EUROPEAN METALS HOLDINGS LIMITED
ARBN 154 618 989
ANNUAL REPORT
30 JUNE 2017
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE DIRECTORY
Directors
Mr David Reeves
Mr Keith Coughlan
Dr Pavel Reichl (resigned 27 June 2017)
Mr Kiran Morzaria
Mr Richard Pavlik (appointed 27 June 2017)
Non-Executive Chairman
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Executive Director
Company Secretary
Ms Julia Beckett
Registered Office in Australia
Suite 12, Level 1
11 Ventnor Avenue
WEST PERTH WA 6005
Telephone 08 6141 3500
Facsimile 08 6141 3599
Email www.europeanmet.com
Registered Office in Czech Republic
Jaselska 193/10, Veveri
602 00 Brno
Czech Republic
Tel: +420 732 671 666
Share Register - Australia
Computershare Investor Services Limited
Level 11
172 St Georges Terrace
Perth WA 6000
Telephone 1300 850 505 (within Australia)
Telephone +61 3 9415 4000 (outside Australia)
Facsimile 1800 783 447 (within Australia)
Facsimile +61 3 9473 2555 (outside Australia)
Auditor
Stantons International Audit and Consulting Pty
Ltd
Level 2, 1 Walker Avenue
West Perth WA 6005
Telephone +61 8 9481 3188
Facsimile +61 8 9321 1204
Nominated Advisor & Broker
Beaumont Cornish Limited
2nd Floor, Bowman House
29 Wilson Street
LONDON EC2M 2SJ
UNITED KINGDOM
Registered Address and Place of Incorporation - BVI
Rawlinson & Hunter
Woodbourne Hall
PO Box 3162
Road Town
Tortola VG1 110
British Virgin Islands
UK Depository
Computershare Investor Services plc
The Pavilions
Bridgewater Road
BRISTOL BS99 6ZZ
UNITED KINGDOM
Reporting Accountants (UK)
Chapman Davis LLP
2 Chapel Court
LONDON SE1 1HH
UNITED KINGDOM
Securities Exchange Listing - Australia
ASX Limited
Level 40, Central Park
152-158 St Georges Terrace
PERTH WA 6000
ASX Code: EMH
Securities Exchange Listing – United Kingdom
London Stock Exchange plc
10 Paternoster Square
LONDON EC4M 7LS
UNITED KINGDOM
AIM Code: EMH
1
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CONTENTS
Chairman’s Letter Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report to the members of European Metals Holdings
Limited
Corporate Governance Statement
Additional Information
Tenement Schedule
3
21
22
23
24
25
26
57
58
62
72
73
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CHAIRMANS LETTER
Dear Shareholders
It is with pleasure that I introduce the 2017 Annual Report of European Metals Holdings limited (“European Metals” or “the
Company”).
European Metals has made considerable progress throughout the 2017 Financial Year in its goal to develop the Cinovec
Project and bring the project into production.
The highlight of the year has been the successful completion of the Company’s Preliminary Feasibility Study (“PFS”), the
highlights of which were announced in April. The PFS confirmed that Cinovec has the very real potential to be a low cost
producer of lithium products.
The demand for lithium is at an all-time high and the consensus amongst all major sector commentators is that this demand
is set to continue due to the dramatic growth in the Electric Vehicle market. The proximity of Cinovec to the major
European vehicle manufacturers, along with the size of the deposit and its low cost nature, provide us with the confidence
that the future of the project is very bright.
Other significant developments for the year have included the dramatic increase in the size of the JORC resource at
Cinovec, and the declaration of the maiden ore reserve shortly after the date of this report. We have secured a number of
important permits for the project and taken significant steps towards the grant of the mining license.
Work done as part of the PFS lead to significant developments throughout the year such as the production of battery grade
lithium carbonate and considerable improvements in lithium recoveries and process cost savings.
From a Corporate perspective, we welcomed our Country Manager, Richard Pavlik to the Board. Richard is a very
experienced Czech mining executive and his knowledge of the industry has already proven invaluable to the Company.
Coinciding with Richard’s appointment, Pavel Reichl stepped down for the Board to pursue other interests. Pavel was
instrumental in securing the licenses over Cinovec in 2010 and the Board would like to thank him for his exceptional service.
The next year looms as a very busy one for European Metals as we enter our Definitive Feasibility Study against a very
positive backdrop of the market for battery supply chain metals, and therefore lithium. We have made very strong
appointments in our DFS study team in Craig Reimer and Grant Harman and look forward to delivering a positive study to
our shareholders towards the end of next year. The contribution of the entire European Metals team has been much
appreciated by the Board in bringing the Company to this stage.
Finally, I would like to thank our shareholders for their ongoing support as we enter the next stage of project development.
We look forward to sharing further successes in the future.
David Reeves
CHAIRMAN
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
PROJECT REVIEW
Project Review
Cinovec Lithium/Tin Project
European Metals owns 100% of the Cinovec lithium-tin project in the Czech Republic, through its wholly owned subsidiary
Geomet s.r.o. Cinovec is an historic mine incorporating a significant undeveloped lithium-tin resource with by-product
potential including tungsten, rubidium, scandium, niobium and tantalum and potash. Cinovec hosts a globally significant
hard rock lithium deposit with a total Indicated Mineral Resource of 348Mt @ 0.45% Li20 and 0.04% Sn and an Inferred
Mineral Resource of 309Mt @ Li20 and 0.04% Sn containing a combined 7.0 million tonnes Lithium Carbonate Equivalent
and 263kt of tin.
An initial Probable Ore Reserve of 34.5Mt @ 0.65% Li20 and 0.09% Sn has been declared to cover the first 20 years mining
at an output of 20,800tpa of lithium carbonate.
This makes Cinovec the largest lithium deposit in Europe, the fourth largest non-brine deposit in the world and a globally
significant tin resource.
The deposit has previously had over 400,000 tonnes of ore mined as a trial sub-level open stope underground mining
operation.
The recently completed Preliminary Feasibility Study, conducted by specialist independent consultants, returned a post-tax
NPV of USD540m and an IRR of 21% and confirmed that it had the potential to be a low cost producer of battery grade
lithium carbonate. Cinovec is centrally located for European end-users and is well serviced by infrastructure, with a sealed
road adjacent to the deposit, rail lines located 5 km north and 8 km south of the deposit and an active 22 kV transmission
line running to the historic mine. As the deposit lies in an active mining region, it has strong community support.
The economic viability of Cinovec has been enhanced by the recent strong increase in demand for lithium globally, and
within Europe specifically. The project lies in close proximity to a number of potentially significant end users, notably
automobile manufacturers. The recent increase in demand for lithium globally has emanated from the automobile industry
as demand for electric vehicles rises. Recent research from a number of global commentators predicts that this increase in
demand will continue.
Project Development
Drilling and Resource Delineation
Project development for the year was centered on a significant drilling program embarked upon by the Company.
There were numerous updates to this program released to the market during the period. Overall, results from the
program either confirmed or exceeded expectations with respect of both lithium content and width of mineralisation.
In November 2016, the Company announced a significant increase in the indicated resource at Cinovec. This upgrade
was a result of the drilling program to that point and increased the indicated resource by approximately 420%.
The Company announced a further substantial upgrade of its Resource in February 2017.
The extensive seven-month drilling campaign at Cinovec was completed early in 2017 and consisted of 17 holes for
6,081 meters. The program was designed to increase the confidence in the resource base and to upgrade a significant
part of the resource from the Inferred category to the higher confidence Indicated category. The program was
successful in achieving this.
The Company commenced a focused infill drilling program at Cinovec South in May to test a gap in the geological
model.
Preliminary Feasibility Study
This drilling program provided important data to the Company’s Preliminary Feasibility Study (“PFS”) which was
ongoing throughout the period. The Company released various updates with regards to this study throughout the year,
and the completion at the end of March 2017.
4
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
PROJECT REVIEW
Highlights of the work program for the PFS included a significant reduction of pre-production capital costs and
outstanding recoveries, and the successful manufacture of >99.5% pure lithium carbonate using an industry proven,
sodium sulphate roast-based flow-sheet.
In April, the Company successfully completed the PFS highlighting that Cinovec could be a very low cost lithium
carbonate producer with attractive economic returns.
Other Developments
Mr Richard Pavlik was appointed to the position of Country Manager in early January and appointed to the board of
European Metals Holdings Limited in June.
The Cinovec South Resource was added to the Czech State resource register in early January 2017. This is the first step
in the process for the granting of a mining permit.
The Company was granted a new exploration license, Cinovec III. The license covers a small area above the Cinovec
deposit itself along the Czech-German border, and also grants exclusive rights to explore for potential deep-seated
lithium ore East of the Cinovec deposit.
All the developments indicate significant enhancements to the economics of Cinovec Project which have now been
reflected in the Preliminary Feasibility Study. The Company will move directly into a definitive feasibility study to accelerate
the project towards development.
Mineral Resource and Ore Reserve Statement
Based upon the Preliminary Feasibility Study undertaken for the Cinovec Project, the Company declares a maiden Probable
Ore Reserve of 34.5 Mt @ 0.65% Li2O, as detailed below. The Probable Reserve has been declared solely from the Indicated
Mineral Resource category and are classified based on a PFS level of study and category of Mineral Resource.
Category
Proven Ore Reserves
Probable Ore Reserves
Total Ore Reserves
Notes to Reserve Table:
CINOVEC ORE RESERVES SUMMARY
Tonnes
(Millions)
0
34.5
34.5
Li
%
0
0.30
0.30
Li20
%
0
0.65
0.65
Sn
%
0
0.09
0.09
W
%
0
0.03
0.03
1.
2.
3.
4.
5.
Probable Ore Reserves have been prepared by Bara International in accordance with the guidelines of the JORC Code (2012).
The effective date of the Probable Ore Reserve is June 2017
All figures are rounded to reflect the relative accuracy of the estimate
The operator of the project is Geomet S.R.O a wholly-owned subsidiary of EMH. Gross and Net Attributable Probable Ore
Reserve are the same.
Any apparent inconsistencies are due to rounding errors
The Ore Reserve is based on the Mineral Resource for the Cinovec deposit prepared by Widenbar and Associates and issued
in February 2017. The Mineral Resource is reported in the report Cinovec Resource Estimation published by Widenbar and
Associates and is reported in accordance with the JORC 2012 guidelines. The table below summarises the Mineral Resource
declared.
Indicated
Inferred
Total
CINOVEC 2017 RESOURCE
Cutoff
%
0.1%
0.1%
0.1%
Tonnes
(Millions)
347.7
308.80
656.50
Li
%
0.21
0.18
0.20
Li20
%
0.45
0.39
0.43
Sn
%
0.04
0.04
0.04
W
%
0.015
0.014
0.014
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
PROJECT REVIEW
Competent Person
Information in this statement that relates to the exploration results is based on information compiled by European Metals Director Dr Pavel
Reichl, Dr Reichl is a Certified Professional Geologist (certified by the American Institute of Professional Geologists), a member of
the
American Institute of Professional Geologists, a Fellow of the Society of Economic Geologists and is a Competent Person as defined in the
2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and a Qualified Person for
the purposes of the AIM Guidance Note on Mining and Oil & Gas Companies dated June 2009. Dr Reichl consents to the inclusion in the
release of the matters based on his information in the form and context in which it appears. Dr Reichl holds CDIs in European Metals.
The information in this statement that relates to Mineral Resources and Exploration Targets has been compiled by Mr Lynn Widenbar. Mr
Widenbar, who is a Member of the Australasian Institute of Mining and Metallurgy, is a full time employee of Widenbar and Associates and
produced the estimate based on data and geological information supplied by European Metals. Mr Widenbar has sufficient experience that
is relevant to the style of mineralisation and type of deposit under consideration and to the activity that he is undertaking to qualify as a
Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of Exploration Results, Minerals
Resources and Ore Reserves. Mr Widenbar consents to the inclusion in this report of the matters based on his information in the form and
context that the information appears.
The information in this statement that relates to Mineral Reserves is based on, and fairly represents, information and supporting
documentation prepared by Mr Jim Pooley. Mr Pooley, who is a Fellow of the Southern African Institute of Mining and Metallurgy, is a full
time employee of Bara International Ltd and produced the estimate based on the Mineral Resource supplied by European Metals. Mr
Pooley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
that he is undertaking to qualify as a Competent Person as defined in the JORC Code 2012 Edition of the Australasian Code for Reporting of
Exploration Results, Minerals Resources and Ore Reserves. Mr Pooley consents to the inclusion in this report of the matters based on his
information in the form and context that the information appears.
6
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Your Directors’ present their report, together with the financial statements of the Group, being the Company and its
controlled entities, for the year ended 30 June 2017.
Directors
The following persons were Directors of the Company and were in office for the entire year, and up to the date of this
report, unless otherwise stated:
Mr David Reeves
Mr Keith Coughlan
Dr Pavel Reichl
Mr Kiran Morzaria
Mr Richard Pavlik
Non-Executive Chairman
Managing Director
Non-Executive Director
Non-Executive Director
Executive Director
Appointed 6 March 2014
Appointed 6 September 2013
Resigned 27 June 2017
Appointed 10 December 2015
Appointed 27 June 2017
Company Secretary
The following person held the position of Company Secretary at the end of the financial year:
Ms Julia Beckett holds a Certificate in Governance Practice and Administration and is a Certificated Member of Chartered
Secretaries Australia. Julia is a Corporate Governance professional, having worked in corporate administration and
compliance for the past 10 years. She has been involved in business acquisitions, mergers, initial public offerings, capital
raisings as well as statutory and financial reporting. Julia is also Company Secretary of Blina Minerals Limited, Drake
Resources Limited and Southern Hemisphere Mining Limited, and Joint Company Secretary of Holista CollTech Limited.
Principal Activities
The Company is primarily involved in the development of a lithium and tin project in the Czech Republic.
Review of Operations
The 2017 Financial Year has been one of significant growth and development for the Company. For further information
refer to the Project Review on page 4 to 6.
Results of Operations
The consolidated loss for year ended 30 June 2017 amounted to $4,145,872 (2016 loss: $1,591,637).
Financial Position
The net assets of the Group have increased by $2,536,541 to $10,495,030 at 30 June 2017.
Significant Changes in the State of Affairs
The following significant changes in the state of affairs of the parent entity occurred during the financial year:
On 7 October 2016, 500,000 warrants were exercised at the price of $0.14 per CDI to raise $70,000.
On 17 October 2016, 2,000,000 listed options were exercised and the Company received a total of $400,000.
On 31 October 2016, pursuant to the terms and conditions, 5,000,000 Class B Performance Shares in the Company
have been automatically redeemed by the Company for a sum of $0.000001 per Class B Performance Share. These
performance shares were issued by the Company on 12 March 2014 as part of the consideration for the acquisition of
European Metals (UK) Ltd as approved by Shareholders at the General Meeting held on 20 February 2014. These
performance shares are automatically redeemed due to the required milestone not being achieved.
On 22 November 2016, 500,000 were exercised at the price of $0.14 per CDI to raise $70,000.
7
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
On 24 November 2016, the Company issued 5,000,000 CDIs to Cadence Minerals Plc (previously named Rare Earth
Minerals Plc) at an issue price of $0.52 per CDI to raise $2,600,000 and 5,000,000 Class B performance shares were
issued to the original vendors of the Cinovec Project in replacement of the Class B performance shares issued to them
in 2014 as approved by Shareholders at Annual General Meeting held 18 November 2016.
On 17 May 2017, the Company issued 500,000 options exercisable at $0.28 expiring on 30 April 2018 to independent
consultants as per consultancy agreements and 400,000 options exercisable at $0.58 expiring on 3 January 2020 to
General Manager (Czech Republic) as per contract of employment.
On 1 June 2017, 250,000 options were exercised at the price of $0.28 per CDI to raise $70,000.
On 6 June 2017, 250,000 options were exercised at the price of $0.28 per CDI to raise $70,000.
On 27 June 2017, the Company announced it had entered into a Funding Facility Agreement with 6466 Investments
Pty Ltd an Australian based sophisticated investors and allows the company to draw down up to AUD $2 million in
tranches as required over 12 months. Any funds drawn down will convert to CDI’s in the Company at a 10% discount
to the 10-day VWAP in the Company’s securities. The funds will be used in the preparation of the Company’s
Definitive Feasibility Study, for further drilling and general working capital.
On 30 June 2017, the Company issued 416,783 ordinary shares at $0.7138 per share to 6466 Investments Pty Ltd in
respect to the first advance of AUD$250,000 under the Funding Facility Agreement in settlement for the facility
establishment fee of 2% (AUD$40,000) and the draw down fee of 3% (AUD$7,500) on the first advance.
Dividends Paid or Recommended
No dividends were declared or paid during the year and the Directors do not recommend the payment of a dividend.
Information on Directors
David Reeves
Qualifications
Experience
Interest in CDIs and Options
Non-Executive Chairman – Appointed 6 March 2014
Mining Engineer
Mr Reeves is a qualified mining engineer with 25 years’ experience globally. Mr
Reeves holds a First Class Honours Degree in Mining Engineering from the University
of New South Wales, a Graduate Diploma in Applied Finance and Investment from
the Securities Institute of Australia and a First Class Mine Managers Certificate of
Competency.
3,720,244 CDIs
1,000,000 Options, 16.6 cents, expire 17 August 2020
542,651 Class B Performance Shares
Special Responsibilities
Directorships held
listed entities
in other
Member of all the Committees
Director of Keras Resources Plc (AIM)
Managing Director of Calidus Resources Limited (ASX)
Keith Coughlan
Qualifications
Experience
Interest in CDIs and Options
Special Responsibilities
Directorships held
listed entities
in other
Managing Director (CEO) – Appointed 6 September 2013
BA
Mr Coughlan has almost 30 years’ experience
in stockbroking and funds
management. He has been largely involved in the funding and promoting of resource
companies listed on ASX, AIM and TSX. He has advised various companies on the
identification and acquisition of resource projects and was previously employed by
one of Australia’s then largest funds management organizations.
8,500,000 CDIs
2,000,000 Options, 16.6 cents, expire 17 August 2020
Member of Audit and Risk Committee
Member of Nomination Committee
Non-Executive Chairman of Calidus Resources Limited
Non-Executive Director of Southern Hemisphere Mining Limited
8
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Pavel Reichl
Qualifications
Experience
Interest in CDIs and Options
Special Responsibilities
Directorships held
listed entities
in other
Kiran Morzaria
Qualifications
Experience
Interest in CDIs and Options
Non-Executive Director – Resigned 27 June 2017
PhD from University of Montana
Dr Reichl has over 15 years’ experience in precious, base and PGE metals exploration
and production and has a PhD from University of Montana. He was formerly
listed minerals exploration company
Business Unit Manager of a Canadian
responsible for Europe and Central Asia. Dr Reichl was the former head of the
Newmont acquisition program in Eastern Europe and exploration manager for
Kyrgyzstan and Uzbekistan. He is fluent in English, Czech and Russian.
2,778,672 CDIs
750,000 Options, 16.6 cents, expire 17 August 2020
793,906 Class B Performance Shares
(As at resignation date 27 June 2017)
Nil
Nil
Non-Executive Director – Appointed 10 December 2015
Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and
an MBA (Finance) from CASS Business School
Mr Morzaria has extensive experience in the mineral resource industry working in
both operational and management roles. He spent the first four years of his career
in exploration, mining and civil engineering before obtaining his MBA. Mr Morzaria
has served as a director of a number of public companies in both an executive and
non-executive capacity.
Mr Morzaria is a director and chief executive of Cadence Minerals Plc (previously
named Rare Earth Minerals Plc) which owns 26,860,756 CDIs. Mr Morzaria has no
direct interest in CDIs.
Special Responsibilities
Directorships held
listed entities
in other
Member of Audit and Risk Committee
Member of Remuneration Committee
Chief Executive Officer and Director of Cadence Minerals plc
Richard Pavlik
Qualifications
Experience
Executive Director – Appointed 27 June 2017
Masters Degree in Mining Engineer
Mr Pavlik is the General Manager of Geomet sro, the Company’s wholly owned Czech
subsidiary, and is a highly experienced Czech mining executive. Mr Pavlik holds a
Masters Degree in Mining Engineer from the Technical University of Ostrava in Czech
Republic. He is the former Chief Project Manager and Advisor to the Chief Executive
Officer at OKD. OKD has been a major coal producer in the Czech Republic. He has
almost 30 years of relevant industry experience in the Czech Republic. Mr Pavlik also
has experience as a Project Analyst at Normandy Capital in Sydney as part of a
postgraduate program from Swinburne University. Mr Pavlik has held previous senior
positions within OKD and New World Resources as Chief Engineer, and as Head of
Surveying and Geology. He has also served as the Head of the Supervisory Board of
NWR Karbonia, a Polish subsidiary of New World Resources (UK) Limited. He has an
intimate knowledge of mining in the Czech Republic.
Interest in CDIs and Options
Special Responsibilities
Directorships held
listed entities
in other
400,000 Options, 58 cents, expire 3 June 2020
Nil
Nil
9
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Director Meetings
The number of Directors’ meetings and meetings of Committees of Directors held during the year and the number of
meetings attended by each of the Directors of the Company during the year is:
Name
David Reeves
Keith Coughlan
Pavel Reichl
Kiran Morzaria
Richard Pavlik
Directors’ Meetings
Number attended
2
2
2
2
-
Number eligible to attend
2
2
2
2
-
Indemnifying officers or auditor
During or since the end of the financial year the Company has given an indemnity or entered into an agreement to
indemnify, or paid or agreed to pay insurance premiums as follows:
i.
ii.
The Company has entered into agreements to indemnify all Directors and provide access to documents, against any
liability arising from a claim brought by a third party against the Company. The agreement provides for the
Company to pay all damages and costs which may be awarded against the Directors.
The Company has paid premiums to insure each of the Directors 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 willful breach of duty in relation to the Company. Under the terms
and conditions of the insurance contract, the nature of the liabilities insured against and the premium paid cannot
be disclosed.
iii. No indemnity has been paid to auditors.
CDIs under option
Unissued CDIs of European Metals Holdings Limited under option at the date of this report is as follows:
Expiry date
17 August 2020
3 January 2020
Exercise Price
16.6 cents
58.0 cents
Number under option
3,750,000
400,000
No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue of any
other body corporate. As of the date of this report, 2,500,000 listed options were exercised and the Company received a
total of $540,000 (2016: $2,136,536).
Warrants in issue
No warrants were on issue as at the date of this report.
No person entitled to exercise the warrant has or has any right by virtue of the option to participate in any share issue of
any other body corporate. As of the date of this report, 1,000,000 warrants were exercised and the Company received a
total of $140,000.
Performance Shares
As at the date of this report, 5,000,000 Class B Performance Shares were issued to the original vendors of the Cinovec
Project in replacement of the Class B performance shares issued to them in 2014 as approved by Shareholders at Annual
General Meeting held 18 November 2016.
Environmental Regulations
The Group’s operations are subject to the environmental risks inherent in the mining industry.
10
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to
which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those
proceedings.
The Company was not a party to any such proceedings during the year.
Non-audit Services
Stantons International has not provided any non-audit services during the year.
Significant events after the reporting date
On 1 August 2017, the Company issued 364,679 ordinary shares at $0.7061 per share to 6466 Investments Pty Ltd in
respect to the second advance of AUD$250,000 under the Funding Facility Agreement and the draw down fee of 3%
(AUD$7,500) on the second advance.
On 10 August 2017, the Company issued 351,448 ordinary shares at $0.7327 per share to 6466 Investments Pty Ltd in
respect to the third advance of AUD$250,000 under the Funding Facility Agreement and the draw down fee of 3%
(AUD$7,500) on the third advance.
On 1 September 2017, the Company issued 375,905 ordinary shares at $0.685 per share to 6466 Investments Pty Ltd in
respect to the fourth advance of AUD$250,000 under the Funding Facility Agreement and the draw down fee of 3%
(AUD$7,500) on the fourth advance.
Except for the matters noted above there have been no other significant events arising after the reporting date.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2017 has been received and can be found on page 21 of
the financial report.
11
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each Director of the Company, and Key Management
Personnel. The directors are pleased to present the remuneration report which sets out the remuneration information for
European Metals Holdings Limited’s non-executive directors, executive directors and other key management personnel.
A. Principles used to determine the nature and amount of remuneration
The remuneration policy of the Group has been designed to align Director and management objectives with shareholder
and business objectives by providing a fixed remuneration component, and offering specific long-term incentives based on
key performance areas affecting the Group financial results. The Board of the Company believes the remuneration policy to
be appropriate and effective in its ability to attract and retain the best management and Directors to run and manage the
Group, as well as create goal congruence between Directors, Executives and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members and Senior Executives of
the Group is as follows:
The remuneration policy, setting the terms and conditions for the Executive Directors and other Senior Executives, was
developed by the Board. All Executives receive a base salary (which is based on factors such as length of service and
experience), superannuation, options and performance incentives. The Board reviews Executive packages annually by
reference to the Group’s performance, executive performance, and comparable information from industry sectors and
other listed companies in similar industries.
Executives are also entitled to participate in the employee share and option arrangements.
All remuneration paid to Directors and Executives is valued at the cost to the Group and expensed.
The Board policy is to remunerate Non-executive Directors at commercial market rates for comparable companies for time,
commitment, and responsibilities. The Board determines payments to the Non-executive Directors and reviews their
remuneration annually based on market practice, duties, and accountability. Independent external advice is sought when
required. 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. Fees for Non- Executive Directors are not linked to the performance of the
Group. However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold CDIs in the
Company.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment
objectives and Directors’ and Executives’ performance. Currently, this is facilitated through the issue of options to the
majority of Directors and Executives to encourage the alignment of personal and shareholder interests. The Company
believes this policy will be effective in increasing shareholder wealth. For details of Directors’ and Executives’ interests in
CDIs, options and performance shares at year end, refer to the remuneration report.
B. Details of Remuneration
Details of the nature and amount of each element of the emoluments of each of the KMP of the Company (the Directors)
for the year ended 30 June 2017 and 30 June 2016 are set out in the following tables:
12
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
B. Details of Remuneration (Continued)
2017
Group Key
Management
Personnel
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Equity-settled share-
based payments
Total
% of
remuneration
as share based
payments
Salary, fees
and leave
Profit
share and
bonuses
Non-
monetary
Other1
Super-
annuation
Other
Equity
Options2
Directors:
$
$
$
$
$
$
$
$
$
David Reeves
36,000
Keith Coughlan
230,000
Pavel Reichl
Kiran Morzaria
Richard Pavlik3
24,000
24,000
73,675
387,675
-
-
-
-
-
-
-
-
-
-
-
-
60,000
-
-
21,850
120,251
-
-
-
-
-
180,251
21,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
96,000
251,850
144,251
24,000
0%
0%
0%
0%
29,559
103,234
29%
29,559
619,335
2016
Group Key
Management
Personnel
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Equity-settled share-
based payments
Total
% of
remuneration
as share based
payments
Salary, fees
and leave
Profit
share and
bonuses
Non-
monetary
Other4
Super-
annuation
Other
Equity
Options
Directors:
$
$
$
$
$
$
$
$
$
David Reeves
36,000
Keith Coughlan
200,000
Pavel Reichl
Kiran Morzaria5
43,508
13,355
292,863
-
-
-
-
-
-
-
-
-
-
60,000
-
-
19,000
50,157
-
-
-
110,157
19,000
-
-
-
-
-
-
-
-
-
-
103,146
199,146
206,292
425,292
77,360
171,025
-
13,355
386,798
808,818
52%
49%
45%
-
1 Consulting services of Company Non-Executive Director (David Reeves) and the Company which he controls, Wilgus Investments Pty Ltd.
The amounts billed related to this consulting service amounted to $60,000 (2016: $60,000) based on normal market rates and the amount
outstanding at reporting date was $nil (2016: $Nil).
Consulting services of Company Non-Executive Director (Pavel Reichl) and the Company which he controls, Orex consultant S.R.O. The
amounts billed related to this consulting service amounted to $120,251 (2016: $50,157) based on normal market rates and the amount
outstanding at reporting date was $nil (2016: $21,528).
2 The value of the options granted to key management personnel as part of their remuneration is calculated as at the grant date using the
Black and Scholes. The amount disclosed as part of remuneration for the financial year is the amount expensed over the vesting period.
3 Balance at the end of year represents Non-Executive Director and Key Management Personnel remuneration from 3 January 2017.
4 Consulting services of Company Non-Executive Director (David Reeves) and the Company which he controls. The amounts billed related to
this consulting service amounted to $60,000 based on normal market rates and the amount outstanding at reporting date was $nil.
Consulting services of Company Non-Executive Director (Pavel Reichl) and the Company which he controls, Orex consultant S.R.O. The
amounts billed related to this consulting service amounted to $50,157 based on normal market rates and the amount outstanding at
reporting date was $21,528.
5 Balance at the end of year represents Non-Executive Director remuneration from 10 December 2015.
13
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
C. Service Agreements
It was formally agreed at a meeting of the directors that the following remuneration be established; there are no formal
notice periods, leave accruals or termination benefits payable on termination:
Mr Keith Coughlan to receive a salary of $200,000 per annum plus SGC of 9.5% for the period 1 July 2016 to 31 March 2017
and a salary of $240,000 per annum plus SGC of 9.5% for the period 1 April 2017 to 30 June 2017.
Mr. Kiran Morazaria to receive a standard non-executive director fee of $24,000 per annum which exclude statutory
superannuation effectively from 10 December 2015.
D. Options issued as part of remuneration for the year ended 30 June 2017.
On 3 January 2017, 400,000 options with an exercise price of 0.58 on or before the 3 January 2020 was granted to Richard
Pavlik who was the general manager of Geomet S.R.O at that date.. The options were valued under Black and Scholes and
were recognised as a share based payment in the profit and loss.
30 June 2017
Grant Details
Exercised
Lapsed
Grant Date
No.
Value6
No.
Value
No.
Value
Balance at End of Year
$
$
$
Group KMP
David Reeves
Keith Coughlan
Pavel Reichl
Kiran Morzaria
-
-
-
-
-
-
-
-
-
-
-
-
Richard Pavlik
3 January 2017
400,000
177,352
400,000
177,352
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No.
Value
$
-
-
-
-
-
-
-
-
400,000
177,352
400,000
177,352
-
-
-
-
-
6 The value of the options granted to key management personnel as part of their remuneration is calculated as at the grant date using the
Black and Scholes. 250,000 of the options issued will vest at completion of the Definitive Feasibility Study and the balance will vest 12
months thereafter. The value of the options have been prorated over the vesting period, therefore, the value included in Section B of the
remuneration report as at 30 June 2017 is the prorated amount relating to that period.
14
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
E. Options issued as part of remuneration for the year ended 30 June 2016.
On 31 July 2015, 3,750,000 options with an exercise price 16.6 cents on or before the 17 August 2020 were granted to
Directors. The issue was approved by shareholders at a General Meeting held on the 31 July 2015. The options were valued
under Black and Scholes and were recognised as a share based payment in the profit and loss.
30 June 2016
Grant Details
Exercised
Lapsed
Grant Date
No.
Value7
No.
Value
No.
Value
Balance at End of Year
$
$
$
Group KMP
David Reeves
31 July 2015
1,000,000
103,146
Keith Coughlan
31 July 2015
2,000,000
206,292
Pavel Reichl
31 July 2015
750,000
77,360
Kiran Morzaria
-
-
-
3,750,000
386,798
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
F. Equity instruments issued on exercise of remuneration options
No.
Value
$
-
-
-
-
-
1,000,000
103,146
2,000,000
206,292
750,000
77,360
-
-
3,750,000
386,798
There were no equity instruments issued during the year to Directors or other KMP as a result of options exercised that had
previously been granted as compensation.
G. Loans to Directors and Executives
No loans have been made to Directors or Executives of the Company during, or since, the year ended 30 June 2017 (2016:
nil).
H. Company performance, shareholder wealth and Directors’ and Executives’ remuneration
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment
objectives and Directors’ and Executives’ performance. This will be facilitated through the issue of options to the majority of
Directors and Executives to encourage the alignment of personal and shareholder interests. The Company believes this
policy will be effective in increasing shareholder wealth. At commencement of mine production, performance based
bonuses based on key performance indicators are expected to be introduced.
7 The value of the options granted to key management personnel as part of their remuneration is calculated as at the grant date using the
Black and Scholes. The expense for these options have been recognised in full in the current year given there is no applicable service
period. The options vested on grant date and are all exercisable at 30 June 2016.
15
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
I. Other information
Options held by Key Management Personnel
The number of options to acquire CDIs in the Company held during the 2017 and 2016 reporting period by each of the Key
Management Personnel of the Group; including their related parties are set out below.
Balance at the
start of the
year
Granted
during the
year
30 June 2017
David Reeves
1,000,000
Keith Coughlan
2,000,000
Pavel Reichl
750,000
Kiran Morzaria
Richard Pavlik
-
-
-
-
-
-
400,000
Total
3,750,000
400,000
Exercised during
the year
Other changes
during the year
Balance at the8
end of the year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
2,000,000
2,000,000
750,000
750,000
-
400,000
-
-
-
-
-
-
400,000
4,150,000
3,750,000
400,000
Balance at the
start of the
year
Granted
during the
year
Exercised during
the year
Other
changesduring
the year
30 June 2016
Balance at the
end of the year
Vested and
exercisable
Unvested
David Reeves
658,372
1,000,000
658,372
Keith Coughlan
4,000,000
2,000,000
4,000,000
Pavel Reichl
Kiran Morzaria
-
-
750,000
-
-
-
Total
4,658,372
3,750,000
4,658,372
-
-
-
-
-
1,000,000
1,000,000
2,000,000
2,000,000
750,000
750,000
-
-
3,750,000
3,750,000
-
-
-
-
-
8 Balance at resignation date of 27 June 2017, for those directors (Mr Reichl) who retired during the year.
16
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
I. Other information (continued)
Chess Depositary Interests (‘CDIs’) held by Key Management Personnel
The number of ordinary CDIs held in the Company during the 2017 and 2016 reporting period held by each of the Key
Management Personnel of the Group; including their related parties are set out below.
2017
Name
David Reeves
Indirect
Keith Coughlan
Indirect
Pavel Reichl
Kiran Morzaria10
Indirect
Richard Pavlik
Total
2016
Name
David Reeves
Indirect
Keith Coughlan
Indirect
Pavel Reichl
Kiran Morzaria12
Indirect
Total
Balance at
Start of year
Granted as
remuneration
during the year
Issued on
exercise of
options
-
3,720,244
-
8,500,000
2,778,672
-
19,860,756
-
34,859,672
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
Start of year
Granted as
remuneration
during the year
Issued on
exercise of
options
-
2,565,147
-
4,500,000
2,778,672
-
-
9,843,819
-
-
-
-
-
-
-
-
-
658,372
-
4,000,000
-
-
-
4,658,372
Other
Changes
during the
year
-
-
-
-
-
-
7,000,000
-
Balance at
end of year9
-
3,720,244
-
8,500,000
2,778,672
-
26,860,756
-
-
7,000,000
41,859,672
Other
Changes
during the
year
-
496,72511
-
-
-
-
19,860,756
20,357,481
Balance at
end of year
-
3,720,244
-
8,500,000
2,778,672
-
19,860,756
34,859,672
9 Balance at resignation date of 27 June 2017, for those directors (Mr Reichl) who retired during the year.
10 Mr Morzaria is a director and chief executive of Cadence Minerals Plc (previously named Rare Earth Minerals plc). One 24 November
2016, Cadence Minerals Plc acquired a further 5,000,000 CDIs as part of a CDI placement to raise $2,600,000. On 17 October 2016, Cadence
Minerals Plc exercised 2,000,000 listed options at 20 cents.
11 During the year, 496,725 CDI’s at $0.06 per share were issued to Mr.Reeves related party in lieu of payment of outstanding 2015
Director & consultancy fees amounting to $30,000 approved by Shareholders at the General Meeting held on 31 July 2015.
12 Mr Morzaria is a director and chief executive of Cadence Minerals Plc. As at the date of Mr Morzaria becoming a director of the
Company, Cadence Minerals Plc had 10,334,830 CDIs. On 18 March 2016, Cadence Minerals Plc c acquired a further 9,525,926 CDIs as part
of a CDI placement.
17
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Performance Shares granted to Key Management Personnel
The number of performance shares held in the Company during the 2017 and 2016 reporting period held by each of the Key
Management Personnel of the Group;
30 June 2017
Grant Details
Exercised
Lapsed
Grant Date
No.
Value
No.
Value
No.
Value Balance at End of Year
$
$
$
Group KMP
David Reeves
24 Nov 2016
542,651
289,932
Keith Coughlan
-
-
-
Pavel Reichl
24 Nov 2016
793,906
424,175
Kiran Morzaria
-
-
-
1,336,557
714,106
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No.
Value
$
-
-
-
-
542,651
289,932
-
-
793,906
424,174
-
-
- 1,336,557
714,106
30 June 2016
Grant Details
Exercised
Lapsed
Grant Date
No.
Value
No.
Value
No.
Value Balance at End of Year
$
$
$
Group KMP
David Reeves
20 Feb 2014
542,651
Keith Coughlan
-
-
Pavel Reichl
20 Feb 2014
793,906
Kiran Morzaria
-
-
1,336,557
No.
Value
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(542,651)
-
(793,906)
-
(1,336,557)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Description of Performance Shares
The terms of the B Class Performance Shares are as follows:
The 5,000,000 B Class Performance Shares will convert in accordance with the below:
(i)
(ii)
(iii)
1,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the
Company’s Mineral Resource at Cinovec South and Cinovec Main being entered in the State Balance. The B Class
Performance Shares shall convert into the number of Shares and equivalent number of CDIs equal to 1,000,000
multiplied by 0.5 and divided by the greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of
CDIs (expressed as a decimal of $1.00) as calculated over the 5 ASX trading days prior to the date the Mineral
Resource is entered. (Explanatory Note: Under Czech law a mineral resource must be registered and henceforth
treated as a resource by the Czech Government before mining licenses can be granted. A mineral resource has to be
calculated according to the Czech regulations, and defended in front of a committee of state certified experts);
1,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the issuance
of the preliminary mining licenses relating to the Cinovec Project. The B Class Performance Shares shall convert into
the number of Shares and equivalent number of CDIs equal to 1,000,000 multiplied by 0.5 and divided by the
greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of CDIs (expressed as a decimal of $1.00)
as calculated over the 5 ASX trading days prior to the date the final preliminary mining license is issued; and
3,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the
completing of a definitive feasibility study (DFS). For clarity, the DFS must be: (i) of a standard suitable to be
submitted to a financial institution as the basis for lending of funds for the development and operation of mining
activities contemplated in the study; (ii) capable of supporting a decision to mine on the Permits; and (iii) completed
to an accuracy of +/- 15% with respect to operating and capital costs and display a pre-tax net present value of not
less than US$250,000,000. The B Class Performance Shares shall convert into the number of Shares and equivalent
number of CDIs equal to 3,000,000 multiplied by 0.5 and divided by the greater of: (A) $0.50 per CDI; and (B) the
volume weighted average price of CDIs (expressed as a decimal of $1.00) as calculated over the 5 ASX trading days
prior to date of receipt of the completed DFS,
(together the Milestones and each a Milestone). For the avoidance of doubt, the number of Shares and equivalent
number of CDIs which will be issued on conversion of the B Class Performance Shares will not exceed a ratio of 1 for
1.
(iv)
If the Milestone is not achieved or the Change of Control Event does not occur by the required date, then each B
Class Performance Share held by a Holder will be automatically redeemed by the Company for the sum of
$0.000001 within 10 ASX trading days of non-satisfaction of the Milestone.
Loans to Key Management Personnel
There were no loans to Key Management Personnel during the financial year.
Other transactions with Key Management Personnel
Purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. The Group
acquired the following services from entities that are controlled by members of the Group’s KMP:
Some Directors or former Directors of the Group hold or have held positions in other companies, where it is considered
they control or significantly influence the financial or operating policies of those entities. During the year, the following
entities provided corporate services and rental to the Group. Transactions between related parties are on normal
commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.
Entity
Nature of transactions
-
Wilgus Investments Pty
Ltd
Reimbursement
Rental
Key
Management
Personnel
David Reeves
David Reeves
Total Transactions
2016
2017
$
$
5,615
-
Payable Balance
2016
$
-
2017
$
-
32,300
31,000
-
-
19
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
There were no other transactions with Key Management Personnel during the financial year.
DIRECTORS’ REPORT
End of Remuneration Report
Signed in accordance with a resolution of the Board of Directors.
Keith Coughlan
MANAGING DIRECTOR
Dated at 29 September 2017
20
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Note
30 June 2017
30 June 2016
Revenue – interest income
Other income
Professional fees
Audit fees
Directors’ fees
Share based payments
Employees’ benefits
Travel and accommodation
Office and rent expense
Insurance expense
Impairment expense
Share registry expense
Depreciation expense
Other expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income
6
16
$
12,622
174,305
$
12,647
140,236
(237,065)
(405,248)
(31,266)
(62,645)
(29,911)
(49,355)
(3,077,218)
(557,246)
(300,914)
(219,100)
(99,464)
(58,738)
(14,923)
(55)
(27,717)
(59,005)
(11,372)
(56)
(115,611)
(325,307)
(242)
(942)
(334,658)
(59,261)
(4,145,872)
(1,591,637)
3
-
-
(4,145,872)
(1,591,637)
Items that may be reclassified subsequently to profit or loss – exchange
differences on translating foreign operations
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive loss for the year
238,343
238,343
(37,900)
(37,900)
(3,907,529)
(1,629,537)
Net Loss attributable to:
members of the parent entity
Total Comprehensive loss attributable to:
members of the parent entity
(4,145,872)
(1,591,637)
(4,145,872)
(1,591,637)
(3,907,529)
(1,629,537)
(3,907,529)
(1,629,537)
Basic and diluted loss per CDI (cents)
7
(3.28)
(1.78)
The above statement should be read in conjunction with the accompanying notes.
22
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation expenditure
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2017
$
2016
$
8
9
10
11
12
13
14
15
446,112
3,134,661
236,103
37,605
94,591
79,915
719,820
3,309,167
349,024
-
9,752,757
4,940,613
5,679
2,599
10,107,460
4,943,212
10,827,280
8,252,379
332,250
332,250
293,890
293,890
332,250
293,890
10,495,030
7,958,489
15,587,656
11,674,141
3,413,445
644,547
(8,506,071)
(4,360,199)
10,495,030
7,958,489
The above statement should be read in conjunction with the accompanying notes.
23
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2017
Issued Capital
Share Based
Payment Reserve
Foreign Currency
Translation
Reserve
Accumulated
Losses
$
$
$
$
Total
$
Balance at 1 July 2015
6,788,183
97,560
125,201
(2,866,122)
4,144,822
Loss attributable to members of the
Company
Other comprehensive loss
Total comprehensive loss for the year
-
-
-
Transactions with owners, recognised
directly in equity
CDIs issued during the year, net of costs
4,855,958
-
-
-
-
Options lapsed
Equity based payments
Balance at 30 June 2016
-
30,000
11,674,141
(97,560)
557,246
557,246
-
(1,591,637)
(1,591,637)
(37,900)
-
(37,900)
(37,900)
(1,591,637)
(1,629,537)
-
-
-
-
4,855,958
97,560
-
-
587,246
87,301
(4,360,199)
7,958,489
Balance at 1 July 2016
11,674,141
557,246
87,301
(4,360,199)
7,958,489
Loss attributable to members of the
Company
Other comprehensive loss
(4,145,872)
(4,145,872)
238,343
238,343
Total comprehensive loss for the year
-
-
238,343
(4,145,872)
(3,907,529)
Transactions with owners, recognised
directly in equity
CDIs issued during the year, net of costs
3,913,515
(546,663)
-
-
3,366,852
Options lapsed
Equity based payments
Balance at 30 June 2017
3,077,218
-
3,077,219
15,587,656
3,087,801
325,644
(8,506,071)
10,495,030
The above statement should be read in conjunction with the accompanying notes.
24
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Interest paid
UK listing cost
R&D Rebate
30 June 2017
30 June 2016
Note
$
$
(1,085,804)
(1,072,664)
12,622
-
-
-
12,647
(23)
(242,392)
128,024
Net cash (used in) operating activities
17
(1,073,182)
(1,174,408)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation expenditure
(4,641,232)
(1,507,146)
Payments for property, plant and equipment
Net cash (used in)/ from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of CDIs
Capital raising costs paid
Net cash from financing activities
(352,361)
(4,993,593)
(1,507,146)
3,530,000
5,004,382
(163,150)
(77,375)
3,366,850
4,927,007
Net increase/(decrease) in cash and cash equivalents
(2,699,925)
2,245,453
Cash and cash equivalents at the beginning of the financial year
Change in foreign currency held
Cash and cash equivalents at the end of financial year
3,134,661
889,208
11,376
-
446,112
3,134,661
The above statement should be read in conjunction with the accompanying notes.
25
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of preparation
These consolidated financial statements and notes represent those of European Metals Holdings Limited (“the
Company”) and Controlled Entities (the “Consolidated Group” or “Group”). The separate financial statements of the
parent entity, European Metals Holdings Limited, have not been presented within this financial report as is permitted by
Corporations Act 2001.
The financial statements are general purpose financial statements, which have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Boards (AASB) and the Corporations Act 2001. The Group is a for-profit entity for
financial reporting purposes under Australian Accounting Standards.
The accounting policies detailed below have been adopted in the preparation of the financial report. Except for cash
flow information, the financial statements have been prepared on an accrual basis and are based on historical cost,
modified, where applicable, by the measurement at fair values of selected non-current assets, financial assets and
financial liabilities.
The Group is a listed public company, incorporated in the British Virgin Islands and registered in Australia.
(i)
Accounting policies
The Group has consistently applied the following accounting policies to all periods presented in the financial
statements. The Group has considered the implications of new and amended Accounting Standards applicable for
annual reporting periods beginning after 1 January 2017 but determined that their application to the financial
statements is either not relevant or not material.
(ii)
Statement of Compliance
The financial report was authorised for issue on 29 September 2017.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in the financial
statements containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial
Reporting Standards as issued by the IASB.
(iii)
Going Concern
The directors have prepared the financial statements on going concern basis, which contemplates continuity of normal
business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of business.
At 30 June 2017, the consolidated entity comprising the Company and its subsidiaries has incurred a loss for the year
amounting to $4,145,872. The Consolidated entity has a net working capital of $387,570, current liabilities of $332,250
and cash and cash equivalents of $446,112.
The directors consider these funds, combined with additional funds from any capital raising to be sufficient for planned
expenditure on the mineral project for the ensuing 12 months as well as for corporate and administrative overhead costs.
The directors also believe that they have the capacity to raise additional capital should that become necessary. For these
reasons, the directors believe the going concern basis of preparation is appropriate.
(iv)
Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying values
of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the period in
which the estimate is revised if it affects only that period or in the period of the revision and future periods if the revision
affects both current and future periods.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted.
26
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(iv) Critical accounting estimates and judgements (continued)
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the
related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, which could impact the cost of mining, future legal changes (including changes to environmental restoration
obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which this determination is made.
Recognition of deferred tax assets
Deferred tax assets relating to temporary differences and unused tax losses have not been recognised as the Directors
are of the opinion that it is not probable that future taxable profit will be available against which the benefits of the
deferred tax assets can be utilised.
(b)
Income Tax
Current income tax expense charged to the 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
year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss
when the tax relates to items that are credited or charged directly to equity.
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.
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 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.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can
be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax
assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities
relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable
entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
27
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)
Impairment of assets
At the end of each reporting period the Group assesses whether there is an indication that an asset may be impaired. If
any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of
the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its
value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be
close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at revalued amount in which case the impairment loss is
treated as a revaluation decrease.
An assessment is also made at each reporting period as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the
carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in
which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted
in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its
remaining useful life.
(d) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities in the Statement of Financial Position.
(e) Revenue
Interest
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.
(f) Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these circumstances the GST 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.
28
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g)
Trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for
settlement within 30 days. Impairment of trade receivables is continually reviewed and those that are considered to
be uncollectible are written off by reducing the carrying amount directly. An allowance account is used when there is
objective evidence that the Group will not be able to collect all amounts due according to the original contractual
terms. Factors considered by the Group in making this determination include known significant financial difficulties of
the debtor, review of financial information and significant delinquency in making contractual payments to the Group.
The impairment allowance is set equal to the difference between the carrying amount of the receivable and the
present value of estimated future cash flows, discounted at the original effective interest rate. Where receivables are
short-term discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the profit and loss within other expenses. When a trade
receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it
is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited
against other expenses in the profit and loss.
(h)
Finance Income and Finance Costs
Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend
income, gains on the disposal of available-for-sale financial assets, changes in the fair value of financial assets at fair
value through profit or loss, and gains on hedging instruments that are recognised in profit or loss. Interest income is
recognised as it accrues in profit or loss, using the effective interest method.
(i) Government Grants
An unconditional government grant is recognised in profit or loss as other income when the grant becomes
receivable. Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income
on a systematic basis in the same period in which the expenses are recognised.
Research and development tax incentives are recognised in the statement of profit or loss when received or when the
amount to be received can be reliably estimated.
(j)
Employee Benefits
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the
Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably.
Other long-term employee benefits
Provision is made for the liability due to employee benefits arising from services rendered by employees to the
reporting date. Employee benefits expected to be settled within one year together with benefits arising out of wages
and salaries, sick leave and annual leave which will be settled after one year, have been measured at their nominal
amount. Other employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits.
Contributions made to defined employee superannuation funds are charged as expenses when incurred.
29
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Exploration and Evaluation Assets
Exploration and evaluation costs, including costs of acquiring licenses, are capitalised as exploration and evaluation
assets on an area of interest basis. Costs of acquiring licences which are pending the approval of the relevant
regulatory authorities as at the date of reporting are capitalised as exploration and evaluation cost if in the opinion of
the Directors it is virtually certain the Group will be granted the licences.
Exploration and evaluation assets are only recognised if the rights of tenure to the area of interest are current and
either:
(a) The expenditures are expected to be recouped through successful development and exploitation of the
area of interest, or
(b) Activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment when:
(i) Sufficient data exists to determine technical feasibility and commercial viability, and
(ii) Facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see
impairment accounting policy in Note 1(c). For the purposes of impairment testing, exploration and
evaluation assets are allocated to cash-generating units to which exploration activity relates. The cash
generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified from intangible assets to mining property and development assets within property, plant and
equipment.
(l)
Financial Instruments
Initial recognition and measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the Group becomes
a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are
delivered within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified
as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit
or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out
below.
Financial assets at fair value through profit and loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the purpose of
short term profit taking, derivatives not held for hedging purposes, or when the are designated as such to avoid an
accounting mismatch or to enable performance evaluation where a Group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk management or investment
strategy. Such assets are subsequently measured at fair value with changes in carrying amount being included in
profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition loans and receivables are measured at amortised cost using the effective interest
method, less any impairment losses. Loans and receivables are included in current assets, except for those which are
not expected to mature within 12 months after the end of the reporting period. All other loans and receivables are
classified as non-current assets.
30
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
Financial Instruments (continued)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable
payments and it is the Group’s intention to hold these investments to maturity. Such assets are recognised initially
at fair value plus any directly attributable transaction costs. They are subsequently measured at amortised cost using
the effective interest rate method, less any impairment losses.
Held-to-maturity investments are included in non-current assets, except for those which are expected to mature
within 12 months after the end of the reporting period. All other investments are classified as current assets.
If during the period the Group sold or reclassified more than an insignificant amount of the held-to-maturity
investments before maturity, the entire held-to-maturity investments category would be tainted and reclassified as
available-for-sale.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into
other categories of financial assets due to their nature, or they are designated as such by management. They
comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable
payments.
Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses
and foreign exchange gains and losses on available-for-sale monetary items, are recognised as a separate component
of equity. When an investment is derecognised, the cumulative gain or loss in equity is transferred to profit and loss.
Available-for-sale financial assets are included in non-current assets, except for those which are expected to mature
within 12 months after the end of the reporting period. All other available-for-sale financial assets are classified as
current assets.
Financial liabilities
Non-derivative financial liabilities are recognised initially at fair value plus any directly attributable transaction costs.
Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest
rate method.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar
instruments and option pricing models.
Derecognition
Financial assets are derecognised where the contractual rights to cash flow expires or the asset is transferred to
another party whereby the entity no longer has any significant continuing involvement in the risks and benefits
associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged,
cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred
to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities
assumed, is recognised in profit or loss.
(m) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial period that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services. Trade and other payables
are presented as current liabilities unless payment is not due within 12 months.
31
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Earnings Per CDI
Basic earnings per CDI
Basic earnings per CDI is determined by dividing the profit or loss attributable to ordinary shareholders of the
Company, by the weighted average number of CDIs outstanding during the period, adjusted for bonus elements in
CDIs issued during the period.
Diluted earnings per CDI
Diluted earnings per CDI adjusts the figure used in the determination of basic earnings per CDI to take into account
the after income tax effect of interest and other financial costs associated with dilutive potential CDIs and the
weighted average number of CDIs assumed to have been issued for no consideration in relation to dilutive potential
CDIs, which comprise convertible notes and CDI options granted.
(o) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such
time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
(p) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, when appropriate, the risks specific to the liability.
(q) Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. Operating segments’ results are reviewed by the Group’s Managing Director to make decisions
about resources to be allocated to the segment and assess its performance, and for which discrete financial
information is available.
(r)
CDI based payments
The grant date fair value of CDI-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees unconditionally become entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related
service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an
expense is based on the number of awards that do not meet the related service and non-market performance
conditions at the vesting date. For CDI-based payment awards with non-vesting conditions, the grant date fair value
of the CDI-based payment is measured to reflect such conditions and there is no true-up for differences between
expected and actual outcomes.
32
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(s)
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars
which is the parent entity’s functional and presentation currency.
Transaction 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
determined.
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. Exchange differences arising on the translation
of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in
other comprehensive income; otherwise the exchange difference is recognised in Profit or Loss.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Group’s
presentation currency are translated as follows:
Assets and liabilities are translated at year end exchange rates prevailing at the end of the reporting period;
Income and expenses are translated at average exchange rates for the period; and
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations recognised in the other comprehensive income and
included in the foreign currency translation reserve in the Statement of Financial Position. These differences are
reclassified into Profit or Loss in the period in which the operation is disposed.
(t)
Issued capital
CDIs are classified as equity. Incremental costs directly attributable to the issue of new CDIs or options are shown in
equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new CDIs
or options for the acquisition of a new business are not included in the cost of acquisition as part of the purchase
consideration.
33
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(u)
Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent European Metals
Holdings Limited and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity
when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. A list of the subsidiaries is provided in Note 20.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the
date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between
Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and
adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests". The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary's net assets on liquidation at either fair value or at the non-
controlling interests' proportionate share of the subsidiary's net assets. Subsequent to initial recognition, non-
controlling interests are attributed their share of profit or loss and each component of other comprehensive income.
Non-controlling interests are shown separately within the equity section of the statement of financial position and
statement of comprehensive income.
NOTE 2: DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-
financial assets and liabilities. Fair values have been determined for measurement and / or disclosure purposes based on the
following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in
the notes specific to that asset or liability.
CDI-based payment transactions
The fair value of the employee CDI options and the share appreciation right is measured using the Black-Scholes formula.
Measurement inputs include CDI price on measurement date, exercise price of the instrument, expected volatility (based on
weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average
expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and
the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the
transactions are not taken into account in determining fair value.
34
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 3: INCOME TAX
(a) Income tax expense
Current tax
Deferred tax
Deferred income tax expense included in income tax expense comprises:
(Increase) in deferred tax assets
Increase in deferred tax liabilities
(b) Reconciliation of income tax expense to prima facie tax payable
Net loss before tax
Prima facie tax on operating loss at 27.5% (2016: 28.5%)
Add / (Less): Non-deductible items
-Impairments
-Legal fees
-Share-based payments
-Other
Current year tax loss not recognised
Income tax attributable to operating loss
The applicable weighted average effective tax rates are as follows:
Balance of franking account at year end
a.
Deferred tax assets
Tax losses
Accruals
Capital raising costs
Unrecognised deferred tax asset
Set-off deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Exploration expenditure
Set-off deferred tax assets
Net deferred tax liabilities
Tax losses
30 June 2017
30 June 2016
$
$
-
-
-
-
-
-
-
-
-
-
-
-
(4,145,872)
(1,591,637)
(1,140,115)
(453,617)
36,315
846,235
146,455
111,110
-
Nil%
Nil
-
160,692
158,815
90,351
43,759
-
Nil%
Nil
174,490
137,932
4,538
92,336
4,702
25,884
271,364
168,518
-
-
271,364
168,518
-
-
-
-
-
-
-
-
Unused tax losses for which no deferred tax asset has been recognised
634,510
483,972
35
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 3: INCOME TAX (CONTINUED)
The Company is registered in the British Virgin Islands (BVI) and the Company is a tax resident of Australia. The unused tax losses
are representative of losses incurred in Australia.
There are currently no withholding taxes or exchange control regulations in the BVI applicable to the Company. The Company is
subject to the taxation regulations of the Czech Republic where it currently holds mining license via Geomet S.R.O, and also to UK
taxation regulations in respect of European Metals (UK) Limited.
NOTE 4: RELATED PARTY TRANSCTIONS
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
Other than transactions with Key Management Personnel and their related entities (refer Note 5), there were no other related
party transactions during the year.
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each
member of the Group’s key management personnel (KMP) for the year ended 30 June 2017 and 30 June 2016.
The totals of remuneration paid to KMP during the year are as follows:
Short-term benefits
Post-employment benefits
Equity settled
Other payments
Loans to Key Management Personnel
There were no loans to Key Management Personnel during the financial year.
2017
$
2016
$
387,675
21,850
29,559
180,251
619,335
292,863
19,000
386,798
110,157
808,818
36
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION (continued)
Other transactions with Key Management Personnel
Purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. The Group
acquired the following services from entities that are controlled by members of the Group’s KMP:
Some Directors or former Directors of the Group hold or have held positions in other companies, where it is considered they
control or significantly influence the financial or operating policies of those entities. During the year, the following entities
provided corporate services and rental to the Group. Transactions between related parties are on normal commercial terms and
conditions no more favourable than those available to other parties unless otherwise stated.
Entity
Nature of transactions
Investments Pty
Reimbursement
Rental
-
Wilgus
Ltd
Key
Management
Personnel
David Reeves
David Reeves
Total Transactions
2016
2017
$
$
5,615
-
Payable Balance
2016
2017
$
$
-
-
32,300
31,000
-
-
There were no other transactions with Key Management Personnel during the financial year.
NOTE 6: AUDITOR’S REMUNERATION
2017
$
2016
$
Details of the amounts paid to the auditor of the Group, Stantons International Audit and Consulting Pty Ltd for audit and non-
audit services provided during the year are set out below:
Auditor’s services
Audit and review of financial report
NOTE 7: BASIC AND DILUTED LOSS PER CDI
Basic and diluted loss per CDI (cents)
Loss attributable to members of European Metals Holdings Limited
Weighted average number of CDI outstanding during the year
31,266
29,911
2017
2016
(3.28)
(1.78)
(4,145,872)
(1,591,637)
126,508,202
89,471,195
The Group is in a loss making position and it is unlikely that the conversion to, calling of, or subscription for, CDI capital in respect
of potential CDIs would lead to diluted earnings per CDI that shows an inferior view of the earnings per CDI. For this reason, the
diluted losses per CDI for the year ended 30 June 2017 are the same as basic loss per CDI.
NOTE 8: CASH AND CASH EQUIVALENTS
Cash at bank
Total cash and cash equivalents in the Statement of Cash Flows
2017
$
2016
$
446,112
3,134,661
446,112
3,134,661
37
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 9: OTHER RECEIVABLES
CURRENT
GST and VAT Receivable
Other receivables
NOTE 10: OTHER ASSETS
Current
Prepayments
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Non-current:
Land at cost
Buildings at cost
Less accumulated depreciation
Plant and equipment at cost
Less accumulated depreciation
Total Property, Plant and Equipment
NOTE 12: EXPLORATION AND EVALUATION EXPENDITURE
Exploration at cost
Balance at the beginning of the year
Acquisition of tenements
Exploration of tenements
Foreign exchange movement
2017
$
2016
$
58,932
177,171
236,103
40,107
54,484
94,591
2017
$
2016
$
37,605
37,605
79,915
79,915
2017
$
2016
$
330,554
5,481
(118)
5,363
17,812
(4,705)
13,107
349,024
-
-
-
-
-
-
-
-
2017
$
2016
$
4,940,613
3,414,934
-
-
4,688,558
1,502,819
123,586
22,860
9,752,757
4,940,613
38
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 13: TRADE AND OTHER PAYABLES
CURRENT
Trade payables
Accrued expenses
Payables are normally due for payment within 30 days.
NOTE 14: ISSUED CAPITAL
(a) Issued and paid up capital
130,333,909 (30 June 2016: 121,417,126 CDIs)
Total issued capital
(b) Movements in CDIs
Balance at the beginning of the year
CDI capital raising
Issued in lieu of director fees
CDI capital raising
CDI capital raising
CDI – exercise of options
CDI – exercise of options
CDI – exercise of options
CDI – exercise of options
CDI – exercise of options
CDI – exercise of options
CDI – exercise of options
Capital raising cost
2017
$
2016
$
295,619
36,631
332,250
225,842
68,048
293,890
Number
$
130,333,909
15,587,656
15,587,656
Date
Number
$
1 July 2015
75,144,459
6,788,183
13 August 2015
17 August 2015
19 October 2015
9,410,578
496,725
2,000,000
752,846
30,000
360,000
18 March 2016
13,000,000
1,755,000
20 April 2016
3,525
353
9 May 2016
300,000
30,000
19 May 2016
688,514
68,851
1 June 2016
1,279,372
127,937
8 June 2016
1,223,446
122,345
16 June 2016
6,045,366
604,537
30 June 2016
11,825,141
1,182,514
-
(148,425)
Balance at the end of the year
30 June 2016
121,417,126
11,674,141
39
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 14: ISSUED CAPITAL (continued)
Balance at the beginning of the year
CDI – exercise of warrants
CDI – exercise of options
CDI – exercise of warrants
CDI capital raising
CDI – exercise of options
CDI – exercise of options
CDI capital raising
Capital raising cost
Date
Number
$
1 July 2016
121,417,126
11,674,141
7 October 2016
17 October 2016
22 November 2016
500,000
2,000,000
500,000
155,225
400,000
155,225
24 November 2016
5,000,000
2,600,000
1 June 2017
6 June 2017
30 June 2017
250,000
250,000
258,108
258,107
416,783
297,500
-
(210,650)
Balance at the end of the year
30 June 2017
130,333,909
15,587,656
CDIs entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number
of shares held. On a show of hands every holder of a CDI present at a meeting in person or by proxy, is entitled to one vote, and
in a poll each share is entitled to one vote.
European Metals Holdings limited is a company limited by shares incorporated in the British Virgin Islands with an authorised
share capital of 200,000,000 no par value shares of a single class. Pursuant to the prospectus dated 26 April 2012, the company
issued CDIs in July 2012. The holder of the CDIs has beneficial ownership in the underlying shares instead of legal title. Legal title
and the underlying shares is held by Chess Depository Nominees Pty Ltd.
Holders of CDIs have the same entitlement benefits of holding the underlying shares. Each Share in the Company confers upon
the Shareholder:
1.
2.
3.
the right to one vote at a meeting of the Shareholders of the Company or on any Resolution of Shareholders;
the right to an equal share in any dividend paid by the Company; and
the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
(c) Movements B Class Performance Shares
Balance at the beginning of the year
Performance Shares lapsed
Balance at the end of the year
Balance at the beginning of the year
Performance Shares issued
Balance at the end of the year
Date
Number
$
1 July 2015
5,000,000
20 February 2016
(5,000,000)
30 June 2016
1 July 2016
-
-
-
-
-
-
24 November 2016
5,000,000
2,671,444
30 June 2017
5,000,000
2,671,444
40
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 14: ISSUED CAPITAL (continued)
The terms of the B Class Performance Shares are as follows:
The 5,000,000 B Class Performance Shares will convert in accordance with the below:
(i)
(ii)
(iii)
1,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the Company’s
Mineral Resource at Cinovec South and Cinovec Main being entered in the State Balance. The B Class Performance Shares
shall convert into the number of Shares and equivalent number of CDIs equal to 1,000,000 multiplied by 0.5 and divided
by the greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of CDIs (expressed as a decimal of $1.00)
as calculated over the 5 ASX trading days prior to the date the Mineral Resource is entered. (Explanatory Note: Under
Czech law a mineral resource must be registered and henceforth treated as a resource by the Czech Government before
mining licenses can be granted. A mineral resource has to be calculated according to the Czech regulations, and defended
in front of a committee of state certified experts);
1,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the issuance of the
preliminary mining licenses relating to the Cinovec Project. The B Class Performance Shares shall convert into the number
of Shares and equivalent number of CDIs equal to 1,000,000 multiplied by 0.5 and divided by the greater of: (A) $0.50 per
CDI; and (B) the volume weighted average price of CDIs (expressed as a decimal of $1.00) as calculated over the 5 ASX
trading days prior to the date the final preliminary mining license is issued; and
3,000,000 B Class Performance Shares will convert into Shares and an equivalent number of CDIs upon the completing of
a definitive feasibility study (DFS). For clarity, the DFS must be: (i) of a standard suitable to be submitted to a financial
institution as the basis for lending of funds for the development and operation of mining activities contemplated in the
study; (ii) capable of supporting a decision to mine on the Permits; and (iii) completed to an accuracy of +/- 15% with
respect to operating and capital costs and display a pre-tax net present value of not less than US$250,000,000. The B
Class Performance Shares shall convert into the number of Shares and equivalent number of CDIs equal to 3,000,000
multiplied by 0.5 and divided by the greater of: (A) $0.50 per CDI; and (B) the volume weighted average price of CDIs
(expressed as a decimal of $1.00) as calculated over the 5 ASX trading days prior to date of receipt of the completed DFS,
(together the Milestones and each a Milestone). For the avoidance of doubt, the number of Shares and equivalent
number of CDIs which will be issued on conversion of the B Class Performance Shares will not exceed a ratio of 1 for 1.
(iv)
If the Milestone is not achieved or the Change of Control Event does not occur by the required date, then each B Class
Performance Share held by a Holder will be automatically redeemed by the Company for the sum of $0.000001 within 10
ASX trading days of non-satisfaction of the Milestone.
$2,671,444 has been attributed to the Performance Shares.
41
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 14: ISSUED CAPITAL (continued)
(e) Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it may continue
to provide returns for shareholders and benefits for other stakeholders.
The capital structure of the Group consists of equity comprising issued capital, reserves and accumulated losses.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities,
with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is to
maintain sufficient current working capital position to meet the requirements of the Group to meet exploration programs and
corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating
requirements, with a view to initiating appropriate capital raisings as required.
The working capital position of the Group at 30 June is as follows:
Cash and cash equivalents
Other receivables
Trade and other payables
The Group is not subject to any externally imposed capital requirements.
NOTE 15: RESERVES
Option Reserve
Performance Shares Reserve
Foreign Currency Translation Reserve
Total Reserves
Option Reserve
Balance at the beginning of the financial year
Options lapsed
Reverse of exercised Options transferred to issued capital
Equity based payments
Balance at the end of the financial year
2017
$
2016
$
446,112
3,134,661
236,103
94,591
(332,250)
(293,890)
349,965
2,935,362
2017
$
2016
$
416,357
557,246
2,671,444
-
325,644
87,301
3,413,445
644,547
2017
$
557,246
(546,663)
405,774
416,357
2016
$
97,560
(97,560)
-
557,246
557,246
The options reserve is used to recognise the fair value of all options and warrants on issue but not yet exercised.
At 30 June 2017 the following options and warrants are outstanding:
3,750,000 unlisted options exercisable at 16.6 cents on or before 17 August 2020 were issued to key management
personnel.
400,000 unlisted options were issued on 3 January 2017 to Richard Ravlik a director of the Company with an exercise
price of 58 cents and expiry date of 3 January 2020. 250,000 of these options will vest at the completion of the Definitive
Feasibility Study and the balance will vest 12 months thereafter.
42
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 15: RESERVES (continued)
On 7 October 2016, 500,000 warrants with an exercise price of 14 cents were exercised. The balance in the option reserve relating
to the options of $85,225 has been transferred to issued capital.
On 22 November 2016, 500,000 warrants with an exercise price of 14 cents were exercised. The balance in the option reserve
relating to the options of $85,225 has been transferred to issued capital.
On 1 June 2017, 250,000 options with an exercise price of 28 cents were exercised. The balance in the option reserve relating to
the options of $188,108 has been transferred to issued capital.
On 6 June 2017, 250,000 options with an exercise price of 28 cents were exercised. The balance in the option reserve relating to
the options of $188,108 has been transferred to issued capital
Performance Share Reserve
The Performance Share reserve records the fair value of the Performance Shares issued.
Balance at the beginning of the financial year
Equity based payment
Balance at the end of the financial year
2017
$
-
2,671,444
2,671,444
2016
$
-
-
-
On 24 November 2016, 5,000,000 B Class Performance Shares were issued to the original vendors of the Cinovec Project in
replacement of the Class B Performance shares issued in 2014.
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries.
Balance at the beginning of the financial year
Movement during the year
Balance at the end of the financial year
2017
$
87,301
238,343
325,644
2016
$
125,201
(37,900)
87,301
43
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 16: SHARE BASED PAYMENTS
The following option share-based payment arrangements existed at 30 June 2017:
On 2 May 2016, 500,000 options with an exercise price of 28 cents and exercisable on or before the 30 April 2018 were granted to
the consultants of the Company as consideration for the preparation of preliminary feasibility study. The options were valued
under Black and Scholes and a fair value adjustment of $376,215 were recognised as a share based payment in the profit and loss.
On 3 January 2017, 400,000 options with an exercise price of 58 cents and exercisable on or before the 3 January 2020 were
granted to a Director of the Company. 250,000 of these options will vest at the completion of the Definitive Feasibility Study and
the balance will vest 12 months thereafter. The options were valued under the Black and Scholes at $177,352. The value of the
options has been pro-rated over the vesting period. Therefore, a fair value adjustment of $29,559 was recognised as a share based
payment in the profit and loss.
On 1 June 2017, 250,000 options were exercised for 28 cents. On 6 June 2017, 250,000 options were exercised for 28 cents.
Options granted to are as follows:
Grant Date
2 May 2016
3 January 20171
Total
Number
$
500,000
400,000
900,000
376,215
29,559
407,774
The following option share-based payment arrangements existed at 30 June 2016:
On 31 July 2015, 3,750,000 options with an exercise price 16.6 cents on or before the 17 August 2020 were granted to Directors.
The issue was approved by shareholders at a General Meeting held on the 31 July 2015. The options were valued under Black and
Scholes and a fair value adjustment of $386,798 and were recognised as a share based payment in the profit and loss.
Further details of these options are provided in the directors’ report. The options hold no voting or dividend right and are unlisted.
A summary of the movements of all company options issued is as follows:
Options granted to are as follows:
Grant Date
31 July 2015
Options outstanding as at 1 July 2015
Granted
Expired
Options outstanding as at 30 June 2016
Number
$
3,750,000
386,798
Number
Weighted
Average
Exercise Price
1,200,000
3,750,000
(1,200,000)
3,750,000
$0.300
$0.166
$0.300
$0.166
44
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NNOTE 16: SHARE BASED PAYMENTS (continued)
Options outstanding as at 1 July 2016
Granted
Exercised
Options outstanding as at 30 June 2017
Options exercisable as at 30 June 2016
Options exercisable as at 30 June 2017
Number
Weighted
Average
Exercise Price
3,750,000
900,000
(500,000)
4,150,000
3,750,000
4,150,000
$0.166
$0.413
$0.280
$0.206
$0.166
$0.206
The following warrant share-based payments existed at 30 June 2017:
The Company made no warrant share-based payment in the financial year ended 30 June 2017.
On 7 October 2016, 500,000 warrants were exercised for 14 cents each. On 22 November 2016, 500,000 warrants were exercised
for 14 cents each.
The following warrant share-based payments existed as at 30 June 2016:
On 10 December 2015, 1,000,000 warrants with an exercise price of 14 cents on or before the 11 November 2018 were granted to
the Company’s Nominated Advisor. The warrants were valued under Black and Scholes and a fair value adjustment of $170,448
was recognised as a share based payment in the profit and loss.
Further details of these warrants are provided in the directors’ report. The warrants hold no voting or dividend rights and are
unlisted.
A summary of the movements of all company warrants issued is as follows:
Warrants outstanding as at 1 July 2015
Granted
Warrants outstanding as at 30 June 2016
Warrants outstanding as at 1 July 2016
Exercised
Warrants outstanding as at 30 June 2017
Number
-
1,000,000
1,000,000
1,000,000
(1,000,000)
-
Weighted
Average Exercise
Price
-
$0.14
$0.14
$0.14
($0.14)
-
These instruments vest immediately except for the 400,000 Options issued to Richard Pavlik. The instruments hold no voting or
dividend rights. The options and warrants are unlisted. All options and warrants were issued. The 400,000 options issued to Richard
Pavlik during the year have vesting conditions attached which have not been met during the current year. All other options have
vested. In respect of the above warrants and options issued for services provided it was determined that no fair value of the
services was able to be determined, as such the fair value of the instruments was used as the fair value recorded.
45
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 16: SHARE BASED PAYMENTS (continued)
A summary of the inputs used in the valuation of the options and warrants is as follows:
Descriptions
Exercise price
Share price at date of issue
Grant date
Expected volatility (i)
Expiry date
Expected dividends
Risk free interest rate
Value per option/warrant
Number of options/warrants
Total value of options
Options
Options
Options
Warrants
$0.166
$0.12
$0.98
$0.28
$0.58
$0.60
$0.14
$0.20
31 July 2015
19 April 2017
3 January
2017
10 December
2015
136.83%
126.44%
126.44%
153.46%
31 July 2020
30 April 2018
3 January
2020
10 December
2018
-
-
-
-
2.12%
1.62%
1.97%
2.16%
$0.10315
$0.75243
$0.44338
$0.17045
3,750,000
500,000
400,000
1,000,000
$386,798
$376,215
$177,352
$170,448
The following performance share-based payment arrangements existed at 30 June 2017:
Instruments granted are as follows:
B Class Performance Shares granted are as follow:
Grant Date
18 November 2016 (related parties)
18 November 2016 (non-related parties)
Total
$2,671,444 has been attributed to the Performance Shares.
Number
$
1,336,557
714,107
3,663,443
1,957,337
5,000,000
2,671,444
46
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 17: CASH FLOW INFORMATION
(a) Reconciliation of cash flow from operating activities with the loss after tax
Loss after income tax
Adjustments for:
Impairment of receivable
Share based payments
Unrealised foreign exchange loss/ (gain)
Depreciation expense
Changes in assets and liabilities
Decrease/ (Increase) in other receivables
(Increase)/ Decrease in other assets
(Decrease)/ Increase in trade and other payables
Cash flow (used in)/from operating activities
(b) Credit standby facilities
The Company had no credit standby facilities as at 30 June 2017 and 2016.
(c) Investing and Financing Activities – Non-Cash
There were no non-cash movements during the year.
2017
$
2016
$
(4,145,872)
(1,591,637)
-
3,077,218
103,397
242
(134,580)
(1,856)
28,269
56
557,246
(37,556)
942
(65,887)
(46,997)
9,425
(1,073,182)
(1,174,408)
47
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 18: OPERATING SEGMENTS
The accounting policies used by the Group in reporting segments are in accordance with the measurement principles of
Australian Accounting Standards.
The Group has identified its operating segments based on the internal reports that are provided to the Board of Directors.
According to AASB 8 Operating Segments, two or more operating segments may be aggregated into a single operating segment if
the segments have similar economic characteristics, and the segments are similar in each of the following respects:
•
•
•
•
•
The nature of the products and services;
The nature of the production processes;
The type or class of customer for their products and services;
The methods used to distribute their products or provide their services; and
If applicable, the nature of the regulatory environment, for example; banking, insurance and public utilities.
The Group currently has one project which takes into account each of the above mentioned aspects. The principal activity for the
project is exploration of Lithium. This is expected to be the same for future projects. Accordingly, management has identified one
operating segment based on the location of the project, that being the Czech Republic and two geographical segments.
Australia
$
Congo
$
Czech
$
Total
$
30 June 2017
REVENUE
Interest revenue
Other Revenue
Total segment revenue
Net expenditure
Loss before income tax
Segment assets
Segment liabilities
30 June 2016
REVENUE
Interest revenue
Total segment revenue
Net expenditure
Loss before income tax
Segment assets
Segment liabilities
12,622
174,305
186,927
(4,200,411)
(4,013,484)
652,866
119,140
12,624
12,624
(1,554,911)
2,835,802
254,630
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(132,388)
(132,388)
12,622
174,305
186,927
(4,332,799)
(4,145,872)
10,174,414
10,827,280
213,110
332,250
-
-
(49,350)
12,624
12,624
(1,604,261)
(1,591,637)
5,416,577
8,252,379
39,260
293,890
48
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 19: FINANCIAL RISK MANAGEMENT
The Group’s financial instruments consist mainly of deposits with banks, equity instruments and accounts receivable and payable.
The main purpose of non-derivative financial instruments is to raise finance for Group’s operations. The Group does not
speculate in the trading of derivative instruments.
The Group holds the following financial instruments:
Financial assets
Cash and cash equivalents
Other receivables
Total financial assets
Trade and other payables
Total financial liabilities
2017
$
2016
$
446,112
3,134,661
236,103
94,591
682,215
3,229,252
332,250
293,890
332,250
293,890
The fair value of the Group’s financial assets and liabilities approximate their carrying value.
Specific Financial Risk Exposures and Management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk)
credit risk and liquidity risk.
(i)
Market risk
The Board meets on a regular basis to analyse currency and interest rate exposure and to evaluate treasury management
strategies in the context of the most recent economic conditions and forecasts.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. The
Group is also exposed to earnings volatility on floating rate instruments.
Interest rate risk is not material to the Group as no interest bearing debt arrangements have been entered into.
Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. The Group is not exposed to securities price risk as it does not hold any investments.
Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to
movement in foreign exchange rates of currencies in which the Group holds financial instruments which are other than the AUD
functional currency of the Group.
With instruments being held by overseas operations, fluctuations in foreign currencies may impact on the Group’s financial
results. The Group’s exposure to foreign exchange risk is monitored by the Board. The majority of the Group’s funds are held in
Australian dollars, British Stirling and Czech Koruna..
49
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 19: FINANCIAL RISK MANAGEMENT (continued)
At 30 June 2017, the group has financial assets and liabilities denominated in the foreign currencies detailed below:
Geomet S.R.O
2017
Amount
in CZK
Amount
in GBP
Amount in AUD
Amount in
CZK
Cash and cash equivalents
Intercompany payables
5% effect in foreign
exchange rates
-
-
-
-
31,000
31,000
-
3,567,245
3,567,245
1,550
178,362
-
-
-
-
2016
Amount
in GBP
-
31,000
31,000
Amount in AUD
-
1,112,243
1,112,243
1,550
55,612
There were no financial assets and liabilities denominated in foreign currencies for EMH UK and the Company.
(ii)
Credit risk
Credit exposure represents the extent of credit related losses that the Group may be subject to on amounts to be received from
financial assets. Credit risk arises principally from trade and other receivables. The objective of the Group is to minimise the risk
of loss from credit risk. Although revenue from operations is minimal, the Group trades only with creditworthy third parties. In
addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is
insignificant. The Group’s maximum credit risk exposure is limited to the carrying value of its financial assets as indicated on the
Statement of Financial Position and notes to the financial statements.
The credit quality of the financial assets was high during the year. The table below details the credit quality of the financial assets
at the end of the year:
Financial assets
Credit Quality
Cash and cash equivalents held at BGFI Bank
Cash and cash equivalents held at Komercni Bank
Cash and cash equivalents held at Westpac Bank
Interest-bearing deposit
Cash and cash equivalents held at ANZ bank
Other receivables and deposits
High
High
High
High
High
Impairment losses
$55 amount due from other debtor was past due and impaired for during the year.
2017
$
2016
$
-
-
31,128
365,399
401,368
2,769,262
13,616
236,103
-
94,591
682,215
3,229,252
50
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 19: FINANCIAL RISK MANAGEMENT (continued)
(iii)
Liquidity risk
Liquidity risk is the risk that the entity will not be able to meet its financial obligations as they fall due. The objective of the Group
is to maintain sufficient liquidity to meet commitments under normal and stressed conditions.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, and the availability of funding
through an adequate amount of committed credit facilities. Due to the lack of material revenue, the Group aims at maintaining
flexibility in funding by maintaining adequate reserves of liquidity.
The Group did not have access to any undrawn borrowing facilities at the reporting date. In June 2017, the Company entered into
an interim funding facility. This facility has been provided by an Australian based sophisticated investor, 6466 Investments Pty
Ltd, and allows for the drawdown of up to AUD 2 million in tranches as required over 12 months. Any funds drawn down will
convert to CDI’s in the Company at a 10% discount to the 10 day VWAP in the Company’s securities. The funds will be used in the
preparation of the Company’s Definitive Feasibility Study, for further drilling and general working capital. The issue of shares
pursuant to draw downs does not require shareholder approval.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the
impact of netting arrangements.
As at 30 June 2017
Trade and other payables
As at 30 June 2016
Trade and other payables
Carrying Amount
$
Contractual Cash
flows
$
332,250
332,250
332,250
332,250
Carrying Amount
$
Contractual Cash
flows
$
293,890
293,890
293,890
293,890
<3 months
$
332,250
332,250
<3 months
$
293,890
293,890
3-6 months
$
6-24
months
$
-
-
3-6 months
$
6-24
months
$
-
-
-
-
-
-
(iv)
Cash flow and fair value interest rate risk
From time to time the Group has significant interest bearing assets, but they are as a result of the timing of equity raising and
capital expenditure rather than a reliance on interest income. The interest rate risk arises on the rise and fall of interest rates. The
Group’s income and operating cash flows are not expected to be materially exposed to changes in market interest rates in the
future and the exposure to interest rates is limited to the cash and cash equivalents balances.
51
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 19: FINANCIAL RISK MANAGEMENT (continued)
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes
in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities:
Floating
Interest
Rate
$
Non-
interest
bearing
$
2017
Total
Floating
Interest
Rate
$
$
Non-
interest
bearing
$
2016
Total
$
Financial assets
- Within one year
Cash and cash equivalents
446,112
-
Other receivables
Total financial assets
-
236,103
446,112
236,103
3,134,661
-
3,134,661
-
94,591
94,591
446,112
236,103
682,215
3,134,661
94,591
3,229,252
Weighted average interest rate
0.69%
1.12%
Financial Liabilities
- Within one year
Trade and other Payables
Total financial liabilities
-
-
332,250
332,250
332,250
332,250
-
-
293,890
293,890
293,890
293,890
Net financial assets/ (liabilities)
446,112
(96,147)
349,965
3,134,661
(199,299)
2,935,362
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in the interest rates at the reporting date would have increased or decreased the Group’s equity and
profit or loss by $4,461 (2016: $31,347).
(v)
Net fair value of financial assets and liabilities
The net fair value of cash and cash equivalents and non-interest bearing monetary assets and financial liabilities approximates
their carrying values.
NOTE 20: CONTROLLED ENTITIES
Subsidiaries of European Metals Holdings Limited
Controlled entity
Country of Incorporation
Class of Shares
Percentage Owned
Equamineral Group Limited (EGL)*
British Virgin Islands
Equamineral SA (ESA Congo)
Republic of Congo
European Metals UK Limited **
United Kingdom
Geomet S.R.O
Czech Republic
Ordinary
Ordinary
Ordinary
Ordinary
2017
100%
100%
100%
100%
2016
100%
100%
100%
100%
*EGL was incorporated on 8 December 2010 and domiciled in the British Virgin Islands. EGL is the parent company for
Equamineral SA (ESA Congo) located in the Republic of Congo. EGL is the beneficial holder of 100% of the issued share capital in
Equamineral SA. This company is currently in the process of being deregistered.
**EMH UK Limited is the parent company for Geomet S.R.O
52
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 21: PARENT ENTITY DISCLOSURE
The following information has been extracted from the books and records of the parent and has been prepared in accordance
with Australian Accounting Standards.
Statement of Financial Position
ASSETS
Current assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Profit or Loss and Other Comprehensive Income
Loss for the year
Total comprehensive loss
Guarantees
2017
$
2016
$
652,868
2,835,802
-
-
652,868
2,835,802
119,140
119,140
254,630
254,630
533,728
2,581,172
2017
$
2016
$
15,587,656
11,674,141
3,087,801
557,246
(18,141,729)
(9,650,215)
533,728
2,581,172
(8,491,514)
(7,088,531)
(8,491,514)
(7,088,531)
There are no guarantees entered into by European Metals Holdings Limited for the debts of its subsidiary as at 30 June 2017.
Contingent liabilities
There are no contingent liabilities as at 30 June 2017.
Commitments
There were no commitments as at 30 June 2017.
53
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 22: CAPITAL COMMITMENTS
There are no capital commitments as at 30 June 2017.
NOTE 23: CONTINGENT LIABILITIES
There are no contingent liabilities as at 30 June 2017.
NOTE 24: SIGNIFICANT EVENTS AFTER THE REPORTING DATE
On 1 August 2017, the Company issued 364,679 ordinary shares at $0.7061 per share to 6466 Investments Pty Ltd in respect to
the second advance of AUD$250,000 under the Funding Facility Agreement and the draw down fee of 3% (AUD$7,500) on the
second advance.
On 10 August 2017, the Company issued 351,448 ordinary shares at $0.7327 per share to 6466 Investments Pty Ltd in respect to
the third advance of AUD$250,000 under the Funding Facility Agreement and the draw down fee of 3% (AUD$7,500) on the third
advance.
On 1 September 2017, the Company issued 375,905 ordinary shares at $0.685 per share to 6466 Investments Pty Ltd in respect to
the fourth advance of AUD$250,000 under the Funding Facility Agreement and the draw down fee of 3% (AUD$7,500) on the
fourth advance.
Except for the matters noted above there have been no other significant events arising after the reporting date.
NOTE 25: NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS
Accounting Standards issued by the AASB that are not yet mandatory applicable to the Group, together with an assessment of the
potential impact of such pronouncements on the Group when adopted in future periods, as discussed below:
AASB 9: Financial Instruments and associated Amending Standards (applicable for annual reporting period commencing 1
January 2018)
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and
includes revised requirements for the classification and measurement of financial instruments, revised recognition and
derecognition requirements for financial instruments and simplified requirements for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the classification of
financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss,
and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for
trading in other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater
flexibility in the ability to hedge risk, particularly with respect to hedges of non-financial items. Should the entity elect to
change its hedge policies in line with the new hedge accounting requirements of the Standard, the application of such
accounting would be largely prospective.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial instruments it
is impractical at this stage to provide a reasonable estimate of such impact.
54
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 24: SIGNIFICANT EVENTS AFTER THE REPORTING DATE (CONTINUED)
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1
January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles-based model. Apart from a limited number of exceptions, including leases, the new revenue model in AASB 15
will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of
business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for the goods or services. To achieve this objective, AASB 15 provides the following five-step process:
- identify the contract(s) with a customer;
- identify the performance obligations in the contract(s);
- determine the transaction price;
- allocate the transaction price to the performance obligations in the contract(s); and
- recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's financial statements,
it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases
and related interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for
leases to be classified as either operating leases or finance leases. Lessor accounting remains similar to current practice.
The main changes introduced by the new Standard are as follows:
- recognition of the right-to-use asset and liability for all leases (excluding short term leases with less than 12 months
of tenure and leases relating to low value assets);
- depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
- inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease
liability using the index or rate at the commencement date;
- application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead
account for all components as a lease; and
- additional disclosure requirements.
55
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 24: SIGNIFICANT EVENTS AFTER THE REPORTING DATE (CONTINUED)
The transitional provisions of AASB 16 allow a lease to either retrospectively apply the Standard to comparatives in line
with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity at the
date of initial application.
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's financial statements,
it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture (applicable to annual reporting periods commencing on or after 1 January 2018).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control over a
subsidiary that is not a “business” as defined in AASB 3: Business Combinations to an associate or joint venture and
requires that:
- a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the extent of the
unrelated investor’s interest in that associate or joint venture;
- the remaining gain or loss be eliminated against the carrying amount of the investment in that associate or joint
venture; and
- any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be
recognised only to the extent of the unrelated investor’s interest in the associate or joint venture. The remaining
gain or loss should be eliminated against the carrying amount of the remaining investment.
Although the directors anticipate that the adoption of AASB 2014-10 may have an impact on the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
56
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
The financial statements and notes, as set out on pages 22 to 56, are in accordance with the Corporations Act 2001
and:
(a)
(b)
(c)
comply with Accounting Standards;
are in accordance with International Financial Reporting Standards issued by the International Accounting
Standards Board, as stated in Note 1 to the financial statements; and
give a true and fair view of the financial position as at 30 June 2017 and of the performance for the year
ended on that date of the Group.
2.
the Chief Executive Officer and Chief Finance Officer have each declared that:
(a)
the financial records of the Group for the financial year have been properly maintained in accordance with
s286 of the Corporations Act 2001;
(b)
the financial statements and notes for the financial year comply with the Accounting Standards; 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 and is signed for and on behalf of the
Directors by:
Keith Coughlan
MANAGING DIRECTOR
Dated at Perth on 29 September 2017
57
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance summary discloses the extent to which the Company will follow the recommendations set by
the ASX Corporate Governance Council in its publication ‘Corporate Governance Principles and Recommendations (3rd
Edition)’ (Recommendations). The Recommendations are not mandatory, however, the Recommendations that will not be
followed have been identified and reasons have been provided for not following them.
The Company’s Corporate Governance Plan has been posted on the Company’s website at www.europeanmet.com.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
Complying
The Company has adopted a Board Charter.
A listed entity should have and disclose a charter
which:
(a)
(b)
the
sets out
roles and
responsibilities of the board, the chair and
management; and
respective
includes a description of those matters
expressly reserved to the board and those
delegated to management.
Recommendation 1.2
A listed entity should:
Complying
(a) undertake
appropriate
before
appointing a person, or putting forward to
security holders a candidate for election, as a
director; and
checks
(b) provide security holders with all material
information relevant to a decision on whether
or not to elect or re-elect a director.
Recommendation 1.3
Complying
A listed entity should have a written agreement
with each director and senior executive setting out
the terms of their appointment.
the
sets out
specific
The Board Charter
responsibilities of the Board, requirements as to the
Boards composition, the roles and responsibilities of
the Chairman and Company
the
establishment, operation and management of Board
Committees, Directors access to company records
and information, details of the Board’s relationship
with management,
Board’s
details
performance review and details of the Board’s
disclosure policy.
Secretary,
the
of
A copy of the Company’s Board Charter is stated in
Schedule 1 of the Corporate Governance Plan which
is available on the Company’s website.
(a) The Company has detailed guidelines for the
appointment and selection of the Board. The
Company’s Corporate Governance Plan requires
the Board to undertake appropriate checks
before appointing a person, or putting forward
to security holders a candidate for election, as a
director.
(b) Material information relevant to any decision on
whether or not to elect or re-elect a Director will
be provided to security holders in the notice of
meeting holding the resolution to elect or re-
elect the Director.
The Company’s Corporate Governance Plan requires
the Board to ensure that each Director and senior
executive is a party to a written agreement with the
Company which sets out the terms of that Director’s
or senior executive’s appointment.
Recommendation 1.4
Complying
The company secretary of a listed entity should be
accountable directly to the board, through the
chair, on all matters to do with the proper
functioning of the board.
The Board Charter outlines the roles, responsibility
and accountability of the Company Secretary. The
Company Secretary is accountable directly to the
Board, through the chair, on all matters to do with
the proper functioning of the Board.
62
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which
includes
requirements for the board:
(i)
set measurable objectives
to
achieving gender diversity; and
for
(ii) to assess annually both the objectives
and the entity’s progress in achieving
them;
(b) disclose that policy or a summary or it; and
(c) disclose as at the end of each reporting
period:
(i) the measurable objectives for achieving
gender diversity set by the board in
accordance with the entity’s diversity
policy and its progress towards achieving
them; and
(ii) either:
(A)
the respective proportions of men
and women on the board, in senior
executive positions and across the
whole organisation (including how
the entity has defined “senior
executive” for these purposes); or
(B)
“Gender Equality
the entity’s
Indicators”, as defined
the
Workplace Gender Equality Act
2012.
in
Complying
(a) The Company has adopted a Diversity Policy.
(i) The Diversity Policy provides a framework
for the Company to achieve a list of 6
measurable objectives
that encompass
gender equality.
for
(ii) The Diversity Policy provides
the
monitoring and evaluation of the scope and
currency of
the Diversity Policy. The
company is responsible for implementing,
monitoring
the
measurable objectives.
reporting
and
on
(b) The Diversity Policy is stated in Schedule 10 of
is
the Corporate Governance Plan which
available on the company website.
(c)
included
(i) The measurable objectives set by the Board
the annual key
in
will be
performance indicators for the CEO, MD
and senior executives. In addition the Board
will review progress against the objectives
in its annual performance assessment.
(ii) The Company currently has no employees
and utilizes external consultants and
contractors as and when required.
The Board will review this position on an
annual
implement
measurable objectives as and when they
deem the Company to require them.
and will
basis
Recommendation 1.6
A listed entity should:
Complying
(a) have and disclose a process for periodically
evaluating the performance of the board, its
committees and individual directors; and
(b) disclose in relation to each reporting period,
whether a performance evaluation was
undertaken
in
in
accordance with that process.
reporting period
the
the Board and
(a) The Board is responsible for evaluating the
performance of
individual
directors on an annual basis. It may do so with
the aid of an independent advisor. The process
for this can be found in Schedule 6 of the
Company’s Corporate Governance Plan.
(b) The Company’s Corporate Governance Plan
requires the Board to disclosure whether or not
performance evaluations were conducted during
the relevant reporting period.
Due to the size of the Board and the nature of
the business, it has not been deemed necessary
to institute a formal documented performance
review program of individuals. However, the
Chairman intends to conduct formal reviews
each financial year whereby the performance of
the Board as a whole and the
individual
contributions of each director are disclosed. The
Board considers that at this stage of the
Company’s development an informal process is
appropriate.
63
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
The review will assist to indicate if the Board’s
performance is appropriate and efficient with
respect to the Board Charter.
remains appropriate
legal and
The Board regularly reviews its skill base and
whether
the
it
for
financial
Company’s operational,
requirements. New Directors are obliged to
participate in the Company’s induction process,
which provides a comprehensive understanding
of the Company, its objectives and the market in
which the Company operates.
Directors are encourages to avail themselves of
resources required to fulfil the performance of
their duties.
Complying
(a) The Board is responsible for evaluating the
performance of senior executives. The Board is
to arrange an annual performance evaluation of
the senior executives.
to
the Board
(b) The Company’s Corporate Governance Plan
requires
annual
performance of the senior executives. Schedule
6 ‘Performance Evaluation’ requires the Board to
disclose whether
performance
or
evaluations were conducted during the relevant
reporting period.
conduct
not
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically
its senior
evaluating the performance of
executives; and
(b) disclose in relation to each reporting period,
whether a performance evaluation was
undertaken
in
in
accordance with that process.
reporting period
the
During the financial year an evaluation of
performance of the individuals was not formally
carried out. However, a general review of the
individuals occurs on an on-going basis to ensure
that structures suitable to the Company’s status
as a listed entity are in place.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
Part -
Complying
(i)
has at least three members, a majority
of whom are independent directors;
and
(ii)
is chaired by an independent director,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the members
at those meetings; or
(b)
if it does not have a nomination committee,
(a) The Nomination Committee was formed on 26
August 2015. There are currently two members
of the Committee being Mr Reeves (Chairman)
and Mr Coughlan. Given the Company’s present
size and scope of the Company’s operations, no
efficiencies or benefits would be gained by
having a third member. The Board intends to re-
evaluate the requirement for another member
as the Company’s operations increase in size and
scale.
The role and responsibilities of the Nomination
Committee
in Nomination
Committee Charter available online on the
Company’s website.
are outlined
The Board devotes time at board meetings to
discuss board succession issues. All members of
in the Company’s
the Board are
nomination process, to the maximum extent
involved
64
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
disclose that fact and the processes
it
employs to address board succession issues
and to ensure that the board has the
appropriate balance of skills, experience,
independence and knowledge of the entity to
its duties and
to discharge
enable
responsibilities effectively.
it
permitted under the Corporations Act and ASX
Listing Rules.
skills matrix
The Board regularly updates the Company’s
board
(in accordance with
recommendation 2.2) to assess the appropriate
balance of skills, experience, independence and
knowledge of the entity.
Recommendation 2.2
Complying
Board Skills Matrix
A listed entity should have and disclose a board
skill matrix setting out the mix of skills and
diversity that the board currently has or is looking
to achieve in its membership.
Recommendation 2.3
Complying
A listed entity should disclose:
(a) the names of the directors considered by the
board to be independent directors;
(b)
if a director has an
association or relationship of
interest, position,
type
the
Number of
Directors that
Meet the Skill
Executive & Non- Executive
experience
Industry experience &
knowledge
Leadership
Corporate governance & risk
management
Strategic thinking
Desired behavioural
competencies
Geographic experience
Capital Markets experience
Subject matter expertise:
- accounting
- capital management
- corporate financing
- industry taxation 1
- risk management
- legal
- IT expertise 2
4
4
4
4
4
4
4
4
2
4
3
0
4
2
0
(1) Skill gap noticed however an external taxation
taxation
is employed
to maintain
firm
requirements.
(2) Skill gap noticed however an external IT firm is
employed on an adhoc basis to maintain IT
requirements.
(a) The Board Charter provides for the disclosure of
the names of Directors considered by the Board
to be independent. None of the directors are
independent directors.
The details of the
directors are disclosed in the Annual Report and
Company website.
(b) The Board Charter requires Directors to disclose
65
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
it
described in Box 2.3 of the ASX Corporate
Governance Principles and Recommendation
(3rd Edition), but the board is of the opinion
that
the
not
independence of the director, the nature of
association or
the
relationship in question and an explanation of
why the board is of that opinion; and
interest, position,
compromise
does
(c)
the length of service of each director
Recommendation 2.4
A majority of the board of a listed entity should be
independent directors.
Recommendation 2.5
The chair of the board of a listed entity should be
an independent director and, in particular, should
not be the same person as the CEO of the entity.
and
that
their
interest, positions, associations and
the
relationships
requires
independence of Directors is regularly assessed
by the Board in light of the interests disclosed by
Directors. Details of the Directors
interests,
positions associations and relationships are
provided in the Annual Reports and Company
website.
(c) The
for
Board
Charter
provides
the
determination of the Directors’ terms and
requires the length of service of each Director to
be disclosed. The length of service of each
Director is provided in the Annual Reports and
Company website.
Not-
complying
The Board Charter requires that where practical the
majority of the Board will be independent.
Given the Company’s present size and scope it is
currently not Company policy to have a majority of
Independent Directors.
Details of each Director’s independence are provided
in the Annual Reports and Company website.
Not-
complying
The Board Charter provides that where practical, the
Chairman of the Board will be a non-executive
director.
Mr David Reeves is the Chairman of the Board and is
not an independent director.
Keith Coughlan is the Managing Director of the
Company and is not an independent director.
If the Chairman resigns the Board will consider
appointing a lead independent Director.
The Board Charter states that a specific responsibility
of the Board is to procure appropriate professional
development opportunities for Directors. The Board
is responsible for the approval and review of
induction and continuing professional development
programs and procedures for Directors to ensure that
they can effectively discharge their responsibilities.
Recommendation 2.6
Complying
directors
providing
A listed entity should have a program for inducting
appropriate
new
and
professional development opportunities
for
continuing directors to develop and maintain the
skills and knowledge needed to perform their role
as a director effectively.
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors,
senior executives and employees; and
(b) disclose that code or a summary of it.
Complying
(a) The Corporate Code of Conduct applies to the
Company’s directors, senior executives and
employees.
(b) The Company’s Corporate Code of Conduct is in
Schedule 2 of the Corporate Governance Plan
which is on the Company’s website.
Principle 4: Safeguard integrity in financial reporting
66
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
Part-
Complying
(i)
has at least three members, all of
whom are non-executive directors and
a majority of whom are independent
directors; and
(ii)
is chaired by an independent director,
who is not the chair of the board,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
relevant
the
and
experience of the members of the
committee; and
qualifications
in relation to each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the members
at those meetings; or
(b)
that
the
if it does not have an audit committee,
disclose that fact and the processes
it
independently verify and
employs
safeguard
financial
integrity of
reporting, including the processes for the
appointment and removal of the external
auditor and the rotation of the audit
engagement partner.
its
(a) The Audit and Risk Committee was formed on 26
August 2015, with directors appointed as
members of the Committee, being Mr Kiran
Morzaria
(Chairman), Mr Reeves and Mr
Coughlan. Given the Company’s present size and
the Company’s operations, no
scope of
efficiencies or benefits would be gained by
having a third member. The Board intends to re-
evaluate the requirement for another member
as the Company’s operations increase in size and
scale.
The role and responsibilities of the Audit and
Risk Committee are outlined in Audit and Risk
Committee Charter available online on the
Company’s website.
the
fulfilling
roles and
The Board devote time at annual board meetings
to
responsibilities
associated with maintaining the Company’s
internal audit function and arrangements with
external auditors. All members of the Board are
involved in the Company’s audit function to
ensure the proper maintenance of the entity and
the integrity of all financial reporting.
Recommendation 4.2
Complying
The board of a listed entity should, before it
approves the entity’s financial statements for a
financial period, receive from its CEO and CFO a
declaration that the financial records of the entity
have been properly maintained and that the
financial statements comply with the appropriate
accounting standards and give a true and fair view
of the financial position and performance of the
entity and that the opinion has been formed on
the basis of a sound system of risk management
and internal control which is operating effectively.
Recommendation 4.3
Complying
A listed entity that has an AGM should ensure that
its external auditor attends
is
from security
available to answer questions
holders relevant to the audit.
its AGM and
The Company’s Corporate Governance Plan states
that a duty and responsibility of the Board is to
ensure that before approving the entity’s financial
statements for a financial period, the CEO and CFO
have declared that in their opinion the financial
records of the entity have been properly maintained
and that the financial statements comply with the
appropriate accounting standards and give a true and
fair view of the financial position and performance of
the entity and that the opinion has been formed on
the basis of a sound system of risk management and
internal control which is operating effectively.
The Company’s Corporate Governance Plan provides
that the Board must ensure the Company’s external
auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
67
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
Complying
(a) have a written policy for complying with its
continuous disclosure obligations under the
Listing Rules; and
(b) disclose that policy or a summary of it.
(a) The Board Charter provides details of the
Company’s disclosure policy.
In addition,
Schedule 7 of the Corporate Governance Plan is
entitled ‘Disclosure – Continuous Disclosure’ and
details the Company’s disclosure requirements
as required by the ASX Listing Rules and other
relevant legislation.
(b) The Board Charter and Schedule 7 of the
Corporate Governance Plan are available on the
Company website.
Principle 6: Respect the rights of security holders
Recommendation 6.1
Complying
A listed entity should provide information about
its
itself and
website.
its governance to
investors via
Information about the Company and its governance is
available in the Corporate Governance Plan which can
be found on the Company’s website.
Information about the Company and its governance is
available in the Corporate Governance Plan which can
be found on the Company website.
Recommendation 6.2
Complying
A listed entity should design and implement an
investor relations program to facilitate effective
two-way communication with investors.
Recommendation 6.3
Complying
A listed entity should disclose the policies and
facilitate and
processes
encourage participation at meetings of security
holders.
in place to
it has
Recommendation 6.4
Complying
A listed entity should give security holders the
option to receive communications from, and send
communications to, the entity and its security
registry electronically.
a
has
adopted
The Company
Shareholder
Communications Strategy which aims to promote and
facilitate effective two-way communication with
investors. The Shareholder Communications Strategy
outlines a range of ways in which information is
communicated to shareholders.
The Shareholder Communications Strategy can be
found in Schedule 11 of the Board Charter which is
available on the Company website.
The Shareholder Communications Strategy states that
as a part of the Company’s developing investor
relations program, Shareholders can register with the
Company Secretary to receive email notifications of
when an announcement is made by the Company to
the ASX, including the release of the Annual Report,
half yearly reports and quarterly reports. Links are
made available to the Company’s website on which
all information provided to the ASX is immediately
posted.
Shareholders are encouraged to participate at all
EGMs and AGMs of the Company. Upon the despatch
of any notice of meeting to Shareholders, the
Company Secretary shall send out material with that
notice of meeting stating that all Shareholders are
encouraged to participate at the meeting.
Security holders can register with the Company to
receive email notifications when an announcement is
made by the Company to the ASX.
Shareholders queries should be referred to the
Company Secretary at first instance.
68
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
Principle 7: Recognise and manage risk
(a) The Audit and Risk Committee was formed on 26
August 2015, with directors appointed as
members of the Committee, being Mr Kiran
Morzaria (appointed Chairman on 5 September
2017), Mr Reeves and Mr Coughlan.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3 of the
Company’s Corporate Governance Plan available
online on the Company’s website.
the
fulfilling
roles and
The Board devote time at annual board meeting
responsibilities
to
associated with overseeing risk and maintaining
the entity’s risk management framework and
associated
internal compliance and control
procedures.
Recommendation 7.1
Complying
The board of a listed entity should:
(a) have a committee or committees to oversee
risk, each of which:
(i)
has at least three members, a majority
of whom are independent directors;
and
(ii)
is chaired by an independent director,
and disclose:
(iii)
the charter of the committee;
(iv)
the members of the committee; and
(v)
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the members
at those meetings; or
(b)
if it does not have a risk committee or
committees that satisfy (a) above, disclose
that fact and the process it employs for
overseeing the entity’s risk management
framework.
Recommendation 7.2
Complying
(a)
The board or a committee of the board should:
(a) review
the entity’s
risk management
framework with management at
least
annually to satisfy itself that it continues to
be sound, to determine whether there have
been any changes in the material business
risks the entity faces and to ensure that they
remain within the risk appetite set by the
board; and
(b) disclose in relation to each reporting period,
whether such a review has taken place.
Recommendation 7.3
Complying
A listed entity should disclose:
(a)
if it has an internal audit function, how the
function
it
performs; or
is structured and what role
(b)
if it does not have an internal audit function,
risks,
these
risk, monitor
The Company process for risk management and
internal compliance includes a requirement to
identify and measure
the
environment for emerging factors and trends
risk
that affect
formulate
management strategies and monitor
the
performance of risk management systems.
Schedule 8 of the Corporate Governance Plan is
entitled ‘Disclosure – Risk Management’ and
details the Company’s disclosure requirements
with respect to the risk management review
procedure and
compliance and
internal
controls.
(b) The Board Charter requires the Board to
disclose the number of times the Board met
throughout the relevant reporting period, and
the individual attendances of the members at
those meetings. Details of the meetings will be
provided in the Company’s Annual Report.
Schedule 3 of the Company’s Corporate Plan provides
for the internal audit function of the Company. The
Board Charter outlines the monitoring, review and
assessment of a range of internal audit functions and
procedures.
69
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
that fact and the processes it employs for
improving the
evaluating and continually
effectiveness of its risk management and
internal control processes.
Recommendation 7.4
Complying
A listed entity should disclose whether, and if so
how, it has regard to economic, environmental
and social sustainability risks and, if it does, how it
manages or intends to manage those risks.
Schedule 3 of the Company’s Corporate Plan details
the Company’s risk management systems which assist
in identifying and managing potential or apparent
business, economic, environmental and
social
sustainability risks (if appropriate). Review of the
Company’s risk management framework is conducted
at least annually and reports are continually created
by management on the efficiency and effectiveness of
the Company’s risk management framework and
control
associated
procedures.
compliance
internal
and
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
Complying
The board of a listed entity should:
(a) have a remuneration committee which:
(i)
has at least three members, a majority
of whom are independent directors;
and
(ii)
is chaired by an independent director,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
individual attendances of the members
at those meetings; or
The Remuneration Committee was formed on 26
August 2015, with directors appointed as members of
the Committee, being Mr Reeves (Chairman) and Mr
Coughlan. Given the Company’s present size and
scope of the Company’s operations, no efficiencies or
benefits would be gained by having a third member.
The Board intends to re-evaluate the requirement for
another member as the Company’s operations
increase in size and scale.
The role and responsibilities of the Remuneration
Committee are outlined in Remuneration Committee
Charter available online on the Company’s website.
The Board devote time at annual board meetings to
fulfilling the roles and responsibilities associated with
setting the level and composition of remuneration for
Directors and senior executives and ensuring that
such remuneration is appropriate and not excessive.
(b)
that
fact and
it does not have a
remuneration
if
committee, disclose
the
processes it employs for setting the level and
composition of remuneration for directors
and senior executives and ensuring that such
remuneration
and not
excessive.
appropriate
is
Recommendation 8.2
Complying
A
its
listed entity should separately disclose
policies and practices regarding the remuneration
of non-executive directors and the remuneration
of executive directors and other senior executives
roles and
and ensure
responsibilities
directors
compared to executive directors and other senior
executives are
level and
composition of their remuneration.
the different
non-executive
that
of
reflected
the
in
The Company’s Corporate Governance Plan requires
the Board to disclose
its policies and practices
regarding
remuneration of non-executive,
executive and other senior directors.
the
70
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
CORPORATE GOVERNANCE STATEMENT
Recommendation 8.3
Complying
listed entity which has an equity-based
A
remuneration scheme should:
(a) have a policy on whether participants are
permitted to enter into transactions (whether
through the use of derivatives or otherwise)
which limit the economic risk of participating
in the scheme; and
(b) disclose that policy or a summary of it.
(a) Company’s Corporate Governance Plan states
that the Board is required to review, manage
and disclose the policy (if any) on whether
participants are permitted
into
(whether through the use of
transactions
derivatives or otherwise) which
the
economic risk of participating in the scheme. The
Board must review and approve any equity
based plans.
to enter
limit
(b) A copy of the Company’s Corporate Governance
Plan is available on the Company’s website.
71
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public companies
only.
1
Shareholding as at 25 September 2017
(a) Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number
of Shareholders
85
172
142
190
68
657
(b) The number of shareholdings held in less than marketable parcels is 53.
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
131,425,941 CDIs
-
Each CDI is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy
has one vote on a show of hands.
(d) 20 Largest Shareholders — CDIs as at 25 September 2017
Name
1. Computershare Company Nominees Ltd
2. HSBC Custody Nominees (Australia) Limited
3. Armco Barriers Pty Ltd
4.
5.
Inswinger Holdings Pty Ltd
J P Morgan Nominees Australia Limited
6. Mrs Eleanor Jean Reeves
7. Merrill Lynch (Australia) Nominees Pty Limited
8. Court Securities Pty Ltd
9. Mr Neil Thacker MacLachlan
10. Hereford Group Limited
11. Lichter Services Pty Ltd
12. Dr Jonathan Lloyd Lichter
13. Hana Vanova
14. Mr Thomas Masaichi Coveney
15. Ms Durdica Bahoric
16. Road & Construction Supplies of Australia Pty Ltd
17. Mr Craig Bartle
18. M & K Korkidas Pty Ltd
19. Citicorp Nominees Pty Limited
20. Mr George Ronald Wilson
Number of
CDIs Held
34,681,499
27,052,644
12,794,750
8,500,000
8,102,937
3,720,244
3,184,730
1,736,027
1,735,000
1,571,429
1,368,000
1,015,000
928,672
841,650
835,000
704,000
702,000
685,000
626,312
550,000
% Held of
Issued Ordinary
Capital
26.39
20.58
9.74
6.47
6.17
2.83
2.42
1.32
1.32
1.20
1.04
0.77
0.71
0.64
0.64
0.54
0.53
0.52
0.48
0.42
111,334,894
84.73
72
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2017
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
2
The name of the Company Secretary is Ms Julia Beckett.
3
The address of the principal registered office in Australia is Suite 12, Level 1, 11 Ventnor Avenue, West Perth WA
6005. Telephone +61 8 6141-3500.
4
Registers of securities are held at the following addresses
Computershare Investor Services Limited
Level 11
172 St Georges Terrace
Perth, Western Australia 6000
5
Securities Exchange Listing
Quotation has been granted for all the CDIs of the Company on all Member Exchanges of the Australian
Securities Exchange Limited.
6
Unquoted Securities
A total of 4,150,000 options over unissued CDIs are on issue.
A total of 5,000,000 B Class Performance Shares
7
Use of Funds
The Company has used its funds in accordance with its initial business objectives.
TENEMENT SCHEDULE
Deposit
Project
Ownership
Exploration Area
Cinovec
Cinovec II
Cinovec III
Cinovec IV
n.a.
Czech
Republic
100%
Preliminary mining
permit
Cinovec II
Cinovec East
Cinovec III
Cinovec South
73