
The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The directors ensure that:
• non-audit services are reviewed and approved to ensure that the provision of such services does not adversely affect the
integrity and objectivity of the auditor, and
• audit services do not compromise the general principles relating to auditor independence in accordance with APES 110:
Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.
The total remuneration for audit and non-audit services provided during the prior and current financial years is set out in note
20 of the consolidated financial statements.
Auditor’s Independence Declaration
The auditor’s independence declaration as required under section 307C of the Corporations Act 2001, is set-out on page 40
of this report.
Rounding
The amounts contained in this report and in the consolidated financial statements have been rounded to the nearest $1,000
(unless otherwise stated) under the option available to the Company under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191. The Company is an entity to which the legislative instrument applies.
Corporate Governance
The directors of EcoGraf are responsible for the corporate governance of the Company and have applied ASX Corporate
Governance Principles in a manner that is appropriate to the Company’s circumstances.
The Company’s corporate governance statement is available on the Company’s website at www.ecograf.com.au.
Directors’
Report
31
ANNUAL REPORT 2024
ECOGRAF LIMITED
Remuneration Report (Audited)
1.
INTRODUCTION
The following sections provide details of the remuneration paid to key management personnel by the Company and its
controlled entities for the year ended 30 June 2024. It forms part of the directors’ report and has been audited in accordance
with section 308C of the Corporations Act 2001.
Key management personnel (KMP) are those persons who, directly or indirectly, have authority and responsibility for planning,
directing and controlling the major activities of the consolidated entity and include:
Key management personnel
Position
Tenure during the year
Non-executive directors
Robert Pett
Non-Executive Chair
Full financial year
John Conidi
Non-Executive Director
Full financial year
Keith Jones
Non-Executive Director
Full financial year
Executives
Andrew Spinks
Managing Director
Full financial year
Howard Rae
Chief Financial Officer & Joint Company Secretary
Full financial year
Dale Harris
Chief Operating Officer
1 July 2023 –
10 November 2023
2.
REMUNERATION GOVERNANCE FRAMEWORK
The remuneration structure adopted by the Company has been designed to promote alignment between the objectives and
interests of shareholders, directors and executives. Accordingly, as the Company’s key projects have not yet reached the
operational phase, a greater emphasis is placed on rewarding performance through equity in the Company which preserves
cash resources and is linked to the creation of shareholder value.
2.1
Remuneration principles
Key principles that guide decisions about remuneration are:
• Fairness: provide a fair level of reward to all employees;
• Transparency: establish transparent links between reward outcomes and performance;
• Alignment: promote mutually beneficial outcomes by aligning employee, customer and shareholder interests; and
• Culture: drive leadership performance and behaviours that promote safety, diversity and employee engagement.
2.2 Remuneration governance
The Company has established a Nomination and Remuneration Committee comprised only of its three non-executive
directors, with Mr Keith Jones as its chairperson. The Nomination and Remuneration Committee operates under an approved
Charter, a copy of which is contained in the Corporate Governance Plan available on the Company’s website.
The Company also engages external consultants to periodically review its remuneration arrangements to ensure they remain
effective and appropriate for the nature of its business activities and align with the interests of shareholders and current
market practices adopted by similar organisations.
2.3 Use of remuneration consultants
As noted above, periodically the directors may seek independent external advice on the appropriateness of KMP remuneration
arrangements. During the year ended 30 June 2024, the Board engaged The Reward Practice Pty Ltd to undertake a review
of remuneration arrangements. No remuneration recommendations, as defined by the Corporations Act, were provided during
the year ended 30 June 2024.
32
ANNUAL REPORT 2024
ECOGRAF LIMITED
3.
EXECUTIVE REMUNERATION ARRANGEMENTS
A combination of fixed and variable reward is provided to executives, based on their responsibility within the Company in
relation to the achievement of its strategic objectives and capacity to contribute to the creation of shareholder value.
The components of executive KMP remuneration consist of fixed remuneration and variable equity-based short and long-
term incentive arrangements. The following table presents a summary of remuneration components for executive KMP for
the year ended 30 June 2024.
Fixed remuneration
Equity-based, variable / at risk remuneration
Purpose
Provide fair remuneration
to recognise executive
responsibilities and impact on
the business.
Assist the attraction, retention and incentivisation of executives in
a cash efficient manner and
enable the Company to develop its graphite businesses and grow
long-term shareholder value.
How the
remuneration
is delivered
and assessed?
Cash
Remuneration level is reviewed
annually by the Board and
may be adjusted based on the
practices adopted by similar
companies and changes in
responsibilities and scope
STI
Equity-based
Awarded annually based on
performance against KPIs. See
3.1 for further details.
LTI
Equity-based
Securities may be granted
to executives which will vest
based on achievement of
the Company’s long-term
objectives.
3.1
Equity-based incentive arrangements
On 27 November 2023 shareholders approved the adoption of the Company’s Securities Plan, replacing the Incentive
Performance Rights Plan. The EcoGraf Securities Plan incorporates regulatory changes related to the employee share
scheme (ESS) regime under the Corporations Act, and is designed to assist recruit, retain and incentivise key personnel who
have the necessary skills and experience to enable the Company to effectively develop its graphite businesses and to grow
shareholder value.
The Company is at a critical stage in its growth as it advances its key natural flake graphite and battery anode material
projects to development and operations. The international graphite industry is also evolving rapidly to support the demand
for lithium-ion batteries in electric vehicles and the retention of specialised skills is essential to the Company’s future success.
To achieve this outcome, the Company believes that incentivising and rewarding performance and the achievement of its
key objectives through non-cash equity arrangements is the most effective remuneration structure because it preserves the
Company’s cash resources and aligns the interests of personnel with those of all shareholders.
Short-term incentive (STI)
The STI arrangements involve the offer of an equity-based award to eligible personnel for the achievement of key objectives
each year, with the determination of the amount (if any) made after the end of the year. To preserve the Company’s cash
resources, any award of STI is settled by the issue of the Company’s securities.
Performance is assessed against a set of agreed key performance indicators (KPIs) using a balanced scorecard of corporate
and individual targets. The Company sets pre-determined threshold, target and stretch objectives for each of the KPIs and the
STI opportunity is based on a percentage of fixed annual remuneration that’s determined on the basis of external advice and
prevailing practices adopted by similar companies.
The entitlement to any STI is subject to the directors’ right to impose a gateway modifier relating to safety, environmental, social
and governance performance.
Directors’
Report
33
ANNUAL REPORT 2024
ECOGRAF LIMITED
Long-term incentive (LTI)
The LTI incentive arrangements involve the offer of equity-based awards in the form of the Company’s securities, to eligible
participants which are subject to pre-determined performance conditions that are required to be achieved prior to vesting,
using a target rolling performance period of 3-5 years. The performance conditions are set to promote achievement of the
Company’s strategic objectives relating to development of the Epanko Graphite Project and the EcoGraf HFfree™ battery anode
materials business.
The number of securities offered to an individual is based on external advice, the prevailing practices adopted by similar
companies and the potential for the individual, through their position, skills and experience, to create long-term shareholder
value.
4.
EXECUTIVE REMUNERATION OUTCOMES
4.1
Financial performance
The table below sets out information about the Company’s results and movements in shareholder value for the past five years
up to and including the current financial year. The historic numbers have not been assessed and adjusted for the impact of the
new accounting standards.
30 June
2024
30 June
2023
30 June
2022
30 June
2021
30 June
2020
Net loss after tax ($’000)
(5,705)
(7,299)
(7,505)
(5,514)
(2,769)
Share price at end of year ($)
0.12
0.14
0.25
0.57
0.07
Basic loss per share (cents)
(1.25)
(1.62)
(1.67)
(1.40)
(0.91)
4.2 Realised executive remuneration
The following table discloses the total realised cash and non-cash remuneration of executive KMP, comprising fixed annual
remuneration, other amounts received and the value of equity-based incentives which vested during the reporting period,
calculated based on the Company's closing share price on the applicable vesting date. This disclosure is voluntary and aims to
provide shareholders with additional information for evaluating the effective value of executive KMP remuneration. This table
differs from the statutory remuneration tables in section 7 which are prepared in accordance with the Corporations Act 2001
and Australian Accounting Standards.
Executives
Fixed annual
remuneration,
inclusive of
superannuation
$
Other amounts
received1
$
Vested
equity-based
incentives2
$
Total
$
2024
Andrew Spinks
440,000
-
52,274
492,274
Howard Rae
430,000
-
61,592
491,592
Dale Harris1
142,423
25,676
-
168,099
TOTAL
1,012,423
25,676
113,866
1,151,965
2023
Andrew Spinks
355,875
-
36,141
392,016
Howard Rae
400,000
-
35,770
435,770
Dale Harris
448,214
-
-
448,214
TOTAL
1,204,089
-
71,911
1,276,000
13 D Harris resigned on 10 November 2023 and received an adjusted cash payment in lieu of his STI entitlement.
23 STI performance rights granted and vested in the relevant financial year.
34
ANNUAL REPORT 2024
ECOGRAF LIMITED
4.3 Equity-based variable/at risk remuneration outcomes
For the year ended 30 June 2024
Executive KMP performance was assessed against a combination of corporate and personal KPIs as follows:
Corporate KPIs
Weight1
Assessment measures
Operational
• Project development – Epanko
• Project development – BAM and recycling
10%
10%
Delivery of outcomes vs business plan
Financial
• Financial management
• Corporate and project funding
10%
10%
Delivery of outcomes vs budget
Epanko financing progress
ESG
• Safety
• Community
• Sustainability
10%
5%
5%
High potential incidents
Social licence and RAP progress
Sustainability strategy and diversity
1 +/- 25% for threshold or stretch outcomes.
Personal KPIs comprised a mix of behavioural and functional assessments with a 40% weighting for target performance,
modified +/- 25% for threshold or stretch outcomes.
As the determination of any STI is conducted after the end of the financial year, an estimate of the share-based payment
expense relating to the STI arrangements has been recognised in the financial statements and is included in the statutory
remuneration tables in section 7.
For the year ended 30 June 2023
In the prior financial year the measurement of short-term performance of executive KMP was determined through the
achievement of outcomes across four key business areas as outlined in the following table:
KPI category and weighting
Weight
KPI areas of assessment
Business development
30%
Effective advancement of the Company’s graphite businesses
towards construction and operations, including completion
of studies, early works programs, entering into contractual
arrangements with constructors, operators, suppliers and
customers, securing support from financiers and obtaining
positive Government cooperation.
Financial management
20%
Delivery against annual financial budgets, including effective
cost control whilst achieving business objectives, accessing
working capital on a timely and cost-effective basis and
protecting the Company from financial loss.
Organisational development
20%
Building organisational capacity and resilience, through
effective human resource management, establishing
appropriate operating structures to support planned expansion,
developing a positive corporate reputation with stakeholders
and overcoming adverse external impacts on the business.
Innovation and continuous improvement
30%
Driving on-going progress in process and product
development, leveraging partnerships with Government and
commercial organisations to explore new technologies and
markets that will add value and identifying opportunities to
continuously enhance and grow the business.
35
ANNUAL REPORT 2024
ECOGRAF LIMITED
As a result of the assessment process, STI performance rights were awarded to executive KMP as follows:
Executives
Potential STI
% of Fixed
Annual
Remuneration
(FAR)
Performance
score
STI award
value
Number of
performance
rights
Grant date
Expiry date
Fair
value per
Performance
Right at
grant date
Andrew Spinks
40% of FAR
70%
$99,645
360,510
19 Jan 2024
19 Jan 2029
$0.145
Howard Rae
40% of FAR
76%
$121,600
439,942
23 Oct 2023
15 Nov 2028
$0.140
A total of 3,779,375 performance rights were issued to executive KMP under LTI arrangements during the year ended 30 June
2024, the terms and conditions of which are set-out below:
Grant date
Expiry date
Vesting milestones
Fair value per
Performance Right
at grant date
22 Dec 2023
22 Dec 2028
30% of Performance Rights vest upon achieving the
20-day VWAP of the Company’s Shares being equal to or
greater than $0.30
$0.118
30% of Performance Rights vest upon achieving the
20-day VWAP of the Company’s Shares being equal to or
greater than $0.40
$0.111
20% of the Performance Rights vest upon production
of battery anode material from the product qualification
facility
$0.135
20% of the Performance Rights vest upon the
commencement of construction of the Company’s:
(a) Epanko Graphite Project; or
(b) commercial scale Battery Anode Material Facility
$0.135
19 Jan 2024
19 Jan 2029
30% of Performance Rights vest upon achieving the
20-day VWAP of the Company’s Shares being equal to or
greater than $0.30
$0.126
30% of Performance Rights vest upon achieving the
20-day VWAP of the Company’s Shares being equal to or
greater than $0.40
$0.118
20% of the Performance Rights vest upon production
of battery anode material from the product qualification
facility
$0.145
20% of the Performance Rights vest upon the
commencement of construction of the Company’s:
(a) Epanko Graphite Project; or
(b) commercial scale Battery Anode Material Facility
$0.145
Section 8.2 contains further details of the performance rights granted to KMP during the year. The fair value of the performance
rights at grant date is independently determined using an option pricing model.
36
ANNUAL REPORT 2024
ECOGRAF LIMITED
5.
EXECUTIVE EMPLOYMENT AGREEMENTS
The remuneration and other conditions of employment of executives are formalised in employment contracts that specify
duties and obligations to be fulfilled and provide for an annual review of remuneration. Executive KMP termination notice
periods and payment provisions are as follows:
Resignation
Termination
for cause
Termination in case of death, disablement,
redundancy or notice without cause
Termination
payment
Andrew Spinks
6 months
None
1 month
3 months
Howard Rae
3 months
1 month
3 months
3 months
6.
NON-EXECUTIVE DIRECTOR REMUNERATION
6.1
Fees
Non-executive director fees are set to attract and retain persons with the experience and skills necessary to oversee the
Company’s business activities and to guide its growth and development into a successful mining and mineral processing
company.
The current fee is $110,000 per annum (inclusive of superannuation) for the role of Chairperson and $90,000 per annum
(inclusive of superannuation, where applicable) for other non-executive directors. Non-executive directors may be paid
additional amounts for special duties or exertions (consultancy services outside of director’s duties) and are entitled to be
reimbursed for reasonable out-of-pocket expenses incurred in the course of their duties.
6.2 Maximum aggregate amount
Total fees payable to all non-executive directors, excluding amounts for special exertion or the reimbursement of reasonable
business expenditures, must not exceed $600,000 per annum, in accordance with the approval provided by shareholders on
27 November 2023.
6.3 Equity grants to non-executive directors
From time to time, the Board may approve the grant of equity to non-executive directors, reflecting the higher risks associated
with the pre-production stage of the Company’s activities and the need to attract and retain specialist director skills and
experience to guide it through project implementation and into successful operations. There were no securities issued to the
directors during the year ended 30 June 2024 (2023: 1,000,000).
37
ANNUAL REPORT 2024
ECOGRAF LIMITED
7.
STATUTORY REMUNERATION DISCLOSURES
Details of the remuneration of the key management personnel of the consolidated entity are set out in the following table.
2024
Short-term benefits
Long-term benefits
Share-based
payments2
Total
$
Linked
to
equity
%
Salary/
Fees
$
Other
payments1
$
Annual
leave
$
Super-
annuation
$
Long
Service
Leave
$
FY23
STI
$
FY24
STI3
$
LTI4
$
Non-executive directors
Robert Pett
99,062
-
-
10,938
-
-
-
25,927
135,927
19%
John Conidi
90,000
-
-
-
-
-
-
25,927
115,927
22%
Keith Jones
81,051
-
-
8,949
-
-
-
-
90,000
-
Executives
Andrew Spinks
412,500
-
17,307
27,500
9,778
52,274
118,451
127,242
765,052
39%
Howard Rae
402,500
-
5,085
27,500
7,344
61,592
121,620
294,054
919,695
52%
Dale Harris1
131,070
25,676
5,915
11,353
(617)
-
-
(54,123)
119,274
-
Total
1,216,183
25,676
28,307
86,240
16,505
113,866
240,071
419,027
2,145,875
36%
1.3 D Harris resigned on 10 November 2023 and received an adjusted cash payment in lieu of his STI entitlement.
2.3 Includes the non-cash value of performance right and loan share equity remuneration arrangements during the financial year under AASB2 Share-based
payments.
3.3 As the STI determination is conducted after the end of the financial year, the share-based payments above include an estimate of the expense relating to the STI
arrangements for the year ended 30 June 2024.
4.3 LTI share-based payment expenses include the following:
a) Unvested performance rights that are subject to the achievement of certain performance conditions linked to the Company's key strategic objectives. Under
AASB2 Share-based payments, the fair value of performance rights is determined at grant date and is recognised as an expense over the estimated vesting
period, based on when the vesting conditions are expected to be met. As a result, the LTI amounts reported include $123,871 for unvested performance rights
granted in the previous year and $139,056 for unvested performance rights granted in the current year.
b) Extension of the repayment date of non-cash loans relating to shares previously issued under the Company's Share Plan. As the share price on the loan
repayment date was less than the issue price, the Company has elected to extend the repayment date to avoid losing the benefit of the full cash repayment,
resulting in a share-based payment expense of $156,100 being recognised during the current year. Shares issued under the Share Plan via non-cash loans
are subject to a holding-lock until the loan is repaid.
Details of the total realised cash and non-cash remuneration of executive KMP is set-out in section 4.2 of this Remuneration Report.
2023
Short-term benefits
Long-term benefits
Share-based payments3
Total
$
Linked
to
equity
%
Salary/
Fees
$
Other
payments
$
Annual
leave
$
Super-
annuation
$
Long
Service
Leave
$
FY22
STI
$
LTI
$
Non-executive directors
Robert Pett
99,322
-
-
10,678
-
-
12,963
122,963
11%
John Conidi
80,000
-
-
-
-
-
12,963
92,963
14%
Keith Jones1
8,465
-
-
931
-
-
-
9,396
-
Executives
Andrew Spinks
328,375
-
13,098
27,500
2,747
36,141
150,314
558,175
33%
Howard Rae
373,000
-
4,956
27,000
4,078
35,770
160,689
605,493
32%
Dale Harris2
423,022
-
(5,915)
25,192
617
-
53,883
496,799
11%
Total
1,312,184
-
12,139
91,301
7,442
71,911
390,812
1,885,789
25%
1.3 K Jones was appointed 23 May 2023.
2.3 D Harris was appointed 4 July 2022.
3.3 Includes the non-cash value of performance right and loan share equity remuneration arrangements during the financial year under AASB2 Share-based
payments.
38
ANNUAL REPORT 2024
ECOGRAF LIMITED
8.
ADDITIONAL DISCLOSURES RELATING TO SHARES AND PERFORMANCE RIGHTS
8.1
Number of shares
Balance at
1 July 2023
Movement
during the year
Balance at
30 June 2024
Non-executives
Robert Pett
3,454,615
-
3,454,615
John Conidi
3,019,402
-
3,019,402
Keith Jones
85,000
-
85,000
Executives
Andrew Spinks
11,998,822 1
-
11,998,822 1
Howard Rae
3,150,000 2
2,698,360 4
5,848,360 2
Dale Harris3
-
-
-
Total
21,707,839
2,698,360
24,406,199
1.3 Includes 2,000,000 shares issued under the former employee share plan.
2.3 Includes 3,000,000 shares issued under the former employee share plan.
3. D Harris resigned 10 November 2023.
4. Issue of shares as a result of performance rights exercised.
8.2 Number of performance rights
Balance at 1 July
2023
Granted2
Exercised
Lapsed
Balance at 30 June
2024
STI
LTI
STI
LTI
STI
LTI
LTI
STI
LTI
Non-executives
Robert Pett
-
1,750,000
-
-
-
-
-
-
1,750,000
John Conidi
-
1,750,000
-
-
-
-
-
-
1,750,000
Keith Jones
-
-
-
-
-
-
-
-
-
Executives
Andrew Spinks
485,100
2,738,908
360,510
1,779,375
-
-
-
845,610
4,518,283
Howard Rae
483,418
2,768,787
439,942 2,000,000
(923,360)
(1,775,000)
-
-
2,993,787
Dale Harris1
-
1,744,862
-
-
-
-
(1,744,862)
-
-
Total
968,518 10,752,557
800,452
3,779,375 (923,360) (1,775,000) (1,744,862)
845,610 11,012,070
1.3 D Harris resigned 10 November 2023.
2.3 Refer to 4.3 on performance outcomes.
8.3 Loans to key management personnel
There were no loans granted to key management personnel during the year ended 30 June 2024 (2023: Nil).
8.4 Other transactions with key management personnel
There were no other transactions with key management personnel of the consolidated entity, including their personally related
parties during the year ended 30 June 2024 (2023: Nil).
END OF REMUNERATION REPORT
39
ANNUAL REPORT 2024
ECOGRAF LIMITED
Shares under Performance Rights
Unissued ordinary shares in the Company under performance rights, with no exercise price, at the date of this report are
as follows:
Date of grant
Expiry date
Number of Performance Rights
20 January 2021
19 January 2026
4,675,000
8 December 2021
7 December 2027
320,825
8 December 2021
7 December 2026
500,000
29 November 20221
29 December 2027
1,000,000
21 February 2023
21 February 2028
2,121,970
22 December 2023
22 December 2028
2,000,000
19 January 2024
19 January 2029
2,139,885
21 February 2024
22 February 2029
1,700,000
Total
14,457,680
1 Date of shareholders’ approval.
Shares Issued on the Vesting of Performance Rights
During the financial year and up to the date of the report, the following ordinary shares of the Company were issued on
exercise of Performance Rights granted by the Company:
Date of grant
Number of Performance Rights exercised
12 July 2023
2,258,418
17 November 2023
1,439,942
Total
3,698,360
Shares Under Options
There are no unissued ordinary shares in the Company under options at the date of this report.
Signed in accordance with a resolution of the directors made pursuant to s298 (2) of Corporations Act 2001.
Andrew Spinks
Managing Director
Perth, 26 September 2024
40
ANNUAL REPORT 2024
ECOGRAF LIMITED
40
ANNUAL REPORT 2024
ECOGRAF LIMITED
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of EcoGraf Limited for year ended 30 June 2024, I declare that,
to the best of my knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA
Perth, WA
TUTU PHONG
Dated: 26 September 2024
Partner
Auditor’s Independence Declaration
Cashflow Statement
For the Year Ended 30 June 2023
41
ANNUAL REPORT 2024
ECOGRAF LIMITED
41
ANNUAL REPORT 2024
ECOGRAF LIMITED
FINANCIAL
STATEMENTS
CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT
OF CASH FLOWS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
42
43
44
45
46
42
ANNUAL REPORT 2024
ECOGRAF LIMITED
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
for the year ended 30 June 2024
Note
2024
$’000
2023
$’000
Revenue
Other income
5
1,996
1,039
Interest income
1,490
1,289
3,486
2,328
Expenses
Corporate and administrative expenses
(2,505)
(3,170)
Depreciation
10
(105)
(17)
Downstream processing expenses
(2,926)
(2,868)
Employee benefits
(2,201)
(2,374)
Exploration and evaluation expense
(431)
(561)
Share-based payments expense
18
(923)
(625)
Finance charges
13
(16)
-
Foreign exchange losses (net)
(84)
(12)
(9,191)
(9,627)
Loss before income tax
(5,705)
(7,299)
Income tax expense
6
-
-
Loss after income tax for the year
(5,705)
(7,299)
Other comprehensive (loss)/ income
Items that may be reclassified subsequently to profit or loss
Exchange differences arising on translation of foreign operations
(3,304)
1,698
Other comprehensive (loss)/ income for the year
(3,304)
1,698
Total comprehensive loss for the year, net of income tax
(9,009)
(5,601)
Loss for the year attributable to:
Owners of the Company
(5,657)
(7,299)
Non-controlling interest
17
(48)
-
(5,705)
(7,299)
Total comprehensive loss for the year attributable to:
Owners of the Company
(8,950)
(5,601)
Non-controlling interest
17
(59)
-
(9,009)
(5,601)
Loss per share attributable to the owners of the Company
Basic and diluted loss per share (cents per share)
7
(1.25)
(1.62)
The above statement should be read in conjunction with the accompanying notes.
43
ANNUAL REPORT 2024
ECOGRAF LIMITED
Consolidated Statement
of Financial Position
as at 30 June 2024
Note
2024
$’000
2023
$’000
Assets
Current assets
Cash and cash equivalents
8
25,459
38,606
Other receivables
546
137
Prepayments
321
320
Total current assets
26,326
39,063
Non-current assets
Exploration and evaluation assets
9
29,292
22,975
Property, plant and equipment
10
269
53
Total non-current assets
29,561
23,028
Total assets
55,887
62,091
Liabilities
Current liabilities
Trade and other payables
11
2,167
1,603
Deferred revenue
12
1,712
1,044
Lease liability
13
99
-
Provisions
14
242
244
Total current liabilities
4,220
2,891
Non-current liabilities
Other payables
11
668
263
Lease liability
13
129
-
Provisions
14
60
41
Total non-current liabilities
857
304
Total liabilities
5,077
3,195
Net assets
50,810
58,896
Equity
Contributed equity
15
99,834
99,834
Reserves
16
8,833
11,203
Accumulated losses
(57,798)
(52,141)
Equity attributable to the owners of the Company
50,869
58,896
Non-controlling interest
17
(59)
-
Total equity
50,810
58,896
The above statement should be read in conjunction with the accompanying notes.
44
ANNUAL REPORT 2024
ECOGRAF LIMITED
Consolidated Statement of
Changes in Equity
for the year ended 30 June 2024
Contribut-
ed equity
$’000
Accu-
mulated
losses
$’000
Foreign
currency
translation
reserve
$’000
Loan
share
reserve
$’000
Share-
based
payments
reserve
$’000
Non-
controlling
interest
$’000
Total
$’000
Balance at 30 June 2022
99,834
(44,842)
-
(1,399)
9,825
-
63,418
Loss for the year
-
(7,299)
-
-
-
-
(7,299)
Other comprehensive income
-
-
1,698
-
-
-
1,698
Total comprehensive loss for the year
-
(7,299)
1,698
-
-
-
(5,601)
Transactions with owners in their
capacity as owners
Share plan shares cancelled/ released
-
-
-
454
-
-
454
Share based payment expense
-
-
-
-
625
-
625
Balance at 30 June 2023
99,834
(52,141)
1,698
(945)
10,450
-
58,896
Loss for the year
-
(5,657)
-
-
-
(48)
(5,705)
Other comprehensive loss
-
-
(3,293)
-
-
(11)
(3,304)
Total comprehensive loss for the year
-
(5,657)
(3,293)
-
-
(59)
(9,009)
Transactions with owners in their
capacity as owners
Share based payment expense
-
-
-
-
923
-
923
Balance at 30 June 2024
99,834
(57,798)
(1,595)
(945)
11,373
(59)
50,810
The above statement should be read in conjunction with the accompanying notes.
45
ANNUAL REPORT 2024
ECOGRAF LIMITED
Consolidated Statement of
Cash Flows
for the year ended 30 June 2024
Note
2024
$’000
2023
$’000
Operating Activities
Research and development tax credit received
1,097
1,039
Government grant received, inclusive of GST
1,723
1,149
Payments to suppliers and employees, inclusive of GST/ VAT
(8,181)
(9,912)
Net cash flows used in operating activities
8
(5,361)
(7,724)
Investing Activities
Payments for exploration and evaluation
(9,166)
(2,100)
Payment for property, plant and equipment
(20)
(17)
Interest received
1,490
1,289
Proceeds from maturity of term deposits
-
40,000
Net cash flows (used in)/ from investing activities
(7,696)
39,172
Financing Activities
Repayment of share plan loans
-
454
Repayment of lease liability
(90)
-
Net cash flows from financing activities
(90)
454
Net (decrease)/ increase in cash and cash equivalents held
(13,147)
31,902
Cash and cash equivalents at beginning of the year
38,606
6,728
Foreign exchange movement on cash and cash equivalents
-
(24)
Cash and cash equivalents at end of the year
8
25,459
38,606
The above statement should be read in conjunction with the accompanying notes.
46
ANNUAL REPORT 2024
ECOGRAF LIMITED
1.
Company Information
The consolidated financial statements of EcoGraf Limited and its subsidiaries (collectively, “the consolidated entity” or “the
Group”) for the year ended 30 June 2024 were authorised for issue in accordance with a resolution of the directors on
26 September 2024.
EcoGraf Limited (“the Company” or “the parent”) is a for profit company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Securities Exchange and Frankfurt Stock Exchange. It has activities in Australia and
Tanzania, with the country of domicile being Australia and the registered office located in Australia.
The nature of the operations and principal activities of the consolidated entity are described in the directors’ report.
2. Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued
by the International Accounting Standards Board (‘IASB’).
The financial report has been prepared on a historical cost basis.
These consolidated financial statements are presented in Australian dollars. All amounts have been rounded to the nearest
thousand, unless otherwise stated in accordance with ASIC Corporations (Rounding In Financial/Directors’ Reports) Instrument
2016/191.
3. Material Accounting Policies
The accounting policies that are material to the consolidated entity are set out below and in the various notes to the consolidated
financial statements. The accounting policies adopted are consistent with those of the previous financial year, unless otherwise
stated.
a)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at 30 June
2024. Subsidiaries are entities that are controlled by the Company. Control is achieved when the Company is exposed to, or
has rights to, variable returns from its involvement with its subsidiaries and has the ability to affect those returns through its
capacity to direct the activities of its subsidiaries.
Specifically, the consolidated entity controls a subsidiary if, and only if, the consolidated entity has:
• power over the subsidiary (i.e., existing rights that give it the current ability to direct the relevant activities of the subsidiary);
• exposure, or rights, to variable returns from its involvement with the subsidiary;
• the ability to use its power over the subsidiary to affect its returns.
Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the
consolidated entity has less than a majority of the voting or similar rights of an subsidiary, the consolidated entity considers all
relevant facts and circumstances in assessing whether it has power over a subsidiary, including:
• the contractual arrangement(s) with the other vote holders of the subsidiary;
• rights arising from other contractual arrangements;
• the consolidated entity’s voting rights and potential voting rights.
The consolidated entity re-assesses whether or not it controls an entity if facts and circumstances indicate that there is a
change to the elements of control. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the
year are included in the consolidated financial statements from the date the consolidated entity gains control until the date the
consolidated entity ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of subsidiaries to align to their accounting policies with the
consolidated entity. All consolidated entity assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the consolidated entity are eliminated in full on consolidation.
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
47
ANNUAL REPORT 2024
ECOGRAF LIMITED
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses
incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
b)
Foreign currency transactions and balances
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian Dollars, which is the Company’s functional currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at
year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement
of profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Foreign subsidiaries
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting
date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates,
which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are
recognised in other comprehensive income through the foreign currency reserve in equity.
Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither
planned nor likely to occur (therefore forming part of the net investment in the foreign operation), are recognised initially in
other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
c)
New accounting standards and interpretations
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
d)
Critical accounting estimates and judgements
The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best
available current information. Estimates assume a reasonable expectation of future events and are based on current trends
and economic data, obtained both externally and generated internally by the consolidated entity. Refer to the following notes
for judgements and estimates made:
• Note 5 Other income
• Note 9 Recoverability of exploration and evaluation costs
• Note 11 Trade and other Payables
• Note 14 Provisions
• Note 18 Share-based payments
4. Segment information
Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and assessment of
segment performance focuses on the geographical location of the Group’s principle activities, which are located in Tanzania
and Australia.
48
ANNUAL REPORT 2024
ECOGRAF LIMITED
Australia
$’000
Tanzania
$’000
Consolidated
$’000
2024 Results
Segment income
3,486
-
3,486
Segment expenses
Corporate and administrative expenses
(2,048)
(457)
(2,505)
Depreciation
(92)
(13)
(105)
Downstream processing expense
(2,926)
-
(2,926)
Employee benefits
(2,147)
(54)
(2,201)
Exploration and evaluation expense
-
(431)
(431)
Share-based payments expense
(923)
-
(923)
Finance charges
(16)
-
(16)
Foreign exchange losses (net)
(17)
(67)
(84)
Segment results
(4,683)
(1,022)
(5,705)
Australia
$’000
Tanzania
$’000
Consolidated
$’000
2023 Results
Segment income
2,328
-
2,328
Segment expenses
Corporate and administrative expenses
(2,796)
(374)
(3,170)
Depreciation
(11)
(6)
(17)
Downstream processing expense
(2,868)
-
(2,868)
Employee benefits
(2,374)
-
(2,374)
Exploration and evaluation expense
-
(561)
(561)
Share-based payments expense
(625)
-
(625)
Foreign exchange losses (net)
(19)
7
(12)
Segment results
(6,365)
(934)
(7,299)
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
49
ANNUAL REPORT 2024
ECOGRAF LIMITED
Australia
$’000
Tanzania
$’000
Consolidated
$’000
30 June 2024
Assets
Exploration and evaluation assets
-
29,292
29,292
Property, plant and equipment
239
30
269
Segment non-current assets
239
29,322
29,561
Unallocated assets:
Cash and cash equivalents
25,459
Other receivables
546
Prepayments
321
Total assets
55,887
Liabilities
Segment liabilities
(3,141)
(1,936)
(5,077)
Total liabilities
(5,077)
Australia
$’000
Tanzania
$’000
Consolidated
$’000
30 June 2023
Assets
Exploration and evaluation assets
-
22,975
22,975
Property, plant and equipment
24
29
53
Segment non-current assets
24
23,004
23,028
Unallocated assets:
Cash and cash equivalents
38,606
Other receivables
137
Prepayments
320
Total assets
62,091
Liabilities
Segment liabilities
(2,430)
(765)
(3,195)
Total liabilities
(3,195)
Accounting policy
Operating segments are presented on the same basis as the internal reports provided to the chief operating decision
maker who is responsible for the allocation of resources to operating segments and for assessing their performance.
50
ANNUAL REPORT 2024
ECOGRAF LIMITED
5. Other Income
2024
$’000
2023
$’000
Research and development tax credit
1,097
1,039
Government grant
899
-
1,996
1,039
Accounting policy
Research and development tax credits are recognised when they can be reliably measured and it is certain that the credit
will be received.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
Judgements and estimates
The government grant relates to the funding received under the Critical Minerals Development Program to establish the
Product Qualification Facility. The grant received is initially recognised as deferred revenue and is recognised as income
on a systematic basis over the periods that the related costs for which it is intended to compensate, are expensed.
6. Income Tax
2024
$’000
2023
$’000
a)
Reconciliation between Tax Expense and Loss before Income Tax
Loss before Income Tax
(5,705)
(7,299)
At Australia’s statutory income tax rate of 30% (2023: 30%)
(1,712)
(2,190)
Amounts not deductible/ (assessed) for income tax
437
505
Over-provision of prior year current income tax
430
699
Deferred tax asset not recognised
845
986
Income tax expense
-
-
b)
Deferred Income Tax
Deferred income tax at balance date relates to the following:
Deferred tax asset
Tax losses available to offset against future taxable income
15,819
15,237
Blackhole expenditure available for future deduction
307
665
Other temporary differences
246
75
16,372
15,977
Deferred tax liabilities
Exploration and evaluation assets
(6,572)
(5,944)
(6,572)
(5,944)
Deferred tax recognised in equity
Foreign exchange translation differences recognised in equity
(1,014)
187
(1,014)
187
Net deferred tax
8,786
10,220
Deferred tax asset not recognised
(8,786)
(10,220)
-
-
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
51
ANNUAL REPORT 2024
ECOGRAF LIMITED
At the reporting date, the Group has unrecognised tax losses of $52,732,000 (2023: $50,789,000) that are available for offset
against future taxable profits. Tax losses in Australia and Tanzania do not expire.
Accounting policy
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted at the reporting date in the countries where the consolidated entity operates and generates taxable income.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit
or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable
tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax is recognised for all taxable
temporary differences, except:
• when the deferred tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a
business combination and at the time of the transaction, it affects neither the accounting profit nor taxable profit or loss;
or
• in respect of temporary differences associated with investments in subsidiaries, associates and interests in joint
arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.
Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
reporting date.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
7.
Loss Per Share
2024
2023
Data used in the basic loss per share computations:
Net loss used in calculating basic and diluted loss per share (A$’000)
(5,657)
(7,299)
Weighted average number of ordinary shares
453,401,136
450,333,459
Basic and diluted loss per share (cents)
(1.25)
(1.62)
Accounting policy
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to the owners of EcoGraf Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year.
52
ANNUAL REPORT 2024
ECOGRAF LIMITED
Accounting policy
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Judgements and estimates
Performance Rights with the potential to be converted to ordinary shares are not included in the calculation of diluted loss
per share as they are not dilutive.
8. Cash and Cash Equivalents
2024
$’000
2023
$’000
Cash at bank and on hand
25,459
38,606
25,459
38,606
a)
Reconciliation of cash flow used in operations with loss for the year
2024
$’000
2023
$’000
Loss for the year
(5,705)
(7,299)
Adjustments for:
Interest income
(1,490)
(1,289)
Depreciation
105
17
Finance charges
16
-
Share based payment expense
923
625
Changes in assets and liabilities:
(Increase)/ decrease in other receivables and prepayments
(119)
104
Increase/ (decrease) in trade and other payables
59
(978)
Increase in provisions
26
52
Increase in deferred revenue
824
1,044
Net cash flows used in operating activities
(5,361)
(7,724)
b) Non-cash investing and financing activities
2024
$’000
2023
$’000
Investing activities
Additions to the right-of-use assets
302
-
Financing activities
Acquisition of leases
(302)
-
Accounting policy
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly liquid
investments with original maturities of 3 months or less.
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
53
ANNUAL REPORT 2024
ECOGRAF LIMITED
9. Exploration and Evaluation Assets
2024
$’000
2023
$’000
Opening balance at the beginning of the year
22,975
18,403
Capitalised expenditure at cost
9,700
2,898
Foreign exchange movement on exploration and evaluation asset
(3,383)
1,674
Balance at 30 June
29,292
22,975
Accounting policy
Exploration and evaluation activities involves the search for mineral resources, the determination of technical feasibility
and the assessment of commercial viability of an identified resource in an individual geological area (“area of interest”).
Exploration and evaluation activities include:
• Researching and analysing historical exploration data;
• Gathering exploration data through geophysical studies;
• Exploratory drilling and sampling;
• Determining and examining the volume and grade of the resource;
• Surveying transportation and infrastructure requirements; and
• Conducting mining and evaluation studies.
Exploration and evaluation expenditure in relation to separate areas of interest for which rights of tenure are current
is carried forward as an asset in the statement of financial position where it is expected that the expenditure will be
recovered through the successful development of an area of interest, or by its sale, or exploration activities are continuing
in an area and activities have not reached a stage which permits a reasonable estimate of the existence or otherwise of
economically recoverable reserves. Otherwise, the expenditure is expensed as incurred.
Where a project or an area of interest has been abandoned, the expenditure incurred thereon is written-off in the year in
which the decision is made.
Once the technical feasibility and commercial viability of the extraction of minerals resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and
then transferred to mine properties and development.
Payments for exploration and evaluation expenditure are recorded net of any government grants.
Judgements and estimates
Epanko project
All expenditures related to this project are capitalised, as these expenditures are expected to be recovered through
successful development of the project.
All other projects
All exploration and evaluation expenditures associated with other projects have been expensed in the period in which
they are incurred.
Recoverability of the carrying amount of exploration and evaluation assets is regularly reviewed, which is dependent on
the successful development and commercial exploitation of areas of interest and the sale of minerals, or the sale of the
respective areas of interest.
54
ANNUAL REPORT 2024
ECOGRAF LIMITED
10. Property, Plant and Equipment
Plant &
equipment
$’000
Motor
Vehicles
$’000
Office
equipment
and
furniture
$’000
Right-of-use
assets
$’000
Total
$’000
Cost
22
68
97
302
489
Accumulated depreciation
(18)
(56)
(62)
(84)
(220)
Net carrying amount
4
12
35
218
269
Carrying amount at 1 July 2022
2
17
28
-
47
Additions
-
-
20
-
20
Disposals
-
-
(3)
-
(3)
Depreciation expense
(1)
(4)
(12)
-
(17)
Foreign exchange movement on property,
plant and equipment
1
6
(1)
-
6
Carrying amount at 30 June 2023
2
19
32
-
53
Additions
-
-
23
302
325
Depreciation
(2)
(3)
(16)
(84)
(105)
Foreign exchange movement on property,
plant and equipment
4
(4)
(4)
-
(4)
Carrying amount at 30 June 2024
4
12
35
218
269
The right-of-use asset relates to the lease of the Corporate office under a three-year agreement.
11. Trade and Other Payables
2024
$’000
2023
$’000
Current
Trade payables
1,528
1,369
Accrued expenses
563
184
Other payables
76
50
2,167
1,603
Non-current
Other payables
668
263
Judgements and estimate
The non-current other payables relate to withholding tax on services payable to the Tanzanian Revenue Authority for
services rendered by EcoGraf Ltd to its Tanzanian subsidiaries. Payment on this tax becomes due when payment of the
services occur, which is anticipated not to occur within the next 12 months.
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
55
ANNUAL REPORT 2024
ECOGRAF LIMITED
12. Deferred Revenue
2024
$’000
2023
$’000
Opening balance of the beginning of the year
1,044
-
Government grant received in advance
1,567
1,044
Recognised as revenue
(899)
-
Balance at 30 June
1,712
1,044
Refer to note 5 on the accounting policy related to government grants.
13. Lease Liability
2024
$’000
2023
$’000
Current
99
-
Non-current
129
-
228
-
Maturity analysis
Within one year
111
-
Later than one year and not later than five years
134
-
245
-
Less: unearned finance cost
(17)
-
Carrying amount at the end of the year
228
-
a)
Amounts recognised in profit or loss
Amount recognised in profit or loss arising from leases:
Interest expense on lease liabilities
16
-
Depreciation on right-of-use assets
84
-
14. Provisions
2024
$’000
2023
$’000
Current
Employee entitlements
200
244
Other provisions
42
-
242
244
Non-current
Employee entitlements
60
41
Judgements and estimates
Other provisions relate to disputes from previous employees on the retrenchment agreements offered by TanzGraphite
(TZ) Limited, a Tanzanian subsidiary of the Company. These cases have been presented at the Commission for Mediation
and Arbitration and are currently ongoing. A provision was raised in the current year to reflect the Company’s best estimate
of any outflow of resources in relation to this matter, although uncertainty remains as to the probability, timing and amount
of any payments.
56
ANNUAL REPORT 2024
ECOGRAF LIMITED
15. Contributed Equity
2024
$’000
2023
$’000
454,031,819 (2023: 450,333,459) fully paid ordinary shares
99,834
99,834
$’000
No. of shares
a)
Ordinary shares
Balance at 30 June 2022 and 2023
99,834
450,333,459
Shares issued on exercise of performance rights
-
3,698,360
Balance at 30 June 2024
99,834
454,031,819
Fully paid ordinary shares carry one vote per share and carry a right to dividends.
16. Reserves
2024
$’000
2023
$’000
Share-based payments reserve
11,373
10,450
Loan plan share reserve
(945)
(945)
Foreign currency translation reserve
(1,595)
1,698
8,833
11,203
Share-based payments reserve
The reserve recognises the value of equity provided as remuneration to employees and also to other parties as compensation
for services provided to the consolidated entity.
Loan plan share reserve
The reserve represents the non-cash nominal value of loan shares on issue to employees and is deducted from equity.
Foreign currency translation reserve
The foreign currency translation reserve arises on the consolidation of the Group’s foreign subsidiaries in Tanzania.
17. Non-controlling Interest
2024
$’000
2023
$’000
Issued capital
-
-
Reserves
(11)
-
Accumulated loss
(48)
-
(59)
-
The non-controlling interest relates to the Government of Tanzania's 16% (2023: 16%) equity holding in Duma TanzGraphite
Limited.
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
57
ANNUAL REPORT 2024
ECOGRAF LIMITED
18. Share-based Payments
Share-based payment expense recorded by the Group during the year was $923,087 (2023: $624,686).
a)
Incentive Performance Rights Plan
The shareholder approved EcoGraf Securities Plan is designed to assist with the recruitment, reward, retention and incentivisation
of key personnel who possess the skills and experience to enable the Company to develop its graphite businesses and grow
long-term shareholder value.
To achieve this outcome, the Company believes that incentivising and rewarding performance and the achievement of key
objectives through equity arrangements is the most effective remuneration structure because it preserves the Company’s cash
reserves and aligns the interests of personnel with those of all shareholders.
Short-Term Incentive
Short-term incentive arrangements involve the offer of an equity-based award to eligible personnel for the achievement of key
objectives each year, with the determination of the amount (if any) made after the end of the financial year.
The amount is determined by multiplying the individual’s assessed key performance score by the applicable percentage of
their fixed annual remuneration. The number of securities issued, if any, is calculated by dividing the short-term incentive
amount earned by the volume weighted average price of the Company’s shares during the applicable financial year.
Long-Term Incentive
The long-term incentive arrangements involve the offer of securities in the Company to eligible participants which are subject
to pre-determined performance conditions that are required to be achieved prior to vesting, using a target rolling performance
period of 3-5 years. The performance conditions are set to promote achievement of the Company’s key strategic objectives.
The number of securities offered to an individual is determined by reference to equity incentives offered by similar companies
and the potential for the individual, through their position, skills and experience, to create long-term shareholder value.
Set out below are the number and movement of performance rights granted under the plan:
2024
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
20 Jan 2021
19 Jan 2026
Nil
7,450,000
-
(2,775,000)
-
4,675,000
8 Dec 2021
07 Dec 2027
Nil
641,650
-
(320,825)
-
320,825
8 Dec 2021
07 Dec 2026
Nil
500,000
-
-
-
500,000
29 Nov 20221
29 Dec 2027
Nil
1,000,000
-
-
-
1,000,000
21 Feb 2023
21 Feb 2028
Nil
4,279,425
-
(162,593)
(1,994,862)
2,121,970
23 Oct 2023
23 Oct 2028
Nil
-
439,942
(439,942)
-
-
22 Dec 2023
22 Dec 2028
Nil
-
2,000,000
-
-
2,000,000
19 Jan 2024
19 Jan 2029
Nil
-
2,139,885
-
-
2,139,885
22 Feb 2024
22 Feb 2029
Nil
-
1,700,000
-
-
1,700,000
13,871,075
6,279,827
(3,698,360)
(1,994,862)
14,457,680
Weighted average remaining contractual life of
outstanding performance rights
3.5 years
3.2 years
1 Date of shareholders’ approval.
58
ANNUAL REPORT 2024
ECOGRAF LIMITED
2023
Grant date
Expiry date
Exercise
price
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
20 Jan 2021
19 Jan 2026
Nil
7,450,000
-
-
-
7,450,000
8 Dec 2021
07 Dec 2027
Nil
641,650
-
-
-
641,650
8 Dec 2021
07 Dec 2026
Nil
1,000,000
-
-
(500,000)
500,000
29 Nov 20221
29 Dec 2027
Nil
-
1,000,000
-
-
1,000,000
21 Feb 2023
21 Feb 2028
Nil
-
4,279,425
-
-
4,279,425
9,091,650
5,279,425
-
(500,000)
13,871,075
Weighted average remaining contractual life of
outstanding performance rights
3.9 years
3.5 years
1 Date of shareholders’ approval.
The performance rights granted during the year included 800,452 performance rights issued under short-term incentive
arrangement to key management personnel, and 5,479,375 performance rights issued under long-term incentive arrangements
to key management personnel and employees.
Performance rights issued under short-term incentive arrangements were vested and exercisable immediately with $nil exercise
price, and will expire as follows:
• 439,942 performance rights on 23 October 2028; and
• 360,510 performance rights on 19 January 2029.
The above performance rights were granted in respect of the achievement of outcomes for the year ended 30 June 2023. As
the determination of any STI is conducted after the end of the financial year, an estimate of the share-based payment expense
relating to the STI arrangements for the year ended 30 June 2024 has been recognised, totalling $240,071.
Performance rights issued under the long-term incentive arrangements are subject to performance hurdles which promote
achievement of the Company’s strategic objectives. Vesting conditions attached to performance rights issued during the year
are as follows:
No. of
performance rights
Grant date
Vesting Conditions
1,175,875
22 Dec 2023
19 Jan 2024
22 Feb 2024
Commencement of construction of the Company’s: (a) Epanko Graphite
Project; or (b) commercial scale Battery Anode Material Facility
855,875
22 Dec 2023
19 Jan 2024
22 Feb 2024
Production of battery anode material from product qualification facility
300,000
22 Feb 2024
Commencement of construction of the Company’s commercial scale Battery
Anode Material Facility
200,000
22 Feb 2024
Commencement of construction of the Company’s Epanko Graphite Project
1,473,813
22 Dec 2023
19 Jan 2024
22 Feb 2024
The 20-day VWAP of the Company’s Shares being equal to or greater than
$0.30
1,473,812
22 Dec 2023
19 Jan 2024
22 Feb 2024
The 20-day VWAP of the Company’s Shares being equal to or greater than
$0.40
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
59
ANNUAL REPORT 2024
ECOGRAF LIMITED
As vesting conditions attached to the performance rights are market and non-market conditions, the fair value at grant date
has been independently determined using various pricing models such as trinomial and Black Scholes option pricing models.
These models take into account the exercise price, the term of the performance right, the share price at grant date, expected
price volatility of the underlying share and the risk-free rate for the term of the performance right. Model inputs for performance
rights granted during the year are as follows:
Grant date
22 Dec 2023
19 Jan 2024
22 Feb 2024
Expiry date
22 Dec 2028
19 Jan 2029
22 Feb 2029
Number of performance rights
2,000,000
1,779,375
1,700,000
Share price at grant date
$0.135
$0.145
$0.150
Exercise price
Nil
Nil
Nil
Expected volatility
90%
85%
85%
Dividend yield
Nil
Nil
Nil
Risk-free interest rate
3.697%
3.925%
3.803%
1,994,862 performance rights granted to employees on 21 February 2023 were forfeited due to employee resignations during
the year.
There were no LTI performance rights which vested during the financial year ended 30 June 2024.
b)
Share Plans
Plan shares are issued to directors and employees in recognition of their performance with the Company and as incentive
remuneration under the respective director and employee share plans (together the “Share Plans”). The terms and conditions
of the Share Plans are identical, other than in respect of who is eligible to participate in each plan. Plan shares are issued at the
discretion of the Board.
Under the Share Plans, eligible directors and employees are offered plan shares in the Company at prices determined by the
Board, which has the discretion to impose conditions on the shares issued under the Share Plans and may also grant a loan,
in the form of a non-cash credit facility, to a participant for the purposes of subscribing for plan shares. Shares issued via loan
facility may not be granted at less than the volume weighted average price of the Company’s shares during the five trading
days up to and including the date of acceptance and are escrowed as security until the loan has been fully repaid, via cash
payment and/or the sale of the plan shares. If the loan is repaid by the sale of shares, any surplus on sale is remitted to the
participant and any shortfall is borne by the consolidated entity.
Set out below are the plan shares on issue and the weighted average exercise price (WAEP) at the end of the financial year:
Grant date
Expiry date
2024
2023
Number
WAEP
Number
WAEP
13 Jul 2017
12 Jul 2023
-
-
1,000,000
0.230
22 Dec 2017
12 Jul 2023
-
-
2,750,000
0.151
22 Dec 2017
22 Jun 20241
5,750,000
0.164
2,000,000
0.151
5,750,000
5,750,000
1 A decision to extend the expiry date was deferred to 24 Jul 2024.
60
ANNUAL REPORT 2024
ECOGRAF LIMITED
During the year, the repayment date of non-recourse loans relating to plan shares were extended in order to maximise the
likelihood of the Company receiving the benefit of the cash funds receivable upon repayment. These extensions have been
treated as a modification with a resulting share-based payment expense. Model inputs for the valuation of the modification are
as follows:
Modification date
12 Jul 2023
Extended terms (years)
0.95
Number of loan shares
3,750,000
New expiry date
22 June 2024
Share price at modification date
0.165
Weighted average exercise price
0.172
Expected volatility
100%
Dividend yield
Nil
Risk-free interest rate
4.1%
Value prior to modification ($'000)
39
Value subsequent to modification ($'000)
236
Impact of modification ($'000)
197
There were no plan shares issued during the year ended 30 June 2024 (2023: Nil).
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
Accounting policy
Equity-settled share-based compensation benefits are provided to employees and directors.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently determined
using pricing models that take into account the exercise price, the term of the option, the impact of dilution, 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, together with non-vesting conditions that do not determine whether the consolidated entity
receives the services that entitle the employees to receive payment. In accordance with Australian Accounting Standards,
no account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification had not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total
calculated fair value of the share-based compensation benefit as at the date of modification.
If a non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is
treated as a cancellation.
If the condition is not within the control of the consolidated entity or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If an equity-settled award is cancelled, it is treated as if it has vested on the date of cancellation and any remaining
expense is recognised immediately, unless those equity instruments do not vest because of failure to satisfy a vesting
condition (other than a market condition) that was specified at grant date. If a new replacement award is substituted for
the cancelled award, the cancelled and new award are treated as if they were a modification.
61
ANNUAL REPORT 2024
ECOGRAF LIMITED
19. Financial Instruments
The consolidated entity is exposed to a variety of financial risks, including foreign currency risk, market risk, credit risk and
liquidity risk.
The consolidated entity’s financial instruments consist of cash and deposits with banks, accounts receivable and accounts
payable. No trading in any financial instruments is undertaken.
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
The main risks arising from the consolidated entity’s financial instruments are foreign currency risk, interest rate risk, liquidity
risk and credit risk. The Board determines policies for managing each of these risks and they are summarised below.
Foreign currency risk
The consolidated entity operates internationally and undertakes certain transactions denominated in foreign currency resulting
in exposure to foreign currency risk through foreign exchange rate fluctuations. Foreign exchange risk also arises as a result of
controlled entities of the Company with functional currencies other than Australian Dollars, the Company’s functional currency.
The Group currently does not engage in any hedging or derivative transactions to manage foreign currency risk.
The carrying amount, in Australian Dollars of the consolidated entity’s foreign currency denominated financial assets and
financial liabilities at the reporting date were as follows:
Cash and cash equivalents
Other receivables
Trade and other payables
2024
$’000
2023
$’000
2024
$’000
2023
$’000
2024
$’000
2023
$’000
USD
624
20
-
-
(1,040)
(521)
EUR
-
-
-
-
(7)
(13)
TZS
2
4
455
-
(670)
(2)
GBP
-
-
-
-
(91)
(91)
ZAR
-
-
-
-
-
(16)
Total
626
24
455
-
(1,808)
(643)
The financial impact of a 10% change in the Australian Dollar exchange rate on the consolidated entity is as follows:
Appreciation in AUD exchange rate
Depreciation in AUD exchange rate
%
change
Effect on loss
before tax
$’000
Effect on
equity
$’000
%
change
Effect on loss
before tax
$’000
Effect on
equity
$’000
2024
10%
66
66
10%
(66)
(66)
2023
10%
29
29
10%
(29)
(29)
62
ANNUAL REPORT 2024
ECOGRAF LIMITED
Interest rate risk
The consolidated entity’s exposure to market risk for changes in interest rates arises from holding cash and deposits. Funds
held in operating accounts and term deposits earned variable interest at rates up to a maximum of 5.13% during the year (2023:
4.54%), depending on the type of bank account and cash balance. The consolidated entity does not have interest-bearing loans
or borrowings.
The interest-bearing financial instruments held by the consolidated entity are:
2024
$’000
2023
$’000
Cash and cash equivalents
25,459
38,606
A change of 1% in the variable interest rate during the reporting date would have an impact on the consolidated entity profit and
loss and equity of $293,000 (2023: $408,000) assuming all other variables remain constant.
Liquidity risk
Liquidity risk is the risk that the consolidated entity will not be able to meet its financial obligations as and when they fall due.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves, by continuously monitoring actual and
forecast cash flows and by matching the maturity profiles of its financial assets and liabilities.
The following table sets out the contractual maturity of the consolidated entity’s financial instrument liabilities based on
undiscounted cash flows.
Carrying
amount
$’000
Contractual
cash flows
$’000
1 year or less
$’000
Between 1
and 2 years
$’000
Between 2
and 5 years
$’000
2024
Trade and other payables
2,835
2,835
2,167
-
668
Lease liability
228
245
111
134
-
Total
3,063
3,080
2,278
134
668
2023
Trade and other payables
1,866
1,866
1,603
-
263
Credit risk management
Credit risk is the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the consolidated
entity. The consolidated entity is exposed to credit risk from its bank deposits and other receivables as disclosed in the statement
of financial position. The consolidated entity does not have any significant credit risk exposure to any single counterparty or any
consolidated entity of counterparties having similar characteristics.
The credit risk on liquid funds is managed through the use of counterparty banks with acceptable credit-ratings assigned by
international credit-rating agencies (S+P Australian AA-, Tanzanian B).
Holdings by geographical region
Australia
$’000
Tanzania
$’000
Total
$’000
Cash and cash equivalents
24,833
626
25,459
The other current receivable balance comprised of VAT refund receivable from the Tanzania Revenue Authority (TRA).
Entitlement to VAT refunds occurs after a six-month period and an audit is conducted by the TRA prior to a payment of the
refund.
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
63
ANNUAL REPORT 2024
ECOGRAF LIMITED
Fair value measurement
The carrying amounts of other receivables and trade and other payables are assumed to approximate their fair values due to
their short-term nature.
20. Auditor’s Remuneration
2024
$
2023
$
Audit and review of the financial reports:
- Group
55,000
46,280
- Controlled entities
-
15,000
55,000
61,280
Fees for assurance services that are required by legislation to be provided by the auditor
-
28,825
Other services
2,000
-
Total fees to RSM Australia Partners
57,000
90,105
Audit services – network firms
Audit of the subsidiaries’ financial statements
17,897
-
21. Key Management Personnel Disclosures
Aggregate compensation of key management personnel of the consolidated entity:
2024
$
2023
$
Short term employee benefits
1,270,166
1,324,323
Post-employment benefits
86,240
91,301
Long term employee benefits
16,505
7,442
Share-based payments (non-cash)
772,964
462,723
2,145,875
1,885,789
Detailed information about the remuneration received by key management personnel is provided in the remuneration report
on pages 31 to 38.
22. Related Party Disclosures
Transactions between related parties are on normal commercial terms.
Ultimate parent
EcoGraf Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 23.
Key management personnel
Disclosures relating to key management personnel are set out in note 21 and the remuneration report in the directors’ report.
Transactions with related parties
There were no related party transactions during the year ended 30 June 2024 (2023: Nil).
64
ANNUAL REPORT 2024
ECOGRAF LIMITED
23. Consolidated Entity Information
Information about subsidiaries
The financial statements of the consolidated entity include the following subsidiaries:
Country of incorporation
Percentage owned (%)
2024
2023
Tanzanian Exploration Company Pty Ltd
Australia
100
100
TanzGraphite Pty Ltd
Australia
100
100
TanzGraphite (AUS) Pty Ltd
Australia
100
100
EcoGraf (Australia) Pty Ltd
Australia
100
100
HFfree Pty Ltd (previously Westoz Technologies Pty Ltd)
Australia
100
100
Innogy Pty Ltd1
Australia
100
100
Innogy Minerals Holdings Pty Ltd
Australia
100
100
Innogy Minerals (UK) Pty Ltd
United Kingdom
100
100
EcoGraf (UK) Pty Ltd
United Kingdom
100
100
EcoGraf (Mauritius) Limited
Mauritius
100
100
EcoGraf (Tanzania) Limited
Tanzania
100
100
TanzGraphite (TZ) Limited
Tanzania
100
100
Innogy Minerals (TZ) Limited
Tanzania
100
100
Frontier Minerals (TZ) Limited
Tanzania
100
100
Duma TanzGraphite Limited
Tanzania
84
84
1 On 28 Jun 2024, the company was converted from a public company to a proprietary company.
24. Parent Information
EcoGraf Limited
2024
$’000
2023
$’000
Current assets
25,226
38,960
Non-current assets
28,726
22,356
Total assets
53,952
61,316
Current liabilities
(2,854)
(2,379)
Non-current liabilities
(288)
(41)
Total liabilities
(3,142)
(2,420)
Net assets
50,810
58,896
Equity
Contributed equity
99,834
99,834
Share based payment reserve
11,373
10,450
Loan share reserve
(945)
(945)
Accumulated losses
(59,452)
(50,443)
Total equity
50,810
58,896
Loss of the parent entity
(9,009)
(14,316)
Total comprehensive loss of the parent entity
(9,009)
(14,316)
Notes to the Consolidated
Financial Statements
for the year ended 30 June 2024
65
ANNUAL REPORT 2024
ECOGRAF LIMITED
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity did not have any guarantees at 30 June 2024 (2023: Nil).
Contingent liabilities
The parent entity did not have any contingent liabilities at 30 June 2024 (2023: Nil).
Capital commitments
The parent entity did not have any capital commitments at 30 June 2024 (2023: Nil).
Significant accounting policies
The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements,
except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost.
25. Expenditure Commitment
Mineral tenements
In order to maintain current rights of tenure to exploration tenements, the consolidated entity is required to outlay rentals and
to satisfy minimum expenditure requirements of $2,036,319 (2023: $2,581,934) over the next 12 months, in accordance with
agreed work programs submitted over the Company’s exploration licenses. Financial commitments for subsequent periods are
contingent upon future exploration results.
26. Contingent Assets and Liabilities
There are no contingent assets or liabilities at 30 June 2024 (2023: Nil).
27. Events After Balance Date
There have been no events that have arisen between 30 June 2024 and the date of this report or any other item, transaction
or event of a material and unusual nature likely, in the opinion of the directors, to materially affect the operations of the Group,
the results of those operations or the state of affairs of the Group, in future financial years.
66
ANNUAL REPORT 2024
ECOGRAF LIMITED
Entity name
Entity type
Country of
incorporation
Percentage
owned (%)
Tax residency
Tanzanian Exploration Company Pty Ltd
Body Corporate
Australia
100
Australia
TanzGraphite Pty Ltd
Body Corporate
Australia
100
Australia
TanzGraphite (AUS) Pty Ltd
Body Corporate
Australia
100
Australia
EcoGraf (Australia) Pty Ltd
Body Corporate
Australia
100
Australia
HFfree Pty Ltd (previously
Westoz Technologies Pty Ltd)
Body Corporate
Australia
100
Australia
Innogy Pty Ltd
Body Corporate
Australia
100
Australia
Innogy Minerals Holdings Pty Ltd
Body Corporate
Australia
100
Australia
Innogy Minerals (UK) Pty Ltd
Body Corporate
United Kingdom
100
United Kingdom
EcoGraf (UK) Pty Ltd
Body Corporate
United Kingdom
100
United Kingdom
EcoGraf (Mauritius) Limited
Body Corporate
Mauritius
100
Mauritius
EcoGraf (Tanzania) Limited
Body Corporate
Tanzania
100
Tanzania
TanzGraphite (TZ) Limited
Body Corporate
Tanzania
100
Tanzania
Innogy Minerals (TZ) Limited
Body Corporate
Tanzania
100
Tanzania
Frontier Minerals (TZ) Limited
Body Corporate
Tanzania
100
Tanzania
Duma TanzGraphite Limited
Body Corporate
Tanzania
84
Tanzania
Consolidated Entity
Disclosure Statement
As at 30 June 2024
67
ANNUAL REPORT 2024
ECOGRAF LIMITED
Directors’ Declaration
In the directors’ opinion:
1.
The financial statements, comprising the consolidated statement of profit or loss and other comprehensive income,
consolidated statement of financial position, consolidated statement of cash flows, consolidated statement of changes
in equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
a)
Comply with accounting standards and the Corporations Regulations 2001, and
b)
Give a true and fair view of the financial position at 30 June 2024 and of the performance for the year ended on that
date.
2.
The Company has included in the notes to the financial statements an explicit and unreserved statement of compliance
with International Financial Reporting Standards.
3.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
4.
The information disclosed in the attached consolidated entity disclosure statement is true and correct.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Andrew Spinks
Managing Director
Perth, 26 September 2024
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ANNUAL REPORT 2024
ECOGRAF LIMITED
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the
members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm
which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32 Exchange Tower, 2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ECOGRAF LIMITED
Opinion
We have audited the financial report of EcoGraf Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial statements, including
material accounting policy information, the consolidated entity disclosure statement and the 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 2024 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (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.
Auditor’s Report
69
ANNUAL REPORT 2024
ECOGRAF LIMITED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Exploration and Evaluation Assets
Refer to Note 9 in the financial statements
The
Group
has
capitalised
exploration
and
evaluation expenditure with a carrying value of
$29,292,000 as at 30 June 2024.
We considered this to be a key audit matter due to
the significant management judgments involved in
assessing the carrying value of the asset including:
• Determination of whether the expenditure can be
associated
with
finding
specific
mineral
resources, and the basis on which that
expenditure is allocated to an area of interest;
• Determination of whether exploration activities
have progressed to the stage at which the
existence
of an economically recoverable
mineral reserve may be assessed; and
• Assessing whether any indicators of impairment
are present, and if so, judgments applied to
determine and quantify any impairment loss.
Our audit procedures included:
•
Assessing the Group’s accounting policy for
compliance with accounting standards;
•
Obtaining
management’s
reconciliation
of
capitalised exploration and evaluation expenditure
by area of interest and agreeing it to the general
ledger;
•
Assessing whether the Group’s right to tenure of
each area of interest is current;
•
Agreeing a sample of additions to supporting
documentation and testing that the amounts are
capital in nature and relate to the area of interest;
•
Assessing
and
evaluating
management’s
assessment of whether indicators of impairment
existed as at 30 June 2024;
•
Enquiring with management and reviewing budgets
and other supporting documentation as evidence
that active and significant operations in, or relation
to, the area of interest will be continued in the future;
•
Assessing
management’s
determination
that
exploration and evaluation activities have not yet
reached a stage where the existence or otherwise of
economically
recoverable
reserves
may
be
reasonably determined; and
•
Assessing
the
disclosures
in
the
financial
statements.
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ECOGRAF LIMITED
Share-based payments
Refer to Note 18 in the financial statements
The Group has in place equity-based incentive
arrangements consisting of performance rights and
loan shares.
Management have accounted for these equity
instruments in accordance with AASB 2 Share-
based Payment.
We have considered this to be a key audit matter
because:
•
The complexity of the accounting associated
with these instruments and management’s
estimation in determining the fair value of these
instruments;
•
Management
judgement
is
required
to
determine the probability of meeting the vesting
conditions of the instruments and the inputs
used in the valuation model to value these
instruments; and
•
The recognition of the share-based payment
expense is complex due to the variety of
vesting
conditions
attached
to
these
instruments.
Our audit procedures included:
•
Assessing the Group’s accounting policy for
compliance with Australian Accounting Standards;
•
Obtaining an understanding of the terms and
conditions of the instruments accounted for during
the year;
•
Assessing the completeness of these instruments
at reporting date;
•
Assessing the appropriateness of management’s
valuation methodology used to determine the fair
value of the instruments accounted for during the
year;
•
Critically assessing management’s determination
of the vesting probability of each instrument;
•
Recalculating the amount of share-based payment
expense recognised for the year ended and the
reserve movement during the year; and
•
Assessing the disclosures in the financial
statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2024 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 accordingly 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.
Auditor’s Report
71
ANNUAL REPORT 2024
ECOGRAF LIMITED
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
a.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001; and
b.
the consolidated entity disclosure statement that is true and correct in accordance with the Corporations
Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view
and is free from material misstatement, whether due to fraud or error; and
ii.
the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the 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 have no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of this financial report.
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/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
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ECOGRAF LIMITED
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of EcoGraf Limited, for the year ended 30 June 2024, complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with 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.
RSM AUSTRALIA
Perth, WA
TUTU PHONG
Dated: 26 September 2024
Partner
Auditor’s Report
73
ANNUAL REPORT 2024
ECOGRAF LIMITED
Shareholder Information
Additional information required by the Australian Securities Exchange and shown elsewhere in this report is set out below. The
information is current as at 20 September 2024.
Capital structure
Securities
Number
Fully paid ordinary shares
454,031,819
Performance rights subject to vesting conditions and expiry
14,457,680
Top 20 Largest Shareholders — Ordinary Shares as at 20 September 2024
Position
Holder Name
Holding
% of
issued capital
1
BNP PARIBAS NOMINEES PTY LTD
138,574,112
30.52
2
CITICORP NOMINEES PTY LIMITED
29,289,113
6.45
3
DR PETER DENNETT MEIER & MRS LYNETTE SUZANNE MEIER
11,383,340
2.51
4
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
8,848,307
1.95
5
MR ANDREW PETER SPINKS ATF A S GOLD SF
6,640,088
1.46
6
BCV NOMINEES PTY LTD
5,685,767
1.25
7
REINDEER INVESTMENTS PTY LIMITED
3,257,692
0.72
8
MR KOSTA TRAJKOVSKI & MRS SUSANNE TRAJKOVSKI
3,233,904
0.71
9
CORNWALL HOLDINGS PTY LTD
3,179,615
0.70
10
LAX CONSULTING PTE LTD
3,039,318
0.67
11
PHELPS HILL INVESTMENTS PTY LTD
3,000,006
0.66
12
BNP PARIBAS NOMS PTY LTD
2,806,526
0.62
13
MRS LORRAINE ATKINSON
2,670,100
0.59
14
MR NICHOLAS BOLGER
2,641,501
0.58
15
ANDREW SPINKS
2,575,000
0.57
16
GUNPIN PTY LTD
2,500,000
0.55
17
ANDREW SPINKS ATF THE SPINKS FAMILY
2,429,434
0.54
18
MR NICOLA CONIDI & MRS GIANNINA CONIDI
2,401,417
0.53
19
NICK CONIDI PTY LTD
2,310,031
0.51
20
MR JEFFREY RONALD LINGARD
2,050,000
0.45
Total
238,515,271
52.54%
Distribution of Listed Securities
A distribution schedule of fully paid ordinary shares:
Category (size of holding)
Holders
Total Units
% Issued
Share Capital
1 to 1,000
846
570,111
0.13
1,001 to 5,000
2,242
6,216,288
1.37
5,001 to 10,000
1,139
8,980,108
1.98
10,001 to 100,000
1,999
67,251,472
14.81
100,001 and over
395
371,013,840
81.72
Total
6,621
454,031,819
100.00%
74
ANNUAL REPORT 2024
ECOGRAF LIMITED
Unmarketable parcels
Holdings less than a marketable parcel of fully paid ordinary shares (being 5,050 shares based on a share price of $0.099 as
at 20 September 2024):
Holders
Number of Shares
3,099
6,841,738
Substantial Shareholders
The names of substantial shareholders and the number of fully paid ordinary shares to which each substantial shareholder and
their associates have a relevant interest, as disclosed in substantial shareholding notices given to the company, are as set out
below:
Substantial Shareholder
Number of Shares
Superannuation and Investments HoldCo Pty Ltd1
28,710,060
Commonwealth Bank of Australia2
27,734,788
1.3 Disclosed to ASX on 31 July 2024 and 02 August 2024.
2.3 Disclosed to ASX on 01 August 2024.
Unquoted securities
Unquoted securities on issue were as follows:
Class
Expiry
Date
Number of
Rights
Number of
Holders
Performance rights
19 January 2026
4,675,000
4
Performance rights
07 December 2026
500,000
1
Performance rights
07 December 2027
320,825
1
Performance rights
29 December 2027
1,000,000
2
Performance rights
21 February 2028
2,121,970
2
Performance rights
22 December 2028
2,000,000
1
Performance rights
19 January 2029
2,139,885
1
Performance rights
22 February 2029
1,700,000
4
Total
14,457,680
Securities Subject to Escrow
As at 20 September 2024, there are no securities currently subject to escrow.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has
one vote on a show of hands.
Performance Rights
There are no voting rights attached to any class of performance rights that are on issue.
On-market Buy-Back
Currently there is no on-market buy-back of the Company’s securities.
Shareholder Information
75
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ECOGRAF LIMITED
Summary of Tenements
Mineral tenements
Licence
Area (km2)
Ownership interest
Project
Location (Region/Country)
ML 548/2015
9.62
100%
Epanko
Mahenge, Tanzania
Epanko SML
18.9
Application
Epanko
Mahenge, Tanzania
PL 9331/2013
2.76
100%
Epanko
Mahenge, Tanzania
PL 10092/2014
23.23
100%
Arusha-Merelani
Arusha, Tanzania
PL 10388/2014
2.57
100%
Epanko
Mahenge, Tanzania
PL 10390/2014
2.81
100%
Epanko
Mahenge, Tanzania
PL 10872/2016
2.60
100%
Arusha-Merelani
Arusha, Tanzania
PL 11081/2017
2.08
100%
Arusha-Merelani
Arusha, Tanzania
PL 11082/2017
20.77
100%
Arusha-Merelani
Arusha, Tanzania
PL 11143/2017
2.62
100%
Arusha-Merelani
Arusha, Tanzania
PL 11196/2018
46.72
100%
Arusha-Merelani
Arusha, Tanzania
PL 11386/2019
6.73
100%
Arusha-Merelani
Arusha, Tanzania
PL 11598/2021
23.45
100%
Epanko
Mahenge, Tanzania
PL 11600/2021
2.49
100%
Epanko
Mahenge, Tanzania
PL 11668/2021
229.48
100%
Northern Frontier
Kagera, Tanzania
PL 11837/2022
297.36
100%
Northern Frontier
Kagera, Tanzania
PL 11839/2022
299.63
100%
Southern Frontier
Ulanga, Tanzania
PL 11840/2022
288.87
100%
Southern Frontier
Ulanga, Tanzania
PL 11841/2022
298.26
100%
Northern Frontier
Kagera, Tanzania
PL 11915/2022
216.94
100%
Northern Frontier
Kagera, Tanzania
PL/19373/2022
298.02
Application
Golden Eagle
Manyara, Tanzania
PL/20188/2022
299.66
Application
Golden Eagle
Manyara, Tanzania
76
ANNUAL REPORT 2024
ECOGRAF LIMITED
Mineral Resources and Ore Reserves Information
Governance and Internal Control
EcoGraf Limited ensures that all Mineral Resource Estimates are subject to appropriate levels of governance and internal
controls. Estimation procedures are well established and are subject to systematic internal peer review and external technical
review undertaken by competent and qualified professionals. These reviews have not identified any material issues. EcoGraf
Limited also periodically reviews this governance framework to ensure it remains appropriate for the requirements of its
business activities.
Mineral Resources and Ore Reserves Estimates are reported on an annual basis in accordance with the 2012 Edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (‘JORC Code’). Mineral Resource
Estimates are quoted inclusive of Ore Reserves. Competent Persons named are Members or Fellows of The Australasian
Institute of Mining and Metallurgy and/or The Australian Institute of Geoscientists and qualify as Competent Persons as defined
under the JORC Code.
Epanko Graphite Project Mineral Resources Estimate
30 June 20241
Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Measured
32.3
7.8
2,500
Indicated
55.7
7.5
4,200
Inferred
202.8
7.2
14,310
Total
290.8
7.2
21,010
1 March 2024 Mineral Resources Estimate for the Epanko Deposit>5.5% TGC. Material assumptions underpinning the Mineral Resource Estimate are set out in the
EGR ASX announcement dated 11 March 2024
30 June 20232
Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Measured
21.5
7.7
1,650
Indicated
41.7
7.6
3,165
Inferred
65.1
7.2
4,690
Total
128.2
7.4
9,510
2 February 2023 Mineral Resources Estimate for the Epanko Deposit>5.5% TGC
Epanko Graphite Project Ore Reserves Estimate
30 June 20241
Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Proven
11.7
8.8
1,033
Probable
2.6
8.5
220
Total
14.31
8.8
1,253
1 Cut-off grade applied Eastern Zone is 4% TGC; Cut-off grade applied Western Zone is 6.25% TGC. Material assumptions underpinning the Ore Reserve are set
out in the EGR ASX announcement dated 25 July 2024
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ANNUAL REPORT 2024
ECOGRAF LIMITED
30 June 20232
Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Proven
5.7
8.4
483
Probable
5.9
8.2
488
Total
11.7
8.3
971
2 Mineral Reserves are quoted from blocks where the TGC grade is greater than 5%.
Merelani–Arusha Graphite Project Mineral Resources Estimate
30 June 20241
Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Measured
7.4
6.7
500
Inferred
10.3
6.3
650
Total
17.7
6.5
1,150
30 June 20231
Classification
Tonnage
(Mt)
Grade
(%TGC)
Contained
Graphite
(Kt)
Measured
7.4
6.7
500
Inferred
10.3
6.3
650
Total
17.7
6.5
1,150
13 Refer to ASX Announcement dated 8 September 2015
Notes to the Mineral Resource Estiimate and Ore Reserve tables above
•3 The Epanko and Merelani-Arusha Graphite Projects are located in Tanzania.
•3 Totals may not sum due to rounding.
•3 Mt = 1,000,000 tonnes.
•3 Tonnage figures have been rounded to the nearest 1,000 and % TGC grades have been rounded to 1 decimal place.
Competent Persons’ Statement
The information in this report that relates to the Epanko Mineral Resource is based on, and fairly reflects, information compiled by Mr David Williams and Mr
David Drabble. The information that relates to the Merulani-Arusha Mineral Resource is based on, and fairly reflects, information compiled by Mr David Williams.
Mr. David Williams is a full-time employee of ERM and is a Member of the Australian Institute of Geoscientists (#4176)(RPGeo). Mr. David Drabble is a full-time employee
of EcoGraf Ltd and is a Member of the Australasian Institute of Mining and Metallurgy (#307348). Mr David Williams and Mr David Drabble have sufficient experience
relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as Competent Persons as
defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code). The Company
confirms that it is not aware of any new information or data that materially affects the information included in the relevant market announcement and all material
assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed.
The information in this report that relates to the Ore Reserve has been compiled by Mr Steve O'Grady. Mr O'Grady, who is a Member of the Australasian Institute
of Mining and Metallurgy (#201545), is a fulltime employee of Intermine Engineering and produced the Mining Reserve estimate based on data and geological
information supplied by Mr Williams. Mr O'Grady has sufficient experience that is relevant to the estimation, assessment, evaluation and economic extraction of
Ore Reserve that he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results,
Minerals Resources and Ore Reserves. The Company confirms that it is not aware of any new information or data that materially affects the information included in
the relevant market announcement and all material assumptions and technical parameters underpinning the estimates, including production targets and forecast
financial information derived from the production targets in the relevant market announcement continue to apply and have not materially changed.
The Company confirms that the Mineral Resource and Ore Reserve statements above have, as a whole, been approved by Mr David Drabble. Mr Drabble has
provided prior written consent to the issue of the Mineral Resource and Ore Reserve statements in the form and context in which they appear in this report.
78
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Corporate Directory
79
ANNUAL REPORT 2024
ECOGRAF LIMITED
Directors
Robert Pett
Non-Executive Chairman
Andrew Spinks
Managing Director
John Conidi
Non-Executive Director
Keith Jones
Non-Executive Director
Company Secretary
Howard Rae and Shannon Coates
Registered and Principal Office
Level 3, 18 Richardson Street
West Perth WA 6005
Telephone: +61 8 6424 9000
Internet:
www.ecograf.com.au
Email:
info@ecograf.com.au
Share Registry
Link Market Services
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: 1300 554 474 (toll free within Australia)
Email:
registrars@linkmarketservices.com.au
Solicitors
Steinepreis Paganin
Level 14, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9321 4000
Facsimile:
+61 8 9321 4333
King & Wood Mallesons
Level 30, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone: +61 8 9269 7000
Facsimile:
+61 8 9269 7999
Auditor
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
Perth WA 6000
Telephone: +61 8 9261 9100
Facsimile:
+61 8 9261 9111
Bankers
Westpac Banking Corporation
Level 3, Tower 2
123 St Georges Terrace
Perth WA 6000
Stock Exchange Listings
Australian Securities Exchange
ASX Code: EGR
Frankfurt Stock Exchange (Börse Frankfurt)
FSE Code: FMK
OTCQB Stock Exchange
OTCQB Code: ECGFF
ASX: EGR FSE: FMK OTCQB: ECGFF
WWW.ECOGRAF.COM.AU