ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
TOMORROW’S TIN
ELEMENTOS LIMITED ANNUAL REPORT
For the year ended 30 June 2021
ASX:ELT | ABN 49 138 468 756
CONTENTS
Chairman’s Letter to Shareholders
Oropesa Project
Cleveland Project
Environment, Social, Governance (ESG)
Tenement Interests
Mineral Resources Statement
Cautionary Statements
Directors’ Report
Auditor’s Independence Declaration
Shareholder Information
Corporate Governance Statement
Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
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CORPORATE DIRECTORY
Directors and Company Secretary
Share Registry
Mr Andy Greig (Non-executive Chairman)
Mr Christopher Dunks (Non-Executive Director)
Mr Calvin Treacy (Non-executive Director)
Mr Corey Nolan (Non-executive Director, Chairman of the
Audit and Risk Committee)
Mr Brett Smith (Non-executive Director)
Mr Duncan Cornish (Company Secretary)
Head Office and Registered Office
Elementos Limited
Level 7, 167 Eagle Street
Brisbane QLD 4000
Tel: +61 7 2111 1110
www.elementos.com.au
Auditor
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane QLD 4000
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Tel: 1300 737 760
Fax: 1300 653 459
www.boardroomlimited.com.au
Stock Exchange Listing
Australian Securities Exchange Ltd
ASX Code: ELT
Australian Business Number
49 138 468 756
Banker
National Australian Bank Limited
Level 19, 259 Queen Street
Brisbane QLD 4000
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
CHAIRMAN’S LETTER
Elementos is strategically placed to take advantage of
tin’s forecast strong market fundamentals. Our flagship
Oropesa Project in southern Spain is one of the best
undeveloped open-cut tin resources in the world – and
Elementos have just completed 5,654m (46 holes) of
additional drilling to increase the size and confidence in
the Mineral Resource, a new estimate is due for
completion by the end of 2021.
We have committed to completing a Definitive Feasibility
Study (DFS) for the Oropesa Tin Project , targeting delivery
at the end of calendar year 2022. This DFS will
incorporate the updated Mineral Resource Estimate and
the other feasibility development programs including
metallurgical, geotechnical and groundwater programs.
Surging tin prices have prompted the commencement of
new work programs at the Cleveland Tin Project in
Tasmania following last year’s updated JORC Mineral
Resource estimate. We have identified additional
mineralisation along strike of the current Mineral
Resource and a 1,000m drilling program (four holes) is
planned and approved by the Tasmanian government.
Additionally, we commenced a strategic review of historic
Cleveland technical studies to assess redevelopment.
“
Our development timing is excellent,
with surging tin prices built upon a
foundation of increasing global
demand for tin and falling supply.
Our pathway to becoming a major tin
producer is clear and we’re looking
forward to an electric tomorrow with
tremendous confidence.
“
Dear fellow shareholders
Welcome to the 2021 Elementos Limited (ASX: ELT)
Annual Report. This has been a transformational year for
Elementos, and backed by surging tin prices, the
Company has firmly established itself as a prominent tin
project developer. We are now rapidly moving towards
becoming a producer of tin concentrate.
London Metal Exchange (LME) Tin prices increased 98%
during the year to US$33,460/tonne, global tin
inventories are at record lows following COVID-19 supply
disruptions, unprecedented growth in demand for
electronics and increased demand for electric vehicles
and green infrastructure. The drawdown on global tin
stocks was so substantial at certain points throughout the
year, market inventories were estimated to have only
supplied one to two days of global demand. End users are
struggling to re-build their private company stockpiles and
have limited ability to draw from exchanges due to a
global undersupply of tin. The International Tin
Association is currently forecasting a 30,000-40,000-
tonne/year (~10% of demand) supply deficit to continue
into 2025, with widening deficits post-2025. As I stated in
my letter last year - it’s good to be “in tin”.
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
In April 2021, Joe David was appointed Chief Executive
Officer. Joe is an experienced mining engineer who has
worked in natural resources finance, operational,
executive, and consulting positions with listed and private
companies. Joe specialises in advancing exploration and
development companies through feasibility studies,
financing, and into construction and operations. Joe has
hit the ground running, working closely with the Board on
establishing the development pathways for our two
projects.
Elementos completed an oversubscribed $6.1m capital
raising to institutional, sophisticated, and accredited
investors in April 2021. This represents a strong vote of
confidence in the Elementos’ vision and development
strategies for its tin assets, and I thank our Shareholders
for your continuing support.
We have established an important new milestone with a
major commitment to ESG. Our new ESG Position
Statement is outlined in this Annual Report. Elementos
plans to operate its business in a manner that considers
and measures our impacts across essential ESG criteria
and in line with changing stakeholder expectations. We
are building a business that aims to provide value to its
shareholders and the communities in which we operate by
placing a greater focus on doing this in an
environmentally and socially sustainable way leading from
our strong governance principles.
Our experienced team has done a fantastic job maturing
our two projects, especially during the very challenging
global COVID-19 pandemic. I want to take this opportunity
to thank all our employees, contractors, and consultants
for delivering such stellar results whilst staying safe and
ensuring the highest standards of environmental
compliance.
I believe it’s an exciting time to be a Shareholder of
Elementos. We have successfully shifted from mineral
explorer to project developer and now have the firm
foundations to progress towards tin producer. Our
development timing is excellent, with surging tin prices
built upon a foundation of increasing global demand and
falling supply. Our pathway to becoming a major tin
producer is clear and we’re looking forward to an electric
tomorrow with tremendous confidence..
Yours sincerely
Andy Greig
Non-executive Chairman
Drill core from recently completed Resource drilling campaign, Expn_016 4m @ 0.69% Sn from 138.8m
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
OROPESA PROJECT
Located in southern Spain, the Oropesa Tin
Project is one of the world’s largest
undeveloped, open-cut mineable tin deposits,
with access to world class infrastructure.
Oropesa is an advanced tin project with near
term development and cash flow potential.
The Company completed the acquisition of the Oropesa tin
project (Oropesa) in Spain in 2019 and maturing this asset
has been the primary focus of the Company. Activities at
Oropesa included the completion of a 46-hole on-ground
Mineral Resource drilling program (completed 14 July
2021). The program, which is still awaiting final assays to
complete an updated Mineral Resource Estimate, can be
deemed an early success due to the intersection of
significant mineralisation both within and external to the
existing Mineral Resource. In addition, the project
commenced a series of feasibility development programs to
further develop key engineering information to feed into the
Definitive Feasibility Study (DFS), which was announced as
the development pathway for the project subsequent to the
year on 12 July 2021.
Tin mineralisation was first recognised at Oropesa in 1982.
Intensive exploration activity since 2010, including 261
historic drill holes (54,026 metres), has resulted in the
definition of the current mineral resource. The project area
contains numerous geophysical and geochemically
anomalous regions that could potentially extend this
resource with additional exploration.
Tin mineralisation at Oropesa (cassiterite with minimal
stannite) occurs as a replacement style orebody associated
with sulphides, predominantly pyrite and pyrrhotite within a
sedimentary sequence at the contact between sandstone
and conglomerate units. Widespread folding and faulting of
the sedimentary sequence has resulted in the mineralised
sequence being overturned and repeated in places.
The Oropesa tin project contains a JORC compliant
Measured, Indicated and Inferred Resource of 67,520
tonnes of tin.
All resources calculated using a 0.15% Tin cut-off grade. This
information was first disclosed under the JORC Code 2012 on 31
July 2018
Oropesa consists of an exploration concession package (Investigation Permit No.
13.050) covering an area of 13km2, located approximately 75km north-west of
Cordoba and 180km north-east of Seville, in the region of Andalucía, in southern
Spain.
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Following the recent drilling program, an updated JORC
Mineral Resource Estimate is being prepared for release
later in 2021.
Elementos is rapidly advancing the Oropesa Tin Project
towards development and production, by commencing a
Definitive Feasibility Study (DFS) which was announced on
12 July 2021. Elementos completed 46 geological diamond
drill holes totalling 5,654m. The program has confirmed
additional near-surface mineralisation that is not currently
included in the 2018 geological resource model and has
also intersected mineralisation that will likely increase the
confidence in parts of the current Mineral Resource.
Feasibility development programs, including metallurgical,
geotechnical and hydrogeological programs to mature on-
ground data collection, laboratory analysis and engineering
confidence are all underway. At year end, pilot plant test
work was 20% complete, the geotechnical rigs were about.
to mobilise to the site and the hydrogeological water
monitoring studies were ongoing. Following the end of the
period the metallurgical pilot plant test work is 55%
completed, three(of 10) geotechnical holes and planning
for the pump testing of groundwater is well advanced.
The Company completed an Economic Study on the project
during the previous annual reporting period. The Economic
Study was based on the development of an open-cut mine,
processing plant, tailings storage facility and infrastructure
to support a 750,000 tonne per annum (tpa) mining
operation over a mine life of 14 years. The operation will
produce high-grade tin concentrate for sale to commercial
smelters in Europe and Asia.
The Economic Study, based on a tin price of US$19,750
per tonne (this price is 41% lower than the tin price at the
end of the current reporting period, US$33,460). Key
highlights of the Economic Study were reported in detail to
the ASX on 7 May 2020, are summarised in Table 1.
DESCRIPTION
UNITS
RESULTS
Average annual ore feed
Tonnes 750,000
Average annual tin metal production
Tonnes 2,440
Life-of-mine
Average tin price
Years
14
US$/t
real
19,750
Pre-production capital expenditure
US$m
52.2
Total life-of-mine revenue
US$m
675
Total life-of-mine EBITDA
US$m
281
All-in-sustaining cash costs
US$/t
metal
11,790
Net Present value (8%, pre-tax, real)
US$m
92
Internal Rate of Return (pre-tax, real) %
25
Net Present value (8%, after-tax, real) US$m
66
Internal Rate of Return (after-tax,
real)
Project capital pay-back period (pre-
tax from mine start)
%
22
Years
4
Table 1. Summary of Oropesa Economic Study financial and technical
information (forecast numbers are approximate)
Elementos has drafted the resubmission of both the
Environmental Approvals and Mining Lease (Exploitation
Licence) application process through discussions with
representatives of the Andalucian Government (Junta)
following the feedback from previous submissions lodged by
Eurotin (Mining Lease application was first lodged in
October 2017, Environmental Impact Study was first lodged
in February 2018). Elementos then decided to revise the
original EIS to better align with the Company’s newly
proposed mining operation and engaged ERM (Global
Environmental Consultants) to re-draft the submissions and
address several recommendations made by the Junta to
improve the EIS and overall environmental outcomes. The
Company continues direct discussions with the Junta about
finalisation and lodgement
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
CLEVELAND PROJECT
The Cleveland Tin Project is located 80km
southwest of Burnie in the mineral-rich
northwest region of Tasmania, Australia. It is
a historic mine boasting excellent power,
water and transport infrastructure.
The tin province in northwest Tasmania hosts some of the
world’s highest grade and most productive tin mines,
including Renison Bell, Mt. Bischoff and Cleveland. The
region has well-developed infrastructure and a strong
mining culture. The site is linked to Burnie Port by sealed
roads. Accessible power runs through the Cleveland
exploration licence area.
Cleveland hosts tin and copper mineralisation in tailings,
open-cut and underground Mineral Resources, and
includes a separate tungsten Mineral Resource. The
Company has completed several studies assessing the
potential of developing these resources
In 2018, the Company completed an update to the JORC
Mineral Resource Estimate for Cleveland. The total
contained tin within the revised 2018 JORC Mineral
Resource Estimate increased by 15.8% and contained
copper increased by 20.0%. There was no change to the
existing 2015 estimate for the tailings resource at
Cleveland. The results for the 2018 hard rock resource
estimate are reported in accordance with the JORC Code
(2012).
The Cleveland ore body remains open at depth, along
strike and down dip from the currently defined ore lenses
The Cleveland Project continues to be progressed towards
development with the next phases of work including an
exploration programme which aims to locate and define
additional Mineral Resources.
Exploration at Cleveland recommenced in the first quarter
of 2021 following a prolonged period of travel restrictions
due to the COVID-19 pandemic. Activity focused on a
prospective region about 500m long to the immediate
northeast and along strike of the existing geological
resource. The area under investigation contains a set of
historic Self-Potential (SP) geophysical anomalies from a
survey carried out by the Bureau of Mineral Resources
(Geoscience Australia) in 1954.
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Figure 1. Cleveland Tin Project Location
Figure 2. Sample interpreted to be from the Cleveland
carbonate bearing host horizon (Washington Creek)
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Reconnaissance mapping of the prospective region has
confirmed the presence of the Cleveland geological mine
sequence (Halls Formation and adjacent Crescent Spur
Sandstone) with rock chip samples containing visible
sulphide mineralisation at four of the five locations
investigated, the most significant assay being 0.7% Sn,
0.57% Cu, & 13.4% Zn.
A diamond drilling program comprising four drill holes,
totaling 1000m, has been planned to test the SP
anomalies. The proposed drilling program was submitted
to Mineral Resources Tasmania for consideration by the
Tasmanian Government for a grant under the Tasmanian
Exploration Drilling Grant Initiative program. The grant
application was successful, comprising $50,000 to co-
fund direct drilling costs and $20,000 for helicopter
support if required.
Elementos received approval of the standard Work
Program from Mineral Resources Tasmania for the drilling
program, subsequent to the reporting period (9 Sep
2021).
Figure 3. Cleveland Tin Mine mine sequence highlighting the surface projection of the geological resource with superimposed SP
anomalies (in blue) and untested SP anomalies (in green) to the northeast of the historical workings.
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Environment, Social & Governance (ESG)
Elementos has established an Environmental, Social and Governance (ESG) Position
Statement as part of its desire to maturing its global tin assets into production in a
responsible way.
Elementos developed this statement via a strategic review with a global boutique ESG and project advisory firm
Adaptus. The review established visibility on material ESG themes through:
• A detailed analysis of relevant statutory and voluntary ESG disclosure and reporting frameworks
• Analysis of applicable mining industry standards and trends for sustainability;
• Analysis of current compliance requirements and emerging regulatory and social license trends in Spain,
Australia and the EU; and,
• Analysis of stated ESG requirements of the investor and lending community.
Elementos is pleased to include this statement as part of the 2021 Annual Report and plans to report on its ESG
progress as part of its Annual Report each year subsequent.
Elementos’ ESG position statement is as follows:
Elementos will develop and operate its mining assets in accordance with evolving industry ESG
and sustainability practices, comply with international laws and regulatory requirements, and
uphold its high standards of safety, business integrity and values. Elementos is committed to
local economic development, environmental protection, and social progress by delivering
responsibly sourced tin into the global market including the clean technology supply chain.
Elementos aims to further enhance its corporate governance policies to facilitate achievement of
its ESG commitments, leveraging its existing performance standards and compliance in the
highly regulated jurisdictions of Australia, Spain and the EU.
Looking forward, Elementos plans to complete the necessary actions to:
• Establish an ESG sub-committee as part of its Board,
• Demonstrate compliance with European and OECD regulations that govern responsibly
sourced tin, including the Tin Code,
• Demonstrate commitment to community and economic development and developing long-
term relationships.
As Elementos matures its projects into production, alongside its commitment to the health and
safety of its people and the communities in which it operates, Elementos will include in its
development philosophy and decision-making consideration of:
• Maximising extraction of the contained mineral resource,
• Minimising ecological footprint,
• Minimising GHG emissions through use of alternative energy sources and electrification of
plant and equipment,
• Minimising the impact of tailings storage facilities,
• Minimising air quality impacts,
• Maximising water recycling,
• Leading practices in diversity and inclusion, and
• Potential impacts of climate change on its operations.
Elementos will continue to monitor the evolving ESG landscape and ensure its ESG
commitments remain relevant and effective in a changing environment.
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
TENEMENT INTERESTS
Elementos Limited held the following interests in
tenements as at the date of this report:
Tenement
Name
Tenement
Number
Area
(km²)
ELT
Interest
Tenement
Location
Cleveland
EL7/2005
Oropesa
13.050
60
13
100%
100%
Tasmania,
Australia
Andalucia,
Spain
A summary of the Group’s annual review of its ore
reserves and mineral resources of its Oropesa Tin Project
in Spain and Cleveland project in Tasmania at 30 June
2021 compared to 30 June 2020 is set out below.
A view of the drill rig operating at the Oropesa Tin Project in southern Spain during the recently
completed 46 hole ( 5,654m) Resource drilling program.
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
MINERAL RESOURCES STATEMENT
Oropesa Project
Total Tin Metal Resource (at 0.15% Sn cut-off)
30 June 2020 and 30 June 2021 – unchanged
Category
Measured
Indicated
Inferred
Tonnage (Mt)
Sn Grade %
Contained Sn (t)
0.33
9.01
3.20
1.09
0.53
0.52
3,585
47,320
16,615
Table subject to rounding errors; Sn = tin
Cleveland Project
Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off)
NOTE: this Open Pit Tin-Copper Mineral Resource is a sub-set of the Total Tin-Copper Mineral Resource noted below
30 June 2020 and 30 June 2021 – unchanged
Category
Indicated
Inferred
Tonnage (Mt)
Sn Grade %
Contained Sn (t)
Cu Grade %
Contained Cu (t)
1.73
0.16
0.93
1.18
16,100
1,900
0.33
0.49
5,700
800
Table subject to rounding errors; Sn = tin, Cu = copper
Underground Tin-Copper Mineral Resource (at 0.35% Sn cut-off)
NOTE: this Underground Tin-Copper Mineral Resource is a sub-set of the Total Tin-Copper Mineral Resource noted below
30 June 2020 and 30 June 2021 – unchanged
Category
Indicated
Inferred
Tonnage (Mt)
Sn Grade %
Contained Sn (t)
Cu Grade %
Contained Cu (t)
4.50
1.08
0.68
0.70
30,600
7,500
0.29
0.25
13,000
2,700
Table subject to rounding errors; Sn = tin, Cu = copper
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
1
Total Tin-Copper Mineral Resource (at 0.35% Sn cut-off)
30 June 2020 and 30 June 2021 – unchanged
Category
Indicated
Inferred
Tonnage (Mt)
Sn Grade %
Contained Sn (t)
Cu Grade %
Contained Cu (t)
6.23
1.24
0.75
0.76
46,700
9,400
0.30
0.28
18,700
3,500
Table subject to rounding errors; Sn = tin, Cu = copper
Underground Tungsten Mineral Resource (at 0.20% WO3 cut-off) 1
30 June 2020 and 30 June 2021 – unchanged
Category
Inferred
Tonnage (Mt)
W03 Grade %
4.00
0.30
Table subject to rounding errors; WO3 = tungsten oxide
Tailings Ore Reserve (at 0% Sn cut-off) 2
30 June 2020 and 30 June 2021 – unchanged
Category
Probable
Tonnage (Mt)
Sn Grade %
Contained Sn (t)
Cu Grade %
Contained Cu (t)
3.70
0.29
11,000
0.13
5,000
Table subject to rounding errors; Sn = tin, Cu = copper
The Group regularly reviews its Mineral Resources and Reserves to assess their reasonableness, engaging suitably qualified
competent person/s where required. A summary of the governance and controls applicable to the Group’s Mineral Resources
and Reserves processes is as follows:
• Review and validation of drilling and sampling methodology and data spacing, geological logging, data collection and
storage, sampling and analytical quality control;
• Geological interpretation — review of known and interpreted structure, lithology and weathering controls;
• Estimation methodology — relevant to mineralisation style and proposed mining methodology;
• Comparison of estimation results with previous mineral resource models, and with results using alternate modelling
methodologies;
• Visual validation of block model against raw composite data; and
• Peer review by senior company personnel and independent consultants as required.
1 This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code
2012 on the basis that the information has not materially changed since it was last reported.
2 Announced per the JORC Code 2012 on 3 August 2015 “Cleveland Tailings Ore Reserve”
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Competent Persons Statement:
The information in this report that relates to the Annual
Mineral Resources and Ore Reserves Statement,
Exploration Results and Exploration Targets is based on
information and supporting documentation compiled by
Mr Chris Creagh, who is a consultant to Elementos Ltd. Mr
Creagh is a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy and who
consents to the inclusion in the report of the matters
based on his information in the form and context in which
it appears.
Chris Creagh has sufficient experience that is relevant to
the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2012
Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves
(JORC Code 2012).
The information in this report that relates to Processing
and Metallurgy for the Oropesa Tin Project is based on
and fairly represents information and supporting
documentation compiled by Chris Creagh, who is a
consultant to Elementos Ltd. Mr Creagh is a Competent
Person who is a Member of the Australasian Institute of
Mining and Metallurgy and who consents to the inclusion
in the report of the matters based on his information in
the form and context in which it appears.
Chris Creagh has sufficient experience that is relevant to
the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to
qualify as a Competent Person as defined in the 2012
Edition of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves
(JORC Code 2012).
The Australian Securities Exchange has not reviewed and
does not accept responsibility for the accuracy or
adequacy of this release.
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
CAUTIONARY STATEMENTS
Forward-looking statements
The Economic Study (Study) referred to in this
announcement has been completed to an overall Scoping
Study level of accuracy of +/- 35%. It should be noted that
a number of the work streams in the Study have been
undertaken to a more detailed standard of evaluation and
definition.
The Study is preliminary in nature, it includes inferred
Mineral Resources that are considered too speculative
geologically to have the economic considerations applied
to them that would enable them to be categorised as
Mineral Reserves, and there is no certainty that the Study
outcomes will be realised. Mineral Resources are not
Mineral Reserves and do not have demonstrated
economic viability. There is no certainty that all or any part
of the Mineral Resources estimated will be converted into
an Mineral Reserves estimate.
While the estimate of Mineral Resources may be
materially affected by environmental, permitting, legal,
title, taxation, socio-political, marketing, or other relevant
issues, the Company is not aware of any such issues. The
quantity and grade of reported Inferred Resources are
uncertain in nature and there has been insufficient
exploration to define these Inferred Resources as an
Indicated or Measured Mineral Resource and it is
uncertain if further exploration will result in upgrading
them to an Indicated or Measured Mineral Resource
category.
The Study outcomes, production target and forecast
financial information are based on information that are
considered to be at Scoping Study level. The information
applied in the Study is insufficient to support the
estimation of Ore Reserves. While each of the modifying
factors was considered and applied, there is no certainty
of eventual conversion to Ore Reserves or that the
production target will be realised. Further exploration work
and evaluation studies are required before Elementos will
be in a position to estimate any Ore Reserves or provide
any assurance of an economic development case.
Given the uncertainties involved, investors should not
make any investment decisions based solely on the
results of the Study. The Study is based on the Measured,
Indicated and Inferred Resources as estimated by SRK in
the Mineral Resource Estimate released on the ASX on
31st July 2018, “Acquisition of the Oropesa Tin Project”
and SEDAR by SRK dated September 2018. For full
details of the Mineral Resources Estimate please refer to
the September 2018 release by SRK on SEDAR (under
the Eurotin Ltd company name). Elementos is not aware
of any new information or data that materially affects the
information included in that release. All material
assumptions and technical parameters underpinning the
estimates in that SEDAR release continue to apply and
have not materially changed.
Of the Mineral Resources scheduled for extraction in the
Study mine production plan, approximately 4% are
classified as Measured, 78% as Indicated and 18% as
Inferred. There is a low level of geological confidence
associated with Inferred Mineral Resources and there is
no certainty that further exploration work will result in the
determination of Indicated Mineral Resources or that the
production target itself will be realised. Inferred
Resources do not contribute to the production schedule in
the first two years of operations and only 1% in the first
nine years of the proposed development. The production
plan includes Inferred Resources in the latter stages of
the production schedule.
This release contains a series of forward-looking
statements. The words “expect”, “potential”, “intend”,
“estimate” and similar expressions identify forward-
looking statements. Forward-looking statements are
subject to known and unknown risks and uncertainties
that may cause the actual results, performance or
achievements to differ materially from those expressed or
implied in any of the forward-looking statements in this
release that are not a guarantee of future performance.
Statements in this release regarding the Elementos
business or proposed business, which are not historical
facts, are forward-looking statements that involve risks
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
and uncertainties. These include Mineral Resource
Estimates, metal prices, capital and operating costs,
changes in project parameters as plans continue to be
evaluated, the continued availability of capital, general
economic, market or business conditions, and statements
that describe the future plans, objectives or goals of
Elementos, including words to the effect that Elementos
or its management expects a stated condition or result to
occur. Forward-looking statements are necessarily based
on estimates and assumptions that, while considered
reasonable by Elementos, are inherently subject to
significant technical, business, economic, competitive,
political and social uncertainties and contingencies. Since
forward-looking statements address future events and
conditions, by their very nature, they involve inherent risks
and uncertainties. Actual results in each case could differ
materially from those currently anticipated in such
statements. Investors are cautioned not to place undue
reliance on forward-looking statements.
For more information on specific risks associated with
forward looking statements refer to the Risk Assessment
section of the ASX announcement “Positive Economic
Study for the Oropesa Tin Project”, 7th May 2020.
Elementos has concluded that it has a reasonable basis
for providing these forward-looking statements and the
forecast financial information included in this release.
This includes a reasonable basis to expect that it will be
able to fund the development of the Oropesa Tin Project
upon successful delivery of key development milestones.
The detailed reasons for these conclusions are outlined
throughout the release on the results of the Economic
Study and in Appendix 1 (JORC Code 2012, Table 1.
Consideration of Modifying Factors). While Elementos
considers all of the material assumptions to be based on
reasonable grounds, there is no certainty that they will
prove to be correct or that the range of outcomes
indicated by the Economic Study will be achieved. To
achieve the range of outcomes indicated in the Study, pre-
production funding in excess of US$70m will likely be
required. There is no certainty that Elementos will be able
to source that amount of funding when required.
Discussions with potential funders have confirmed that a
project of this scale will be able to be funded with a
combination of Debt and Equity. The company is
confident that the capital costs are sufficiently low that
raising the required equity will be possible. The company
continues to have the full support of its existing largest
shareholders and is working with potential offtake
partners, brokers, private equity firms and traditional
funders to ensure that the Company will be in a position
14
to fund the project as needed. It is also possible that
such funding may only be available on terms that may be
dilutive to or otherwise affect the value of Elementos’
shares. It is also possible that Elementos could pursue
other value realisation strategies such as a sale, partial
sale or joint venture of the Oropesa Tin Project. This could
materially reduce Elementos’ proportionate ownership of
the Oropesa Tin Project.
No Mineral Reserve has been declared. All material
assumptions, including sufficient progression of all JORC
modifying factors, on which the Production Target and
forecast financial information are based have been
included in this release.
Mineral Resources, Ore Reserves and Production Targets
The information in this report that relates to the Mineral
Resources and Ore Reserves were last reported by the
company in compliance with the 2012 Edition of the JORC
Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves. The Mineral
Resources, Ore Reserves, production targets and financial
information derived from a production target were
included in market releases dated as follows:
*1 - Cleveland Tailings Ore Reserve, 3 August 2015;
*2 - Cleveland JORC Resource Significantly Expanded, 5
March 2014 (tungsten resource);
*3 - Acquisition of the Oropesa Tin Project, 31st July
2018;
*4 - Substantial Increase in Cleveland Open Pit Project
Resources following revised JORC study, 26th
September 2018;
*5 - Exploration Evaluation at Oropesa tin project, 4th
February 2019;
*6 - Oropesa Ore Sorting Performance Testwork, 9th
August 2019;
*7 - Oropesa Presentation – Seville, Spain, 18th October
2019;
*8 - Positive Economic Study for the Oropesa Tin Project,
7th May 2020; and
*9 - Oropesa optimisation work and drilling to unlock
further value, 13th July 2020
*10 – “Elementos commences feasibility development
programs at the Oropesa Tin Project”, 20th May
2021
*11 – “Oropesa Tin Project – Drilling Progress Report”,
2nd June 2021
*12 – “Oropesa Tin Project – Drilling Progress Report”,
16th June 2021
*13 - “Cleveland Tin Project Co-Funding”, 17th June 2021
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Subsequent to the reporting period
*14 - “Oropesa Tin Project – Drilling Progress Report”,
11th August 2021
*15 - “Oropesa Tin Project – Drilling Progress Report”,
24th August 2021
*16 – “Oropesa Tin Project – Drilling Progress Report”,
30th August 2021
*17 – “Elementos drilling further defines new zone of tin
mineralisation at Oropesa”, 2nd September 2021
*18 – “High-grade assays extend new zone of shallow tin
mineralisation at Oropesa”, 8th September 2021
*19 – “Broad drilling intercepts confirm new shallow tin
mineralisation at Oropesa”, 10th September 2021
The company confirms that it is not aware of any new
information or data that materially affects the information
included in the market announcements referred above
and further confirms that all material assumptions
underpinning the production targets, forecast financial
information derived from a producation target and all
material assumptions and technical parameters
underpinning the Ore Reserve and Mineral Resource
statements contained in those market releases continue
to apply and have not materially changed.
15
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
DIRECTORS’ REPORT
The directors submit their report on the consolidated entity (“Group”) consisting of Elementos Limited and the
entities it controlled at the end of, and during, the financial year ended 30 June 2021.
Directors
The following persons were directors of Elementos Limited during the financial year and up to the date of this report,
unless otherwise stated:
Mr Andy Greig
Mr Chris Dunks
Mr Corey Nolan
Mr Calvin Treacy
Mr Brett Smith
Information on Directors
The board has a strong combination of technical, managerial and capital markets experience. Expertise and
experience includes operating and mineral exploration in Australia. The names and qualifications of the current
directors are summarised as follows:
Andy Greig
Non-Executive Chairman
Mr Greig (GDipBus (Monash); Fellow, ATSE) retired from the Bechtel Group, Inc., the globally renowned engineering,
construction, and project management company, in 2015 after a 35-year career. Mr Greig was a director of Bechtel
Group, Inc. for 5 years, and for 13 years through until 2014; the President of its Mining and Metals Global Business
Unit.
Mr Greig has deep experience in the engineering and construction of large mining and minerals processing projects
around the world. He is a business graduate of Monash University, and a Fellow of the Australian Academy of
Technological Sciences and Engineering.
Mr Greig has not held any other (ASX listed) directorships in the last three years.
Chris Dunks
Non-Executive Director
Mr Dunks (BEng (Mech), GAICD) is currently the Managing Director of Synergen Met Pty Ltd, a Brisbane-based
company that is commercialising novel minerals processing technology.
Mr Dunks was a Founder and Managing Director of Rockwell Minerals Pty Ltd, the company that merged with
Elementos in 2013, and negotiated the original deal to purchase the Cleveland Project. Mr Dunks’ experience over
the last 20 years has been dominated by working on major minerals processing, refining and power projects both
in Australia and the USA.
Mr Dunks’ experience has been in mechanical design, construction management and supervision, project controls,
project management, contract negotiation, business development and new technology commercialisation. He has
worked extensively with Bechtel, Worley Parsons, SNC Lavalin and Jacobs (Aker Kvaerner).
Mr Dunks was originally appointed as a Non-Executive Director of Elementos in November 2015. Following the
resignation of the Company’s CEO in July 2016, Mr Dunks transitioned into an Executive Director role until 1 July
2021 when his role reverted to a Non-Executive Director capacity.
Mr Dunks is a member of the Audit and Risk Committee.
During the past three years, Mr Dunks has also served as a director of ASX listed company Strategic Minerals
Corporation NL (ASX: SMC) (February 2020 to October 2020).
16
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corey Nolan
Non-executive Director
Mr Nolan is an accomplished public company director whose 30-year career in the resources industry started on
the ground in operations before spanning a broad range of corporate roles from equities analyst and corporate
finance director to a number of senior executive and board positions.
As Managing Director of ASX listed Platina Resources Limited since August 2018, he has been instrumental in
restructuring the company’s project portfolio, which has included the acquisition, funding, exploration and
development of new assets.
Prior to Platina, Mr Nolan was Chief Executive Officer at Sayona Mining Limited where he led the acquisition and
development of the Authier Lithium Project in Canada and chartered a substantial growth in the company’s market
capitalisation.
Mr Nolan’s qualifications include a Bachelor of Commerce, Masters Degree in Mineral and Energy Economics and
graduate diploma from the Australian Institute of Company Directors.
Mr Nolan is a member of the Audit and Risk Committee.
During the past three years, Mr Nolan has also served as a director of ASX listed company Platina Resources Limited
(August 2018 to current).
Calvin Treacy
Non-executive Director
Mr Treacy (BEng, MBA, MAICD) has over 20 years senior management experience in mining, mining technology and
manufacturing. He has a strong track record of founding and growing companies, and brings a wealth of experience
in the areas of strategic planning and capital raising.
Mr Treacy is a qualified Mechanical Engineer and holds a Masters of Business Administration, with extensive
experience across a range of industries and positions.
Mr Treacy has worked in a range of roles including Non-executive Director, Chief Executive Officer, Chief Operating
Officer and Production Manager, providing a blend of experience from hands-on management through to executive
oversight and strategic management.
Mr Treacy is a member of the Audit and Risk Committee.
Mr Treacy has not held any other (ASX listed) directorships in the last three years.
Brett Smith
Non-executive Director
Mr Smith has over 30 years’ experience in the resources, construction and engineering industries in senior
operational and financial positions. Mr Smith is Executive Director of Hong Kong listed Dragon Mining which has
operating gold mines and processing plants in both Finland and Sweden.
Mr Smith is also Deputy Chairman of Hong Kong listed resources investment company APAC Resources and
Executive Director of Australian Securities Exchange listed company Metals X. Mr Smith’s qualifications include a
Bachelor’s Degree in Chemical Engineering (Hons), a Master’s Degree in Business Administration and a Master’s
Degree in Research Methodology.
During the past three years, Mr Smith has also served as a director of ASX-listed companies Metals X (December
2019 to present), Tanami Gold (November 2018 to present) and Prodigy Gold (May 2016 to present).
Company Secretary
Duncan Cornish held the position of Company Secretary during the financial year and up to the date of this report.
Mr Cornish is a Chartered Accountant with significant experience as public company CFO and Secretary, focused on
junior resource companies, as well as financial, administration and governance.
17
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Mr Cornish is an accomplished and highly efficient corporate administrator and manager. Duncan has more than
20 years’ experience in the accountancy profession both in England and Australia, mainly with the accountancy
firms Ernst & Young and PricewaterhouseCoopers.
He has extensive experience in all aspects of company financial reporting, corporate regulatory and governance
areas, business acquisition and disposal due diligence, capital raising and company listings and company
secretarial responsibilities, and serves as corporate secretary and chief financial officer of several Australian and
Canadian public companies.
Mr. Cornish holds a Bachelor of Business (Accounting) and is a member of the Chartered Accountants Australia and
New Zealand.
Interests in Securities
As at the date of this report, the interests of each director in shares and options issued by the Company are shown
in the table below:
Directors
A. Greig
C. Dunks
C. Nolan
C. Treacy
B. Smith
Shares
Options
507,486,460
19,687,505
5,784,065
31,636,368
4,040,866
-
-
454,546
1,212,122
-
Principal Activities
The principal activity of the Group during the year was exploration activity in relation to the Oropesa Tin Project. The
Group is also developing the Cleveland tin-copper-tungsten Project through a staged, low-capital development
strategy, which minimises upfront capital, with cash flow funding future stages.
Operating Results
The Group’s operating loss for the financial year, after applicable income tax was $1,612,387 (2020: $1,581,484).
Dividends Paid or Recommended
There were no dividends paid or recommended during the financial year.
Review of Operations
Information on the operations of the Group during the financial year and up to the date of this report is set out
separately in the Annual Report under Review of Operations.
Review of Financial Condition
Capital Structure
At 1 July 2020, the Company had 2,548,330,961 ordinary shares on issue.
On 6 August 2020, the Company announced that it had received commitments to complete a private placement of
464,000,017 shares to be issued at 0.55 cents per share with participants receiving an attaching option on a one
for three basis, with an exercise price of 0.9 cents per share and expiry date of 31 August 2022. The transaction
completed in two tranches as follows:
(a) On 14 August 2020 422,727,288 shares were issued at 0.55 cents per share and 140,909,121 unlisted
options with an exercise price of 0.9 cents per share and expiry date of 31 August 2022 were issued.
18
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
(b) On 2 December 2020, following shareholder approval at the 2020 Annual General Meeting the Company
issued 41,272,729 shares at 0.55 cents per share and 13,757,578 unlisted options with an exercise
price of 0.9 cents per share and expiry date of 31 August 2022.
As part of the Capital Raising activity announced on 6 August 2020 detailed above, the Company announced that it
had engaged BW Equities to act as lead manager to the placement. As consideration BW Equities were issued,
following shareholder approval at the 2020 Annual General Meeting, 40,000,000 unlisted options with an exercise
price of 0.9 cents per share expiring 31 August 2022.
On 6 August 2020, the Company announced that it had entered into an agreement to convert $500,000 of the
outstanding loan balance with Mr Andy Greig (Chairman). Following shareholder approval at the 2020 Annual
General Meeting Mr Greig received 90,909,091 ordinary shares with an issue price of 0.55 cents per share and
30,303,030 options with an exercise price of 0.9 cents per share and expiry date of 31 August 2022.
On 9 September 2020, the Company announced the successful completion of an oversubscribed Shares Purchase
Plan (“SPP”) to existing shareholders raising $773,000. The SPP resulted in the issue of 140,545,487 shares with
an issue price 0.55 cents per share and 35,333,373 options with an exercise price of 0.9 cents per share and expiry
date of 31 August 2022.
On 2 December 2020, following shareholder approval at the 2020 Annual General Meeting Mr Brett Smith (Director)
received 2,540,866 shares in lieu of fees.
On 23 April 2021, the Company announced that it had received commitments to complete a private placement of
610,000,000 shares to be issued at 1.0 cents per share with participants receiving an attaching option on a one
for two basis, with an exercise price of 1.5 cents per share and expiry date of 30 April 2022. The transaction
completed in two tranches as follows:
(a) On 27 April 2021 544,000,000 shares were issued at 1.0 cents per share and 272,000,000 unlisted
options with an exercise price of 1.5 cents per share and expiry date of 30 April 2022 were issued.
(b) On 14 July 2021, following shareholder approval at the 2021 Extraordinary General Meeting the Company
issued 66,000,000 shares at 1.0 cents per share and 33,000,000 unlisted options with an exercise price
of 1.5 cents per share and expiry date of 30 April 2022.
As part of the Capital Raising activity announced on 23 April 2021 detailed above the Company announced that it
had engaged BW Equities to act as lead manager to the placement. As consideration BW Equities were issued,
following shareholder approval at the 2021 Extraordinary General Meeting, 45,000,000 unlisted options with an
exercise price of 1.5 cents per share expiring 30 April 2022.
On 19 April 2021, the Company announced that it had entered into an agreement to convert $569,246 of the
outstanding loan balance with Mr Andy Greig (Chairman). Following shareholder approval at the 2021 Extraordinary
General Meeting Mr Greig received 56,924,600 ordinary shares with an issue price of 1.0 cents per share and
28,462,300 options with an exercise price of 1.5 cents per share and expiry date of 30 April 2022.
On 9 July 2021, the Company issued 82,500,000 performance rights to Executives of the Company with
performance based vesting conditions. 37,500,000 performance rights have an expiry date of 30 June 2023,
37,500,000 performance rights have an expiry date of 31 December 2023 and 7,500,000 performance rights have
an expiry date of 31 December 2025.
From 1 July 2020 to the date of this report the following share options have been exercised into ordinary shares of
the Company:
• 70,889,719 share options with an exercise price of 0.9 cents per share raising $638,007; and
• 65,712,300 options with an exercise price of 1.5 cents per option raising $985,685.
As at the date of this report, the Company had 4,049,853,041 ordinary shares, 502,163,383 unlisted options and
82,500,000 performance rights on issue.
Financial Position
At 30 June 2021, the Group’s net assets totalled $14,576,070 (2020: $7,017,848) which included cash assets of
$5,542,252 (2020: $199,176).
19
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
The Group’s working capital, being current assets less current liabilities has increased from ($1,433,784) in 2020
to $2,969,668 in 2021, principally due to capital raisings undertaken during the period and ongoing exploration
expenditure and operating costs.
Treasury policy
The Group does not have a formally established treasury function. The Board is responsible for managing the
Group’s finance facilities. The Group does not currently undertake hedging of any kind.
Liquidity and funding
Following the capital raisings undertaken during the period, the Group has sufficient funds to finance its operations
and exploration activities, and to allow the Group to take advantage of favourable business opportunities, not
specifically budgeted for, or to fund unforeseen expenditure.
Significant Changes in State of Affairs
Elementos Limited remained relatively unaffected during the period by COVID-19. Staff worked remotely when
possible and followed enhanced social distancing and health and safety procedures when at the workplace.
There was no other matter or circumstance during the financial year that has significantly affected the state of
affairs of the Group.
Events After Reporting Date
• Following shareholder approval on 6 July 2021, the following transactions occurred:
-
-
-
The issue of 66,000,000 shares with an issue price of 1 cent per share and 33,000,000 attaching options
with an exercise price of 1.5 cents per share and expiry of 30 April 2022 in relation to the capital raising
completed in April 2021.
The issue of 45,000,000 options with an exercise price of 1.5 cents per share and expiry of 30 April 2022
to BW Equities who acted as lead manager to the April 2021 capital raising.
The issue of 56,924,600 shares with an issue price of 1 cent per share and 28,462,300 attaching options
with an exercise price of 1.5 cents per share and expiry of 30 April 2022 to Mr Andy Greig (Chairman) on
conversion of the outstanding loan principal and interest. The loan facility was closed upon the issue of
shares. See Note 7 for further details in relation to the loan facility.
• As announced on 8 September 2021, the Company executed an agreement with Mark Wellings (Eurotin
Managing Director) and his entity, ZCR Corp, to settle the outstanding CAD$1m loan facility due to mature in
January 2022. A payment of CAD$683,642 which is inclusive of interest was made during September 2021 to
finalise the agreement.
• As announced on 9 July 2021, the Company issued 82,500,000 performance rights to executives of the
company with company related performance vesting conditions.
• Subsequent to the reporting period the following options were exercised:
-
-
2,727,274 options with an exercise price of 0.9 cents per option raising $24,545; and
62,962,300 options with an exercise price of 1.5 cents per option raising $944,435.
Other than the events noted above, there are no other matters or circumstances that have arisen since the end of
the year which significantly affected or may significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in future financial years.
Environmental Issues
The Group is subject to significant environmental regulations under the laws of the Commonwealth of Australia and
states of Australia in which the Group currently operates. In addition, the Group is subject to the environmental
regulations of the Central Government of Spain, Cordoba Province of Andalucia, Fuente Obejuna municipality and
to a lesser extent the European Union in relation to the Oropesa Tin Project.
The directors monitor the Group’s compliance with environmental obligations. The directors are not aware of any
compliance breach arising during the year and up to the date of this report.
20
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
In addition, the company has established an Environmental, Social and Governance (ESG) Position Statement as
part of its desire to maturing its global tin assets into production in a responsible way. This statement is available
for review in the ESG section of this Annual Report.
Native Title
Mining tenements that the Group currently holds, are subject to Native Title claims. The Group has a policy that is
respectful of the Native Title rights and is continuing to negotiate with relevant indigenous bodies.
21
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Remuneration Report (Audited)
This report details the nature and amount of remuneration for each director and other key management personnel.
The names of key management personnel of Elementos Ltd who have held office during the financial year are:
Key Management Personnel
Position
Andy Greig
Chris Dunks
Corey Nolan
Director – Non-executive Chairman
Director – Non-executive (Executive Director until 1 July 2021)
Director - Non-executive
Calvin Treacy
Director - Non-executive
Brett Smith
Joe David
Director - Non-executive
Chief Executive Officer (appointed 13 April 2021)
Drew Speedy
Chief Financial Officer
The Group’s remuneration policy seeks to align director and executive objectives with those of shareholders and
business, while at the same time, recognising the early development stage of the Group and the criticality of funds
being utilised to achieve development objectives. The board believes the current policy has been appropriate and
effective in achieving a balance of these objectives.
The Group’s remuneration policy provides for long-term incentives to be offered through a director and employee
share option plan and also through a performance rights plan. Options may be granted under these plans to align
directors’, executives’, employees’ and shareholders’ interests. Two methods may be used to achieve this aim, the
first being performance rights and options that vest upon reaching or exceeding specific predetermined objectives,
and the second being options granted with higher exercise prices (than the share price at issue) rewarding share
price growth.
The board of directors is responsible for determining and reviewing the Group’s remuneration policy, remuneration
levels and performance of both executive and non-executive directors. Independent external advice will be sought
when required. No independent external advice was sought during the current year.
Performance-Based Remuneration
Performance-based remuneration includes both short-term and long-term incentives and is designed to reward key
management personnel for reaching or exceeding specific objectives or as recognition for strong individual
performance. Short-term incentives are available to eligible staff of the Group and may be comprised of cash
bonuses, determined on a discretionary basis by the board. No short-term incentives were made available during
the year.
Long-term incentives are comprised of share options and performance rights, which are granted from time-to-time
to encourage sustained strong performance in the realisation of strategic outcomes and growth in shareholder
value.
The exercise price of the options is determined after taking into account the underlying share price performance in
the period leading up to the date of grant and if applicable, performance conditions attached to the share options.
Subject to specific vesting conditions, each option is convertible into one ordinary share.
The Group’s policy for determining the nature and amount of remuneration of board members and key executives
is set out below.
Non-Executive Directors
Board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The maximum aggregate amount of fees that can be paid to non-executive
directors is subject to approval by shareholders at the Annual General Meeting and is not linked to the performance
of the Group. The maximum aggregate amount of fees that can be paid to non-executive directors approved by
22
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
shareholders is currently $250,000. One-third, by number, of non-executive directors retires by rotation at the
Company’s Annual General Meeting. Retiring directors are eligible for re- election by shareholders at the Annual
General Meeting of the Company. The appointment conditions of the non-executive directors are set out and agreed
in letters of appointment.
The Company currently believes it is prudent it continues to maintain a very low-cost corporate overhead and
preserve its cash resources. Consequently, non-executive director fees for the reporting period were $25,000 per
annum (including superannuation where applicable) to each non-executive director. The Company’s chairman, Andy
Greig has chosen to not accept a (director) fee. Chris Dunks was appointed as an executive director and his fee was
increased to $73,000 per annum from 1 August 2016. If directors perform services for the Company that, in the
opinion of the other directors, is outside the scope of the ordinary duties of the director, the Company may pay that
director for those services in addition to the remuneration outlined above. During the current Financial Year Mr
Treacy received $2,400 of additional fees in relation to work undertaken on investor relations.
Executives
The remuneration structure for executives is based on a number of factors, including length of service, particular
experience of the individual concerned, and overall performance of the Group. The executives receive payments
provided for under an employment or service agreement, which may include cash, superannuation, short-term
incentives, and equity based performance remuneration.
Joe David was appointed Chief Executive Officer (CEO) on 13 April 2021. The key terms of the employment
agreement with Joe David were:
•
Total Fixed Remuneration of $275,000 per annum (inclusive of superannuation);
• Short term incentive of up to $50,000 for the initial 12 months from 1 July 2021 based on the achievement
of key performance indicators; and
• 6 months’ notice of termination by either party.
Drew Speedy was appointed Chief Financial Officer (CFO) on 1 April 2019. The key terms of the employment
agreement with Drew Speedy are:
•
Total Fixed Remuneration of $100,000 per annum (inclusive of superannuation);
• Annual cash bonus at the discretion of the board (no STI was granted during the 2021 or 2020 financial
years); and
• 90 days’ notice of termination by either party.
Remuneration Details of Key Management Personnel
The remuneration of the key management personnel of Elementos Limited for the year ended 30 June 2021 was
as follows:
Year Ended 30 June 2021
Short Term Benefits
Key Management
Personnel
Salary &
Fees
Bonuses
Equity
Settled
Shares
Equity
Settled
Performan
ce Rights
Post-
Employment
Super-
annuation
Total
Performance
related %
%
consisting
of options
$
$
$
$
$
$
A. Greig
-
C. Dunks(1)
114,747
C. Nolan
C. Treacy(2)
B. Smith
J. David(3)
D. Speedy(4)
22,831
27,400
22,831
55,380
124,810
367,999
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23
-
-
-
114,747
2,169
25,000
-
27,400
2,169
5,261
25,000
60,641
11,857
136,667
21,456
389,455
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
1. During the period Mr Dunks received $41,751 of additional fees in relation to work undertaken on investor relations and
capital raisings.
2. During the period Mr Treacy received $2,400 of additional fees in relation to work undertaken on investor relations.
3. Appointed CEO on 13 April 2021.
4. During the period Mr Speedy received $35,000 of additional fees in relation to work undertaken on investor relations and
capital raisings.
Short Term Benefits
Key Management
Personnel
Salary &
Fees
Bonuses
Year Ended 30 June 2020
Equity
Settled
Shares
Equity
Settled
Performan
ce Rights
Post-
Employment
Super-
annuation
Total
Performance
related %
%
consisting
of options
A. Greig
C. Dunks
C. Nolan
C. Treacy(1)
B. Smith(2)
C. Creagh(3)
D. Speedy(4)
$
$
$
$
$
$
-
72,996
22,831
26,819
10,896
155,942
119,424
408,908
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
72,996
2,169
25,000
181
27,000
-
10,896
-
-
-
-
-
25,692
13,014
194,648
13.2%
-
11,345
130,769
-
25,692
26,709
461,309
-
-
-
-
-
-
-
1. During the period Mr Treacy received $2,000 of additional fees in relation to work undertaken on investor relations.
2. Appointed Non-Executive Director on 24 January 2020.
3. Resigned as CEO on 31 March 2020 and ceased to be a KMP.
4. Transitioned from full-time to part-time in October 2019.
There was no equity-based remuneration for persons who were key management personnel of the Group during
the year ended 30 June 2021.
Company Performance, Shareholder Wealth, and Director and Executive Remuneration
During the financial year, the Company has generated losses as its principal activity was mineral exploration.
The following table shows the share price of the Company since 2017.
30 June
2021
30 June
2020
30 June
2019
30 June
2018
30 June
2017
Share Price at
year end ($)
0.017
0.005
0.006
0.006
0.0084
As the Company is still in the exploration and development stage, the link between remuneration, company
performance and shareholder wealth is tenuous. Share prices are subject to the influence of metal prices and
market sentiment towards the sector, and as such, increases and decreases might occur independent of executive
performance and remuneration.
Options Granted as Remuneration
As noted above, there were no options or performance rights issued to key management personnel during the year
ended 30 June 2021.
24
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Shares Held by Key Management Personnel
Details of shares held directly, indirectly or beneficially by key management personnel during the year ended 30
June 2021 were as follows:
Key
Management
Personnel
Balance at 1
July 2020
Granted as
Compensation
Received on
Exercise of
Options / Rights
Net change
other
Balance at 30
June 2021
A. Greig
C. Dunks
C. Nolan
C. Treacy
B. Smith
J. David
D. Speedy
300,887,439
19,687,505
4,420,428
28,000,004
-
-
-
352,995,376
-
-
-
-
-
-
-
-
30,303,030
90,909,091
422,099,560
-
-
-
-
-
-
-
-
19,687,505
1,363,637
5,784,065
3,636,364
31,636,368
2,540,866
2,540,866
-
-
-
-
98,449,958
481,748,364
Unlisted options held by Key Management Personnel
The number of options in Elementos Limited held by each key management person of the consolidated entity during
the financial year is set out below. These figures do not include any options issued post year end. The options in this
table are attaching options to shares that were issued
Key
Management
Personnel
Balance at 1
July 2020
Additions
Expired
Exercised
A. Greig
C. Dunks
C. Nolan
C. Treacy
B. Smith
J. David
D. Speedy
-
-
-
-
-
-
-
-
30,303,030
-
454,546
1,212,122
-
-
-
-
-
-
-
-
-
-
(30,303,030)
-
-
-
-
-
-
Balance at 30
June 2021
-
-
454,546
1,212,122
-
-
-
31,969,698
(30,303,030)
1,666,668
Other transactions with Key Management Personnel
On 17 April 2019, the Company executed a loan facility with the Company’s Non-Executive Chairman Mr Andy Greig,
a related party, with the following key terms:
•
•
•
Loan amount = $2,000,000
Loan term = 2 years
Interest rate = 6.0% on drawn funds
• Unsecured
• No conversion rights
25
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
• No requirement to repay principal or pay interest during the loan term
• Repayable by the Company at any time (during the loan term)
During the period the Company undertook the following in relation to the loan facility:
•
In parallel with the August 2020 Capital raising and following shareholder approval, $500,000 of the
outstanding loan balance was converted to equity on the same terms of the capital raising. The conversion
resulted in the issue of 90,909,091 ordinary shares and 30,303,030 options with an exercise price of 0.9
cents per share and expiry of 31 August 2022.
• On 9 April 2021 the Company and Mr Greig agreed to exercise 30,303,030 share options with an exercise
•
price of 0.9 cents per share through the conversion of $272,727 of the outstanding loan balance.
In parallel with the April 2021 Capital raising and following shareholder approval, $569,246 of the
outstanding loan balance and accrued interest was converted to equity on the same terms of the capital
raising. The conversion resulted in the issue of 56,924,600 ordinary shares and 28,462,300 options with
an exercise price of 1.5 cents per share and expiry of 30 April 2022. The shares and options were issued
following shareholder approval on 14 July 2021.
End of Remuneration Report (Audited)
Options
At the date of this report, the unissued ordinary shares of the Company under options are as follows:
Unlisted Options
Grant Date/s
Expiry Date
Exercise Price
No. Under Option
14 August 2020
31 August 2022
27 April 2021
30 April 2022
0.9 cents
1.5 cents
189,413,383
312,750,000
The following ordinary shares were issued during and since the year ended 30 June 2021 on the exercise of options.
Grant Date/s
Exercise Price
No. of shares issued
14 August 2020
27 April 2021
0.9 cents
1.5 cents
70,889,719
65,712,300
Performance Rights
At the date of this report the following Performance Rights were on issue:
Grant Date/s
9 July 2021
9 July 2021
9 July 2021
Expiry Date
Exercise Price
No. of Rights
30 June 2023
31 December 2023
31 December 2025
Nil
Nil
Nil
37,500,000
37,500,000
7,500,000
Option and Performance Right holders do not have any rights to participate in any share issue or other interests in
the Company or any other entity.
26
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Directors’ Meetings
The meetings attended by each director during the financial year were:
Directors
A. Greig
C. Dunks
C. Nolan
C. Treacy
B. Smith
Board
Audit & Risk Committee
Meetings
Attended
Meetings
Attended
4
4
4
4
4
4
4
4
4
4
2*
2
2
2
2*
0*
2
2
2
0*
* Mr Greig and Mr Smith are not members of the Audit & Risk Committee.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of
Elementos Limited support and, where practicable or appropriate, have adhered to the ASX Principles of Corporate
Governance. The Company’s corporate governance statement is set out in this Annual Report.
Indemnification and Insurance of Directors and Auditors
The Company has entered into a Deed with each of the directors whereby the Company has agreed to provide certain
indemnities to each director to the extent permitted by the Corporations Act and to use its best endeavours to obtain
and maintain directors’ and officers’ indemnity insurance, subject to such insurance being available at reasonable
commercial terms.
The economic entity has paid premiums to insure each of the directors of the Company 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 of the Company, other than conduct involving a wilful breach of duty in relation to the Company.
The contracts include a prohibition on disclosure of the premium paid and nature of the liabilities covered under the
policy.
The Company has not given an indemnity or entered into an agreement to indemnify, or paid or agreed to pay
insurance premiums in respect of any person who is or has been an auditor of the Company or a related entity
during the year and up to the date of this report.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
Non-Audit Services
The auditors did not provide any non-audit services during the year (2020: Nil).
Future Developments and Likely Outlook
Planned developments in the operations of the Group and the expected results of those operations in subsequent
financial years has been discussed where appropriate in the Annual Report under Review of Operations.
There are no further developments of which the Directors are aware which could be expected to affect the results
of Group's operations and plans, other than information which the Directors believe comment on, or disclosure of,
would prejudice the interests of the Group.
27
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Auditor’s Independence Declaration
The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 is attached to this
financial report.
Signed in accordance with a resolution of the board of directors.
Chris Dunks
Director
Dated 28 September 2021
Brisbane, Queensland
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ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Auditor’s Independence Declaration
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY D P WRIGHT TO THE DIRECTORS OF ELEMENTOS LIMITED
As lead auditor of Elementos Limited for the year ended 30 June 2021, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Elementos Limited and the entities it controlled during the year.
D P Wright
Director
BDO Audit Pty Ltd
Brisbane, 28 September 2021
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
29
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Shareholder Information
Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is as
follows. The information is current as at 21 September 2021.
(a) Distribution of equity securities
The number of holders, by size of holding, in each class of security are:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Ordinary Shares
No. Holders
No. Shares
77
72
69
749
1,114
2,081
14,544
210,082
551,855
39,971,758
4,009,104,802
4,049,853,041
Share Options
No. Holders
No. Options
1
0
0
1
164
166
1
0
0
100,000
502,063,382
502,163,383
Performance Rights
No. Holders
No. Rights
2
2
82,500,000
82,500,000
The number of shareholders holding less than a marketable parcel is 65.
30
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Shareholder Information
(b) Twenty Largest Shareholders
The names of the twenty largest holders of Quoted Ordinary Shares are:
Registered Name
Number of Shares
% of total
Shares
BOND STREET CUSTODIANS LIMITED
507,486,460
12.53%
#
1
2
3
4
5
6
7
8
9
CITICORP NOMINEES PTY LIMITED
SANDHURST TRUSTEES LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
TR NOMINEES PTY LTD
J P MORGANS NOMINEES AUSTRALIA PTY LIMITED
KEO PROJECTS PTY LTD
GOM PROPERTIES PTY LTD
JAMES CALAWAY*
303,218,939
202,660,881
189,285,997
130,181,818
105,867,906
102,000,000
83,673,061
60,020,768
10 BNP PARIBAS NOMINEES PTY LTD
54,800,000
7.48%
5.00%
4.67%
3.21%
2.61%
2.52%
2.07%
1.48%
1.35%
1.23%
1.20%
1.11%
1.11%
1.05%
0.97%
0.88%
49,900,000
48,640,000
45,000,000
45,000,000
42,386,945
39,412,000
35,689,305
35,000,001
0.86%
34,956,034
31,636,368
0.86%
0.78%
2,146,816,483
53.01%
4,049,853,041
11 GLEN LEWIS PTY LTD
12 MR JOSEPH IGNATIUS D'SOUZA
13 MCCUSKER HOLDINGS PTY LTD
14 PAN ANDEAN CAPITAL PTY LTD
15 SANGWILL PTY LTD
16 MR CRAIG RONALD TINDALE & MRS GABRIELLE TINDALE
17 LIONS BAY CAPITAL INC
18 MR JOHN DOUGLAS JEFFERY & MRS ELSPETH LOUISE JEFFERY
19 BNP PARIBAS NOMS PTY LTD
20 CALVIN PATRICK TREACY*
Top 20 Total
Total of Securities
* Merged holding
31
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Shareholder Information
(c) Substantial Shareholders
The Company notes that, as at the date of this report, the following shareholders own substantial shareholdings (>=
5.0%) in Elementos Limited:
Name of Shareholder
Ordinary Shares
% of total Shares
507,486,460
218,839,901
12.53%
5.40%
BOND STREET CUSTODIANS LIMITED
MARK WELLINGS
(d) Voting rights
All ordinary shares carry one vote per share without restriction.
Options and Rights do not carry voting rights.
(e) Restricted securities
The Group currently has no restricted securities on issue.
(f) On-market buy back
There is not a current on-market buy-back in place.
(g) Business objectives
The Group has used its cash and assets that are readily convertible to cash in a way consistent with its business
objectives.
32
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
The board of directors of Elementos Limited is responsible for the corporate governance of the consolidated entity.
The Board guides and monitors the business and affairs of Elementos Limited on behalf of the shareholders by
whom they are elected and to whom they are accountable.
Elementos Limited’s Corporate Governance Statement (which can be found on the Company’s website
www.elementos.com.au) is structured with reference to the Australian Securities Exchange (“ASX”) Corporate
Governance Council’s (the “Council”) “Corporate Governance Principles and Recommendations, 4th Edition”, which
are as follows. A copy of the eight Corporate Governance Principles and Recommendations can be found on the
ASX’s website.
The Board is of the view that, during the reporting period, with the exception of the departures from the ASX
Guidelines as set out below, it otherwise complies with all of the ASX Guidelines.
ASX CGC Principle 1
Lay solid foundations for management and oversight.
Role of the Board
The Board of Directors is pivotal in the relationship between shareholders and management and the role and
responsibilities of the Board underpin corporate governance.
The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true
spirit of corporate governance commensurate with the Group’s needs.
Generally, the powers and obligations of the Board are governed by the Corporations Act and the general law.
Without limiting those matters, the Board expressly considers itself responsible for the following:
Ensuring compliance with the Corporations Act, ASX Listing Rules (where appropriate) and all relevant laws;
Oversight of the Group including its framework of control and accountability systems to enable risk to be
assessed and managed;
Appointing and removing the chief executive officer;
Ratifying the appointment and, where appropriate, removal of senior executives including the chief financial
officer and the Group secretary;
Input into and final approval of management’s development of corporate strategy and performance
objectives;
Monitoring senior executive’s performance and implementation of strategy;
Ensuring appropriate resources are available to senior executives;
Approving and monitoring the progress of major capital expenditure, capital management and acquisitions
and divestitures;
Approving and overseeing Committees where appropriate to assist in the Board’s function and powers.
The Functions, Powers and Responsibilities of the Board are set out in the Company’s Corporate Governance Charter
which is available from the corporate governance section of the Group’s website.
The board meets on a regular basis to review the performance of the Company against its goals both financial and
non-financial. In normal circumstances, prior to the scheduled board meetings, each board member is provided with
a formal board package containing appropriate management and financial reports.
Appropriate background checks are conducted on proposed new directors and material information about a director
being re-elected is provided to security holders.
Written agreements are entered in to with directors and senior management clearly setting out their roles and
responsibilities.
The company secretary works directly with the chair and the executive director on the functioning of all board and
committee procedures.
33
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
Diversity
The Group is committed to workplace diversity and ensuring a diverse mix of skills amongst its directors, officers
and employees.
Recommendation 1.5 requires that listed entities should establish a policy concerning diversity. Whilst the Group
does not currently have a Diversity policy due to its size and nature of its operations, it strives to attract the best
person for the position regardless of gender, age, ethnicity or cultural background.
As at 30 June 2021, the proportion of women in the whole organisation is a follows:
Male
Female
Board Members
Officers
Employees
5
2
5
-
-
2
Performance Evaluation
The Board (in carrying out the functions of the Remuneration and Nomination Committees) considers remuneration
and nomination issues annually and otherwise as required in conjunction with the regular meetings of the Board.
No formal performance evaluation of the CEO has been undertaken to date.
No formal performance evaluation of the non-executive directors was undertaken during the year ended 30 June
2021.
ASX CGC Principle 2
Structure of the Board to be effective and add value
Nomination Committee
Recommendation 2.1 requires the Board to establish a nomination committee.
Although the Board has adopted a Nominations Committee Charter, the Board has not formally established a
Nominations Committee as the Directors consider that the Company is currently not of a size nor are its affairs of
such complexity as to justify the formation of this Committee. The Board as a whole is able to address these issues
and is guided by the Nominations Committee Charter. The Company will review this position annually and determine
whether a Nominations Committee needs to be established.
The Nomination Committee Charter is set out in the Company’s Corporate Governance Charter which is available
from the corporate governance section of the Group’s website.
The Company is developing an appropriate board skills matrix. The skills, experience and expertise relevant to the
position of each director who is in office at the date of the Annual Report is detailed in the Directors’ report.
Corporate Governance Council Recommendation 2.4 requires a majority of the Board to be independent Directors.
The Corporate Governance Council defines independence as being free from any interest, position, association or
relationship that might influence, or reasonably be perceived to influence, in a material capacity to bring
independent judgement to bear on issues before the board and to act in the best interests of the entity and its
security holders generally.
In the context of Director independence, “materiality” is considered from both the Group and the individual Director
perspective. The determination of materiality requires consideration of both quantitative and qualitative elements.
An item is presumed to be material (unless there is qualitative evidence to the contrary) if it is equal to or greater
than 10% of the appropriate base amount.
Qualitative factors considered included whether a relationship is strategically important, the competitive landscape,
34
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
the nature of the relationship and the contractual or other arrangements governing it and other factors which point
to the actual ability of the Director in question to shape the direction of the Group.
In accordance with the Council’s definition of independence above and the materiality thresholds set, all of the
Company’ s directors except for those listed below are considered independent therefore the Group does currently
comply with Recommendation 2.4:
Name
A. Greig
C. Dunks
Position
Reason for non-compliance
Non-Executive Chairman
Director is a substantial (>5%) shareholder
Executive Director
Director was engaged in an executive capacity within the
previous 3 years
Elementos Limited considers industry experience and specific expertise, as well as general corporate experience,
to be important attributes of its Board members. The Directors noted above have been appointed to the Board of
Elementos Limited due to their considerable industry and corporate experience. The term in office held by each
Director in office at the date of this report is as follows:
Name
A. Greig
C. Dunks
C. Nolan
C. Treacy
B. Smith
Term in Office
5 years, 11 months
5 years, 11 months
12 years 2 months
7 years 11 months
1 year 8 months
Directors have the right to seek independent professional advice in the furtherance of their duties as directors at
the Group’s expense. Written approval must be obtained from the chair prior to incurring any expense on behalf of
the Group. Informal induction is provided to any new directors.
ASX CGC Principle 3
Instil a culture of acting lawfully, ethically and responsibly
The Directors are subject to certain stringent legal requirements regulating the conduct both in terms of their internal
conduct as directors and in their external dealings with third parties both on their own and on behalf of the Group.
To assist directors in discharging their duty to the Group and in compliance with relevant laws to which they are
subject, the Group has adopted a Corporate Ethics Policy and Corporate Code of Conduct, whistleblower, anti-bribery
and corruption policy within its Corporate Governance Charter.
The Corporate Ethics Policy sets out rules binding Directors in respect of:
a Directors’ legal duties as an officer of the Company;
a Directors’ obligations to make disclosures to the ASX and the market generally; and
dealings by Directors in shares in the Company.
The Corporate Ethics Policy, as set out in the Company’s Corporate Governance Charter is available from the
corporate governance section of the Group’s website.
ASX CGC Principle 4
Safeguard Integrity in Corporate Reporting
Audit Committee
The Board has established an Audit and Risk Management Committee which operates under a charter approved by
the Board.
35
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
Recommendation 4.1 states that an audit committee should be structured so that it:
i.
consists only non-executive directors;
ii. consists of a majority of independent directors;
iii. is chaired by an independent chair, who is not the chair of the Board; and
iv. has at least three members.
The members of the Audit & Risk Management Committee are Corey Nolan, Calvin Treacy and Chris Dunks. The
Committee is chaired by an independent director (Corey Nolan). While Messrs Nolan and Treacy are both non-
executive directors, Chris Dunks was until 1 July 2021 engaged in an executive capacity. The majority of the
Committee are independent directors, with only Chris Dunks not considered as being independent (based on the
Council’s definition). The Company does not presently comply fully with Recommendation 4.1 having not met point
i above.
All members of the Audit & Risk Management Committee are considered financially literate in the context of the
Company’s affairs. The Company believes that given the size and nature of its operations, non-compliance by the
Company with Recommendation 4.1 will not be detrimental to the Company.
The number of meetings of the Audit & Risk Management Committee held during the year and the number of
meetings attended by each Director was as follows:
Member
C. Nolan
C. Dunks
C. Treacy
Audit & Risk Management Committee
Number of meetings held
while in office
Meetings attended
2
2
2
2
2
2
The Audit Committee Charter is set out in the Company’s Corporate Governance Charter which is available from the
corporate governance section of the Group’s website.
Certification of financial reports
The Chief Executive Officer has made the following certifications to the Board:
That the Group’s financial reports are complete and present a true and fair view, in all material respects, of
the financial position and performance of the Group and are in accordance with relevant accounting
standards;
The integrity of the reports is founded on a sound system of financial risk management and internal
compliance and control.
The Chief Financial Officer has made the following certifications to the Board:
That the Group’s financial reports are complete and present a true and fair view, in all material respects, of
the financial position and performance of the Group and are in accordance with relevant accounting
standards;
The integrity of the reports is founded on sound system of financial risk management and internal
compliance and control.
The Group ensures that its external auditor is present at the AGM to answer any questions with regard to the efficacy
of the financial statement audit and the associated independent audit report. The Board ensures that management
provide sufficient additional information to ensure the integrity of periodic corporate reports disclosed to the market
and, if appropriate, certain declarations are provided by management regarding the underlying assumptions and
procedures that have been implemented to ensure this integrity.
36
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
ASX CGC Principle 5
Make timely and balanced disclosure
The Group has adopted a corporate ethics and continuous disclosure policy which is included in the Corporate
Governance Charter that duly complies with ASX and ASIC requirements for the timely and accurate reporting of the
Group’s financial activities, thus ensuring that the Group has disclosed all information which has a material impact
on shareholders. This includes the Annual Financial Report, Interim Financial Report, quarterly cash flows, new and
relinquished tenements and changes in directors and shareholder interests and other events which are identified
to be material. All ASX announcements are available on the Group’s website.
The Company Secretary is responsible for communication with the ASX, including responsibility for ensuring
compliance with the continuous disclosure requirements of the ASX Listing Rules and oversight of information
distributed to the ASX.
ASX CGC Principle 6
Respect The Rights of Security Holders
The Board of directors undertakes to ensure that shareholders are informed of all major developments affecting
the Group. Information is communicated to shareholders through the annual report, interim financial report,
announcements made to the ASX, notices of Annual General and Extraordinary General Meetings, the AGM and
Extraordinary General Meetings.
Information regarding the Group and its governance is available in the Corporate Governance Charter which can be
found on the Group’s website.
The Board encourages full participation of shareholders at Annual and Extraordinary General Meetings to ensure a
high level of accountability and identification with the Group’s direction, strategy and goals. In particular,
shareholders are responsible for voting on the re-election of directors.
The Group also offers shareholders the option to receive ASX announcements and other notices from the Company
electronically.
ASX CGC Principle 7
Recognise and manage risk
The Board has established an Audit and Risk Management Committee which operates under a charter approved by
the Board.
Recommendation 7.1 states that an audit committee should be structured so that it:
i.
consists of a majority of independent directors;
ii.
is chaired by an independent chair, who is not the chair of the Board; and
iii. has at least three members.
The members of the Audit & Risk Management Committee are Corey Nolan, Calvin Treacy and Chris Dunks. The
Committee is chaired by an independent director (Corey Nolan). While Messrs Nolan and Treacy are both non-
executive directors, Chris Dunks was until 1 July 2021 engaged in an executive capacity. The majority of the
Committee are independent directors, with only Chris Dunks not considered as being independent (based on the
Council’s definition). The Company does not presently comply fully with Recommendation 7.1 having not met point
i above.
All members of the Audit & Rick Management Committee are considered to have sufficient technical, legal and
industry experience in the context of the Company’s affairs to properly assess the risks facing the Group. The
Company believes that given the size and nature of its operations, non-compliance by the Company with
Recommendation 7.1 will not be detrimental to the Company.
The number of meetings of the Audit & Risk Management Committee held during the year and the number of
meetings attended by each Director was as follows:
37
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
Member
C. Nolan
C. Dunks
C. Treacy
Audit & Risk Management Committee
Number of meetings held
while in office
Meetings attended
2
2
2
2
2
2
The Company has developed a basic framework for risk management and internal compliance and control systems
which cover organisational, financial and operational aspects of the Company’s affairs. Further detail of the
Company’s risk management policies can be found within the Audit and Risk Management Committee Charter.
Recommendation 7.2 requires that the Board review the Company’s risk management framework and disclose
whether such a review has taken place. Business risks are considered regularly by the Board and management at
management and Board meetings. A formal report to the Board as to the effectiveness of the management of the
Company’s material business risks has not been formally undertaken.
The Audit and Risk Management Committee Charter is set out in the Company’s Corporate Governance Charter
which is available from the corporate governance section of the Group’s website.
The Company does not have a separate internal audit function. The board considers that the Company is not
currently of the size or complexity to justify a separate internal audit function, and that appropriate internal financial
controls are in place. Such controls are monitored by senior financial management and the Audit and Risk
Committee.
The Directors’ Report sets out some of the key risks relevant to the Company and its operations. Although not
specifically defined as such, the risks include economic, environmental and social sustainability risks. As noted
above, the Company regularly reviews risks facing the Company and adopts appropriate mitigation strategies where
possible.
ASX CGC Principle 8
Remunerate fairly and responsibly
Remuneration Committee
Although the Board has adopted a Remuneration Committee Charter, the Board has not formally established a
Remuneration Committee as the Directors consider that the Company is currently not of a size nor are its affairs of
such complexity as to justify the formation of this Committee. The Board as a whole considers themselves to have
sufficient legal, corporate, commercial and industry experience in the context of the Company’s affairs to properly
assess the remuneration issues required by the Group and is able to address these issues while being guided by
the Remuneration Committee Charter. The Company will review this position annually and determine whether a
Remuneration Committee needs to be established.
The Company believes that given the size and nature of its operations, non-compliance by the Company with
Recommendation 8.1 will not be detrimental to the Company.
It is the Company’s objective to provide maximum stakeholder benefit from the retention of a high quality Board
and Executive team by remunerating directors and key executives fairly and appropriately with reference to relevant
employment market conditions. To assist in achieving this objective, the Board links the nature and amount of
executive Directors’ and officer’s remuneration to the Group’s financial and operations performance. The expected
outcomes of the remuneration structure are:
retention and motivation of key Executives
attraction of quality management to the Group
performance incentives which allow executives, management and staff to share the rewards of the success
of Elementos Limited.
38
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Corporate Governance Statement
For details on the amount of remuneration and all monetary and non-monetary components for Key Management
Personnel during the period, please refer to the Remuneration Report within the Directors’ Report. In relation to the
payment of bonuses, options and other incentive payments, discretion is exercised by the Remuneration Committee
and the Board, having regard to the overall performance of Elementos Limited and the performance of the individual
during the period.
There is no scheme to provide retirement benefits to directors other than statutory superannuation.
The Remuneration Committee Charter is set out in the Company’s Corporate Governance Charter which is available
from the corporate governance section of the Group’s website.
Remuneration Policy
The Group’s remuneration policy is also further detailed in the Remuneration Report in the Directors Report.
Non-Executive Director Remuneration
Non-executive directors are remunerated at market rates for time, commitment and responsibilities. Non-executive
directors are remunerated by fees as determined by the Board with the aggregate directors’ fee pool limit of
$250,000. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at the Annual General Meeting. Independent consultancy sources provide advice, as
required; ensuring remuneration is in accordance with market practice. Fees for non-executive Directors are not
linked to the performance of the Group. However, to align Directors’ interests with shareholders’ interests, the
Directors are encouraged to hold shares in the Company and are, subject to approval by shareholders, periodically
offered options and/or performance rights.
The Company has adopted a Trading Policy that includes a prohibition on hedging, aimed at ensuring participants
do not enter into arrangements which would have the effect of limited their exposure to risk relating to an element
of their remuneration.
Other Information
Further information relating to the Group’s corporate governance practices and policies has been made publicly
available on the Group’s web site.
39
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the Year Ended 30 June 2021
Interest income
Other income
Note
30 June 2021
30 June 2020
$
$
1,768
60,650
341
50,000
Corporate and administrative expenses
2
(1,633,858)
(1,641,250)
Foreign Currency Gain / (Loss)
(40,947)
9,425
Loss before income tax expense
(1,612,387)
(1,581,484)
Income tax expense
3
-
-
Loss for the period attributable to members of the parent
entity
(1,612,387)
(1,581,484)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange gains on translation of foreign operations
Other comprehensive income for the period, net of tax
(160,625)
(160,625)
(51,093)
(51,093)
Total comprehensive loss attributable to members of the
parent entity
(1,773,012)
(1,632,577)
Basic and diluted loss per share (cents per share)
11
(0.05)
(0.08)
The accompanying notes form part of these financial statements.
40
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Consolidated Statement of Financial Position
As at 30 June 2021
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Total Current Assets
NON-CURRENT ASSETS
Exploration and evaluation assets
Property, plant and equipment
Right of use assets
Other non-current assets
Total Non-Current Assets
Note
30 June 2021
30 June 2020
$
$
4
5,542,252
227,294
5,769,546
199,176
138,267
337,443
5
11,390,716
9,438,708
4,730
7,471
76,497
-
14,487
80,000
11,479,414
9,533,195
TOTAL ASSETS
17,248,960
9,870,638
CURRENT LIABILITIES
Trade and other payables
Lease liability
Borrowings
Total Current Liabilities
NON-CURRENT LIABILITIES
Lease liability
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
6
7
7
1,106,332
6,163
515,576
5,651
1,550,464
1,250,000
2,662,959
1,771,227
9,931
16,260
-
1,065,303
9,931
1,081,563
2,672,890
2,852,790
14,576,070
7,017,848
8
28,740,673
19,699,725
78,568
(51,093)
(14,243,171)
(12,630,784)
14,576,070
7,017,848
The accompanying notes form part of these financial statements.
41
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2021
Note
Issued
Capital
Accumulated
Losses
Share-
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
Balance at 1 July 2019
16,667,725
(11,442,500)
430,935
Loss for the period
Other comprehensive loss
Total comprehensive income
-
-
(1,581,484)
(1,581,484)
Issue of shares
8
3,000,000
Transfer of exercised
performance rights
Issue and expiry of
performance rights
Transfer of expired options
32,000
-
-
-
-
-
393,200
Balance at 30 June 2020
19,699,725
(12,630,784)
Loss for the period
Other comprehensive loss
Total comprehensive income
-
-
-
(1,612,387)
-
(1,612,387)
Issue of shares
Transaction costs
8
8
9,426,181
(885,233)
Conversion of loan to equity
7,8
500,000
-
-
-
-
-
-
(32,000)
(5,735)
(393,200
)
-
-
-
-
-
290,286
-
-
-
5,656,160
(1,581,484)
(51,093)
(51,093)
(51,093)
(1,632,577)
-
-
-
-
3,000,000
-
(5,735)
-
(51,093)
7,017,848
-
(1,612,387)
(160,625)
(160,625)
(160,625)
(1,773,012)
-
-
-
9,426,181
(594,947)
500,000
Balance at 30 June 2021
28,740,673
(14,243,171)
290,286
(211,718) 14,576,070
The accompanying notes form part of these financial statements.
42
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Government COVID Assistance
Payments to suppliers and employees
Interest Paid
Payments in relation to Oropesa Tin Project
30 June 2021
30 June 2020
$
$
1,768
60,650
341
50,000
(1,545,995)
(1,022,864)
(698)
-
-
(413,305)
Net cash used in operating activities
10
(1,484,275)
(1,385,828)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets
(1,672,631)
(255,288)
Payments for property, plant and equipment
Proceeds received on acquisition of Oropesa Tin Project
(5,270)
-
-
186,988
Net cash used in investing activities
(1,677,901)
(68,300)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Costs associated with share issues
Proceeds from loan
Lease payments
8
8
7
9,146,964
(594,948)
-
-
-
1,250,000
(5,817)
(6,933)
Net cash provided by financing activities
8,546,199
1,243,067
Net increase/(decrease) in cash held
Net foreign exchange difference
Cash at Beginning of Year
5,384,023
(211,061)
(40,947)
199,176
9,425
400,812
Cash at End of Year
4
5,542,252
199,176
The accompanying notes form part of these financial statements.
43
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are general purpose financial statements that have been prepared in accordance with the
Corporations Act 2001, Australian Accounting Standards and
Interpretations, and other authoritative
pronouncements of the Australian Accounting Standards Board. Elementos Limited is a for-profit entity for the
purpose of preparing the financial statements. The financial statements are presented in Australian dollars.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards. The financial statements are for the consolidated entity consisting of
Elementos Limited and its Controlled Entities. Elementos Limited is a public company, incorporated and domiciled
in Australia. The financial statements have been prepared on an accruals basis and are based on historical cost.
The financial report was authorised for issue on 28 September 2021 by the directors of the Company.
Financial information required for Elementos Limited as an individual entity is included in Note 21.
Material accounting policies adopted in the preparation of these financial statements are presented below. They
have been consistently applied unless otherwise stated.
Going Concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and discharge of liabilities in the ordinary course of business.
The Group has not generated any revenues from operations. As at 30 June 2021 the Group had cash reserves of
$5,542,252, net current assets of $3,106,587 and net assets of $14,576,070. The Group incurred a net loss of
$1,612,387 for the year ended 30 June 2021 and had an outflow of $1,484,275 of cash from operating activities.
The ability of the Group to maintain continuity of normal business activities and to pay its debts as and when they
fall due is dependent on the ability of the Group to successfully raise additional capital and/or successful exploration
and subsequent exploitation of areas of interest through sale or development.
These conditions give rise to material uncertainty which may cast significant doubt over the Group’s ability to
continue as a going concern.
The directors believe that the going concern basis of preparation is appropriate due to the following reasons:
• To date the Group has funded its activities through issuance of equity securities, and it is expected that the
Group will be able to fund its future activities through further issuances of equity securities; and
• The directors believe there is sufficient cash available for the Group to continue operating based on the
Company’s cash flow forecast.
Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish
its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements. This financial report does not include any adjustments relating to the recoverability and
classification of recorded asset amounts or the amounts or classification of liabilities and appropriate disclosures
that may be necessary should the Group be unable to continue as a going concern.
COVID-19 Impacts
Elementos Limited remained relatively unaffected during the period by COVID-19. Staff worked remotely when
possible and followed enhanced social distancing and health and safety procedures when at the workplace.
Elementos received $60,650 of Government assistance during the year (2020: $50,000).
The Company is not expecting any significant impacts in the coming year.
Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Elementos Limited
("Company" or "parent entity") as at 30 June 2021, and the results of all subsidiaries for the year then ended.
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
Elementos Limited and its subsidiaries together are referred to in these financial statements as “the Group” or “the
consolidated entity”.
The names of the subsidiaries are contained in Note 19. All subsidiaries are accounted for by the parent entity at
cost.
Subsidiaries are all entities over which the Group has control. The Group has control over an entity when the Group
is exposed to, or has a right to, variable returns from its involvement with the entity, and has the ability to use its
power to affect those returns. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the
asset transferred. Accounting policies of controlled entities have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Executive Director.
Income Tax
The income tax expense/(income) for the year comprises current income tax expense/(income) and deferred tax
expense/(income). Current income tax expense charged to profit or loss is the tax payable on taxable income
calculated using applicable income tax rates enacted, or substantially enacted, as at reporting date. Current tax
liabilities/ (assets) are therefore measured at the amounts expected to be paid to/ (recovered from) the relevant
taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability
balances during the period as well as unused tax losses. Current and deferred income tax expense/ (income) is
charged or credited directly to equity instead of profit or loss when the tax relates to items that are credited or
charged directly to equity.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the
asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date.
Their measurement also reflects the manner in which management expects to recover or settle the carrying amount
of the related asset or liability.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be
recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no
effect on accounting or taxable profit or loss.
The Company and its Australian 100% owned controlled entities have formed a tax consolidated group.
Members of the Group entered into a tax sharing arrangement. The agreement provides for the allocation of income
tax liabilities between the entities in proportion to their contribution to the Group's taxable income. The head entity
of the tax consolidated Group is Elementos Ltd.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that
it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be
utilised. The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that the Group will
derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law.
Exploration and Evaluation Assets
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. Such
expenditures comprise net direct costs and an appropriate portion of related overhead expenditure but do not
45
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
include overheads or administration expenditure not having a specific nexus with a particular area of interest. These
costs are only carried forward to the extent that they are expected to be recouped through the successful
development of the area or where activities in the area have not yet reached a stage which permits reasonable
assessment of the existence of economically recoverable reserves and active or significant operations in relation to
the area are continuing.
A regular review has been undertaken on each area of interest to determine the appropriateness of continuing to
carry forward costs in relation to that area of interest.
A provision is raised against exploration and evaluation assets where the directors are of the opinion that the carried
forward net cost may not be recoverable or the right of tenure in the area lapses. The increase in the provision is
charged against the results for the year. Accumulated costs in relation to an abandoned area are written off in full
against profit or loss in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of
the area according to the rate of depletion of the economically recoverable reserves.
Restoration Costs
Costs of site restoration are provided over the life of the facility from when exploration commences and are included
in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment
and building structures, waste removal, and rehabilitation of the site in accordance with clauses of the exploration
and mining permits. Such costs have been determined using estimates of future costs, current legal requirements
and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted for on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly, the costs have been determined on the basis that the restoration will be
completed within one year of abandoning the site.
The Group currently has no obligation for any restoration costs in relation to discontinued operations, nor is it
currently liable for any future restoration costs in relation to current areas of interest. Consequently, no provision
for restoration has been deemed necessary.
Impairment of Non-Financial Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the
asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to profit or
loss. No impairment existed at reporting date.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of
the financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and
not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective interest method. Borrowing costs on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs.
Borrowings are removed from the consolidated statement of financial position when the obligation specified in the
contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
46
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
Borrowings are classified as current liabilities unless the consolidated entity has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
Cash and Cash Equivalents
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 less than 3 months.
Issued Capital
Ordinary shares are classified as equity. Transaction costs (net of tax where the deduction can be utilised) arising
on the issue of ordinary shares are recognised in equity as a reduction of the share proceeds received.
Share Based Payments and Performance Rights
The Company makes equity-settled share based payments to directors, employees and other parties for services
provided or the acquisition of exploration assets. Where applicable, the fair value of the equity is measured at grant
date and recognised as an expense over the vesting period, with a corresponding increase to an equity account.
The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a Black
Scholes option pricing model. Where applicable, the number of shares and options expected to vest is reviewed and
adjusted at each reporting date such that the amount recognised for services received as consideration for the
equity instruments granted shall be based on the number of equity instruments that eventually vest.
Where the fair value of services rendered by other parties can be reliably determined, this is used to measure the
equity-settled payment.
Interest income
Interest income is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
Employee Benefits
Short-term employee benefit obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled wholly within 12 months after the end of the reporting period are recognised in liabilities in
respect of employees' services rendered up to the end of the reporting period and are measured at amounts
expected to be paid when the liabilities are settled.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST (or overseas VAT), except where the
amount of GST incurred is not recoverable. In these circumstances the GST (or overseas VAT) is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement
of financial position are shown inclusive of GST. Cash flows are presented in the statement of cash flows on a gross
basis except for the GST component of investing and financing activities which are disclosed as operating cash
flows.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional and presentation currency of Elementos Ltd and its Australian subsidiaries is Australian dollars ($A).
47
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-
monetary items measured at fair value are reported at the exchange rate at the date when fair values were
measured. Exchange differences arising on the translation of monetary items are recognised in profit or loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the Company’s
presentation currency are translated as follows:
assets and liabilities are translated at period-end exchange rates prevailing at that reporting date;
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
income and expenses are translated at average exchange rates for the period;
Exchange differences arising on translation of foreign operations are recognised in other comprehensive income.
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant
will be received and the group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the profit or loss over the period necessary to
match them with the costs that they are intended to compensate.
Government grants relating to exploration and evaluation assets that have been capitalised are recognised by
deducting the grant received from the carrying amount of the exploration and evaluation asset recognised on the
statement of financial position.
Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial period adjusted for any bonus elements in ordinary shares issued during the period.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income 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.
New and Amended Standards and Interpretations Adopted During the Year
There were no new or revised accounting standards adopted that had any impact on the Group’s accounting policies
and required retrospective adjustments.
New Standards and Interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2021 reporting periods. The consolidated entity has decided against early adoption of these standards. The
Consolidated Entity’s has assessed the impact of these new standards that are not yet effective and determined
that they are not expected to have a material impact to the Group’s financial statements in the current or future
reporting periods and on foreseeable future transactions.
Fair Values
Fair values may be used for financial asset and liability measurement as well as for sundry disclosures. Fair value
is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. It is based on the presumption that the transaction takes place either
48
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous
market. The principal or most advantageous market must be accessible to, or by, the Group.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability
assuming that market participants act in their best economic interest. The fair value measurement of a non-
financial asset takes into account the market participant's ability to generate economic benefits by using the asset
at its highest and best use or by selling it to another market participant that would use the asset at its highest and
best use. In measuring fair value, the Group uses valuation techniques that maximise the use of observable inputs
and minimise the use of unobservable inputs.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial statements 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 within the Group.
Key Judgements:
Exploration and Evaluation Assets
The Group performs regular reviews on each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. These reviews are based on detailed surveys and analysis of drilling
results performed to reporting date. Exploration and evaluation assets at 30 June 2021 were $11,390,716 (2020:
$9,438,708). Based on review performed as at 30 June 2021, the Directors determined that it is still appropriate
to continue capitalising costs in relation to the Group's area of interest.
Deferred Tax Assets
The Company is subject to income taxes in Australia and jurisdictions where it has foreign operations. Significant
judgement is required in determining the worldwide provision for income taxes. There are certain transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain. The consolidated entity estimates its tax liabilities based on the consolidated entity’s understanding of
the tax law. Where the final tax outcome of these matters is different from the amounts that were initially recorded,
such differences will impact the current and deferred income tax assets and liabilities in the period in which such
determination is made.
In addition, the consolidated entity has recognised deferred tax assets relating to carried forward tax losses to the
extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation
authority and the same subsidiary against which the unused tax losses can be utilised. However, utilisation of the
tax losses also depends on the ability of the entity, which is not part of the tax consolidated group, to satisfy certain
tests at the time the losses are recouped. Due to the parent entity acquiring the entity that holds the losses it is
expected that the entity will fail to satisfy the continuity of ownership test and therefore has to rely on the same
business test. As at 30 June 2021 the consolidated entity has not received advice that the losses are unavailable,
however should this change in the future the consolidated entity may be required to derecognise these losses.
49
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 2: EXPENSES
Included in expenses are the following items:
Depreciation
ASX, ASIC, share registry expenses
Business development and investor relations costs
Legal fees
Oropesa Tin Project operating costs
Insurances
Audit, tax and external accounting fees
Interest on loans
Employee benefits expense comprises:
Salaries and wages
Consulting fees
Superannuation
Equity settled securities
Annual leave expensed
NOTE 3: INCOME TAX EXPENSE
The prima facie tax on the operating loss is reconciled to income tax
expense as follows:
Prima facie tax/ (benefit) on loss from ordinary activities before income
tax at 26% (2020: 27.5%)
Adjust for tax effect of:
Non-deductible amounts
Tax loss not recognised
Temporary differences recognised
Under/Over
Income tax expense/(benefit)
30 June 2021
30 June 2020
$
$
7,556
73,423
142,749
19,632
-
39,457
72,574
113,856
643,873
255,990
45,752
-
18,081
7,423
58,559
120,472
62,333
413,305
42,612
97,619
69,519
431,610
108,215
37,122
(5,735)
(4,037)
30 June 2021
30 June 2020
$
$
(419,221)
(587,213)
35,211
385,524
-
209,993
272,421
-
(1,514)
104,799
-
-
Deferred tax assets and liabilities not recognised, the net benefit of which will only be realised if the conditions for
deductibility as set out in Note 1 occur:
Temporary differences
Tax losses
-
-
4,668,283
4,437,673
The Group has carried forward tax losses of $22,653,181 in Australia, which must satisfy the Continuity of
Ownership Test, or failing that, the Same Business Test, in order to be utilised in the future.
50
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 4: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits
NOTE 5: EXPLORATION AND EVALUATION ASSETS
30 June 2021
30 June 2020
$
5,532,252
10,000
5,542,252
$
189,176
10,000
199,176
30 June 2021
30 June 2020
$
$
Exploration and evaluation expenditure carried forward in respect of
areas of interest are:
Exploration and evaluation phase - at cost
11,390,716
9,438,708
Movement in exploration and evaluation assets:
Opening balance - at cost
Capitalised exploration expenditure
Capitalised exploration on initial recognition
of Oropesa Tin Project
Foreign exchange differences
Carrying amount at the end of the year
9,438,708
1,970,790
5,436,336
284,275
-
3,798,330
(18,782)
(80,233)
11,390,716
9,438,708
Recoverability of the carrying amount of exploration assets is dependent on the successful development and
commercial exploitation of projects, or alternatively, through the sale of the areas of interest.
NOTE 6: TRADE AND OTHER PAYABLES
Current:
Trade payables and accrued expenses
Short term employee benefits
Total payables (unsecured)
30 June 2021
30 June 2020
$
$
1,076,657
29,675
1,106,332
503,982
11,594
515,576
The average credit period on purchases of goods and services is 30 days. No interest is paid on trade payables.
51
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 7: BORROWINGS
Current:
Unsecured:
Loan (a)(b)
Total unsecured current liability
Non-Current:
Unsecured:
Loan (b)
Total unsecured non-current liability
30 June 2021
30 June 2020
$
$
1,550,464
1,550,464
1,250,000
1,250,000
-
-
1,065,303
1,065,303
(a)
On 17 April 2019, the Company executed a loan facility with the Company’s Non-Executive Chairman Mr
Andy Greig, a related party, with the following key terms:
•
•
•
•
•
•
•
Loan amount = $2,000,000
Loan term = 2 years
Interest rate = 6.0% on drawn funds
Unsecured
No conversion rights
No requirement to repay principal or pay interest during the loan term
Repayable by the Company at any time (during the loan term)
As at 30 June 2021 the Company had undertaken the following with regards to the loan facility:
o
o
Converted $500,000 of loan principal and interest into equity of the Company see Note 8 for
further details.
Converted $272,727 of loan principal to exercise 30,303,030 options with an exercise price of
0.9 cents per share.
As at 30 June 2021 the balance outstanding was $477,273. Subsequent to the reporting period the loan
facility was settled and closed, see Note 20 for further details.
(b)
As part of the Oropesa Tin Project acquisition the Company acquired a loan owing from its newly acquired
wholly owned subsidiary MESPA to the Eurotin Inc. chairman Mr Mark Wellings, with the following key
terms:
•
•
•
•
•
•
•
Loan amount = CAD$1,000,000
Loan term = 2 years from grant date being 14 January 2020
Interest rate = 5.0% on drawn funds
Unsecured
Conversion rights: subject to the Company’s prior written consent (which may be given or refused
in the Company’s sole discretion) the principal amount and accrued interest may be converted into
fully paid ordinary shares of Elementos Ltd. The conversion price is the higher of $0.004 or the 20
trading day volume weighted average price of Elementos shares traded on the ASX.
No requirement to repay principal or pay interest during the loan term
Repayable by the Company at any time (during the loan term)
52
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
As at 30 June 2021 the balance outstanding was $1,073,191. Subsequent to the reporting period the loan
facility was settled and closed, see Note 20 for further details.
NOTE 8: CONTRIBUTED EQUITY
Fully paid ordinary shares
Balance as at 1 July
2,548,330,961
19,699,725
1,544,330,961
16,667,725
2021
2020
No. of Shares
$
No. of Shares
$
Share issues:
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue of shares
Issue
acquisition
of
shares – MESPA
Issue of shares – exercise of rights
(a)
(b)
(c)
(d)
(e)
(f)
(f)
(g)
(h)
464,000,017
2,551,940
140,545,487
90,909,091
2,540,866
773,029
500,000
6,490
544,000,000
5,440,000
68,162,445
613,472
2,750,000
41,250
-
-
-
-
1,000,000,000
3,000,000
4,000,000
32,000
Balance as at 30 June
3,861,238,867 29,625,906
2,548,330,961
19,699,725
Total transaction costs associated
with share issues
(i)
(885,233)
-
Net issued capital
28,740,673
19,699,725
Ordinary shareholders are entitled to participate in dividends and the proceeds on the winding up of the company
in proportion to the number of and amount paid on the shares held. Every ordinary shareholder present at a meeting
in person or by proxy is entitled to one vote on a show of hands or by poll. Ordinary shares have no par value.
Notes for the above table, relating to the year ended 30 June 2021, are:
(a) On 6 August 2020, the Company announced that it had received commitments to complete a private
placement of 464,000,017 shares to be issued at 0.55 cents per share with participants receiving an
attaching option on a one for three basis, with an exercise price of 0.9 cents per share and expiry date of
31 August 2022. The transaction completed in two tranches as follows:
•
On 14 August 2020 422,727,288 shares were issued at 0.55 cents per share and 140,909,121
unlisted options with an exercise price of 0.9 cents per share and expiry date of 31 August 2022
were issued.
On 2 December 2020, following shareholder approval, 41,272,729 shares were issued at 0.55
cents per share and 13,757,578 unlisted options with an exercise price of 0.9 cents per share and
expiry date of 31 August 2022.
•
(b) On 9 September 2020, the Company announced the successful completion of an oversubscribed Shares
Purchase Plan (“SPP”) to existing shareholders raising $773,000. The SPP completed as follows:
On 9 September 2020 135,545,486 shares were issued at 0.55 cents per share.
•
Following shareholder approval at the 2020 Annual General Meeting the Company issued 5,000,001
•
shares at 0.55 cents per share and 1,666,668 unlisted options with an exercise price of 0.9 cents
per share and expiry date of 31 August 2022 to Directors that participated in the SPP.
The Company offered SPP participants up to 45,181,875 unlisted options with an exercise price of
0.9 cents per share and expiry date of 31 August 2022 subject to a separate offer under a cleansing
prospectus. On 7 December 2020, the Company issued 35,666,705 options under the cleansing
prospectus.
•
53
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
(c) On 6 August 2020, the Company announced that it had entered into an agreement, subject to shareholder
approval at the 2020 Annual General Meeting, to convert $500,000 of the outstanding loan balance with
Mr Andy Greig (Chairman). On 2 December 2020, following shareholder approval, Mr Greig received
90,909,091 ordinary shares with an issue price of 0.55 cents per share and 30,303,030 options with an
exercise price of 0.9 cents per share and expiry date of 31 August 2022.
(d) On 2 December 2020, following shareholder approval, the Company issued 2,540,866 ordinary shares to
Mr Brett Smith (non-executive Director) in lieu of $6,490 of outstanding fees.
(e) On 19 April 2021, the Company announced that it had received commitments to complete a private
placement of 544,000,000 shares to be issued at 1 cent per share with participants receiving an attaching
option on a one for two basis, with an exercise price of 1.5 cents per share and expiry date of 30 April 2022.
(f) During the period the following shares were issued on the exercise of options:
•
•
68,162,445 shares were issued on the exercise of options with an exercise price of 0.9 cents per
share. Included in this were 30,303,030 options exercised by Mr Greig for a total of $272,727.
2,750,000 shares were issued on the exercise of options with an exercise price of 1.5 cents per
share.
(g) On 14 January 2020, the Company announced completion of the transaction with Eurotin Inc. for the
acquisition of the Oropesa Tin Project. As a result of completion 1,000,000,000 convertible redeemable
preference shares converted to 1,000,000,000 ordinary shares.
(h) Issued on the exercise of vested performance rights, no funds were raised as this amount reflects the
valuation of performance rights at the time of grant.
(i) Transaction costs include $290,286 of share based payment expense relating to BW Equities. Refer to
note 15 for further details.
Options
Note
Weighted
average
exercise price
(cents)
30 June 2021
No. of Options
Weighted
average
exercise
price (cents)
30 June 2020
No. of Options
Unlisted Share Options
1.25 546,390,657
-
-
Balance at the beginning of the
reporting period
Options issued during the period:
-
-
-
-
0.70
100,000,000
-
-
- Broker Options
15
1.22
85,000,000
-
-
Placement attaching options
Placement attaching options
Options exercised during the
period:
-
-
Placement attaching options
Placement attaching options
Expired
0.90 260,303,102
1.50 272,000,000
0.90
(68,162,445)
1.50
(2,750,000)
-
-
0.70
(100,000,000)
Exercisable at end of year
1.25 546,390,657
-
-
The weighted average remaining contractual life of the options was 1 year.
Capital Management
Exploration companies such as Elementos Limited are funded almost exclusively by share capital. In April 2019, the
Group also entered in to a loan facility set out in more detail in Note 7 (Borrowings).
Management controls the capital of the Group to ensure it can fund its operations and continue as a going concern.
Capital management policy is to fund its exploration activities principally by way of equity, and where required, debt
54
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
and/or project finance. No dividend will be paid while the Group is in exploration stage. There are no externally
imposed capital requirements.
There have been no other changes to the capital management policies during the year.
NOTE 9: RESERVES
Foreign Currency Translation Reserve
The foreign currency translation reserve recorded exchange differences arising on translation of foreign controlled
subsidiaries.
Share-Based Payments Reserve
The share-based payment reserve is used to recognise the fair value of options issued to employees and
consultants. This reserve can be reclassified to retained earnings if options lapse.
NOTE 10: CASH FLOW INFORMATION
Reconciliation of Cash Flow from Operations with Loss after Income
Tax:
Loss after income tax
Non-cash flows in loss from ordinary activities:
Depreciation
Equity settled compensation
Unrealised Foreign exchange
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables
(Decrease)/Increase in payables
Cash flows from operations
30 June 2021
$
30 June 2020
$
(1,612,387)
(1,581,484)
7,556
6,490
40,947
7,423
(5,735)
-
-
73,119
(1,484,275)
(40,123)
234,091
(1,385,828)
Options and performance rights issued to employees and consultants for no cash consideration are disclosed in
note 15.
55
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
Reconciliation of cash and non-cash movements in borrowings from financing activities
2020 Cash flows
Principal
converted to
equity
Principal
converted to
exercise
options
Foreign
exchange
movements
2021
Lease liability
21,911
(5,817)
-
-
16,094
Borrowings
2,315,303
-
(500,000)
(272,727)
7,888 1,550,464
2,337,214
(5,817)
(500,000)
(272,727)
7,888 1,566,558
2019
Cash flows
Interest
accrued
Acquired
through
acquisition
Foreign
exchange
movements
2020
Lease liability
27,401
(6,932)
1,442
-
-
21,911
Borrowings
-
1,250,000
-
1,096,000
(30,697)
2,315,303
27,401
1,243,068
1,442
1,096,000
(30,697)
2,337,214
NOTE 11: LOSS PER SHARE
Net loss used in the calculation of basic and diluted LPS
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic LPS
30 June 2021
$
30 June 2020
$
(1,612,387)
(1,581,484)
3,218,266,530
2,004,988,495
Options are considered potential ordinary shares. Options issued are not presently dilutive and were not included
in the determination of diluted loss per share for the period. Shares and options issued subsequent to 30 June
2021 are also not dilutive. If the 188,614,174 shares issued since the end of the reporting period were issued on
1 July 2020, the loss per share for 30 June 2021 would have been (0.05) cents per share.
56
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 12: COMMITMENTS
(a) Exploration Commitments
The Group has certain obligations to expend minimum amounts on exploration in tenement areas. These obligations
may be varied from time to time and are expected to be fulfilled in the normal course of operations of the Group.
The following commitments exist at reporting date but have not been brought to account. If the relevant option to
acquire a mineral tenement is relinquished, the expenditure commitment also ceases. The Group has the option to
negotiate new terms or relinquish the tenements and also to meet expenditure requirements by joint venture or
farm-in arrangements.
30 June 2021
$
420,000
-
30 June 2020
$
400,000
-
420,000
400,000
Not later than 1 year
Later than 1 year but not later than 5 years
Total commitment
NOTE 13: CONTINGENT LIABILITIES
There were no contingent liabilities at the end of the reporting period.
NOTE 14: RELATED PARTY TRANSACTIONS
Parent Entity
Elementos Limited is the legal parent and ultimate parent entity of the Group, owning 100% of all subsidiaries at
30 June 2021.
Subsidiaries
Interest in subsidiaries are disclosed in Note 19.
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Equity-based payments
30 June 2021
30 June 2020
$
367,999
21,456
-
389,455
$
408,908
26,709
25,692
461,309
On 17 April 2019, the Company executed a loan facility with the Company’s Non-Executive Chairman Mr Andy Greig,
a related party, for up to $2,000,000. The Company had drawn $1,250,000 under the loan and during the period
made arrangements for the conversion of the loan to equity of Company and closing of the facility. Further details
are contained in Note 7 and Note 20.
57
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 15: SHARE-BASED PAYMENTS
During the year ended 30 June 2021 85,000,000 options were issued to the Company’s corporate advisor BW
Equities in relation to capital raising activities undertaken during the year. The amount recognised for the period
under the share-based payment reserve in relation to share based payments amounts to $290,286. As at 30 June
2021, none of the options had been exercised and all were vested and exercisable.
The fair value of options at grant date is determined using generally accepted valuation techniques that take into
account exercise price, the term of the option, the impact of dilution, the share price at grant date, the expected
price volatility of the underlying share, the expected dividend yield and the risk-free rate for the term of the option
and an appropriate probability weighting to factor the likelihood of the satisfaction of non-vesting conditions. The
expected volatility is based on historic volatility, adjusted for any expected changes to future volatility due to publicly
available information.
Inputs used to value the share options are as follows:
Number of options
40,000,000
45,000,000
Grant date
2-Dec-2020
13-Apr-2021
Expected volatility
Risk-free interest rate
Expected life
Model used
125%
0.25%
125%
0.25%
1.74 years
1.04 years
Black Scholes
Black Scholes
Value per option
$0.00234
$0.00437
The following table shows the number, movements and exercise price of options for the 2021 year.
Grant Date/s
Expiry Date
Exercise Price
2 December 2020
31 August 2022
13 April 2021
30 April 2022
0.9 cents
1.5 cents
Exercisable
40,000,000
45,000,000
The weighted average remaining contractual life of options outstanding at the end of the reporting period is 1 year.
The 45,000,000 options were issued to BW Equities in August 2021. Refer to note 20 for further information.
NOTE 16: AUDITOR’S REMUNERATION
Remuneration for the auditor of the parent entity:
BDO Audit Pty Ltd and its related entities:
Auditing or reviewing the financial reports
30 June 2021
30 June 2020
$
$
49,490
49,490
47,648
47,648
58
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 17: FINANCIAL RISK MANAGEMENT
(a) Financial Risk Management Policies
The Elementos Group's financial instruments comprises cash balances, receivables and payables, loans to and from
subsidiaries. The main purpose of these financial instruments is to provide finance for Group operations.
Treasury Risk Management
Key executives of the Company meet on a regular basis to analyse exposure and to evaluate treasury management
strategies in the context of the most recent economic conditions and forecasts.
The board of directors has overall responsibility for the establishment and oversight of the Group's risk management
framework. Management is responsible for developing and monitoring the risk management policies and reports to
the board.
Financial Risks
The main risks the Group is exposed to through its financial instruments are interest rate risk, credit risk and liquidity
risk. These risks are managed through monitoring of forecast cash flows, interest rates, economic conditions and
ensuring adequate funds are available.
Interest Rate Risk
The Group's exposure to interest rate risk, which is the risk that a financial instrument's cash flows from interest will
fluctuate as a result of changes in market interest rates, arises in relation to the Group's bank balances. This risk
is managed through careful placement of surplus funds in interest bearing bank accounts.
The Company has performed sensitivity analysis relating to its exposure to interest rate risk. At year end, the effect
on profit and equity as a result of a 1% change in the interest rate, with all other variables remaining constant, is
immaterial (2020: immaterial).
Liquidity Risk
Liquidity risk is the risk that the Group will not be able meet its financial obligations as they fall due. This risk is
managed by ensuring, to the extent possible, that there is sufficient liquidity to meet liabilities when due, without
incurring unacceptable losses or risking damage to the Group's reputation.
The Group's activities are funded from equity and where required and available debt and/or project finance.
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to
recognised financial assets, is their carrying amount, net of any provisions for impairment of those assets, as
disclosed in the statement of financial position and notes to the financial statements.
Credit risk arises from exposures to deposits with financial institutions and sundry receivables.
Credit risk is managed and reviewed regularly by key executives. The key executives monitor credit risk by actively
assessing the rating quality and liquidity of counter parties:
only banks and financial institutions with an ‘A’ rating are utilised; and
all other entities are rated for credit worthiness taking into account their size, market position and financial
standing.
At 30 June 2021, there was no concentration of credit risk, other than bank balances and on geographical basis
with most financial assets in Australia (2020: nil).
59
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
(b) Financial Instrument Composition and Contractual Maturity Analysis
Financial assets:
Within 6 months:
cash & cash equivalents
receivables (i)
Financial liabilities:
Within 6 months:
payables (i)
Within 12 months:
Borrowings (ii)(a)
Lease liabilities
Greater than 12 months:
Borrowings (ii)
Lease liabilities
30 June 2021
30 June 2020
$
$
5,542,252
227,294
5,769,546
199,176
138,267
337,443
(1,106,332)
(515,575)
(1,550,464)
(1,250,000)
(6,932)
(6,932)
-
(1,065,303)
(10,025)
(16,957)
(2,673,753)
(2,854,767)
(i) Non-interest bearing. The contractual cash flows do not differ to the carrying amount.
(ii)
Interest bearing with a weighted average interest rate of 6% per annum.
(a) Borrowings outstanding at 30 June 2021 were settled in full subsequent to the reporting period. See Note 20
for further details.
(c) Fair Values
Fair values of financial assets and financial liabilities are materially in line with carrying values due to their short
term nature.
NOTE 18: SEGMENT REPORTING
Operating segments have been determined on the basis of reports reviewed by the board of directors (chief
operating decision makers) in assessing performance and determining the allocation of resources. The Group is
managed primarily on a geographic basis, that is, the location of the respective areas of interest (tenements) in
Australia and Spain. Operating segments are determined on the basis of financial information reported to the board
of directors.
Accordingly, management currently identifies the Group as having two reportable segments, being Australia and
Spain. This has changed from previous reporting periods as a result of the completion of the Oropesa Tin Project
acquisition.
Basis of accounting for purposes of reporting by operating segments.
(a) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision maker with respect
to operating segments, are determined in accordance with accounting policies that are consistent to those adopted
in the annual financial statements of the Group.
60
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
Segment Assets
Where an asset is used across multiple segments, the asset is allocated to that segment that receives majority
economic value from that asset. In the majority of instances, segment assets are clearly identifiable on the basis of
their nature and physical location.
(c) Segment Liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment. Segment liabilities include trade and other payables, lease liabilities and borrowings.
2021
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income
for the period
Total comprehensive income
for the period
2020
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income
for the period
Total comprehensive income
for the period
Australia
Spain
Intercompany
eliminations
$
$
Total
$
527,002
(3,021,368)
5,769,546
5,917,435
-
11,479,414
$
8,263,912
5,561,979
13,825,891
6,444,437
(3,021,368)
17,248,960
787,161
4,897,166
(3,021,368)
2,662,959
9,931
-
-
9,931
797,092
4,897,166
(3,021,368)
2,672,890
25,740,673
290,286
3,000,000
(211,718)
(13,002,160)
(1,241,011)
13,028,799
(1,246,612)
1,547,271
(369,775)
-
(160,625)
(1,246,612)
(530,400)
-
-
-
-
-
-
-
Australia
Spain
Intercompany
eliminations
$
1,241,434
5,499,444
6,740,878
1,543,695
$
$
143,491
(1,047,482)
4,033,751
-
4,177,242
(1,047,482)
1,275,013
(1,047,482)
16,260
1,065,304
-
1,559,955
2,340,317
(1,047,482)
16,699,725
3,000,000
-
(51,093)
(11,518,802)
(1,111,982)
5,180,923
(1,452,455)
1,836,925
(129,029)
-
(51,093)
(1,452,455)
(180,122)
61
-
-
-
-
-
-
-
28,740,673
78,568
(14,243,171)
14,576,070
(1,612,387)
(160,625)
(1,773,012)
Total
$
337,443
9,533,195
9,870,638
1,771,226
1,081,564
2,852,790
19,699,725
(51,093)
(12,630,784)
7,017,848
(1,581,484)
(51,093)
(1,632,577)
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 19: SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-owned
subsidiaries in accordance with the accounting policy described in Note 1:
Rockwell Minerals Pty Ltd
Rockwell Minerals (Tasmania) Pty Ltd
Elementos Minerales S.A.
Elementos Chile Limitada
Elementos Spain Pty Ltd
Minas de Estano de Espana, S.L.U
NOTE 20: EVENTS AFTER REPORTING PERIOD
Country of
incorporation
Australia
Australia
Argentina
Chile
Australia
Spain
Ownership interest
2021
100%
100%
100%
100%
100%
100%
2020
100%
100%
100%
100%
100%
100%
• Following shareholder approval on 6 July 2021, the following transactions occurred:
-
-
-
The issue of 66,000,000 shares with an issue price of 1 cent per share and 33,000,000 attaching options
with an exercise price of 1.5 cents per share and expiry of 30 April 2022 in relation to the capital raising
completed in April 2021.
The issue of 45,000,000 options with an exercise price of 1.5 cents per share and expiry of 30 April 2022
to BW Equities who acted as lead manager to the April 2021 capital raising.
The issue of 56,924,600 shares with an issue price of 1 cent per share and 28,462,300 attaching options
with an exercise price of 1.5 cents per share and expiry of 30 April 2022 to Mr Andy Greig (Chairman) on
conversion of the outstanding loan principal and interest. The loan facility was closed upon the issue of
shares. See Note 7 for further details in relation to the loan facility.
• As announced on 8 September 2021, the Company executed an agreement with Mark Wellings (Eurotin
Managing Director) and his entity, ZCR Corp, to settle the outstanding CAD$1m loan facility due to mature in
January 2022. A payment of CAD$683,642 which is inclusive of interest was made during September 2021 to
finalise the agreement.
• As announced on 9 July 2021, the Company issued 82,500,000 performance rights to executives of the
company with company related performance vesting conditions.
• Subsequent to the reporting period the following options were exercised:
-
-
2,727,274 options with an exercise price of 0.9 cents per option raising $24,545; and
62,962,300 options with an exercise price of 1.5 cents per option raising $944,435.
Other than the events noted above, there are no other matters or circumstances that have arisen since the end of
the year which significantly affected or may significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in future financial years.
62
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
NOTE 21: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Elementos Limited at 30 June 2021. This information has
been prepared using consistent accounting policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the period
30 June 2021
30 June 2020
$
$
5,242,417
193,826
14,418,375
12,141,209
19,660,792
12,335,035
781,946
24,570
806,517
1,553,286
16,095
1,569,381
44,636,204
35,595,256
290,286
-
(26,072,214)
(24,829,602)
18,854,276
10,765,654
(1,242,612)
(1,039,149)
-
-
(1,242,612)
(1,039,149)
The Company has no contingent liabilities, nor has it entered into any guarantees in relation to the debts of its
subsidiaries (2020: nil).
The Company has not entered into any contractual commitments for the acquisition of property, plant and
equipment (2020: nil).
NOTE 22: DIVIDENDS & FRANKING CREDITS
There were no dividends paid or recommended during the financial year. There are no franking credits available to
the shareholders of the Company.
NOTE 23: ASSET ACQUISITION
As announced on 14 January 2020 the Company completed the acquisition of the Oropesa Tin Project from Eurotin
Inc. The completion of the transaction represents the acquisition of the Oropesa Tin Project which includes the
tenement and all historical exploration information including drilling results, core samples, environmental and
development applications. No goodwill is recognised on the transaction.
As part of the acquisition Elementos assumed a CAD$1m loan owed from MESPA to Eurotin’s Chief Executive officer
and Eurotin and subsequently Elementos’ largest shareholder, Mark Wellings. The Loan is unsecured, accrues
interest at a rate of 5.0% p.a. and is to be repaid by the second anniversary of the Final Completion. In support of
the Loan Agreement, Elementos has issued to Mark Wellings a convertible debenture, pursuant to which Mark
Wellings shall have the right to convert, from time to time, up to the principal amount and all accrued interest into
Elementos shares at a price equal to the higher of the 20 day VWAP of Elementos shares preceding the date that
Mark Wellings provides notice of his intention to convert and $0.004 per share. Conversion during the term of the
Convertible Debenture will be subject to Elementos’ prior consent, other than during a 10 business day period at
the end of the Convertible Debenture’s terms.
At interim completion the Company issued 1,000,000,000 convertible redeemable preference shares to Eurotin
Inc. shareholders. On 14 January 2020 the Company confirmed that final completion had occurred and the CRPS
had converted on a 1 for 1 basis to 1,000,000,000 fully paid ordinary shares of Elementos Ltd.
63
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2021
Notes to the Consolidated Financial Statements for the Year Ended 30 June 2021
The Group has determined that the assets acquired did not include the sufficient inputs, processes and outputs to
meet the definition of a business defined in the Australian Accounting Standards as at the date of acquisition and
therefore is not a business combination. The acquisition has been accounted for as an asset acquisition.
Details of the relative fair value of the assets acquired and liabilities assumed at 14 January 2020 being the date
control of MESPA was obtained, are as follows:
Purchase Consideration
Elementos Ltd ordinary shares
Total Purchase Consideration
Net assets acquired
Cash
Trade and other receivables
Other assets
Exploration and Evaluation assets
Trade and other payables
Borrowings
Net identifiable assets acquired
14 January
2020
$
3,000,000
3,000,000
186,988
97,887
74,557
3,798,330
(61,762)
(1,096,000)
3,000,000
64
ELEMENTOS LIMITED - ABN 49 138 468 756
ANNUAL REPORT 2020
Directors’ Declaration
The directors of the Company declare that:
1. The attached financial statements and notes are in accordance with the Corporations Act 2001, including:
a.
b.
complying with Australian Accounting Standards and Interpretations which, as stated in accounting
policy note 1 to the financial statements, constitutes explicit and unreserved compliance with
International Financial Reporting Standards (IFRS); and
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of
its performance for the financial year ended on that date.
2. The executive director and chief financial officer have each declared under section 295A that:
a.
b.
the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
the financial statements and notes for the financial year comply with the Australian Accounting
Standards and Interpretations; and
c.
the financial statements and notes for the financial year give a true and fair view.
3.
In the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
This declaration is made in accordance with a resolution of the board of directors.
Chris Dunks
Director
28 September 2021
Brisbane, Queensland
65
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Elementos Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Elementos Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2021, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
66
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Carrying value of exploration and evaluation assets
Key audit matter
How the matter was addressed in our audit
The Group carries exploration and
evaluation assets in accordance with the
Group’s accounting policy for exploration
and evaluation assets as set out in Note 1
and Note 5.
The recoverability of exploration and
evaluation asset is a key audit matter due
to:
•
•
the significance of the total balance;
and
the level of procedures undertaken to
valuate management’s application of
the requirements of AASB 6
Exploration for and Evaluation of
Mineral Resources (‘AASB 6’) in light
of any indicators of impairment that
may be present.
Our procedures included, but were not limited to, the
following:
Obtaining evidence that the Group has valid rights
to explore in the areas represented by the
capitalised exploration and evaluation expenditure
by obtaining supporting documentation and
considering whether the Group maintains the
tenements in good standing.
Making enquiries of management with respect to
the status of ongoing exploration programs in the
respective areas of interest, assessing the Group's
cash flow budget for the level of budgeted spend
on exploration projects, and held discussions with
Directors of the Group as to their intentions and
strategy.
Enquiring of management, reviewing ASX
announcements, and reviewing directors' minutes
to ensure that the Group had not decided to
discontinue activities in any applicable areas of
interest and to assess whether there are any other
facts or circumstances that existed to indicate
impairment testing was required.
•
•
•
67
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2021, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
68
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 22 to 26 of the directors’ report for the
year ended 30 June 2021.
In our opinion, the Remuneration Report of Elementos Limited, for the year ended 30 June 2021,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
D P Wright
Director
Brisbane, 28 September 2021
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
69