Elementos Limited Annual Report for the year ended 30 June 2023 1
Elementos Limited Annual Report for the year ended 30 June 2023 2
Contents
04
Corporate Directory
05
Chairman’s Letter
07
Operations
Review of
08
Project Overview
22
Corporate
30
Statements
Cautionary
51
Information
Shareholder
24
Governance
Environmental,
Social and
26
Tenement Interests
27
Reserves
Resources and
33
Directors’ Report
39
Report
Remuneration
54
Statement
Corporate
Governance
61
Consolidated Statement
of Profit or Loss and
Other Comprehensive
Income
50
Declaration
Auditor’s
Independence
62
Financial Position
Consolidated
Statement of
86
Declaration
Directors’
63
Changes in Equity
Consolidated
Statement of
64
Flows
Consolidated
Statement of Cash
87
Auditor’s Report
Independent
65
Notes to the
Consolidated
Financial
Statements
Elementos Limited Annual Report for the year ended 30 June 2023 3
Elementos is developing two world class tin
projects to meet forecast supply deficits.
Our inventory of tungsten, zinc, copper and fluorite
are also rated “critical” by many major economies.
Uncertainty in international relations and changing
geopolitical dynamics has seen the risk factors
associated with securing these minerals grow
significantly in importance for many developed
economies.
Elementos Limited Annual Report for the year ended 30 June 2023 4
Corporate Directory
Directors and Company Secretary
Share Registry
Mr Andy Greig (Non-executive Chairman)
M Joe David (Managing Director)
Mr Calvin Treacy (Non-executive Director, Chairman of
the ESG Committee)
Mr Corey Nolan (Non-executive Director, Chairman of
the Audit and Risk Committee)
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 8, 210 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 Annual Report for the year ended 30 June 2023 5
Chairman’s Letter
Dear fellow shareholders
The 2023 financial year has been an extremely busy period for the company as we continue to develop our
independent and world-class tin projects in a safe, responsible way. We engaged with our local communities,
stakeholders and regulators, and remain energised and focussed on becoming one of a few global companies
positioned to deliver ethically sourced tin into growing supply deficits.
We continued to focus our efforts on our Oropesa Tin Project in Andalucia Spain, which is on track to deliver
Europe’s first and only significant tin mine into the European Union. The EU is acutely aware of the need for it to
supply its own critical raw materials, remaining on track to deliver their Critical Raw Materials Act legislation, to
support mining within the EU, before the end of 2023. We also matured our Cleveland Tin Project in Tasmania,
Australia – which contains not only tin but other critical minerals such as copper, tungsten, and fluorite (which was
highlighted this year).
The company has further matured Oropesa’s Definitive Feasibility Study (DFS) while expanding the Mineral Resource
and improving the geological confidence. The project has been significantly technically de-risked with the following
elements all providing positive results to support the development of the project and required confidence levels to
support the DFS: geology, mineralogy, metallurgy, geochemistry, water quality and tailings characteristics,
thickening, concentrate grade and recovery, geotechnical results, environmental surveys, geohydrology, hydrology,
water-balances, mass-balances to name just a few.
The remaining de-risking objectives for Oropesa are clear and are the major focus for our management team –
project approvals, offtake and the financing of the project. I assure shareholders that we have a highly engaged
management team who have the capability and fortitude to achieve successful outcomes on all these fronts.
Whilst the global macro-economic environment has been challenging to forecast over the past year, the facts
moving forward remain clear for tin. Tin remains highly critical to the global electronics industry and its role in the
energy transition is fundamental. There are only a handful of real tin projects in development globally. Oropesa and
Cleveland are well placed to be two of only a few projects that get financed and developed in the next decade. The
fundamentals of both projects are robust. Their locations are strategic and geographically secure (Europe and
Australia). More importantly, they will be developed with high levels of sophistication and maturity driving towards
high Environmental, Social, Governance (ESG) credentials.
Elementos’ management continues to be highly engaged with the Andalucian authorities relating to Oropesa’s
approvals. The trading halt and short-term suspension of ELT shares in June this year was to address a number of
issues raised by the authorities. Subsequent to that event, the company submitted its official response to the
referenced correspondence on 17 July 2023, of which we await the formal response from the Department. The
submission to the authorities includes some proposed modifications to the project layout to satisfy the requirements
of the Department and further minimise environmental impacts. This interaction with the authorities and flexibility
shown by our project team is visible evidence of ESG at work. We as a company, will always work with our
stakeholders to ensure the project is being developed in a responsible way that engenders the backing of the
community and regulators.
Elementos Limited Annual Report for the year ended 30 June 2023 6
Throughout the recent interactions with the government on these approvals, the combined support from the regional
(Andalucia), provincial (Córdoba), and local (Fuente Obejuna & Valle del Guadiato), authorities has been nothing
short of overwhelming with all sharing an obvious desire to see the project approved to stimulate their respective
economies and benefit the lives of their constituents. The project remains highly engaged with the Andalucia Project
Accelerator Unit (of which it’s a foundation mining member) which is proving invaluable and facilitates cross-
department communication. The project continues to be more prominent daily as our staff engage positively with the
local communities in which we operate.
At our Cleveland Project, we completed the reporting from the FY2022 drilling program, which identified material
intersections of Tungsten 150m closer to the surface than previously recorded at the project. This drilling was
followed up with downhole electromagnetic geophysical surveys, carried out on two drill holes during the period,
mostly confirming known extensions to the Resource. The Cleveland Project has significant Mineral Resource
Estimates published for tin, copper and tungsten; with the potential for additional minerals like fluorite (another
“Critical Mineral”), also being identified at material grades. Cleveland is a historic underground mine with excellent
electrical, water and transport infrastructure, and we are keen to continue maturation of the asset once we have
adequately defined the mineralisation.
Tin has displayed significant volatility, much like the global economy, during the year. A subdued tin price has
created a challenging environment for many tin project developers to mature their projects toward production.
However, Elementos remained focused on realising its vision and is confident it will enter a favourable tin market in
the future. Tin remains one of the ‘forgotten critical metals’ and supply-demand models forecast significant deficits
over the next decade and beyond. Tin has many growth opportunities driven by electrical solder usage, with solar PV,
5G rollout and increased automation and AI being the major demand generators, along with general electronics
consumption.
I thank our shareholders for your ongoing support of Elementos over the past 12 months. The development of mining
projects is not always a smooth or straightforward road, especially with the current macro-economic headwinds
that continue to buffet the industry. However, we believe there has never been a better time to be developing critical
mineral projects, with the general population starting to comprehend the massive shortages ahead.
I also thank our dedicated management team, led by Managing Director Joe David during a challenging year. I also
want to again thank our former Non-Executive Director Brett Smith who stepped down in May 2023 following 3 and a
half years of valued service to the company.
Elementos operates an integrated owners’ team delivery model, so it would be remiss of me if I didn’t also thank all
our staff, consultants and contractors who work closely together to ensure we mature our assets in a safe and
responsible way. The company operates multiple projects, across multiple time zones and jurisdictions around the
globe and it’s only with the correct team, culture and attitude that we achieve the many goals that we do.
The year ahead promises to be another busy one as we continue to move through critical development and approval
phases at Oropesa and Cleveland. We will be working hard to deliver on our significant goals, and I look forward to
keeping you updated on our progress.
Yours sincerely,
Andy Greig
Chairman
Elementos Limited Annual Report for the year ended 30 June 2023 7
Review of Operations
Elementos Limited Annual Report for the year ended 30 June 2023 8
Projects Overview
Elementos Limited’s strategy is to deliver sustainable shareholder value through the development of its portfolio of
tin assets including the Oropesa Tin Project in Andalucia, Spain and Cleveland Tin Project in Tasmania, Australia.
The company is focussed on maturing the Oropesa Tin Project through the completion of a Definitive Feasibility
Study (DFS) whilst also maturing its understanding of the Cleveland Tin Project, before formalising its development
pathway.
Activities at Oropesa during the period initially focussed on acquiring the final data to support the DFS, but quickly
moved into lab engineering and market engagement phases.
In September 2022, the company released its robust pilot scale metallurgical results, supporting the assumptions of
previous studies, and appointed Duro Felguera as Process Plant Contractor, under an Early-Contractor Involvement
(ECI) contract.
In February 2023, the company issued a Mineral Resource Update for its Oropesa Project, with 95% of the total
Mineral Resource now being classified and Measured or Indicated. The company also had some very strong drilling
results in its first ‘outside the Resource’ exploration program, hitting some VMS style mineralisation to the North-
West of the main Oropesa Tin Resource.
Significant progress was made at the end of the financial year to complete the Oropesa Tin Project DFS, with major
workstreams, packages and reporting over 90% concluded. However, as per the 22 June 2023 ASX announcement,
the finalisation of the DFS was paused following communications with the Andalusian Administration related to
project approvals.
In addition, Elementos continued to develop its Cleveland Tin Project in Tasmania, determining potential to increase
the mineralisation of the project through exploration on prospective targets adjacent and below the existing
resource, and also investigating the potential of other critical minerals, with the recent confirmation of significant
fluoride mineralisation.
Elementos Limited Annual Report for the year ended 30 June 2023 9
Oropesa Tin Project
Andalucia, Spain
The Oropesa Tin Project is located in the Guadiato Valley, in the Province of Cordoba, within the Andalucia
autonomous region, Spain and as a result is strategically located within the European Union. Oropesa has one of
the world’s largest undeveloped, open-cut mineable tin deposits, with access to world class infrastructure. It is an
advanced tin project, significantly progressed through its Definitive Feasibility Study (DFS) and in detailed
negotiation with the authorities for its major project approvals.
Oropesa consists of an exploration concession package (Investigation Permit No. 13.050) covering an area of
13.0km2, located approximately 75km north-west of Cordoba and 180km north-east of Seville, in the region of
Andalucía, in southern Spain. The Oropesa district has historically been a mining district for base metals (copper,
lead, silver, and iron) and coal, with coal mining ceasing in recent times on European Union intervention.
Tin mineralisation was first identified at Oropesa in 1982. Intensive exploration activity since 2010, including 261
historic drill holes (54,026m), 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.
Figure 1. Oropesa Tin Project location
Elementos Limited Annual Report for the year ended 30 June 2023 10
Tin mineralisation at Oropesa (>99% 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.
Oropesa contains a JORC compliant Measured, Indicated and Inferred Resource of 75,834 tonnes of tin, 95% of
which is classified as Measured or Indicated, which forms the basis for the DFS. Recently the company has
announced significant zinc mineralisation, in the form of sphalerite, which has the potential for a maiden zinc
Mineral Resource at Oropesa and a zinc by-product.
Definitive Feasibility Study Progress
The company continues to progress the Oropesa Tin Project DFS, via its subsidiary Minas de Estaño de España, and
with the support of its Integrated Owners Team (IoT). The IoT is led by our Australian Owner’s Engineer, Wave
International, supported by our Spanish study team, MINEPRO SOLUTIONS S.L. (formerly “SCYPI”). This IoT
approach allows us to deliver best-for-project in-country solutions with experienced local contractors and
consultants, whist also meeting the high regulatory requirements of being an Australian listed entity subject to ASX
and the JORC code.
The Integrated Owners Team continued to progress the DFS via regular workshops and meetings in Spain and
Australia during the year. The team has continued to progress significantly on many fronts including the following
summaries:
The DFS was significantly matured during the year, the following is a high-level summary of the key items progressed
during the period:
Figure 2 . Integrated Owners Team
Elementos Limited Annual Report for the year ended 30 June 2023 11
Metallurgical Processing
Pilot scale Metallurgical test work was successfully completed.
•
•
•
Pilot-scale metallurgical test work confirms conventional and modern tin flowsheet for Oropesa Project,
producing high-grade commercial tin concentrate
Robust metallurgical upgrades and flow sheet confirmed from a representative bulk sample to set the basis of
the Oropesa DFS (see Table-1)
All physical test work completed, final reporting of pilot and variability test work underway
• Mineralogy confirms Oropesa is cassiterite tin-bearing mineral (>99%), with <0.5% stannite in Ore
Plant
Feed
%
Concentrate
Grade
%
Tin Concentrate
Plant Recovery
%
Tin (Sn)
Iron (Fe)
Total sulphide (Stot)
Lead (Pb)
0.46
12.85
5.02
0.04
61.4
4.9
3.2
0.2
Table 1. Pilot Plant Metallurgical Upgrade Results
74.1
Figure 3: Oropesa Long Section Showing Block Model and Metallurgical Sample Locations
Elementos Limited Annual Report for the year ended 30 June 2023 12
Ore Sorting Test Work
•
•
The company ran two further bulk samples through the ore sorting equipment at the TOMRA facilities in
Hamburg, Germany.
The results have confirmed the previous ore sorting settings, used in the optimisation study, as robust upgrade
and waste rejection factors, and have added to the confidence level of the study, sufficient for use in the DFS.
Mineral Processing Plant Contractor Awarded ECI Contract
• Mineral Process Plant design matured significantly throughout the quarter working with our Early Contractor
Involvement (ECI) partner Duro Felguera (DF), a highly experienced Spanish EPC contractor. Highlights
included:
o Design development of materials handling facilities and the overall layout further optimised in conjunction
with major earthworks pads.
o
3D Modelling of the Plant has also been significantly advanced (see Figure-6) showing the main wet plant
facilities.
o Process Control Philosophy has been developed and drafting of Process and Instrumentation Diagrams
(P&IDs) is in progress.
o RFQs have been issued for civil and concrete works, structural steel fabrication and installation, and
mechanical equipment installation.
o Planning for execution of the works, including temporary construction facilities and schedule development
has been initiated.
o DF have provided Management Plans for the contract, including Project Execution Plan, HSE Management
Plan, Environmental Management Plan, QA/QC Management Plan and Commissioning Procedure.
o Review of electrical loads and distribution arrangements, including substations.
o
EPC Contract reviews continue to be negotiated towards an executable EPC contract.
Tailings Dam & Civil Workstreams
Civil Investigations
•
•
During the period major civil investigations were completed for the tailings dam, waste dump and main
infrastructure locations across the site.
This included investigating locations for source material and defining the locations for key pieces of
infrastructure.
Civil Designs
•
Civil designs were progressed for the following project elements:
o Roads & Tracks
▪ Upgrade of public roads
▪ Access roads from public roads to site
▪
▪
Relocation and upgrade of local farmers tracks
Ex-pit haul roads
Elementos Limited Annual Report for the year ended 30 June 2023 13
Figure 4. Oropesa Tin Project Infrastructure Layout – Basic Detail (current DFS Design)
o
Infrastructure pads
▪ Mineral Process Plant
▪ Dry Crushing and ore sorting circuits
▪
Rom Pad & Primary crushing
Conveyors
▪
▪ Mine Contractor Area
▪ Offices, workshops, parking and storage
Power switchboards & Reticulation
▪
o
Tailings Dam
▪
▪
Sulphide & non-sulphide tailings dams
Pipelines, pumps and supporting infrastructure
o Water Infrastructure
▪ Water dam
Pipelines
▪
▪ Borefield
▪ Overflow drains
Elementos Limited Annual Report for the year ended 30 June 2023 14
Geology
Mineral Resource
During the year the company issued a Mineral Resource Update for its Oropesa Project. The MRE update achieved
its goal of significantly upgrading the Inferred and Indicated Mineral Resource categories, increasing the geological
confidence of the deposit. The MRE will be further assessed for conversion to JORC Ore Reserves, via techno-
economic modification factors, as part of the Oropesa’s Definitive Feasibility Study (DFS).
Increase in Geological Confidence
•
•
•
•
100% of 2023 Mineral Resource Estimate (MRE) tonnes located within the 2022 Optimisation Study1 US$30k/t Pit
Shell are classified as Measured or Indicated (no Inferred Resources within the US$30k/t Pit Shell).
95% of 2023 MRE is classified either Measured or Indicated Resources, totalling 18.5Mt (+11%) at 0.39% Sn.
38% of 2023 MRE is classified as Measured Resources, increasing by 3.1Mt (+73%) to 7.4Mt at 0.36% Sn.
Elementos will assess the 2023 MRE, applying applicable Modifying Factors, for conversion to JORC Ore
Reserves as part of its Definitive Feasibility Study (DFS) due for delivery in Q2 CY23.
Increased Tonnage
•
•
Total 2023 MRE increases by 0.7Mt (+4%) to 19.6Mt at 0.39% Sn.
2023 MRE Measured or Indicated Resource contained tin increases to 71.8kt (+12%)
The Oropesa Tin Project MRE update was completed by Measured Group, following completion of an 11-hole in-fill
drilling program and supersedes the Mineral Resource Estimate previously released in November 2021². The Mineral
Resource Estimate was announced to the ASX on 14 February 2023 with JORC Table 1
Figure 5 Cross-section depicting the outlines of the mineral resource wireframes and location of exploration drill
holes ADD-04, ADD-05 & ADD-07, at the Oropesa Tin Project, Spain (looking towards the northwest)
Elementos Limited Annual Report for the year ended 30 June 2023 15
Further Tin, Zinc and Copper Exploration Potential
During the year the company intersecting further tin, zinc and copper mineralisation outside the Mineral Resource,
to the north-west of the main tin deposit. These results were announced to the ASX on the following dates in 2023: 22
June, 16 May, 29 March and 21 February. They include the following significant results:
Significant assay results (0.1% Sn cut-off grade):
ADD_05:-
8.9m @ 1.14% Cu & 0.31% Zn from 87.0m
ADD_04:-
19.7m @ 0.12% Sn, 0.96% Zn & 0.7% Cu from 93.7m including:
2.1m @ 0.13% Sn, 5.28% Zn & 2.81% Cu from 99.0m
8.8m @ 0.23% Sn, 1.65% Zn & 1.21% Cu from 99.0m &
1.0m @ 0.23% Sn & 1.83% Zn from 151.0m
ADD_04A:-
22.5m @ 0.11% Sn, 1.43% Zn & 0.77% Cu from 92.6m (0.1% Sn cut-off grade), including
10.0m @ 0.24% Sn, 2.44% Zn & 0.82% Cu from 99.5m
2.2m @ 0.05% Sn & 3.78% Zn & 1.32% Cu from 120.2m
10.0m @ 0.56% Sn, 4.65% Zn & 0.32% Cu from 152.9m
Geological Database
The company continues to finalise it excel based database into a propriety database (Micromine Geobank). This
includes a London based consultant, ALS laboratories and a validation exercise which is designed to confirm the
quality of the data and link to its primary source. This process has progressed smoothly and is in its final stages.
Zinc Assays & By-product potential
Elementos confirmed significant zinc mineralisation from assays within Oropesa Tin Project’s Mineral
Resource area on 3 August 2023.
•
•
Zinc mineralisation reported from 282 historic drillholes within and surrounding Oropesa’s tin Mineral
Resource wireframe areas.
Zinc metallurgical test work from Wardell Armstrong Laboratories (UK) confirms potential to develop
an additional incremental and low-cost by-product zinc concentrate (>40% Zn at 50-75% Zn recovery)
at Oropesa from zinc feed average grades of ~0.5% Zn.
• Ore sorting test work at TOMRA laboratories also confirms an average +28% upgrade of zinc ore feed
grades when processed with cassiterite.
•
Elementos performing additional modelling on Oropesa’s zinc mineralisation to confirm potential of
delivering a maiden Zinc Mineral Resource during 2H CY2023.
Mine Planning
• During the year the company significantly progressed detailed mine planning activities:
o Detailed pit design and staging was completed.
o Design of the topsoil, in-pit and out of pit dumps was completed.
o Waste haulage to the tailings dam construction was completed.
o Blasting and grade control drilling activities were designed and scheduled.
Elementos Limited Annual Report for the year ended 30 June 2023 16
o Ore and Waste schedules were completed, with only minor refinement required to complete the
final DFS schedule.
o Tender documentation were developed, sent and evaluated from six pre-selected contract miners,
set included:
▪ Request for Tender documents
▪ Scope of Works (inclusive of Division of Responsibility Matrix)
▪ Mining Schedule (ore, waste and equipment)
▪ Drawing set (mining and sitewide)
Truck Haulage paths
▪
▪ Six-monthly topography
▪ Animation.
•
•
The ROM pad has been re-positioned at the top of the pit master ramp / bottom of the waste dump,
~750m closer to the pit which materially reduces ore haulage distance (~1.5km round trip) and thus
reduces truck turn-around time, truck numbers, diesel burn, CO2 emissions and unit operating cost.
The 750m reduction will now be serviced by a conveyor between the primary and secondary crushing,
being delivered under DFS Process Plant and NPI scope.
The final mine planning activities which will lead to the declaration of a maiden Ore Reserves
Statement have been placed on hold, due to the pending feedback on project footprints from the
Andalusian regulators. Any adjustment to footprints will likely lead to some re-work to ensure full
alignment between DFS designs and regulatory approvals.
Tailings Dam, Waste Dump Facilities & Water Dam
•
•
•
Tailings Dam Design completed to a level to support market pricing was completed.
Further site investigations and laboratory works were completed in both the locations of the Tailings
dam wall and the source material locations to further refine material suitability.
Final Tailings dam location continues will be confirmed following feedback from the Andalucian
regulators, then it will be finalised for regulatory submissions.
Non-Process Infrastructure
Power Supply
•
•
•
Spanish power supplier ENDESA confirmed the availability of sub-station connection point and power
supply to the Oropesa project, subject to conditions and ongoing negotiations which are commercial
in nature.
Further high voltage alignment work is underway to confirm final route to site to support approvals and
DFS.
Study completed on alternative forms of power generation (waste energy recovery, renewable
alternatives), but base case for DFS is confirmed to remain a power grid connection.
Elementos Limited Annual Report for the year ended 30 June 2023 17
Buildings, Offices & Workshops
• With the support of Duro Felguera the company is currently seeking market pricing form a number of
Spanish builders for the provision of buildings to service the project.
•
•
This includes the provision of potable water, sewage, gas and supporting services.
Laboratory services have been tendered separately but their building is contained in the building
package.
Offtake and Concentrate Sales
• During the year the company conducted an Expression of Interest (EOI) with thirteen offtake parties, a
combination of smelters and traders offering a wide variety of commercial models and finance
structures.
•
•
This EOI process has confirmed that the Oropesa concentrate is an attractive concentrate and there
appears to be limited pushback to any specific characteristics.
The company will continue to progress these discussions to support the DFS but will also look to
short-list a number of parties to further commercial discussions.
Update on Regulatory Approvals and DFS (as at time of 2023 Annual Report publication)
On 20th June the Minas de Estaños de España received correspondence from the local department considering its
Environmental Application, stating that they considered elements of the proposed mining project and treatment plant
(Project) were not fully compatible with certain environmental regulations. Since receiving the correspondence,
Elementos has worked with its local team, advisors, and local authorities to clarify and better understand the
communications and their potential impact on the Oropesa Tin Project and to plan the optimal pathway to licencing.
This has included meetings with the Environmental Department, Mining Department, Project Accelerator Unit and
Senior Government Officials (Local, Provincial, Regional). We are now confident, following these meetings, that the
Oropesa Tin Project is better understood by the relevant department and continues to have strong support at all
levels.
The company submitted its official response to the referenced correspondence on Monday 17th July, subsequent to
year end. The company will continue to work closely with the authorities as this submission is assessed and a plan is
agreed in a consultative manner. The submission to the authorities includes some proposed modifications to the
project layout to satisfy the requirements of the department and further minimise impacts.
The company will provide further updates to the market when the proposed modifications are agreed, and the
forward plan is ratified. Once this modified scope is confirmed, the DFS will re-commence and timelines to
completion will be established.
Elementos Limited Annual Report for the year ended 30 June 2023 18
Cleveland Tin Project
Tasmania, Australia
The Cleveland Project is located at Luina, approximately 80km southwest from Burnie in north-western Tasmania,
Australia. 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.
Cleveland hosts tin and copper mineralisation in tailings, open-cut and underground Mineral Resources, and
includes a separate tungsten Mineral Resource and Exploration Target (Foleys Zone). The Company continues to
assess the potential of developing these resources for the recovery of tin, copper, tungsten and fluorite.
It is important to note that tungsten has been identified as a critical mineral by the Australian Government, with
tungsten, fluorite and tin having been identified as critical minerals by a number of Australia’s strategic partners
(including the USA, UK and the EU.)
In 2018, the company completed an update to the JORC Resource Estimate for hard rock resources for Cleveland.
The total contained tin within the revised 2018 JORC 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.
Figure 6 Cleveland Tin Project location (EL7/2005)
Elementos Limited Annual Report for the year ended 30 June 2023 19
Figure 7 . Topographical plan showing the location of drill hole C2119 and the current Cleveland Tin Lodes and Foleys
Zone tungsten resource
The Cleveland Project is being steadily progressed towards development. In 2022, the company completed a 1,130m
four-hole exploration diamond drilling campaign testing geophysical anomalies along strike north-east of the current
resource and an additional target within the previously mined area, between the tin-copper ore bodies and deeper
tungsten Foleys Zone ore body.
Significant results were recorded for the exploration drill hole located within the untested zone between north-east
dipping and southwest dipping limbs of the historical underground mine workings (C2119), with extensions identified
to the Battery Tin-Copper Lode and a new zone of mineralisation identified 150m above the tungsten Foleys Zone
Resource. Both zones included significant broad zones of fluorite mineralisation.
The confirmation of two broad zones of significant fluorite mineralisation being intersected at the Cleveland Tin
Project is additional confirmation that the company holds a very special asset in Tasmania. The historic tin mine is
one which is clearly highly mineralised and just starting to show its potential as a source of other critical minerals.
All three drill holes intersected the Cleveland ore host horizon geological sequence (Halls Formation) and recorded
anomalous tin, copper and zinc. All three drill holes intersected carbonaceous black shales (conductive) which
contained disseminated and laminar exhalative pyrite at the interpreted location of the self-potential anomalies.
Elementos Limited Annual Report for the year ended 30 June 2023 20
Figure 8. Section A-A’ of C2119 Drilling (with assays plotted) looking northeast.
Downhole electromagnetic geophysical surveys were carried out on drill holes C2120 and C2122. An off-hole
anomaly was detected in drill hole C2120 which corresponded to the location of known mineralisation to the west,
within the Halls Lode. No off-hole anomalies were detected in drill hole C2122.
Whilst the down hole assays and geophysical surveys did not produce significant results, they do continue to
highlight the prospectivity for additional mineralisation in the area.
Figure 9. 3D view of the Cleveland 2022 diamond drilling program looking from the southeast
Elementos Limited Annual Report for the year ended 30 June 2023 21
Figure 10. Coarse grained fluorite (purple) with wolframite (black) and molybdenite (silver) with quartz
± carbonate ± sericite (C2119)
Elementos Limited Annual Report for the year ended 30 June 2023 22
Corporate
Placement
On 5 April 2023, the company announced it had successfully completed a $3.0 million Placement to fund completion
of several significant project milestones at its Oropesa Tin Project in Spain. The Placement was supported by existing
and new institutional, professional and sophisticated investors. Fully paid ordinary shares were issued under the
Placement at an issue price of $0.18 per Share. Morgans and BW Equities acted as Joint Lead Manager to the
Placement, which was strongly supported by Elementos’ Directors and existing shareholders. Elementos’ Directors
(or their associated entities) subscribed for a total of 4,805,556 Shares (approximately $865,000) under the Placement
which was approved by shareholders at an extraordinary general meeting (EGM) of shareholders in May 2023.
Tin Pricing
The London Metals Exchange (LME) tin price increased 3% during the year from US$27,000/t (1 July 2022) to
US$27,700/t (30 June 2023) www.LME.com as the market navigated a period of weak demand (caused by high
inflation, interest rate increases and Chinese lockdowns) and even weaker supply. The supply side challenges
continue to persist with major tin producers China, Myanmar, Indonesia, Peru & Bolivia all experiencing significant
concentrate or metal supply shortages during the year. These major tin supply and demand issues created a volatile
price environment with tin prices ranging from as low as US$17,700/t on LME (31 Oct 2022) to US$35,294/t on SHFE
(20 Jan 2023).
FY2023 Tin Prices (Cash/Spot)
US$27.0k/t
US$37.5k
US$35.0k
US$32.5k
US$30.0k
US$27.5k
US$25.0k
US$22.5k
US$20.0k
US$17.5k
US$15.0k
US$30.3k/t
US$27.7k/t
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23 Mar-23
Apr-23 May-23
Jun-23
Figure 11. LME and SHFE Tin Prices during FY 2023 (www.LME.com & www.shfe.com.cn/)
LME Cash
SHFE.SN2310
Elementos Limited Annual Report for the year ended 30 June 2023 23
Oropesa Project Debt Advisor Appointment
In January 2023, Elementos engaged London based Debt Advisors Terrafranca to support the debt serviceability
during the Oropesa Definitive Feasibility Study (DFS). In addition, Terrafranca have engaged, and introduced
Elementos, to a number of global debt providers and assist the company proceeding into project finance.
Elementos Limited Annual Report for the year ended 30 June 2023 24
Environmental, Social and Governance
Following Elementos’ initial Environmental, Social and Governance (ESG) Position Statement in 2021 the company
made further commitments to developing its global tin assets in a responsible way.
Elementos has subsequently progressed in the following manner:
✓ Held ESG sub-committee meetings of the Board of Directors,
✓ Responded to Administrative queries regarding its Environmental Impact Study and Restoration Plan for the
Oropesa Project in Spain which is designed to comply with European regulations and OECD guidance.
✓ Continued to improve long-term relationships with the communities in which we operate and committed to the
economic development of the mine via our application for the Oropesa Exploitation licence.
Elementos will continue to monitor the evolving ESG landscape and ensure its ESG commitments remain relevant
and effective in a changing environment.
Revised Tin Code Reporting Plan
As the Tin Code was not yet formally available to explorers and developers last year, Elementos initiated discussions
with the ITA on reporting against the tin code during FY2023. Whilst the company was informed that the ITA board
approved mine developers to report against the Tin Code in November 2022, the company did not receive the terms
and conditions to do so until Q2-2023, the company has subsequently decided to delay its reporting against the tin
code for at least one more year, to ensure it has the adequate time and resources to deliver a suitable submission
aligned with its projects environmental commitments.
Background on the Tin Code
The Tin Code ESG reporting tool has 10 Principles supported by more than 70 Standards. These standards are
specific to various tiers of the supply chain, with many being relevant to mine operators and others to smelters or
secondary recycling companies and vice-versa. Company evidence for each standard is independently evaluated by
an external assessor against a range of indicators to demonstrate progressive improvement with an expectation to
achieve conformance in priority areas and to increasingly make use of assurance for further validation. This
approach has been adopted to provide an opportunity for positive change among all operators.
The Tin Code reflects leading ESG standards & international expectations including;
•
ISO (14001, 9001, 45001, 37001)
• OECD Guidance for responsible supply chains
•
ILO Convention standards
• RMI Risk Readiness Assessment
•
Investor expectations & more
The Tin Code is accepted and recognised by leading external organisations:
Elementos Limited Annual Report for the year ended 30 June 2023 25
•
•
LME passport – listed multi-dimensional ESG reporting tool
LME Responsible Sourcing – Standard 7.3 conditionally approved for ‘Track A’
• Responsible Steel – recognition in progress
•
ICMM Mining Principles – equivalency in progress
Elementos Limited Annual Report for the year ended 30 June 2023 26
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
Oropesa
EL7/2005
13.050
60
13
100% Tasmania, Australia
100% Andalucia, Spain
Figure 12. A view of our acreage at the Oropesa Tin Project in southern Spain with a drill rig in the foreground and the
local town of Fuente Obejuna in the background.
Elementos Limited Annual Report for the year ended 30 June 2023 27
Resources and Reserves
Oropesa Project
Total Tin Metal Resource (at 0.15% Sn cut-off)
30 June 2023
Category
Measured
Indicated
Sub: Measured & Indicated
Inferred
Total
Tonnage (Kt)
Sn Grade %
Contained Sn (t)
7,418
11,113
18,532
1,071
19,602
0.36
0.41
0.39
0.38
0.39
26,801
45,012
71,813
4,021
75,834
Feb-2023 Oropesa Mineral Resource Estimate at a 0.15% Sn cut-off
Table subject to rounding errors; Sn = tin
30 June 2022
Category
Measured
Indicated
Sub: Measured & Indicated
Inferred
Total
Tonnage (Kt)
Sn Grade %
Contained Sn (t)
4,295
12,326
16,621
2,237
18,858
0.41
0.38
0.38
0.51
0.40
17,640
46,321
63,961
11,457
75,418
Nov-2021 Oropesa Mineral Resource Estimate at a 0.15% Sn cut-off
Table subject to rounding errors; Sn = tin
Significant changes in the 30 June 2023 Resource Estimate compared to the 2022 Resource Estimate are;
•
•
•
•
•
Total 2023 MRE increases by 0.7Mt (+4%) to 19.6Mt at 0.39% Sn.
2023 MRE Measured or Indicated Resource contained tin increases to 71.8kt (+12%)
100% of 2023 Mineral Resource Estimate (MRE) tonnes located within the 2022 Optimisation Study1 US$30k/t Pit Shell
are classified as Measured or Indicated (no Inferred Resources within the US$30k/t Pit Shell).
95% of 2023 MRE is classified either Measured or Indicated Resources, totaling 18.5Mt (+11%) at 0.39% Sn.
38% of 2023 MRE is classified as Measured Resources, increasing by 3.1Mt (+73%) to 7.4Mt at 0.36% Sn.
See ASX Release on 14th February 2023 “Oropesa Tin Project – 2023 Mineral Resource Update”
Elementos Limited Annual Report for the year ended 30 June 2023 28
Cleveland Project
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 2022 and 30 June 2023 – 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
Total Tin-Copper Mineral Resource (at 0.35% Sn cut-off)
30 June 2022 and 30 June 2023 – 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)
30 June 2022 and 30 June 2023 – 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)
30 June 2022 and 30 June 2023 – 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.
Elementos Limited Annual Report for the year ended 30 June 2023 29
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 an employee 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 an employee 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.
Elementos Limited Annual Report for the year ended 30 June 2023 30
Cautionary Statements
Forward-looking statements
This report 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 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.
Elementos has concluded that it has a reasonable basis for providing these forward-looking statements and the
forecast financial information included in this Presentation. 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 this ASX release and in Appendix 1 (JORC Code
2012, Table 1. Consideration of Modifying Factors) contained in the announcement released to the ASX on 29 March
2022. All material assumptions and technical parameters underpinning the production target and forecast financial
information contained in the Study continue to apply and have not materially changed.
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 Study will be achieved. To achieve
the range of outcomes indicated in the Study, pre-production funding in excess of US$86m 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, senior debt providers, private equity firms and traditional funders to ensure that
the Company will be in a position 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, and corresponding funding liability,
for the Oropesa Tin Project.
The inclusion of such statements should not be regarded as a representation, warranty or prediction with respect to
the accuracy of the underlying assumptions or that any forward-looking statements will be or are likely to be
Elementos Limited Annual Report for the year ended 30 June 2023 31
fulfilled. Elementos undertakes no obligation to update any forward-looking statement to reflect events or
circumstances after the date of this document (subject to securities exchange disclosure requirements).
The information in this document does not take into account the objectives, financial situation or particular needs of
any person or organisation. Nothing contained in this document constitutes investment, legal, tax or other advice.
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 JORC Resource Significantly Expanded, 5 March 2014 (tungsten resource);
2. Cleveland Tailings Ore Reserve, 3 August 2015;
3. Substantial Incrhease in Cleveland Open Pit Project Resources following revised JORC study, 26th September
2018;
4. Oropesa Tin Project - Mineral Resource Estimate, 8th November 2021
5. Optimisation Study Oropesa Tin Project, 29th March 2022
6. Oropesa Tin Project – 2023 Mineral Resource Update, 14th February 2023
References to Previous Releases
1. Optimisation Study Oropesa Tin Project, 29th March 2022
2. Oropesa Tin Project - 2022 Drilling Program, 29 th June 2022
3. Cleveland Tin & Tungsten Mineralisation, 15th June 2022
4. Regulatory Documents Submitted for Oropesa Tin Project, 7th April 2022
5. Government support for Oropesa Tin Project, 10th March 2022
6. Elementos CEO Joe David appointed Managing Director, 28th Jan 2022
7. Update - Consolidation/Split – ELT, 1st Dec 2021
8. Director Resignation, 26th Nov 2021
9. Process Plant contract awarded Oropesa Tin Project, 20th Sept 2022
10. Oropesa Pilot Scale Metallurgical Results, 29th Sept 2022
11. Significant mineralisation outside Oropesa Resource, 21st Feb 2023
12. Fluorite Confirmed at Cleveland Project, 3rd Mar 2023
13. Director Resignation, 26th May 2023
14. Update on Regulatory Approvals and DFS, 20th June 2023
15. Elementos confirms zinc at Oropesa Tin Project, 3rd August 2023
Elementos Limited Annual Report for the year ended 30 June 2023 32
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 production 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.
Elementos Limited Annual Report for the year ended 30 June 2023 33
Directors’ Report
Elementos Limited Annual Report for the year ended 30 June 2023 34
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 2023.
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 Joe David
Mr Corey Nolan
Mr Calvin Treacy
Mr Brett Smith (resigned 26 May 2023)
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.
Joe David - (appointed 27 January 2022)
Managing Director
Mr David joined Elementos as Chief Executive Officer in April 2021 and was appointed Managing Director in January 2022.
His career has spanned executive roles with private equity, listed and private mining companies, an Associate Director within
M&A advisory as well running his own project development consulting company. He has managed the development of natural
resource projects, bankable feasibility studies, exploration and metallurgical programs, project financing, corporate finance
advisory, corporate strategy, and mergers and acquisitions.
Mr David is a Mining Engineer (AusIMM), Civil Engineer and holds a Commerce Degree in Finance.
Mr David is a member of the ESG Committee.
Mr David has not held any other (ASX listed) directorships in the last three years.
Elementos Limited Annual Report for the year ended 30 June 2023 35
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 and ESG Committee.
Mr Treacy has not held any other (ASX listed) directorships in the last three years.
Brett Smith - (resigned 26 May 2023)
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.
Mr Smith was a member of the Audit and Risk Committee.
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), Prodigy Gold (May 2016 to present) and Nico Resources Limited (January 2022 to
present).
Elementos Limited Annual Report for the year ended 30 June 2023 36
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.
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, options and rights issued by the Company are shown in the
table below:
Directors
A. Greig
J. David(1)
C. Nolan
C. Treacy(1)
Shares
26,442,901
273,631
249,545
1,548,107
Rights
-
2,200,000
-
-
Options
360,000
-
360,000
360,000
(1) The Company has agreed to issue 6,000,000 share options to Mr David and 1,500,000 share options to Mr Treacy subject to
shareholder approval at the 2023 Annual General Meeting. The share options are to be issued in three equal tranches with
the following exercise prices: tranche 1: $0.25, tranche 2: $0.30 and tranche 3: $0.35, each tranche has an expiry date of 30
June 2026 and vest immediately upon grant.
Principal Activities
The principal activity of the Group during the year was exploration and project development activity in relation to the Oropesa Tin
Project. The Group is also exploring the Cleveland tin-copper-tungsten Project, 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 $2,225,307 (2022: $2,230,637).
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.
Elementos Limited Annual Report for the year ended 30 June 2023 37
Review of Financial Condition
Capital Structure
At 1 July 2022, the Company had 177,128,963 ordinary shares, 3,300,000 performance rights and 4,912,265 unlisted options on issue.
From 1 July 2022 to 31 August 2022 the following share options were exercised into ordinary shares of the Company:
•
1,000,011 options with an exercise price of $0.225 per option raising $225,002 (and 3,912,254 options lapsed).
On 16 November 2022 following shareholder approval, the Company issued 1,800,000 unlisted options with an exercise price of
$1.10 per share and expiry of 31 May 2025 to Non-executive Directors and Company Secretary.
On 5 April 2023, the Company announced that it had received commitments to complete a private placement of 16,611,111 shares
to be issued at $0.18 per share. The transaction completed in two tranches as follows:
•
•
On 13 April 2023 11,444,444 shares were issued at $0.18 per share raising $2,060,000.
On 5 June 2023, following shareholder approval, 5,166,667 shares were issued at $0.18 per share raising $930,000.
At 30 June 2023, the Company had 194,740,085 ordinary shares, 3,300,000 performance rights and 1,800,000 unlisted options on
issue.
On 28 August 2023, the Company cancelled 360,000 options with an exercise price of $1.10 and expiry of 31 May 2025.
On 8 September 2023, the Company issued 2,100,000 options in three equal tranches with the following exercise prices: tranche 1:
$0.25, tranche 2: $0.30 and tranche 3: $0.35, each tranche has an expiry date of 30 June 2026 and vest immediately upon grant.
As at the date of this report, the Company had 194,740,085 ordinary shares, 3,300,000 performance rights and 3,540,000 unlisted
options on issue. The Company has agreed to issue a total of 7,500,000 share options to the Managing Director and a Non-Executive
Director subject to shareholder approval at the 2023 Annual General Meeting.
Financial Position
At 30 June 2023, the Group’s net assets totalled $21,913,878 (2022: $20,019,846) which included cash assets of $3,449,654 (2022:
$6,270,173).
The Group’s working capital, being current assets less current liabilities has decreased from $6,001,367 in 2022 to $2,697,455 in
2023, principally due to ongoing exploration and evaluation 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
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
There was no significant changes in the state of affairs of the Group in the financial year.
Elementos Limited Annual Report for the year ended 30 June 2023 38
Events After Reporting Date
Subsequent to the reporting period the following occurred:
•
•
•
On 28 August 2023, the Company cancelled 360,000 options with an exercise price of $1.10 and expiry of 31 May 2025.
On 8 September 2023, the Company agreed to issue 9,600,000 options in three equal tranches with the following exercise
prices: tranche 1: $0.25, tranche 2: $0.30 and tranche 3: $0.35, each tranche has an expiry date of 30 June 2026 and vest
immediately upon grant. A total of 2,100,000 options were issued on 8 September with the remainder to be issued subject to
shareholder approval at the 2023 Annual General Meeting planned for late November 2023.
As previously disclosed, the Company’s wholly owned subsidiary, Minas de Estano De Espana (MESPA) has been involved
in legal proceedings with Sondeos & Perforaciones Industriales Del Bierzo, SA (SPIB) and its principal Mr. José Cereijo
Soto. During September 2023 the Court ruled in favour of SPIB in relation to its services as Dirección Facultativa alleged to
have been performed by Mr Soto. MESPA has been ordered to make payment of €141,000 and potentially other interest and
costs to SPIB as a result of the ruling.
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.
In addition, in 2021 the company 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. The company made further commitments to commence
reporting against the Tin Code in 2023, subject to final negotiations with the International Tin Association (ITA) who manages the
reporting. Whilst the company was informed that the ITA board approved mine developers to report against the Tin Code in
November 2022, the company did not receive the terms and conditions to do so until Q2-2023, the company has subsequently
decided to delay its reporting for at least one more year.
Native Title
Mining tenements that the Group currently holds, are not subject to any known Native Title claims. The Group has a policy that is
respectful of the Native Title rights and therefore surveys sites before disturbance for archaeological items.
Elementos Limited Annual Report for the year ended 30 June 2023 39
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
Joe David
Corey Nolan
Calvin Treacy
Brett Smith
Drew Speedy
Director – Non-executive Chairman
Managing Director
Director - Non-executive
Director - Non-executive
Director – Non-executive (resigned 26 May 2023)
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 and/or rights 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.
The short-term incentives (‘STI’) program is designed to align the targets of the Company with the performance hurdles of key
management personnel. The STI payments are granted based on specific annual targets and key performance indicators (‘KPI’s’)
being achieved. The KPI’s for the current financial year for the MD and CFO included delivering of the Oropesa DFS, Oropesa
approvals and capital management.
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 perio d
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.
Performance rights are issued with performance conditions that align with strategic outcomes of the business.
The Group’s policy for determining the nature and amount of remuneration of board members and key executives is set out below.
Elementos Limited Annual Report for the year ended 30 June 2023 40
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 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.
Non-Executive Director fees as at 30 June 2023 were $55,000 per annum (including superannuation where applicable) to each
non-executive director. In addition, Non- Executive Directors who act as a Director of operational subsidiaries are paid an annual
fee of $15,000 per operating subsidiary.
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 period Mr Treacy received $11,375 of additional fees in relation to work undertaken on the Oropesa Tin Project.
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 and subsequently Managing Director on 27 January 2022.
The key terms of the employment agreement with Joe David were:
•
Total Fixed Remuneration of $295,000 per annum (inclusive of superannuation);
• Short term incentive of up to $100,000 (inclusive of superannuation) for the 2023 financial year 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 $121,095 per annum (inclusive of superannuation);
• Short term incentive of up to $50,000 (inclusive of superannuation) for the 2023 financial year based on the achievement
of key performance indicators; and
•
90 days’ notice of termination by either party.
Elementos Limited Annual Report for the year ended 30 June 2023 41
Remuneration Details of Key Management Personnel
The remuneration of the key management personnel of Elementos Limited for the year ended 30 June 2023 was as follows:
Year Ended 30 June 2023
Short Term Benefits
Key Management
Personnel
Salary & Fees
Bonuses
Equity
Settled
Options(1)
Equity
Settled
Performanc
e Rights
Post-
Employment
Super-
annuation
Total
Performance
related %
%
consisting
of options /
rights
A. Greig
J. David
C. Nolan
C. Treacy
B. Smith(2)
D. Speedy
$
$
$
$
$
$
55,000
-
(16,447)
-
-
38,553
(42.7%)
(42.7%)
285,931
45,000
-
240,372
49,774
81,371
45,626
-
-
-
(16,447)
(16,447)
(16,447)
-
-
-
114,225
11,312
-
120,186
27,450
5,226
-
4,791
12,695
598,753
47.7%
40.1%
38,553
64,924
33,970
(42.7%)
(42.7%)
(25.3%)
(25.3%)
(48.4%)
(48.4%)
258,418
50.9%
46.5%
631,927
56,312
(65,788)
360,558
50,162
1,033,171
(1) The Company agreed on 31 May 2022 to issue 360,000 share options to each Non-Executive Director subject to shareholder approval at
the 2022 Annual General Meeting. The negative equity settled option amount for the current financial period is a result of the reduced value
of the options at grant date following shareholder approval compared to the valuation performed at 30 June 2022 as a result of the
agreement to issue the options.
(2) Resigned as Non-Executive Director on 26 May 2023 and ceased to be a KMP.
Year Ended 30 June 2022
Short Term Benefits
Key Management
Personnel
Salary & Fees
Bonuses
Equity
Settled
Options(1)
Equity
Settled
Performanc
e Rights
Post-
Employment
Super-
annuation
Total
Performance
related %
%
consisting
of options /
rights
A. Greig(2)
J. David
C. Nolan
C. Treacy
B. Smith
C. Dunks(3)
D. Speedy
$
$
$
$
$
$
4,583
-
37,759
-
-
42,342
279,311
46,364
-
235,103
37,500
42,507
37,500
16,500
-
-
-
-
118,543
22,727
37,759
37,759
37,759
-
-
29,476
3,750
-
3,750
-
590,254
79,009
80,266
79,009
16,500
-
-
-
-
89.2%
47.7%
47.8%
47.0%
47.8%
-
89.2%
39.8%
47.8%
47.0%
47.8%
-
117,552
13,232
272,054
51.6%
43.2%
536,444
69,091
151,036
352,655
50,208
1,159,434
(1) The Company has agreed to issue 360,000 share options to each Non-Executive Director subject to shareholder approval at the 2022
Annual General Meeting
(2) Mr Greig commenced receiving Director fees from 1 June 2022.
(3) Resigned as Non-Executive Director on 26 November 2021 and ceased to be a KMP.
Elementos Limited Annual Report for the year ended 30 June 2023 42
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Key
Management
Personnel
A. Greig
J. David
C. Nolan
C. Treacy
B. Smith(1)
D. Speedy
Fixed Remuneration
At risk - STI
At risk – LTI
2023
2022
2023
2022
2023
2022
142.7%
52.3%
142.7%
125.3%
148.4%
49.1%
10.8%
52.3%
52.2%
53.0%
52.2%
48.4%
-
7.5%
-
-
-
-
(42.7%)
7.9%
-
-
-
40.1%
(42.7%)
(25.3%)
(48.4%)
46.5%
89.2%
39.8%
47.8%
47.0%
47.8%
43.2%
4.4%
8.4%
(1) Mr Smith resigned and ceased being a KMP on 26 May 2023.
Cash bonuses are dependent on meeting defined performance measures. The amount of the bonus is determined having regard
to the satisfaction of performance measures and weightings. The maximum bonus values are established at the start of each
financial year and amounts payable are determined throughout the financial year based on the achievement of the defined
performance conditions.
Key Management
Personnel
J. David
D. Speedy
Cash bonus paid / payable
Cash bonus forfeited
2023
2022
2023
2022
37.5%
25%
100%
100%
62.5%
75%
-
-
Equity-based Remuneration
Options
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other key
management personnel in this financial year or future reporting years are included in the table below. The Company agreed to
issue 360,000 share options to each Non-Executive Director on 31-May-2022 subject to shareholder approval. Shareholder
approval was received at the 2022 Annual General Meeting and the share options were issued on 16 November 2022.
Key Management
Personnel
Number of
options
Grant date(1)
Vesting date
and exercisable
date
Expiry date
Exercise
price
Fair value per option
at 30 June 2023
Value of options
granted during the
year
A. Greig
B. Smith
C. Nolan
360,000
16-Nov-2022 Upon issue
31-May-2025
360,000
16-Nov-2022 Upon issue
31-May-2025
360,000
16-Nov-2022 Upon issue
31-May-2025
C. Treacy
360,000
16-Nov-2022 Upon issue
31-May-2025
$1.10
$1.10
$1.10
$1.10
$0.0592
$0.0592
$0.0592
$0.0592
$21,312
$21,312
$21,312
$21,312
(1) During the year ended 30 June 2022 the Company agreed to issue 1,440,000 options to the Company’s Non-Executive Director’s, subject to
shareholder approval at the 2022 Annual General Meeting. The amount recognised for the 30 June 2022 period in relation to share based
payments amounted to $0.1049 per option (total value per Director $37,758). Following shareholder approval, the Company issued the
1,440,000 options at which time the Company revalued the options and a subsequent reduction to the share-based payment of $0.0457 per
option (total value reduction per Director of 16,446) was recognised based on the reduced valuation of the options at the point of issue.
Elementos Limited Annual Report for the year ended 30 June 2023 43
Performance Rights
The terms and conditions of each grant of performance right over ordinary shares affecting remuneration of directors and other
key management personnel in this financial year or future reporting years are included in the table below.
Tranche
Key
Management
Personnel
Number of
rights
Value of
rights
expensed
during the
year
Grant date
Vesting date and
exercisable date
Expiry date
Exercise
price
Fair value per
right at grant
1 & 2
J. David
800,000
$171,883
D. Speedy
400,000
$85,941
8-Jul-2021
Completion of Oropesa
DFS and retention to 1-
08-22
24-Jul-2024(1)
Nil
3
4
5
6
7
J. David
200,000
D. Speedy
100,000
Nil
Nil
8-Jul-2021
Granting of Oropesa
Exploitation License and
retention to 1-08-22
31-Jul-2024(2)
Nil
J. David
400,000
$68,487
D. Speedy
200,000
$34,243
8-Jul-2021
Oropesa project funding
package and retention to
1-07-23
31-Jan-2025(3)
Nil
J. David
D. Speedy
J. David
D. Speedy
J. David
400,000
200,000
200,000
100,000
200,000
D. Speedy
100,000
Nil
Nil
Nil
Nil
Nil
Nil
8-Jul-2021
Acquisition or merger
and retention to 1-07-23
31-Jan-2024
Nil
8-Jul-2021
Completion of Cleveland
PFS and retention to 1-
07-23
31-Jan-2025(3)
Nil
8-Jul-2021
First production of
mineral concentrate and
retention to 1-07-25
31-Jan-2026
Nil
$0.43
(1) During the current financial period the Company extended the Expiry date from 31 July 2023 to 24 July 2024.
(2) During the current financial period the Company extended the Expiry date from 31 July 2023 to 31 July 2024.
(3) During the current financial period the Company extended the Expiry date from 31 January 2024 to 31 January 2025.
Company Performance, Shareholder Wealth, and Director and Executive Remuneration
During the financial year, the Company has generated losses as its principal activity was mineral exploration.
The following table shows the share price of the Company since 2019 (historical comparative prices have been adjusted to reflect
the 25:1 consolidation undertaken in December 2021).
30 June
2023
30 June
2022
30 June
2021
30 June
2020
30 June
2019
Share Price at
year end ($)
0.165
0.405
0.425
0.125
0.15
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.
$0.43
$0.43
$0.43
$0.43
$0.43
Elementos Limited Annual Report for the year ended 30 June 2023 44
Shares Held by Key Management Personnel
Details of shares held directly, indirectly or beneficially by key management personnel during the year ended 30 June 2023 were
as follows:
Key
Management
Personnel
A. Greig
J. David
C. Nolan
C. Treacy
B. Smith
D. Speedy
Balance at 1
July 2022
Granted as
Compensation
Received on
Exercise of
Options / Rights
Net change
other
Balance at 30
June 2023
20,299,459
50,000
231,363
1,315,455
161,635
120,000
22,177,912
-
-
-
-
-
-
-
-
-
18,182
48,485
-
-
5,143,442
25,442,901
223,631
-
273,631
249,545
184,167
1,548,107
(161,635)(1)
-
69,444
189,444
66,667
5,459,049
27,703,628
(1) Mr Smith resigned and ceased being a KMP on 26 May 2023, balance held at resignation.
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.
Key
Management
Personnel
Balance at
1 July 2022
Granted as
compensation
Other
Expired
Exercised
Balance at
30 June
2023
Total vested
and
exercisable
at 30 June
2023
A. Greig
J. David
C. Nolan
C. Treacy
B. Smith
D. Speedy
360,000
-
378,182
408,485
360,000
-
1,506,667
-
-
-
-
-
-
-
-
-
-
-
(360,000)(1)
-
(360,000)
-
-
-
-
-
-
-
-
-
360,000
360,000
-
-
(18,182)
360,000
360,000
(48,485)
360,000
360,000
-
-
-
-
-
-
(66,667)
1,080,000
1,080,000
(1) Mr Smith resigned and ceased being a KMP on 26 May 2023, balance held at resignation.
Elementos Limited Annual Report for the year ended 30 June 2023 45
Unlisted performance rights held by Key Management Personnel
The number of performance rights in Elementos Limited held by each key management person of the consolidated entity during
the financial year is set out below. There were no rights issued post year end.
Key
Management
Personnel
J. David
D. Speedy
Balance at 1
July 2022
Granted as
compensation
Exercised
Expired
Balance at 30
June 2023
Total vested
and
exercisable at
30 June 2023
2,200,000
1,100,000
3,300,000
-
-
-
-
-
-
-
-
-
2,200,000
1,100,000
3,300,000
-
-
-
Other transactions with Key Management Personnel
There were no other transactions with Key Management Personnel during the financial year.
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
The following share options are currently on issue at the date of this report:
Grant Date/s
Expiry Date
Exercise Price
No. of options No. of options agreed
to be issued(1)
16 November 2022
31-May-2025
8 September 2023
8 September 2023
8 September 2023
30-Jun-2026
30-Jun-2026
30-Jun-2026
$1.10
$0.25
$0.30
$0.35
1,440,000
700,000
700,000
700,000
-
2,500,000
2,500,000
2,500,000
(1) The Company has agreed to issue 6,000,000 share options to Mr David and 1,500,000 share options to Mr Treacy subject to
shareholder approval at the 2023 Annual General Meeting.
The following ordinary shares were issued during and since the year ended 30 June 2023 on the exercise of options.
Grant Date/s
14 August 2020
Exercise Price
No. of shares issued
$0.225
1,000,011
Elementos Limited Annual Report for the year ended 30 June 2023 46
Performance Rights
At the date of this report the following Performance Rights were on issue:
Grant Date/s
Expiry Date
Exercise Price
No. of Rights
8 July 2021
8 July 2021
8 July 2021
8 July 2021
8 July 2021
24 July 2024
31 July 2024
31 January 2024
31 January 2025
31 January 2026
Nil
Nil
Nil
Nil
Nil
1,200,000
300,000
600,000
900,000
300,000
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.
Directors’ Meetings
The meetings attended by each director during the financial year were:
Directors
A. Greig
J. David
C. Nolan
C. Treacy
B. Smith
Corporate Governance
Board
Audit & Risk Committee
ESG Committee
Meetings
Attended
Meetings
Attended
Meetings
Attended
8
8
8
8
7
6
8
8
7
7
n/a
n/a
2
2
2
n/a
n/a
2
2
1
n/a
2
n/a
2
n/a
n/a
2
n/a
2
n/a
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 Company 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.
Elementos Limited Annual Report for the year ended 30 June 2023 47
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 (2022: 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.
Business Risks
The Company is currently developing two mineral projects, which are currently licensed for exploration, into approved mines
which still require approvals, feasibility studies, finance, offtake, construction development and commissioning into operations,
these activities carry inherent risks. Factors specific to the company or those which impact the market more broadly, may
individually or in combination, impact the financial and operating performance of the Company. These events may be beyond the
control of the Board and management of the Company.
The material risks for the company are outlined below. This summary is not an exhaustive list of all the risks that may affect the
Company and its projects, nor have they been listed in any particular order of materiality.
▪ Exploration of in-situ minerals - the success of the Company depends on the discovery and quantification of mineralisation,
positive assessment that those resources are economically mineable, access to required development capital, movement in
the price of commodities, securing and maintaining title to the Company’s exploration and mining tenements and licenses and
obtaining all consents and approvals necessary for the conduct of its exploration and development activities. The Company
undertakes extensive exploration and laboratory tests prior to establishing JORC compliant resource estimates, with industry
accepted QA/QC protocols. The Company engages external experts to assist with the evaluation of exploration results where
required and utilises third party competent persons to prepare JORC resource statements or suitably qualified senior
management of the Company.
▪ Technical/Feasibility Studies - The company conducts technical studies, feasibility modelling and economic reporting of its
projects in conjunction with third party experts who, where required, provide Competent Person sign-off under the JORC Code
and listing rules. The economic studies (Scoping Studies, Pre-Feasibility Studies & Definitive Feasibility Studies) are published
as per the regulations and clearly states the risks and confidence levels associated with inputs, the confidence levels
associated with capital and operating costs as well as any other material statements and the risks that remain. The Company
engages external experts to assist with the development and compilation of studies and utilises third party competent persons
to prepare JORC resource statements or suitably qualified senior management of the Company.
▪ Regulatory Approval Risk - the Company’s operations are subject to various National, State/Regional(Spain), Provincial(Spain)
and local laws (including Royal Decrees in Spain), as well as other Regulations, Standards, Guidelines and Plans, including
those relating to exploration/investigation(Spain), mining/exploitation(Spain), development & construction permits and licence
requirements, industrial relations, environment, land use, royalties, water, native title and cultural heritage, mine safety and
occupational health. Approvals, licences and permits required to comply with such rules are subject to the discretion of the
applicable government body officials. No assurance can be given that the Company will be successful in acquiring and
maintaining such authorisations in full force and effect without modification or revocation. To the extent such approvals are
Elementos Limited Annual Report for the year ended 30 June 2023 48
required and not retained or obtained in a timely manner or at all, the Company may be curtailed or prohibited from continuing
or proceeding with exploration, development or production. The Company’s business and results of operations could be
adversely affected if applications lodged for exploration, environmental and mining/exploitation(Spain) licences are not
granted. Mining/Exploitation(Spain) and exploration/investigation(Spain) tenements are subject to periodic renewal. The
renewal of the term of a granted tenement is also subject to the discretion of the relevant Minister and/or Department. Renewal
conditions may include increased expenditure and work commitments or compulsory relinquishment of areas of the tenements
comprising the Company’s projects. The imposition of new conditions or the inability to meet those conditions may adversely
affect the operations, financial position and/or performance of the Company. The Company diligently lodges tenement annual
reports and renewals and liaises closely with applicable government departments to best manage its regulatory compliance.
▪ Environmental - all phases of mining and exploration present environmental risks and hazards. The Company’s operations are
subject to environmental regulations pursuant to a variety of national, state/regional(Spain), Provincial(Spain) and local laws
and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or
emissions of various substances produced in association with exploration and mining operations. Compliance with such
legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which
may be material. Environmental legislation is evolving in both Australian and Spain in a manner expected to result in stricter
standards and enforcement, larger fines and liability and potentially increased capital expenditures and operating costs.
Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors,
officers and employees. The Company assesses each of its projects very carefully with respect to potential environmental
issues, in conjunction with specific environmental regulations applicable to each project, prior to commencing field
exploration and in great details when submitting its Environmental applications to support mining operations.
▪ Safety - safety is of critical importance in the planning, organisation and execution of the Company’s exploration, development
and planned mining activities. The Company is committed to providing and maintaining a working environment in which its
employees are not exposed to hazards that will jeopardise an employee’s health, safety or the health and safety of others
associated with the Company. The Company recognises that safety is both an individual and shared responsibility of all
employees, contractors and other persons involved with the operation of the organisation. The Company has a Safety and
Health Management system which is designed to minimise the risk of an uncontrolled safety and health event and to
continuously improve the safety culture within the organisation. In addition, all contractors and consultants are inducted to
site when they are performing activities deemed a risk to themselves or others. This is supported by a culture which supports
all personnel feeling they are free to report incidents or risks without worrying about persecution.
▪ Funding - the Company will require additional funding to continue the exploration, development and construction of its projects
before they become cashflow positive. There is no certainty that the Company will have access to available financial resources
sufficient to fund its exploration, feasibility or development costs at the required points in time. Discussions with ongoing
development sources of funds, and key project finance funders have confirmed that a project of these scales should be able
to be funded with a combination of Debt (various types) and Equity. The company remains confident that the development
capital costs are sufficiently low that raising the required equity, in conjunction with debt facilities, will be possible. The
company continues to have the full support of its existing largest shareholders and is working with potential offtake partners,
brokers, senior debt providers, private equity firms, government grants and traditional funders to best ensure that the Company
will be in a position to fund the projects as needed. It is also possible that Elementos could pursue other value realisation
strategies such as a sale, partial sale or joint venture of the projects if the opportunity presents itself.
▪ Macro-economic/External Risks - Fluctuations in commodity prices foreign currency exchange rates have the ability to
significantly affect the financial outcomes and profitability of both studies and operating mines. There can be no assurance
that commodity prices will be significantly supportive so the Company can develop and mine its deposits at a profit. Commodity
prices fluctuate due to a variety of factors including supply and demand fundamentals, international economic and political
trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumption patterns and
speculative activities. Similarly, demand and supply of capital and currencies, forward trading activities, relative interest rates
and exchange rates and relative economic conditions can impact exchange rates.
Elementos Limited Annual Report for the year ended 30 June 2023
49
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.
Joe David
Managing Director
Dated 25 September 2023
Brisbane, Queensland
Elementos Limited Annual Report for the year ended 30 June 2023
50
Auditor’s Independence Declaration
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek Street
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY A J WHYTE TO THE DIRECTORS OF ELEMENTOS LIMITED
As lead auditor of Elementos Limited for the year ended 30 June 2023, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Elementos Limited and the entities it controlled during the period.
A J Whyte
Director
BDO Audit Pty Ltd
Brisbane, 25 September 2023
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.
Elementos Limited Annual Report for the year ended 30 June 2023 51
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 19 September 2023.
(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
388
606
250
581
203
2,028
147,318
1,656,443
1,910,845
20,294,555
170,730,924
194,740,085
Performance Rights
No. Holders
No. Rights
-
-
-
-
2
2
-
-
-
-
3,300,000
3,300,000
Options
No. Holders
No. Rights
-
-
-
-
6
6
-
-
-
-
3,540,000
3,540,000
The number of shareholders holding less than a marketable parcel is 844.
Elementos Limited Annual Report for the year ended 30 June 2023 52
(b) Twenty Largest Shareholders
The names of the twenty largest holders of Quoted Ordinary Shares are:
#
1
2
3
4
5
6
7
8
9
10
11
Registered Name
MR ANDREW CARLYLE GREIG
SANDHURST TRUSTEES LTD
MCCUSKER HOLDINGS PTY LTD
TR NOMINEES PTY LTD
GOM PROPERTIES PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
KEO PROJECTS PTY LTD
BINVID PTY TLD
BNP PARIBAS NOMS PTY LTD
DRAWONE PTY LTD < THE NEWTOWN INVESTMENT A/C>
12 MR JAMES CALAWAY*
13 MR CARLO CHIODO
14 MR SAMUEL MCCARDEL
15 WOODY POINT HOLIDAY VILLAGE PTY LTD
16 MR JOSEPH IGNATIUS D'SOUZA
17
18
19
SANGWILL PTY LTD
TUWHERA TE RANGI LTD
ZCR CORPORATION
20 MR CRAIG RONALD TINDALE & MRS GABRIELLE TINDALE
Top 20 Total
Total of Securities
* Merged holding
Number of Shares
% of total
Shares
26,442,901
13.58%
14,454,802
10,205,965
8,247,273
6,009,145
4,487,075
4,328,331
4,030,000
3,856,371
3,678,398
2,919,000
2,400,833
2,382,635
2,300,912
2,100,000
2,078,000
1,977,237
1,905,000
1,896,636
1,800,000
7.42%
5.24%
4.24%
3.09%
2.30%
2.22%
2.07%
1.98%
1.89%
1.50%
1.23%
1.22%
1.18%
1.08%
1.07%
1.02%
0.98%
0.97%
0.92%
107,500,514
55.20%
194,740,085
Elementos Limited Annual Report for the year ended 30 June 2023 53
(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
MR ANDREW CARLYLE GREIG
SANDHURST TRUSTEES LTD
MCCUSKER HOLDINGS PTY LTD
Ordinary Shares
% of total Shares
26,442,901
14,454,802
10,205,965
13.58%
7.42%
5.24%
(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.
Elementos Limited Annual Report for the year ended 30 June 2023 54
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 and/or Managing Director;
▪ 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 the cash position of the company and providing oversight on the timing and quantum of capital raises;
▪ 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.
Elementos Limited Annual Report for the year ended 30 June 2023 55
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.
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 2023, the proportion of women in the whole organisation is a follows:
Board Members
Officers
Employees
Performance Evaluation
Male
Female
4
1
5
-
-
2
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.
An informal performance evaluation of the CEO has been undertaken.
No formal performance evaluation of the non-executive directors was undertaken during the year ended 30 June 2023.
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.
Elementos Limited Annual Report for the year ended 30 June 2023 56
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, 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, the directors listed below
are not considered independent. As the Chairman of the Company is not considered independent, the Group does not comply with
Recommendation 2.5. Corey Nolan and Calvin Treacy are considered independent. Brett Smith, who resigned on 26 May 2023, was
also considered independent. For the majority of the reporting period, until Mr Smith’s resignation on 26 May 2023, the Group
complied with Recommendation 2.4, by having a majority of independent directors. Despite not complying with Recommendation
2.5 and now not complying with Recommendation 2.4, the Board believes the current structure is appropriate given the size and
scale of operations.
Name
A. Greig
J. David
Position
Reason for non-compliance
Non-Executive Chairman
Director is a substantial (>5%) shareholder
Managing 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 below 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
J. David
C. Nolan
C. Treacy
Term in Office
7 years, 11 months
1 year, 8 months
14 years 2 months
9 years 11 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.
Elementos Limited Annual Report for the year ended 30 June 2023 57
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.
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 during the financial year were Corey Nolan, Calvin Treacy and Brett
Smith (resigned 26 May 2023) all of whom are considered non-executive and independent directors. The Committee is chaired by
an independent director (Corey Nolan). The Company complied with Recommendation 4.1 until Mr Smith’s resignation on 26 May
2023, following which it did not comply fully with the recommendation due to the committee only consisting of 2 members. The
Board believes the current structure is appropriate given the size and scale of operations.
All members of the Audit & Risk Management Committee are considered financially literate in the context of the Company’s affairs.
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
B.Smith
C. Treacy
Audit & Risk Management Committee
Number of meetings held
while in office
Meetings attended
2
2
2
2
1
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 Managing Director and Chief Financial Officer have 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.
Elementos Limited Annual Report for the year ended 30 June 2023 58
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.
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 o f
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.
ii.
consists of a majority of independent directors;
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 during the financial year are Corey Nolan, Calvin Treacy and Brett Smith
(resigned 26 May 2023) all of whom are considered independent directors. The Committee is chaired by an independent director
(Corey Nolan). The Company complied with Recommendation 7.1 until Mr Smith’s resignation on 26 May 2023, following which it
did not comply fully with the recommendation due to the committee only consisting of 2 members. The Board believes the current
structure is appropriate given the size and scale of operations.
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.
Elementos Limited Annual Report for the year ended 30 June 2023 59
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
B. Smith
C. Treacy
Audit & Risk Management Committee
Number of meetings held
while in office
Meetings attended
2
2
2
2
1
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
Elementos Limited Annual Report for the year ended 30 June 2023 60
▪
performance incentives which allow executives, management and staff to share the rewards of the success of Elementos
Limited.
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.
The Board will seek shareholder approval at the 2023 Annual General Meeting to increase the maximum aggregate amount of fees
that can be paid to non-executive directors to $400,000. The Board considers that this increase is necessary to provide future
flexibility to consider increases to the remuneration payable to the non‐executive directors, including appointing additional non‐
executive directors who might join the Board, to reflect the appropriate level of remuneration required to attract and retain
directors with the necessary skills and experience for the Board. 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 limiting 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.
Elementos Limited Annual Report for the year ended 30 June 2023 61
Consolidated Statement of Profit or Loss and
Other Comprehensive Income for the Year Ended 30 June 2023
Interest income
Gain on settlement of borrowings
Other income
Corporate and administrative expenses
Foreign Currency Gain / (Loss)
Loss before income tax expense
Income tax expense
Note
30 June 2023
30 June 2022
$
$
38,702
-
50,000
1,163
154,905
-
(2,308,429)
(5,580)
(2,346,817)
(39,888)
(2,225,307)
(2,230,637)
-
-
2
3
Loss for the period attributable to members of the parent entity
(2,225,307)
(2,230,637)
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange gain / (losses) on translation of foreign operations
Other comprehensive income for the period, net of tax
744,148
744,148
(291,813)
(291,813)
Total comprehensive loss attributable to members of the parent
entity
(1,481,159)
(2,522,450)
Basic and diluted loss per share
11
(0.012)
(0.014)
The accompanying notes form part of these financial statements.
Elementos Limited Annual Report for the year ended 30 June 2023 62
Consolidated Statement of Financial Position
As at 30 June 2023
Note
30 June 2023
30 June 2022
$
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
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
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liability
Total Current Liabilities
NON-CURRENT LIABILITIES
Lease liability
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
4
5
6
7
8
9
3,449,654
287,333
9,362
3,746,349
6,270,173
563,624
27,685
6,861,482
19,007,033
13,901,380
57,754
6,686
144,950
2,616
47,376
74,199
19,216,423
14,025,571
22,962,772
20,887,053
1,041,831
7,063
1,048,894
-
-
808,997
51,118
860,115
7,092
7,092
1,048,894
867,207
21,913,878
20,019,846
39,262,318
1,350,675
(18,699,115)
21,913,878
36,165,450
328,204
(16,473,808)
20,019,846
The accompanying notes form part of these financial statements.
Elementos Limited Annual Report for the year ended 30 June 2023 63
Consolidated Statement of Changes in Equity
For the Year Ended 30 June 2023
Note
Contributed
Equity
Accumulated
Losses
Share-
Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
Balance at 1 July 2021
28,740,673
(14,243,171)
290,286
(211,718)
14,576,070
Loss for the period
Other comprehensive loss
Total comprehensive income
-
-
-
(2,230,637)
-
(2,230,637)
Issue of shares
Exercise of options
Transaction costs
Conversion of loan to equity
Issue of options and
performance rights
8
8
8
8
15
660,000
6,244,701
(49,170)
569,246
-
-
-
-
-
-
-
-
-
-
-
-
-
541,449
-
(291,813)
(291,813)
-
-
-
-
-
(2,230,637)
(291,813)
(2,522,450)
660,000
6,244,701
(49,170)
569,246
541,449
Balance at 30 June 2022
36,165,450
(16,473,808)
831,735
(503,531)
20,019,846
Balance at 1 July 2022
36,165,450
(16,473,808)
831,735
(503,531)
Loss for the period
Other comprehensive loss
Total comprehensive income
-
-
-
(2,225,307)
-
(2,225,307)
Issue of shares
Exercise of options
Transaction costs
Issue of options and
performance rights
8
8
8
15
2,990,000
225,002
(118,134)
-
-
-
-
-
-
-
-
-
-
-
278,323
-
744,148
744,148
-
-
-
-
20,019,846
(2,225,307)
744,148
(1,481,159)
2,990,000
225,002
(118,134)
278,323
Balance at 30 June 2023
39,262,318
(18,699,115)
1,110,058
240,617
21,913,878
The accompanying notes form part of these financial statements.
Elementos Limited Annual Report for the year ended 30 June 2023 64
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Payments to suppliers and employees
Interest Paid
VAT refunds
Other receipts
Note
30 June 2023
30 June 2022
$
$
38,702
1,163
(1,948,004)
(1,710,130)
(6,310)
801,490
50,000
(99,225)
-
-
Net cash used in operating activities
10
(1,064,122)
(1,808,192)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets
Payments for property, plant and equipment
(4,745,219)
(3,629,814)
(57,015)
(2,114)
Net cash used in investing activities
(4,802,234)
(3,631,928)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Costs associated with share issues
Repayment of loan
Lease payments
8
8
10
10
3,215,002
(118,134)
-
(51,147)
6,904,701
(49,170)
(648,569)
(38,117)
Net cash provided by financing activities
3,045,721
6,168,845
Net increase/(decrease) in cash held
Net foreign exchange difference
Cash at Beginning of Year
(2,820,635)
116
728,725
(804)
6,270,173
5,542,252
Cash at End of Year
4
3,449,654
6,270,173
The accompanying notes form part of these financial statements.
Elementos Limited Annual Report for the year ended 30 June 2023 65
Notes to the Consolidated Financial
Statements
For the Year Ended 30 June 2023
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 25
September 2023 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 2023 the Group had cash reserves of $3,449,654, net
current assets of $2,697,455 and net assets of $21,913,878. The Group incurred a net loss of $1,481,159 for the year ended 30 June
2023 and had an outflow of $1,064,122 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.
Elementos Limited Annual Report for the year ended 30 June 2023 66
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 2023, and the results of all subsidiaries for the year then ended. 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
income tax expense/(income) for the year comprises current
The
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.
Elementos Limited Annual Report for the year ended 30 June 2023 67
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 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.
Other Receivables
Other receivables are recognised at amortised cost less any allowance expected credit losses.
Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financ ial
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.
Elementos Limited Annual Report for the year ended 30 June 2023 68
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.
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. The fair value of
performance rights with no market conditions is determined by reference to the share price at grant. Where applicable, the
number of shares options and performance rights 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 and annual 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.
Elementos Limited Annual Report for the year ended 30 June 2023 69
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).
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;
▪
▪ accumulated losses 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.
Elementos Limited Annual Report for the year ended 30 June 2023 70
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 2023 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 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 2023 were $19,007,033 (2022: $13,901,380). Based on a review
performed as at 30 June 2023, the Directors determined that it is still appropriate to continue capitalising costs in relation to the
Group's areas 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
Elementos Limited Annual Report for the year ended 30 June 2023 71
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 2023 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.
NOTE 2: EXPENSES
Included in expenses are the following items:
Depreciation
ASX, ASIC, share registry expenses
Business development and investor relations costs
Legal fees
Insurances
Audit, tax and external accounting fees
Interest on loans
Employee benefits expense comprises:
Salaries and wages
Consulting fees
Superannuation
Share based payment expense
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 25% (2022: 25%)
Adjust for tax effect of:
Non-deductible amounts
Tax loss not recognised (current year and true up)
Temporary differences recognised
Under/Over
Income tax expense/(benefit)
30 June 2023
30 June 2022
$
$
51,319
99,734
141,951
35,522
47,797
103,292
3,690
854,865
349,734
84,389
278,323
35,936
44,555
114,770
158,204
44,758
31,981
143,257
6,349
856,842
136,957
84,609
541,449
42,858
30 June 2023
30 June 2022
$
$
(556,327)
(557,659)
97,050
458,786
-
491
-
100,228
458,071
-
(640)
-
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
-
-
5,347,629
4,904,118
Elementos Limited Annual Report for the year ended 30 June 2023
72
The Group has carried forward tax losses of $27,076,087 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. Elementos Ltd failed the Continuity of Ownership Test on 4 January
2019. As a result, tax losses incurred prior to this date will need to satisfy the Same Business Test or Similar Business Test, in order
for them to be available in future years.
NOTE 4: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits
NOTE 5: TRADE AND OTHER RECEIVABLES
GST & VAT receivable
30 June 2023
30 June 2022
$
3,404,931
44,723
3,449,654
$
6,225,623
44,550
6,270,173
30 June 2023
30 June 2022
$
287,333
287,333
$
563,624
563,624
As at year end, there were no material receivable balances that were past due and not impaired. All receivables as at 30 June
2023 were due within 60 days (2022: 60 days). The carrying value of trade receivables is considered a reasonable approximation
of fair value.
NOTE 6: EXPLORATION AND EVALUATION ASSETS
Exploration and evaluation expenditure carried forward in respect of areas
of interest are:
Exploration and evaluation phase - at cost
19,007,033
13,901,380
30 June 2023
30 June 2022
$
$
Movement in exploration and evaluation assets:
Opening balance - at cost
Capitalised exploration expenditure
Foreign exchange differences
Carrying amount at the end of the year
13,901,380
4,315,361
790,292
19,007,033
11,390,716
2,646,427
(135,763)
13,901,380
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.
Elementos Limited Annual Report for the year ended 30 June 2023 73
NOTE 7: TRADE AND OTHER PAYABLES
Current:
Trade payables and accrued expenses
Short term employee benefits
Total payables (unsecured)
30 June 2023
30 June 2022
$
$
933,361
108,470
1,041,831
736,463
72,534
808,997
The average credit period on purchases of goods and services is 30 days. No interest is paid on trade payables.
NOTE 8: CONTRIBUTED EQUITY
Fully paid ordinary shares
Balance as at 1 July
177,128,963
36,165,450
3,861,238,867
28,740,673
2023
2022
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 of shares
Issue of shares
(a)
(b)
(c)
(c)
(d)
(d)
(e)
(f)
(f)
1,000,011
225,002
16,611,111
2,990,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66,000,000
56,924,600
8,691,465
-
-
660,000
569,246
78,223
69,212,300
1,038,185
(3,899,584,015)
-
2,425,746
545,793
12,220,000
4,582,500
Balance as at 30 June
194,740,085
39,380,452
177,128,963
36,214,620
Total transaction costs associated with
share issues
Net issued capital
(118,134)
39,262,318
(49,170)
36,165,450
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 2023, are:
(a) From 1 July 2022 to 31 August 2022 the following share options were exercised into ordinary shares of the Company:
1,000,011 options with an exercise price of $0.225 per option raising $225,002 (and 3,912,254 lapsed).
•
Elementos Limited Annual Report for the year ended 30 June 2023 74
(b) On 5 April 2023, the Company announced that it had received commitments to complete a private placement of 16,611,111
shares to be issued at $0.18 per share. The transaction completed in two tranches as follows:
•
•
On 13 April 2023 11,444,444 shares were issued at $0.18 per share raising $2,060,000.
On 5 June 2023, following shareholder approval, 5,166,667 shares were issued at $0.18 per share raising $930,000.
Notes for the above table, relating to the year ended 30 June 2022, are:
(c) On 6 July 2021, following shareholder approval, 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 unlisted 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 56,924,600 shares with an issue price of 1 cent per share and 28,462,300 attaching unlisted 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 8 for further details in relation to the loan facility.
(d) Between 1 July 2021 and the share consolidation date of 1 December 2021 the following options were exercised:
•
•
8,691,465 options with an exercise price of 0.9 cents per option raising $78,223; and
69,212,300 options with an exercise price of 1.5 cents per option raising $1,038,185.
(e) On 1 December 2021, following shareholder approval, the Company undertook a 25:1 consolidation of the ordinary
shares on issue. The consolidation resulted in the reduction in the number of shares on issue by 3,899,584,015 ordinary
shares.
(f) Between the date of the share consolidation and 30 June 2022 the following options were exercised:
2,425,746 options with an exercise price of $0.225 per option raising $545,793; and
12,220,000 options with an exercise price of $0.375 per option raising $4,582,500.
•
•
Other Options
Unlisted Share Options
Balance at the beginning of the
reporting period
Options issued during the period:
-
Placement attaching options
Options exercised during the period:
-
-
Prior to consolidation
Following the consolidation
Consolidation (a)
Expired
Exercisable at end of year
Note
Weighted
average
exercise price
(cents)
30 June 2023
No. of Options
Weighted
average
exercise
price (cents)
30 June 2022
No. of Options
-
22.5
-
-
22.5
-
22.5
-
-
4,912,265
22.5
1.25
4,912,265
506,390,657
-
-
(1,000,011)
-
(3,912,254)
-
1.50
61,462,300
1.43
35.02
-
37.5
22.5
(77,903,765)
(14,645,746)
(470,351,181)
(40,000)
4,912,265
(a) Following shareholder approval on 23 November 2021 the Company completed a consolidation of its share capital on a 25:1
basis. The share options were reconstructed on a like for like basis which resulted in the following:
Elementos Limited Annual Report for the year ended 30 June 2023 75
31-August-2022 Options
30-April-2022 Options
Pre consolidation
Post Consolidation
Pre consolidation
Post Consolidation
Number of options
Exercise Price
183,449,192
$0.009
7,338,011
$0.225
306,500,000
$0.015
12,260,000
$0.375
The weighted average remaining contractual life of the options was nil (2022: 62 days).
Director Options
Weighted
average
exercise price
$
Note
30 June 2023
No. of Options
Weighted
average
exercise
price
$
30 June 2022
No. of Options
Unlisted Share Options
Balance at the beginning of the
reporting period
Options issued during the period(a)
15
Options exercised during the period
Expired
Balance at end of year
Exercisable at end of year
1.10
1.10
-
-
-
1.10
1.10
1,800,000
1,800,000
-
-
-
1,800,000
1,800,000
1.10
-
1.10
-
-
1.10
-
1,800,000
-
1,800,000
-
-
1,800,000
-
(a) The 1,800,000 options to the Directors and Company Secretary were agreed to be issued on 31 May 2022 subject to
shareholder approval at the 2022 Annual General Meeting. Approval was received at the Annual General Meeting and the
options were issued on 15 November 2022.
The weighted average remaining contractual life of the options was 1.9 years (2022: 2.9 years).
Performance Rights
During the previous financial period the Company issued 3,300,000 performance rights (on a post consolidation basis) to
Executives of the Company. The performance rights have both company milestone and employment retention vesting conditions.
A share-based payment expense of $360,557 was recorded during the period (2022: 352,655) see Note 15 for further details.
Capital Management
Exploration companies such as Elementos Limited are funded almost exclusively by share capital.
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 and/or project
finance. No dividend will be paid while the Group is in the exploration stage. There are no externally imposed capital requirements.
There have been no changes to the capital management policies during the year.
Elementos Limited Annual Report for the year ended 30 June 2023 76
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 and rights issued to employees and consultants.
This reserve can be reclassified to accumulated losses if options or rights 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 2023
30 June 2022
$
$
(2,225,307)
(2,230,637)
51,319
278,323
5,580
819,813
6,150
44,555
541,449
39,084
(27,685)
(174,958)
(1,064,122)
(1,808,192)
Options and performance rights issued to employees and consultants for no cash consideration are disclosed in note 15.
Reconciliation of cash and non-cash movements in borrowings from financing activities
Lease liability
2022 Cash flows
58,210
58,210
(51,147)
(51,147)
Principal
converted to
equity
Loan balance
offset /
discounted
Non-cash
adjustments
-
-
-
-
-
-
2021 Cash flows
Principal
converted to
equity
Loan balance
offset /
discounted
Non-cash
adjustments
2023
7,063
7,063
2022
Lease liability
16,094
(38,117)
Borrowings
1,550,464
(737,163)
1,566,558
(775,280)
-
(477,273)
(477,273)
-
80,233
58,210
(336,028)
(336,028)
-
-
80,233
58,210
Elementos Limited Annual Report for the year ended 30 June 2023 77
NOTE 11: LOSS PER SHARE
Net loss used in the calculation of basic and diluted EPS
Weighted average number of ordinary shares outstanding during the period
used in the calculation of basic EPS
30 June 2023
30 June 2022
$
$
(2,225,307)
(2,230,637)
180,796,145
164,987,703
Options and performance rights are considered potential ordinary shares. Options and performance rights issued are not
presently dilutive and were not included in the determination of diluted loss per share for the period.
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.
Not later than 1 year
Total commitment
NOTE 13: CONTINGENT LIABILITIES
30 June 2023
30 June 2022
$
602,000
602,000
$
382,500
382,500
The Company’s wholly owned subsidiary, Minas de Estano De Espana (MESPA) is currently involved in legal proceedings in
Spain. While the referenced case is not considered material, and does not affect the Company’s title to the Oropesa Project, the
Company has appointed legal counsel who are monitoring the progress of the case through the Spanish courts and will prepare
to defend the case when required. MESPA is defending the claim regarding the alleged 2018 appointment and subsequent
dismissal of Mr Jose Cereijo Soto as MESPA’s Con.Delegado (CEO) and an alleged €300,000 payment he claims he was entitled to.
The pre-trial hearing in relation to the claim has been set for March 2024.
There were no other 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 2023.
Subsidiaries
Interest in subsidiaries are disclosed in Note 19.
Elementos Limited Annual Report for the year ended 30 June 2023 78
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
NOTE 15: SHARE-BASED PAYMENTS
Options
30 June 2023
30 June 2022
$
688,239
50,162
294,770
$
575,663
50,208
503,691
1,033,171
1,129,562
During the year ended 30 June 2022 the Company agreed to issue 1,800,000 options to the Company’s Director’s and Company
Secretary, subject to shareholder approval at the 2022 Annual General Meeting. The amount recognised for the 30 June 2022
period under the share-based payment reserve in relation to share based payments amounted to $188,794. Following shareholder
approval the Company issued the 1,800,000 options at which time the Company revalued the options and a subsequent reduction
to the share-based payment reserve of $82,234 was recognised based on the reduced valuation of the options at the point of issue.
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
Agreed to be issued
1,800,000
31-May-2022
Grant/valuation date
15-November-2022
Share price at valuation date
Exercise price
Expected volatility
Risk-free interest rate
Expected life
Model used
Value per option
$0.30
$1.10
75%
2.81%
3 years
Black Scholes
$0.0592
Elementos Limited Annual Report for the year ended 30 June 2023 79
Outstanding Options
The outstanding balance of options is represented below:
Grant Date/s
Expiry Date
Exercise Price
Share options
Share options
30 June 2023
30 June 2022
2 December 2020
31 August 2022
31 May 2022(b)
31 May 2025
$0.225(a)
$1.10
-
1,600,000(a)
1,800,000
1,800,000
The weighted average remaining contractual life of the options
outstanding at year end:
1.9 years
1 year
(a) The quantity and exercise price of the options have been adjusted to reflect the consolidation of the Company’s share
capital in December 2021 on a 25:1 basis.
(b) The 1,800,000 options to the Directors and Company Secretary were agreed to be issued on 31 May 2022 subject to
shareholder approval at the 2022 Annual General Meeting, which was received on 15 November 2022.
Performance Rights
During the year ended 30 June 2022 3,300,000 (post consolidation) rights were issued to the Company’s Executives. The amount
recognised for the current period under the share-based payment reserve in relation to share based payments amounts to
$360,557 (2022: $352,655).
The fair value of rights at grant date is determined using the share price at the grant date and the estimated probability of achieving
each vesting condition. These values are then recognised over the proposed vesting period.
Inputs used to value the performance rights are as follows:
Tranche
Number of
rights
Grant/
valuation
date
Vesting date and exercisable date
Expiry date
Exercise
price
Spot price
at grant
1 & 2
1,200,000
8-Jul-2021
Completion of Oropesa DFS and retention to 1-08-22
24-Jul-2024(a)
3
4
5
6
7
300,000
8-Jul-2021
Granting of Oropesa Exploitation License and retention to 1-08-22
31-Jul-2024(b)
600,000
8-Jul-2021
Oropesa project funding package and retention to 1-07-23
31-Jan-2025(c)
600,000
8-Jul-2021
Acquisition or merger and retention to 1-07-23
31-Jan-2024
300,000
8-Jul-2021
Completion of Cleveland PFS and retention to 1-07-23
31-Jan-2025(c)
300,000
8-Jul-2021
First production of mineral concentrate and retention to 1-07-25
31-Jan-2026
Nil
Nil
Nil
Nil
Nil
Nil
$0.43
$0.43
$0.43
$0.43
$0.43
$0.43
(a) During the current financial period the Company extended the Expiry date from 31 July 2023 to 24 July 2024.
(b) During the current financial period the Company extended the Expiry date from 31 July 2023 to 31 July 2024.
(c) During the current financial period the Company extended the Expiry date from 31 January 2024 to 31 January 2025.
Elementos Limited Annual Report for the year ended 30 June 2023 80
Outstanding Rights
The outstanding balance of rights is represented below:
Grant Date/s
Expiry Date
Exercise Price
Rights
Rights
8 July 2021
8 July 2021
24 July 2024(a)
31 July 2024(b)
8 July 2021
31 January 2024
8 July 2021
31 January 2025(c)
8 July 2021
31 January 2026
30 June 2023
30 June 2022
Nil
Nil
Nil
Nil
Nil
1,200,000
300,000
600,000
900,000
300,000
-
1,500,000
1,500,000
-
300,000
(a) During the current financial period the Company extended the Expiry date from 31 July 2023 to 24 July 2024.
(b) During the current financial period the Company extended the Expiry date from 31 July 2023 to 31 July 2024.
(c) During the current financial period the Company extended the Expiry date from 31 January 2024 to 31 January 2025.
None of the rights on issue at 30 June 2023 are vested and exercisable. The weighted average remaining contractual life of the
rights outstanding at year end is 1.18 years.
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
NOTE 17: FINANCIAL RISK MANAGEMENT
(a) Financial Risk Management Policies
30 June 2023
30 June 2022
$
$
59,158
59,158
54,676
54,676
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.
Elementos Limited Annual Report for the year ended 30 June 2023 81
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 (2022: 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 2023, there was no concentration of credit risk, other than bank balances and on geographical basis with most financial
assets in Australia (2022: nil).
Elementos Limited Annual Report for the year ended 30 June 2023 82
(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:
Lease liabilities
Greater than 12 months:
Lease liabilities
30 June 2023
30 June 2022
$
$
3,449,654
287,333
3,736,987
6,270,173
563,624
6,833,797
(1,041,831)
(808,997)
(7,117)
(52,521)
-
(1,048,948)
(7,117)
(868,635)
(i) Non-interest bearing. The contractual cash flows do not differ to the carrying amount.
(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.
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.
(b) 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.
Elementos Limited Annual Report for the year ended 30 June 2023 83
(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.
2023
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
2022
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
$
14,301,676
6,348,392
20,650,068
422,034
-
$
$
399,715
(10,955,042)
12,868,031
13,267,746
11,581,902
-
-
(10,955,042)
(10,955,042)
-
422,034
11,581,902
(10,955,042)
36,262,318
1,110,058
3,000,000
240,617
(17,144,342)
(1,554,773)
20,228,034
(1,958,134)
1,685,844
(267,173)
-
744,148
(1,958,134)
476,975
-
-
-
-
-
-
-
Australia
Spain
Intercompany
eliminations
$
12,968,095
6,203,202
19,171,297
347,118
7,092
354,210
33,165,450
831,735
$
743,613
7,822,369
8,565,982
7,363,223
-
7,363,223
3,000,000
(503,531)
(15,180,098)
(1,293,710)
18,817,087
(2,177,939)
1,202,759
(52,698)
-
(291,813)
(2,177,939)
(344,511)
$
(6,850,226)
-
(6,850,226)
(6,850,226)
-
(6,850,226)
-
-
-
-
-
-
-
Total
$
3,746,349
19,216,423
22,962,772
1,048,894
-
1,048,894
39,262,318
1,350,675
(18,699,115)
21,913,878
(2,225,307)
744,148
(1,481,159)
Total
$
6,861,482
14,025,571
20,887,053
860,115
7,092
867,207
36,165,450
328,204
(16,473,808)
20,019,846
(2,230,637)
(291,813)
(2,522,450)
Elementos Limited Annual Report for the year ended 30 June 2023 84
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
Country of
incorporation
Australia
Australia
Argentina
Chile
Australia
Spain
Ownership interest
2023
100%
100%
100%
100%
100%
100%
2022
100%
100%
100%
100%
100%
100%
NOTE 20: EVENTS AFTER REPORTING PERIOD
• Subsequent to the reporting period the following occurred:
-
-
-
On 28 August 2023, the Company cancelled 360,000 options with an exercise price of $1.10 and expiry of 31 May 2025.
On 8 September 2023, the Company agreed to issue 9,600,000 options in three equal tranches with the following exercise
prices: tranche 1: $0.25, tranche 2: $0.30 and tranche 3: $0.35, each tranche has an expiry date of 30 June 2026 and vest
immediately upon grant. A total of 2,100,000 options were issued on 8 September with the remainder to be issued subject
to shareholder approval at the 2023 Annual General Meeting planned for late November 2023.
As previously disclosed, the Company’s wholly owned subsidiary, Minas de Estano De Espana (MESPA) has been
involved in legal proceedings with Sondeos & Perforaciones Industriales Del Bierzo, SA (SPIB) and its principal Mr.
José Cereijo Soto. During September 2023 the Court ruled in favour of SPIB in relation to its services as Dirección
Facultativa alleged to have been performed by Mr Soto. MESPA has been ordered to make payment of €141,000 and
potentially other interest and costs to SPIB as a result of the ruling.
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.
Elementos Limited Annual Report for the year ended 30 June 2023 85
NOTE 21: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Elementos Limited at 30 June 2023. 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 2023
30 June 2022
$
3,346,308
18,999,029
22,345,337
431,459
-
431,459
55,157,849
1,110,058
$
6,115,743
14,267,738
20,383,481
356,543
7,092
363,635
52,060,981
831,735
(34,354,029)
(32,872,870)
21,913,878
(1,481,159)
-
20,019,846
(6,800,656)
-
(1,481,159)
(6,800,656)
The Company has no contingent liabilities, nor has it entered into any guarantees in relation to the debts of its subsidiaries (2022:
nil).
The Company has not entered into any contractual commitments for the acquisition of property, plant and equipment (2022: 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.
Elementos Limited Annual Report for the year ended 30 June 2023
86
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 2023 and of its
performance for the financial year ended on that date.
2.
The managing 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.
Joe David
Managing Director
25 September 2023
Brisbane, Queensland
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
87
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 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
88
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 recognises 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 6 in the financial report.
The recoverability of exploration and
evaluation assets is a key audit matter due to:
•
•
the significance of the total balance; and
the level of procedures undertaken to
evaluate 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.
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.
89
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
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.
90
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 39 to 45 of the directors’ report for the
year ended 30 June 2023.
In our opinion, the Remuneration Report of Elementos Limited, for the year ended 30 June 2023,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
A J Whyte
Director
Brisbane, 25 September 2023
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.
88
Elementos Limited Annual Report 30 June 2022