EUROPEAN METALS HOLDINGS LIMITED
ARBN 154 618 989
ANNUAL REPORT
30 JUNE 2018
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
CORPORATE DIRECTORY
Directors
Mr David Reeves
Mr Keith Coughlan
Mr Richard Pavlik
Mr Kiran Morzaria
Company Secretary
Ms Julia Beckett
Registered Office in Australia
Suite 12, Level 1
11 Ventnor Avenue
WEST PERTH WA 6005
Telephone 08 6245 2050
Facsimile 08 6245 2055
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
Facsimile +61 3 9473 2555 (outside Australia)
1800 783 447 (within 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
Non-Executive Chairman
Managing Director and Chief Executive Officer
Executive Director
Non-Executive Director
Nominated Advisor & Broker
Beaumont Cornish Limited
10th Floor
30 Crown Place
LONDON EC2A 4EB
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
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
CONTENTS
Chairman’s Letter Report
Project Review
Directors Report
Remuneration 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 Statements
Additional Information
Tenement Schedule
3
4
7
12
20
21
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24
25
54
55
59
73
74
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
CHAIRMANS LETTER
Dear Shareholders
It is with pleasure that I introduce the 2018 Annual Report of European Metals Holdings limited (“European Metals” or “the
Company”).
The year has seen continued improvement to the lithium flowsheet with a goal of improving recoveries and maximising
cashflow. This work is now complete, and the year ahead will see locked cycle and pilot scale work undertaken which is an
essential step in the finalisation of the Definitive Feasibility Study. With the improved recoveries developed over the year,
the project continues to improve and highlight why it is such an exciting development story in the heartland of the electric
vehicle revolution.
In parallel, a large amount of work has been invested in the background studies for environmental permits and infrastructure
positioning to minimise environmental and social impacts. This work is ongoing and is an essential part of the permitting
process on the road to mine development.
The Company continues to actively engage with all stakeholders in the Czech Republic with a view to supporting a Czech
initiative whereby the full production chain from primary inputs, through battery and vehicle manufacturing predominantly
occurs in the Czech Republic. With car manufacturing accounting for roughly 9% of GDP, this is an obvious route to follow
and we look forward to further developments in this area. The manufacturing of large scale stationary storage systems in
the Czech Republic is also an emerging area of interest to EMH.
From a Corporate perspective, we welcomed Neil Meadows as Chief Operating Officer to the team. Neil’s experience with
projects similar in size and complexity as the Cinovec Project has augmented our existing team, both in Australia and the
Czech Republic.
The year ahead will see us into the detailed engineering of the Project and advancing the permitting in tandem. This will be
a very busy time for the Company as it locks in the path to mining and production.
I would like to take this opportunity to thank all staff, advisors, contractors and our shareholders who have allowed us to
continue this electrifying journey together.
David Reeves
CHAIRMAN
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
PROJECT REVIEW
PROJECT REVIEW
European Metals, through its wholly owned Subsidiary, Geomet s.r.o., controls the mineral exploration licenses awarded by
the Czech State over the Cinovec Lithium/Tin Project. Cinovec hosts a globally significant hard rock lithium deposit with a
total Indicated Mineral Resource of 372Mt @ 0.45% Li2O and 0.04% Sn and an Inferred Mineral Resource of 323Mt @ 0.39%
Li2O and 0.04% Sn containing a combined 7.22 million tonnes Lithium Carbonate Equivalent and 278kt of tin. An initial
Probable Ore Reserve of 34.5Mt @ 0.65% Li2O and 0.09% Sn has been declared to cover the first 20 years mining at an output
of 22,500tpa 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.
EMH has completed a Preliminary Feasibility Study, conducted by specialist independent consultants, which indicated a
return post tax NPV of USD540m and an IRR of 21%. It confirmed the deposit is amenable to bulk underground mining.
Metallurgical test work has produced both battery grade lithium carbonate and high-grade tin concentrate at excellent
recoveries. 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.
Project Development
Project development for the year was centred 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.
On 16 August 2017 the Company announced analytical results for the first drillhole CIS-4 at the Cinovec Lithium-Tin Project
(“the project” or “Cinovec”) and reported on its ongoing infill drilling program. Infill drilling was undertaken in the southwest
section of the deposit, targeting two ‘gaps’ in the resource model that could potentially be targeted for mining in the initial
years. Five out of six planned drillholes were completed during the period, for a total of 2163.1m. Assays were received for
the first drillhole CIS-4, which returned a continuous mineralized intercept of 148.30m averaging 0.40% Li2O from 297.7m
drill string depth. In addition, the upper section of the main lithium interval contains significant tin and tungsten
mineralization with 15.85 meters averaging 0.70% Li2O, 0.29% tin and 0.073% tungsten.
On 2 November 2017 the Company announced the successful completion of its six core-hole infill drilling program at the
Cinovec Project. A total of 2,697.1m was completed on time and without loss time accidents. Analytical results for three
drillholes in the eastern sector and for two drillholes on the western sector of the of the Cinovec South deposit were reported.
On 28 November 2017 the Company was pleased to announce a further upgrade of its JORC compliant Indicated Mineral
Resources at the Cinovec Lithium/Tin Project in the Czech Republic, confirming its status as the largest lithium resource in
Europe.
On 28 March 2018, European Metals reported on the preliminary results received from its ongoing metallurgical optimisation
and ore variability testwork program. Recent metallurgical testwork has seen further roast recovery improvements on ore
sourced from core taken from the area that is intended to be mined and processed in the first years of the project.
Subsequently testwork was completed whereby the more cost effective reagent limestone was substituted for lime into the
roasting feed mix. A lithium recovery rate of 94.8% was achieved from this test. This finding will support the achievement of
significant cost savings in this part of the flowsheet.
On 6 June 2018 the Company announced the commencement of the beneficiation and magnetic separation of a 15 tonne
bulk sample which represents the ore that will be mined in the first stages of project development. The beneficiation and
magnetic separatation of a lithium rich concentrate will provide pilot plant feed for planned downstream processing through
the roast, leach, purification and final product precipitation flowsheet that has been developed. It is intended to ultimately
produce up to 200 kg of battery grade lithium carbonate or, lithium hydroxide from this material for marketing and other
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
PROJECT REVIEW
user acceptance purposes. The program work was carried out by UVR-FIA GmbH in Freiberg who are specialists in
beneficiation and magnetic separation testwork.
Developments Post 30 June 2018
On 11 July 2018 the Company reported that it had completed roast optimisation testwork and that improved recoveries have
resulted in increased lithium carbonate production from the Cinovec Project to 22,500 tpa. All recent roast/leach tests have
reliably achieved lithium extractions in the region of 94% recovery. The significance of these results is that a 7% increase in
lithium recovery is predicted over that used in the Preliminary Feasibility Study (PFS) completed last year which in turn leads
to an increase to 22,500 tpa of lithium carbonate production from the project. The increased production results in
approximately a 10% increase in EBITDA margins for the project which will have obvious positive effects to the project returns
which the definitive feasibility will re-model.
Progress of Mining Licence
On 19 December 2017 the Company announced that the Cinovec NorthWest Resource had been added to the Czech State
resource register. This followed the addition of the Cinovec South Resource earlier in the year. The addition of Resources to
the Czech State register is the first step in the process for the granting of a mining permit.
Other Developments
On 29 November 2017 European Metals announced a capital raising of GBP 2,281,000 (approximately AUD 4 million (before
costs)) via subscriptions to predominantly UK based sophisticated investors. The raising was completed via an issue of
6,517,142 CDIs at a price of 35p or 61.5 cents and was placed using the Company’s capacity under Listing Rule 7.1. Shard
Capital Partners LLP arranged the majority of the subscriptions.
Mr Neil Meadows was appointed to the position of Chief Operating Officer on 11 April 2018. Neil has previously held the
position of Chief Operating Officer at Karara Mining Ltd, Managing Director of IMX Resources Limited and worked with the
Australian Premium Iron Ore Joint Venture on mine infrastructure. Prior to that, he was the Chief Operating Officer of
Queensland Nickel Pty Ltd, subsequent to the sale of the business by BHP and was previously the General Manager of the
Yabulu Refinery site for BHP. Prior to that he was the General Manager at the Murrin Operation for Minara Resources Ltd, a
position he held for almost five years.
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 Reserves have 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
CINOVEC ORE RESERVES SUMMARY
Tonnes
(Millions)
0
34.5
Li
%
0
0.30
Li20
%
0
0.64
Sn
%
0
W
%
0
0.09
0.03
Total Ore Reserves
Notes to Reserve Table:
1. Probable Ore Reserves have been prepared by Bara International in accordance with the guidelines of the JORC Code (2012).
2. The effective date of the Probable Ore Reserve is June 2017
3. All figures are rounded to reflect the relative accuracy of the estimate
4. 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
0.64
0.30
34.5
0.09
0.03
same.
5. 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.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
PROJECT REVIEW
Indicated
Inferred
CINOVEC NOVEMBER 2017 RESOURCE
Cutoff
Tonnes
%
0.1%
0.1%
(Millions)
372.4
323.5
Li
%
0.206
0.183
Li20
%
0.44
0.39
Sn
%
0.04
0.04
W
%
0.016
0.013
Total
Notes:
1. Mineral Resources are not Reserves until they have demonstrated economic viability based on a feasibility study or prefeasibility study.
2. Mineral Resources are reported inclusive of any reserves and are prepared by Widenbar in accordance with the guidelines of the JORC Code
695.9
0.014
0.195
0.1%
0.04
0.43
(2012).
3. The effective date of the Mineral Resource is November 22, 2017.
4. All figures are rounded to reflect the relative accuracy of the estimate.
5. The operator of the project is Geomet s.r.o., a wholly-owned subsidiary of EMH. Gross and Net Attributable resources are the same.
6. Any apparent inconsistencies are due to rounding errors.
7. LCE is Lithium Carbonate Equivalent and is equivalent to Li2CO3
COMPETENT PERSON
Information that relates to exploration results is based on information compiled by 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 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.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
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 2018.
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
Non-Executive Chairman
Appointed 6 March 2014
Mr Keith Coughlan
Managing Director
Appointed 6 September 2013
Mr Richard Pavlik
Executive Director
Appointed 27 June 2017
Mr Kiran Morzaria
Non-Executive Director
Appointed 10 December 2015
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 the
Governance Institute of Australia. Julia is a Corporate Governance professional, having worked in corporate administration
and compliance for the past 11 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 Calidus Resources Limited (ASX: CAI)
Drake Resources Limited (ASX: DRK) and Joint Company Secretary of Doriemus Plc (ASX: DOR) and has held non-executive
director rules for a number of ASX listed companies.
Principal Activities
The Company is primarily involved in the development of a lithium and tin project in the Czech Republic.
Review of Operations
The 2018 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 2018 amounted to $4,655,209 (2017 loss: $4,145,872).
Financial Position
The net assets of the Group have increased by $1,904,068 to $12,399,098 at 30 June 2018.
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 1 August 2017, the Company issued 364,679 CDIs 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 in settlement for the facility draw down
fee of 3% (AUD$7,500) on the second advance.
On 10 August 2017, the Company issued 351,448 CDIs 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 in settlement for the facility draw down
fee of 3% (AUD$7,505) on the third advance.
On 1 September 2017, the Company issued 375,905 CDIs 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 in settlement for the facility draw down
fee of 3% (AUD$7,495) on the fourth advance.
On 10 October 2017, the Company issued 371,644 CDIs at $0.693 per share to 6466 Investments Pty Ltd in respect to
the fifth advance of AUD$250,000 under the Funding Facility Agreement and in settlement for the facility draw down
fee of 3% (AUD$7,550) on the fifth advance.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
•
•
•
On 14 December 2017 the Company issued 1,650,000 CDIs to the Directors, at a price of $0.725 per CDI, under the
Company’s Employee Securities Incentive Plan as approved by Shareholders at the Annual General Meeting held on 30
November 2017.
On 20 December 2017 the Company issued 6,517,142 CDIs to sophisticated investors at a price of $0.615 per CDI.
On 6 June 2018 the Company issued a total of 1,500,000 CDIs, at an issue price of $0.4848 per CDI, under the Company’s
Employee Securities Incentive Plan as approved by Shareholders at the Annual General Meeting held on 30 November
2017.
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
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.
Interest in CDIs and Options
4,020,244 CDIs
1,000,000 Options, 16.6 cents, expire 17 August 2020
542,651 Class B Performance Shares
Special Responsibilities
Member of all the Committees
Directorships held
listed entities
in other
Director of Keras Resources Plc (AIM)
Managing Director of Calidus Resources Limited (ASX)
Keith Coughlan
Managing Director (CEO) – Appointed 6 September 2013
Qualifications
Experience
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.
Interest in CDIs and Options
9,350,000 CDIs
2,000,000 Options, 16.6 cents, expire 17 August 2020
Special Responsibilities
Member of Audit and Risk Committee
Member of Nomination Committee
Directorships held
listed entities
in other
Non-Executive Director of Calidus Resources Limited
Non-Executive Director of Southern Hemisphere Mining Limited
Mr Coughlan previously held the position of Non-Executive Chairman of Talga
Resources Limited from 17 September 2013 to 8 February 2017.
8
Richard Pavlik
Qualifications
Experience
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
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
300,000 CDIs
400,000 Options, 58 cents, expire 3 June 2020
Special Responsibilities
Directorships held
listed entities
in other
Nil
Nil
Kiran Morzaria
Qualifications
Experience
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.
Interest in CDIs and Options
Mr Morzaria is a director and chief executive of Cadence Minerals Plc which owns
27,846,470 CDIs. Mr Morzaria has 200,000 direct interest in CDIs.
Special Responsibilities
Member of Audit and Risk Committee
Member of Remuneration Committee
Directorships held
listed entities
in other
Chief Executive Officer and Director of Cadence Minerals plc and Director of UK Oil
& Gas plc. Mr Morzaria was previously a Director of Bacanora Minerals plc.
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
Richard Pavlik
Kiran Morzaria
Directors’ Meetings
Number attended
Number eligible to attend
4
4
3
4
4
4
4
4
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
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
Exercise Price
Number under option
17 August 2020
3 January 2020
16.6 cents
58.0 cents
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. No options were exercised during the year or to the date of this report (2017: 2,500,000 options
receiving $540,000).
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.
CDIs Issued Under Employee Securities Incentive Plan
On 14 December 2017, the Company issued 1,650,000 Loan CDIs to the Directors under the Company’s Employee Securities
Incentive Plan as approved by Shareholders at the Annual General Meeting held on 30 November 2017, of which Mr Keith
Coughlan was entitled for 850,000 Loan CDIs , Mr David Reeves was entitled for 300,000 Loan CDIs, Mr Richard Pavlik was
entitled for 300,000 Loan CDIs and Mr Kiran Morzaria was entitled for 200,000 Loan CDIs respectively. A value of $1,149,653
has been attributed to the Loan CDIs has been fully expensed.
In consideration of retaining key quality employees of European Metals, on the 6 June 2018 the Company issued 1,500,000
Loan CDIs under the Employee Securities Incentive Plan during the year ended 30 June 2018 of which 1,400,000 Loan CDIs
were issued to key management personnel. An interest free loan for the full amount to purchase the employee securities
will be made available to the employee.
Environmental Regulations
The Group’s operations are subject to the environmental risks inherent in the mining industry.
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.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
Non-audit Services
Stantons International has not provided any non-audit services during the year.
Significant events after the reporting date
At the meeting of the Board held on 15 August 2018 the Board noted that the terms and conditions of the Performance B
shares are incorrect. At this meeting it was agreed that the corrected terms and conditions of the Performance B shares be
put to Shareholders for approval at the upcoming Annual General Meeting.
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 2018 has been received and can be found on page 20 of
the financial report.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
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 2018 and 30 June 2017 are set out in the following tables:
The maximum amount of remuneration for non-executive directors is $300,000 as approved by shareholders.
12
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
2018
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
Other 1
Super-
annuation
Other
Equity 2 Options 3
Directors
$
$
$
$
$
$
$
$
$
David Reeves
36,000
Keith Coughlan
240,000
Kiran Morzaria
24,000
Richard Pavlik
159,542
30,125
76,083
565,750
Key Management
Personnel
James Carter
Neil Meadows
2017
Group Key
Management
Personnel
-
-
-
-
-
-
-
- 17,000
-
-
-
-
-
-
-
22,800
-
-
- 19,833
-
-
2,862
7,228
-
-
-
-
-
-
209,028
592,245
139,352
-
-
-
262,028
855,045
163,352
209,028
58,388
426,958
-
6,228
-
-
52,820
89,539
80%
69%
85%
63%
-
17%
- 36,833
32,890
- 1,155,881
58,388 1,849,742
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
Other 1
Super-
annuation
Other
Equity
Options
Directors
$
$
$
$
$
$
$
$
$
David Reeves
36,000
Keith Coughlan
230,000
Kiran Morzaria
Richard Pavlik 4
Pavel Reichl 5
24,000
73,675
24,000
387,675
-
-
-
-
-
-
- 60,000
-
-
-
-
-
-
- 120,251
-
21,850
-
-
-
- 180,251
21,850
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
96,000
251,850
24,000
29,559
103,234
-
144,251
29,559
619,335
0%
0%
0%
29%
0%
Notes:
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 $17,000 (2017: $60,000) based on normal market rates and the amount outstanding at reporting date was
nil (2017: 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 $nil (2017: $120,251) based on normal market rates and the amount outstanding at reporting date was nil (2017:
nil).
Consulting services of Mr Carter and the Company which he controls Stillwater Resources Group Pty Ltd (Stillwater) to provide Chief Financial Officer services
to the Company. The amounts billed related to his consulting service amounted to $19,833 (2017L nil) based on normal market rates and the amount
outstanding at reporting date was nil (2017: nil)
2. Loan CDIs are treated similar to options and value is an estimate calculated using an appropriate mathematical formula based on Black-Scholes option pricing
model. The amount disclosed as part of remuneration for the financial year is the amount expensed over the vesting period.
3. 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.
4. Balance at the end of year represents Non-Executive Director and Key Management Personnel remuneration from 3 January 2017.
5. Total for the year represents Non-executive Director remuneration to date of resignation on 27 June 2017.
13
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
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, Managing Director, 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% from 1 April 2017.
Mr James Carter, Chief Financial Officer, to receive a salary of $72,300 per annum plus SGC of 9.5% from 1 February 2018.
Mr Neil Meadows, Chief Operating Officer, to receive a salary of $220,000 per annum plus SGC of 9.5% from 20 February
2018.
D. Share-based compensation
In consideration of retaining key quality employees of European Metals, the Company issued 3,050,000 Loan CDIs to KMP
under the Employee Securities Incentive Plan during the year ended 30 June 2018.
30 June 2018
Loan CDIs Grant Details
Exercised
Lapsed
Balance at End of Year
Grant Date
No.
Value
No.
Value
No.
Value
No
No.
Value
$
$
$
Vested Not Vested
$
Group KMP
David Reeves
30 Nov 2017
300,000
209,028
Keith Coughlan
30 Nov 2017
850,000
592,245
Richard Pavlik
30 Nov 2017
300,000
209,028
Kiran Morzaria
30 Nov 2017
200,000
139,352
James Carter
6 June 2018
400,000
106,550
Neil Meadows
6 June 2018
1,000,000
266,376
3,050,000
1,522,579
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
300,000
850,000
300,000
200,000
-
-
-
-
209,028
592,245
209,028
139,352
-
400,000
106,550
- 1,000,000
266,376
- 1,650,000 1,400,000 1,522,579
Employee Securities Incentive Plan
Key quality employees of European Metals were issued 3,050,000 CDIs under the Employee Securities Incentive Plan. The
terms of the employee securities were as follows:
•
•
•
•
•
$0.725 per CDI for 1,650,000 CDIs
$0.4848 per share for 1,400,000 CDIs
Employee securities had the following issue price:
o
o
The employee must remain employed by a member of the Group for one year after the date the employee
securities are issued
1,650,000 of the employee securities are held in a voluntary holding lock for a period of 12 months from the
date of issue, until 14 December 2018
1,400,000 of the employee securities are held in a voluntary holding lock until 26 February 2019
An interest free loan for the full amount to purchase the employee securities will be made available to the
employee. The terms of the loan were as follows:
o
The Company agrees to lend the amount equal to the issue price multiplied by the number of employee
securities
The employee can repay the balance outstanding on the loan at any time
The loan is interest free
The outstanding amount of the loan will become payable on the earliest of:
▪
▪
▪
▪
▪
The repayment date for 1,650,000 CDIs - 15 years after the date of loan advance
The repayment date for 1,400,000 CDIs – 7 years after the date of loan advice
The employee securities being sold
The employee becoming insolvent
The employee ceasing to be an employee
o
o
o
14
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
▪
The employee securities being acquired by a third party by way of an amalgamation, arrangement or
formal takeover bid
o
The employee may not repay the balance outstanding on the loan in respect of the employee securities
which are in voluntary holding lock.
E. Options issued as part of remuneration for the year ended 30 June 2018
No options were issued as part of the remuneration for the year ended 30 June 2018.
F. 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
Options Grant Details
Exercised
Lapsed
Balance at End of Year
Grant Date
No.
Value 1
No.
Value
No.
Value
No.
Value
$
$
$
$
Group KMP
David Reeves
Keith Coughlan
Pavel Reichl 2
Kiran Morzaria
-
-
-
-
-
-
-
-
-
-
-
-
Richard Pavlik
3 January 2017
400,000
177,352
400,000
177,352
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
400,000
177,352
400,000
177,352
Notes:
1. 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 and 30 June 2018 is the prorated amount relating to that period.
2. Pavel Reichl resigned on 27 June 2017.
G. Equity instruments issued on exercise of remuneration options
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.
H. Loans to Directors and Key Management Personnel
Apart from the 1,650,000 Loan CDIs to Directors issued at $0.4848 and 1,400,000 Loan CDIs issued at $0.725 to Key
Management Personnel, no other loans were provided. (2017: nil).
I. 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.
J. Other information
Options held by Key Management Personnel
The number of options to acquire CDIs in the Company held during the 2018 and 2017 reporting period by each of the Key
Management Personnel of the Group; including their related parties are set out below.
15
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
Balance at the
start of the
year
Granted
during the
year
30 June 2018
David Reeves
1,000,000
Keith Coughlan
2,000,000
Kiran Morzaria
-
Richard Pavlik
400,000
James Carter
Neil Meadows
-
-
Total
3,400,000
-
-
-
-
-
-
-
Balance at the
start of the
year
Granted
during the
year
30 June 2017
David Reeves
1,000,000
Keith Coughlan
2,000,000
Kiran Morzaria
Richard Pavlik
Pavel Reichl 1
-
-
750,000
-
-
-
400,000
-
Total
3,750,000
400,000
Note 1: Pavel Reichl resigned on 27 June 2017.
Exercised during
the year
Other changes
during the year
Balance at the
end of the year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
2,000,000
2,000,000
-
400,000
-
-
-
-
-
-
-
-
-
400,000
-
-
3,400,000
3,000,000
400,000
Exercised during
the year
Other changes
during the year
Balance at the
end of the year
Vested and
exercisable
Unvested
-
-
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
2,000,000
2,000,000
-
-
-
400,000
-
-
750,000
-
4,150,000
3,750,000
400,000
-
400,000
750,000
Chess Depositary Interests (‘CDIs’) held by Key Management Personnel
The number of ordinary CDIs held in the Company during the 2018 and 2017 reporting period held by each of the Key
Management Personnel of the Group; including their related parties are set out below.
The CDIs held directly have been obtained through the Employee Securities Incentive Plan.
2018
Name
David Reeves
Indirect
Keith Coughlan
Indirect
Kiran Morzaria
Indirect 2
Richard Pavlik
James Carter
Neil Meadows
Total
Balance at
Start of year
Granted as
remuneration
during the year 1
Issued on
exercise of
options
Other
Changes
during the
year
-
300,000
3,720,244
-
-
850,000
8,500,000
-
-
200,000
26,860,756
-
-
-
39,081,000
-
300,000
400,000
1,000,000
3,050,000
-
-
-
-
-
-
-
-
-
-
Balance at
end of year
300,000
3,720,244
850,000
8,500,000
200,000
-
-
-
-
-
985,714
27,846,470
-
-
-
300,000
400,000
1,000,000
985,714
43,116,714
Issue of Loan CDIs through the Employee Securities Incentive Plan.
Notes:
1.
2. Mr Morzaria is a director and chief executive of Cadence 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. On 20 December 2017, Cadence Minerals Plc acquired a further 985,714 CDIs as part of a CDI placement to raise
approximately $4,000,000.
16
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
2017
Name
David Reeves
Indirect
Keith Coughlan
Indirect
Kiran Morzaria
Indirect 1
Richard Pavlik
Pavel Reichl 2
Total
Balance at
Start of year
Granted as
remuneration
during the year
Issued on
exercise of
options
Other
Changes
during the
year
-
3,720,244
-
8,500,000
-
19,860,756
-
2,778,672
34,859,672
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of year
-
3,720,244
-
8,500,000
-
-
-
-
-
-
7,000,000
26,860,756
-
-
-
2,778,672
7,000,000
41,859,672
Notes:
1. Mr Morzaria is a director and chief executive of Cadence 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. On 20 December 2017, Cadence Minerals Plc acquired a further 985,714 CDIs as part of a CDI placement to raise
approximately $4,000,000.
2. Pavel Reichl resigned on 27 June 2017.
Performance Shares granted to Key Management Personnel
The number of B Class Performance shares held in the Company during the 2018 and 2017 reporting period held by each of
the Key Management Personnel of the Group:
30 June 2018
Grant Details
Exercised
Lapsed
Balance at End of Year
Grant Date
No.
Value
No.
Value
No.
Value
No.
Value
$
$
$
Unvested
$
Group KMP
David Reeves
Keith Coughlan
Richard Pavlik
Kiran Morzaria
James Carter
Neil Meadows
24 Nov 2016
542,651
289,932
-
-
-
-
-
-
-
-
-
24 Nov 2016
514,650
274,971
-
-
-
1,057,301
564,903
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
542,651
289,932
-
-
-
-
-
-
514,650
274,971
-
-
- 1,057,301
564,903
17
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
30 June 2017
Grant Details
Exercised
Lapsed
Balance at End of Year
Grant Date
No.
Value
No.
Value
No.
Value
No.
Value
$
$
$
Unvested
$
Group KMP
David Reeves
Keith Coughlan
Pavel Reichl 1
Kiran Morzaria
24 Nov 2016
542,651
289,932
-
-
-
24 Nov 2016
793,906
424,175
-
-
-
1,336,557
714,106
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
542,651
289,932
-
-
793,906
424,174
-
-
- 1,336,557
714,106
Note 1: Pavel Reichl resigned on 27 June 2017.
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)
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 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 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 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.
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.
(ii)
(iii)
(iv)
At the meeting of the Board held on 15 August 2018 the Board noted that the terms and conditions of the Performance B
shares require a correction. The correction to the terms and conditions of the Performance B shares are to be put to
Shareholders for approval at the upcoming Annual General Meeting with details to be provided in the Notice of Meeting.
18
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ REPORT
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
Key
Management
Personnel
Total Transactions
Payable Balance
2018
$
2017
$
2018
$
2017
$
Wilgus Investments Pty Ltd
Rental
David Reeves
59,000
32,300
6,270
-
During the first half of the year, Mr. David Reeves loaned $200,000 to the Company for a short term period which bore no
interest. The full amount was repaid during that period.
There were no other transactions with Key Management Personnel during the financial year.
End of Remuneration Report
Signed in accordance with a resolution of the Board of Directors.
Keith Coughlan
MANAGING DIRECTOR
Dated at 28 September 2018
19
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Revenue – interest income
Other income
Professional fees
Audit fees
Directors’ fees
Share based payments
Advertising and Promotion
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
Note
30 June 2018
$
30 June 2017
$
1,599
645,554
12,622
174,305
(944,334)
(237,065)
(33,175)
(60,000)
(31,266)
(62,645)
6
16
(1,216,018)
(3,077,218)
(94,951)
(580,751)
(187,683)
(83,470)
(46,777)
(1,880,742)
(28,116)
(300,914)
(99,464)
(58,738)
(14,923)
(55)
(154,844)
(115,611)
(1,945)
(242)
(17,672)
(306,542)
(4,655,209)
(4,145,872)
3
-
-
(4,655,209)
(4,145,872)
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
517,841
517,841
238,343
238,343
(4,137,368)
(3,907,529)
Net Loss attributable to:
members of the parent entity
Total Comprehensive loss attributable to:
members of the parent entity
(4,655,209)
(4,145,872)
(4,655,209)
(4,145,872)
(4,137,368)
(3,907,529)
(4,137,368)
(3,907,529)
Basic and diluted loss per CDI (cents)
7
(3.43)
(3.28)
The above statement should be read in conjunction with the accompanying notes.
21
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018
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
Provisions – employee entitlements
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2018
$
2017
$
8
9
10
11
12
13
14
15
2,223,109
32,640
11,982
2,267,731
446,112
236,103
37,605
719,820
372,997
349,024
10,169,177
9,752,757
6,056
5,679
10,548,230
10,107,460
12,815,961
10,827,280
342,214
74,649
416,863
332,250
-
332,250
416,863
332,250
12,399,098
10,495,030
20,413,074
15,587,656
5,147,304
3,413,445
(13,161,280)
(8,506,071)
12,399,098
10,495,030
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 2018
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2018
Issued Capital
Share Based
Payment Reserve
Foreign Currency
Translation
Reserve
Accumulated
Losses
$
$
$
$
Total
$
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
Total comprehensive loss for the year
Transactions with owners, recognised
directly in equity
-
-
-
-
-
-
-
(4,145,872)
(4,145,872)
238,343
-
238,343
238,343
(4,145,872)
(3,907,529)
CDIs issued during the year, net of costs
3,913,515
(546,663)
-
3,077,218
-
-
-
-
3,366,852
3,077,218
15,587,656
3,087,801
325,644
(8,506,071)
10,495,030
Equity based payments
Balance at 30 June 2017
Balance at 1 July 2017
15,587,656
3,087,801
325,644
(8,506,071)
10,495,030
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
4,825,418
-
-
-
-
Equity based payments
CDI’s issued pursuant to loan plan
-
-
58,386
1,157,632
-
(4,655,209)
(4,655,209)
517,841
-
517,841
517,841
(4,655,209)
(4,137,368)
-
-
-
-
-
-
4,825,418
58,386
1,157,632
Balance at 30 June 2018
20,413,074
4,303,819
843,485
(13,161,280)
12,399,098
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 2018
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
R&D Rebate
Note
30 June 2018
$
30 June 2017
$
(1,658,465)
(1,085,804)
1,599
820,647
12,622
-
Net cash (used in) operating activities
17
(836,219)
(1,073,182)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation expenditure
Payments for property, plant and equipment
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of CDIs
Proceeds from related party
Repayment of related party
Capital raising costs paid
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
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
(2,190,590)
(4,641,232)
(4,436)
(352,361)
(2,195,026)
(4,993,593)
5,018,667
3,530,000
200,000
(200,000)
(212,674)
-
-
(163,150)
4,805,993
3,366,850
1,774,748
(2,699,925)
446,112
3,134,661
2,249
2,223,109
11,376
446,112
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 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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 28 September 2018.
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 2018, the consolidated entity comprising the Company and its subsidiaries has incurred a loss for the year
amounting to $4,655,209. The Consolidated entity has a net working capital of $1,850,868, current liabilities of $416,863
and cash and cash equivalents of $2,223,109.
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 estimated fair value of the
equity instruments at the date at which they are granted. These are expensed over the estimated vesting periods.
25
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
26
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
27
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
28
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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 they 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.
29
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
30
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
Loan CDIs are treated similar to options and value is an estimate calculated using an appropriate mathematical formula
based on Black-Scholes option pricing model. The choice of models and the resultant Loan CDI value require
assumptions to be made in relation to the likelihood and timing of the vesting of the Loan CDIs and the value and
volatility of the price of the underlying shares.
31
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
(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.
32
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
33
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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% (2017: 27.5%)
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
Provisions
Unrecognised deferred tax asset
Set-off deferred tax liabilities
Net deferred tax assets
Deferred tax liabilities
Exploration expenditure
Property, plant and equipment
Set-off deferred tax assets
Net deferred tax liabilities
Tax losses
30 June 2018
30 June 2017
$
$
-
-
-
-
-
-
-
-
-
-
-
-
(4,655,209)
(4,145,872)
(1,280,182)
(1,140,115)
517,204
23,468
334,405
72,748
332,357
-
Nil%
Nil
-
36,315
846,235
146,455
111,110
-
Nil%
Nil
706,261
174,490
4,950
-
20,529
731,740
(36,274)
695,466
(35,295)
(979)
(36,274)
36,274
-
4,538
92,336
-
271,364
-
271,364
-
-
-
-
-
Unused tax losses for which no deferred tax asset has been recognised
2,568,222
634,510
34
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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 2018 and 30 June 2017.
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
2018
$
565,750
32,890
1,214,269
36,833
1,849,742
2017
$
387,675
21,850
29,559
180,251
619,335
Apart from Loan CDIs issued to Directors 1,650,000 and Key Management Personnel 1,400,000, there were no other loans to Key
Management Personnel during the financial year. The deemed value of the Loan issued to directors was $1,198,250 based on an
issue price of $0.725 per Loan CDI and the deemed value of the loans issued to other key management personnel was $678,720
based on the issue price of $0.4848 per Loan CDI.
35
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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
Wilgus Investments Pty
Ltd
Rental
Key
Management
Personnel
David Reeves
Total Transactions
2017
2018
$
$
Payable Balance
2017
2018
$
$
59,000
32,300
6,270
-
During the first half of the year, Mr. David Reeves loaned $200,000 to the Company for a short term period which beared no
interest. The full amount was repaid during that period.
There were no other transactions with Key Management Personnel during the financial year.
NOTE 6: AUDITOR’S REMUNERATION
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
2018
$
2017
$
33,175
31,266
2018
2017
(3.43)
(3.28)
(4,655,209)
(4,145,872)
135,979,290
126,508,202
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 2018 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
NOTE 9: OTHER RECEIVABLES
CURRENT
GST and VAT Receivable
Other receivables
2018
$
2,223,109
2,223,109
2017
$
446,112
446,112
2018
$
2017
$
34,526
(1,886)
32,640
58,932
177,171
236,103
36
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 10: OTHER ASSETS
Current
Prepayments
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Land at cost
Buildings at cost
Less accumulated depreciation
Plant and equipment at cost
Less accumulated depreciation
Total Property, Plant and Equipment at cost
Less accumulated Depreciation
Total Property, Plant and Equipment
Reconciliation
Reconciliation of the carrying amounts set out below.
Opening Property, Plant and Equipment
Additions
Disposals
Depreciation
Foreign currency differences
Carrying amount at the end of the year
NOTE 12: EXPLORATION AND EVALUATION EXPENDITURE
Exploration at cost
Balance at the beginning of the year
Acquisition of tenements
Exploration of tenements
Impairment of exploration assets
Foreign exchange movement
2018
$
2017
$
11,982
11,982
37,605
37,605
2018
$
2017
$
352,660
330,554
5,848
(427)
5,421
18,641
(3,725)
14,916
377,149
(4,152)
372,997
349,024
5,444
(1,411)
(4,152)
24,092
5,481
(118)
5,363
17,812
(4,705)
13,107
353,847
(4,823)
349,024
-
353,847
(4,823)
372,997
349,024
2018
$
2017
$
9,752,757
4,940,613
-
-
1,772,258
4,688,558
(1,880,742)
524,904
123,586
10,169,177
9,752,757
37
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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
141,464,727 (30 June 2017: 130,333,909 CDIs)
Total issued capital
(b) Movements in CDIs
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
2018
$
2017
$
263,409
78,805
342,214
295,619
36,631
332,250
Number
$
141,464,727
20,413,074
20,413,074
Date
Number
$
1 July 2016
121,417,126
11,674,141
7 October 2016
17 October 2016
22 November 2016
24 November 2016
1 June 2017
6 June 2017
30 June 2017
500,000
2,000,000
500,000
5,000,000
250,000
250,000
416,783
-
155,225
400,000
155,225
2,600,000
258,108
258,107
297,500
(210,650)
Balance at the end of the year
30 June 2017
130,333,909
15,587,656
Balance at the beginning of the year
CDI issue under the Funding Facility Agreement @ $0.7061 per CDI
CDI issue under the Funding Facility Agreement @ $0.7327 per CDI
CDI issue under the Funding Facility Agreement @ $0.685 per CDI
CDI issued under the Funding Facility Agreement @ $0.693 per CDI
CDI issue to Directors under the Employee Securities Incentive Plan
@ $0.725 per CDI
CDI capital raising @ $0.615 per CDI
CDIs issued under the Employee Securities Incentive Plan @0.4848
per CDI
Capital raising cost
Balance at the end of the year
Date
Number
$
1 July 2017
130,333,909
15,587,656
1 August 2017
10 August 2017
1 September 2017
10 October 2017
364,679
351,448
375,905
371,644
257,500
257,505
257,495
257,550
14 December 2017
20 December 2017
1,650,000
6,517,142
-
4,008,042
6 June 2018
1,500,000
-
-
(212,674)
30 June 2018
141,464,727
20,413,074
38
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
(c) Loan CDIs Reserve
Balance at the beginning of the year
Date
1 Jul 2017
Number
-
Unit Value $
-
Total$
Amount
Expensed
-
-
Loan CDIs Employee Securities Incentive Plan 14 Dec 2017
1,650,000
Loan CDIs Employee Securities Incentive Plan
6 Jun 2018
1,500,000
$0.69676
$0.26638
1,149,653
1,149,653
399,564
7,979
1,159,632
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.
(d) Movements B Class Performance Shares
Balance at the beginning of the year
Performance Shares issued
Balance at the end of the year
Balance at the beginning of the year
Balance at the end of the year
Date
1 July 2016
Number
$
-
-
24 November 2016
5,000,000
2,671,444
30 June 2017
5,000,000
2,671,444
1 July 2017
30 June 2018
5,000,000
2,671,444
5,000,000
2,671,444
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
39
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
(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
Employee entitlement
The Group is not subject to any externally imposed capital requirements.
NOTE 15: RESERVES
Option Reserve
Performance Shares Reserve
CDIs Reserve
Foreign Currency Translation Reserve
Total Reserves
Option Reserve
Balance at the beginning of the financial year
Reverse of exercised Options transferred to issued capital
Equity based payment expense
Balance at the end of the financial year
The options reserve is used to recognise the fair value of all options on issue but not yet exercised.
2018
$
2017
$
2,223,109
32,640
446,112
236,103
(342,214)
(332,250)
74,649
1,988,184
349,965
2018
$
2017
$
474,743
416,357
2,671,444
2,671,444
1,157,632
-
843,485
325,644
5,147,304
3,413,445
2018
$
2017
$
416,357
557,246
-
(546,663)
58,386
474,743
405,774
416,357
40
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
At 30 June 2018 the following options 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 Pavlik 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.
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
Loan CDIs Reserve
The CDIs reserve records the fair value of the Loan CDIs issued.
Balance at the beginning of the financial year
Loan CDIs issued to directors – equity based expense
Loan CDIs issued to employees - equity based expense
Balance at the end of the financial year
2018
$
2017
$
2,671,444
-
-
2,671,444
2,671,444
2,671,444
2018
$
-
1,149,653
7,979
1,157,632
2017
$
-
-
-
-
Employee securities incentive plan
During the year remuneration in the form of Employee Securities Incentive Plan were issued to the Directors and employees to
attract, motivate and retain such persons and to provide them with an incentive to deliver growth and value to shareholders.
The Loan CDIs represent an option arrangement. Loan CDIs vested immediately. The key terms of the Employee Share Plan and of
each limited recourse loan provided under the Plan are as follows:
i.
ii.
iii.
The total loan equal to issue price multiplied by the number of Plan CDIs applied for (“Advance”), which shall be
deemed to have been draw down at Settlement upon issued of the Loan Shares.
The Loan shall be interest free. However, if the advance is not repaid on or before the Repayment date, the Advance
will accrue interest at the rate disclosed in the Plan from the Business Day after the Repayment Date until the date
the Advance is repaid in full.
All or part of the loan may be repaid prior to the Advance repayment Date.
Repayment date
iv.
v.
vi.
Notwithstanding paragraph iii. above, (“the borrower”) may repay all or part of the Advance at any time before the
repayment date i.e. The repayment date for 1,650,000 Director CDIs - 15 years after the date of loan advance and
the repayment date for 1,500,000 Employee CDIs – 7 years after the date of loan advice
The Loan is repayable on the earlier of:
(a) The repayment date;
(b) The plan CDIs being sold;
(c) The borrower becoming insolvent;
(d) The borrower ceasing to be employed by the Company; and
(e) The plan CDIs being acquired by a third party by way of an amalgamation, arrangement or formal takeover bid
for not less than all the outstanding CDIs.
Loan Forgiveness
vii.
The Board may, in its sole discretion, waive the right to repayment of all or any part of the outstanding balance of
an Advance where:
41
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
(i) The borrower dies or becomes permanently disabled; or
(ii) The Board otherwise determines that such waiver is appropriate
Where the Board waives repayment of the Advance in accordance with clause 6(a), the Advance is deemed to have
been repaid in full for the purposes of the Plan in this agreement.
viii.
Sale of loan CDIs
i.
In accordance with the terms of the Plan and the Invitation, the Loan CDIs cannot be sold, transferred, assigned,
charged or otherwise encumbered with the Plan CDIs except in accordance with the Plan.
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
NOTE 16: SHARE BASED PAYMENTS
No option share-based payments were granted during the current period.
Options Outstanding as at 1 July 2016
Granted
Exercised
Options outstanding as at 30 June 2017
Options outstanding as at 30 June 2018
2018
$
325,644
517,841
843,485
2017
$
87,301
238,343
325,644
Number
Weighted
Average
Exercise Price
3,750,000
900,000
(500,000)
4,150,000
4,150,000
$0.166
$0.413
$0.280
$0.206
$0.206
The following option share-based payment arrangements existed 30 June 2018 and at 30 June 2017:
On 17 August 2015 3,750,000 options with an exercise price of 16.6 cents and exercisable on or before 17 August 2020 were granted
to directors. These remain outstanding as at 30 June 2018 and 30 June 2017.
On 19 April 2017, 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 in 2017.
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 in 2017. The share based payment recognised in the profit is less in 2018 amounted to $58,386.
On 1 June 2017, 250,000 options were exercised for 28 cents. On 6 June 2017, 250,000 options were exercised for 28 cents.
42
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
Options granted to are as follows:
Grant Date
19 April 20171
3 January 20171
Total
Number
$
500,000
400,000
900,000
376,215
29,559
405,774
Note 1: These instruments vest immediately except for the 400,000 Options issued to Richard Pavlik. The instruments hold no voting or dividend
rights. The options are unlisted. All options 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 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.
A summary of the inputs used in the valuation of the options in 2017 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
$0.28
$0.98
$0.58
$0.60
19 April 2017
3 January 2017
126.44%
126.44%
30 April 2018
3 January 2020
-
1.62%
$0.75243
500,000
$376,215
-
1.97%
$0.44338
400,000
$177,352
The following performance share-based payment arrangements existed at 30 June 2018 and 30 June 2017:
Instruments granted are as follows:
B Class Performance Shares granted are as follows:
Grant Date
Number
$
Number
$
18 November 2016 (related parties)
1,057,301
564,903
1,336,557
714,107
18 November 2016 (non-related parties)
3,942,699
2,106,541
3,663,443
1,957,337
5,000,000
2,671,444
5,000,000
2,671,444
2018
2017
$2,671,444 has been attributed to the Performance Shares.
Fair value of Loan CDIs in existence at 30 June 2018
The fair value of the 3,150,000 Loan CDIs granted have been valued using a Black Scholes Methodology, taking into account the
terms and conditions upon which the Loan CDIs were granted. The exercise price of the Loan CDI’s is equal to the market price of
the underlying shares being the VWAP of shares traded on the ASX over the 5 trading days immediately preceding the date of grant.
43
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
The following Loan CDIs share-based payment arrangements existed at 30 June 2018
Director Loan CDIs
Employee Securities Incentive Plan Loan CDIs 1
Note 1: These Loan CDIs are being expensed over the period.
Value recognised
during the year
Value to be
recognised in
future years
1,149,653
-
7,979
285,035
Number
1,650,000
1,500,000
A summary of the inputs used in the valuation of the loan CDIs issued to directors are as follows:
Loan CDIs
Issue price
Share price at date of issue
Keith Coughlan
David Reeves
Richard Pavlik
Kiran Morzaria
$0.725
$0.70
$0.725
$0.70
$0.725
$0.70
$0.725
$0.70
Grant date
30 November 2017
30 November 2017
30 November 2017
30 November 2017
Expected volatility
143.41%
143.41%
143.41%
143.41%
Expiry date
30 November 2032
30 November 2032
30 November 2032
30 November 2032
Expected dividends
Risk free interest rate
Value per loan CDI
Number of loan CDIs
Total value
Nil
2.47%
$0.69676
850,000
$592,245
Nil
2.47%
$0.69676
300,000
$209,028
Nil
2.47%
$0.69676
300,000
$209,028
Nil
2.47%
$0.69676
200,000
$139,352
A summary of the inputs used in valuation of the loan CDIs issued to employees.
Tranche 1 1
Tranche 2 2
Tranche 3 3
Tranche 4 4
Tranche 5 5
Loan CDIs
Exercise price
Share price at date of issue
$0.4848
$0.365
$0.4848
$0.365
$0.4848
$0.365
$0.4848
$0.365
Grant date
6 June 2018
6 June 2018
6 June 2018
6 June 2018
Expected volatility
85.9%
85.9%
85.9%
85.9%
Expiry date
6 June 2025
6 June 2025
6 June 2025
6 June 2025
Expected dividends
Risk free interest rate
Value per loan CDI
Number of loan CDIs
Total value
Nil
2.42%
$0.2664
550,000
$146,507
Nil
2.42%
$0.2664
250,000
$66,594
Nil
2.42%
$0.2664
250,000
$66,594
Nil
2.42%
$0.2664
200,000
$53,275
Notes:
1. Tranche 1 escrowed until 26 February 2019.
2. Tranche 2 escrowed until company announcing completion of the definitive feasibility study
3. Tranche 3 escrowed until company announcing construction has commenced at the Cinovec Project
4. Tranche 4 escrowed until the completion of project finance for the Cinovec Project
5. Tranche 5 escrowed until the practical completion of the Cinovec Project
$0.4848
$0.4848
$0.365
$0.365
6 June 2018
6 June 2018
85.9%
6 June 2025
85.9%
Nil
6 June 2025
2.42%
$0.2664
250,000
$66,594
44
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 17: CASH FLOW INFORMATION
(a) Reconciliation of cash flow from operating activities with the loss after tax
Loss after income tax
Adjustments for:
Exploration costs expensed
Impairment of exploration
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
(Decrease)/ Increase in provisions
Cash flow (used in)/from operating activities
(b) Credit standby facilities
The Company had no credit standby facilities as at 30 June 2018 and 2017.
(c) Investing and Financing Activities – Non-Cash
There were no non-cash movements during the year.
2018
$
2017
$
(4,655,209)
(4,145,872)
442,029
1,880,742
-
1,216,018
3,077,218
(35,442)
103,397
1,945
242
203,463
(134,580)
25,623
9,963
74,649
(1,856)
28,269
-
(836,219)
(1,073,182)
45
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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.
30 June 2018
REVENUE
Interest revenue
Other Revenue
Total segment revenue
Net expenditure
Loss before income tax
Segment assets
Segment liabilities
30 June 2017
REVENUE
Interest revenue
Other Revenue
Total segment revenue
Net expenditure
Loss before income tax
Segment assets
Segment liabilities
Australia
$
Czech
$
Total
$
1,599
645,554
647,153
-
-
-
1,599
645,554
647,153
(3,193,197)
(2,546,044)
(2,109,165)
(2,109,165)
(5,302,362)
(4,655,209)
2,240,188
10,575,773
12,815,961
339,820
77,043
416,863
Australia
$
Czech
$
Total
$
12,622
174,305
186,927
(4,200,411)
(4,013,484)
-
-
-
12,622
174,305
186,927
(132,388)
(132,388)
(4,332,799)
(4,145,872)
652,866
10,174,414
10,827,280
119,140
213,110
332,250
46
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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
2018
$
2017
$
2,223,109
32,640
2,255,749
446,112
236,103
682,215
342,214
332,250
342,214
332,250
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.
47
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 19: FINANCIAL RISK MANAGEMENT (continued)
At 30 June 2018, the Group has financial assets and liabilities denominated in the foreign currencies detailed below:
Amount in AUD
Amount in
CZK
Cash and cash equivalents
in EMHL
Intercompany payables to
EMHL by subsidiaries
5% effect in foreign
exchange rates
Amount
in CZK
-
-
-
-
2018
Amount
in GBP
823,600-
24,608
848,208
-
4,225,696
4,225,696
42,410
211,285
2017
Amount
in GBP
-
31,000
31,000
Amount in AUD
-
3,567,245
3,567,245
1,550
178,362
-
-
-
-
Other than intercompany balances there were no financial assets and liabilities denominated in foreign currencies for EMH UK or
Geomet s.r.o..
(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 Komercni Bank
Cash and cash equivalents held at Westpac Bank
•
Interest-bearing deposits
Cash and cash equivalents held at ANZ bank
Other receivables and deposits
High
High
High
High
2018
$
2017
$
10,924
31,128
735,960
401,368
1,476,255
32,640
2,255,749
13,616
236,103
682,215
48
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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 undrawn amount to 30 June 2018 was $1,327,495 which included a 2%
Establishment Fee for the first drawdown ($40,000) and a 3% Draw Down Fee for each advance (total for the 5 drawdowns $37,495).
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact
of netting arrangements.
As at 30 June 2018
Trade and other payables
As at 30 June 2017
Trade and other payables
Carrying Amount
$
Contractual Cash
flows
$
342,214
342,214
342,214
342,214
Carrying Amount
$
Contractual Cash
flows
$
332,250
332,250
332,250
332,250
<3 months
$
342,214
342,214
<3 months
$
332,250
332,250
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.
49
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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
$
2018
Total
Floating
Interest
Rate
$
$
Non-
interest
bearing
$
2017
Total
$
Financial assets
- Within one year
Cash and cash equivalents
2,223,109
-
2,223,109
446,112
-
Other receivables
Total financial assets
-
32,640
32,640
-
236,103
2,223,109
32,640
2,255,749
446,112
236,103
446,112
236,103
682,215
Weighted average interest rate
0.10%
0.69%
Financial Liabilities
- Within one year
Trade and other Payables
Total financial liabilities
-
-
342,214
342,214
342,214
342,214
-
-
332,250
332,250
332,250
332,250
Net financial assets/ (liabilities)
2,223,109
(309,574)
1,913,535
446,112
(96,147)
349,965
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 $16,642 (2017: $4,461).
(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)*
Equamineral SA (ESA Congo)
European Metals UK Limited **
Geomet S.R.O
British Virgin Islands
Republic of Congo
United Kingdom
Czech Republic
Ordinary
Ordinary
Ordinary
Ordinary
2018
100%
100%
100%
100%
2017
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
50
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
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
2018
$
2017
$
2,236,630
652,868
3,512
-
2,240,142
652,868
339,820
339,820
119,140
119,140
1,900,322
533,728
2018
$
20,413,074
2017
$
15,587,656
4,303,818
3,087,801
(22,816,570)
(18,141,729)
1,900,322
533,728
(4,674,841)
(4,674,841)
(8,491,514)
(8,491,514)
There are no guarantees entered into by European Metals Holdings Limited for the debts of its subsidiary as at 30 June 2018.
Contingent liabilities
There are no contingent liabilities as at 30 June 2018.
Commitments
There were no commitments as at 30 June 2018.
51
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
NOTE 22: CAPITAL COMMITMENTS
There are no capital commitments as at 30 June 2018.
NOTE 23: CONTINGENT LIABILITIES
There are no contingent liabilities as at 30 June 2018.
NOTE 24: SIGNIFICANT EVENTS AFTER THE REPORTING DATE
At the meeting of the Board held on 15 August 2018 the Board noted that the terms and conditions of the Performance B shares
are incorrect. At this meeting it was agreed that the corrected terms and conditions of the Performance B shares be put to
Shareholders for approval at the upcoming Annual General Meeting.
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 not expected to be material.
▪
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 not expected to be material.
52
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2018
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2018
▪
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.
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.
▪
AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment
Transactions (applicable to annual reporting periods commencing on or after 1 January 2018).
The AASB issued amendments to AASB 2 Share-based Payment that address three main areas:
- the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction;
- the classification of a share-based payment transaction with net settlement features for withholding tax obligations;
and
- accounting where a modification to the terms and conditions of a share-based payment transaction changes its
classification from cash settled to equity settled.
On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application
is permitted if elected for all three amendments and other criteria are met. Early application of this amendment is
permitted.
Although the directors anticipate that the adoption of this amendment may have an impact on the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
53
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
The financial statements and notes, as set out on pages 21 to 54, are in accordance with the Corporations Act 2001
and:
(a)
comply with Accounting Standards;
(b)
(c)
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 2018 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)
(c)
the financial statements and notes for the financial year comply with the Accounting Standards; and
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 28 September 2018
54
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
ASX 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
respective
sets out
roles and
responsibilities of the board, the chair and
management; and
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
The Board Charter
specific
responsibilities of the Board, requirements as to the
Boards composition, the roles and responsibilities of
the Chairman and Company Secretary,
the
establishment, operation and management of Board
Committees, Directors access to company records
and information, details of the Board’s relationship
with management, details of
the Board’s
performance review and details of the Board’s
disclosure policy.
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.
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EUROPEAN METALS HOLDINGS LIMITED
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Recommendation 1.5
A listed entity should:
(a) have a diversity policy which
requirements for the board:
includes
(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
towards
achieving them; and
its progress
(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)
the entity’s “Gender Equality
Indicators”, as defined
in the
Workplace Gender Equality Act
2012.
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.
(ii) The Diversity Policy provides for 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
the Corporate Governance Plan which
is
available on the company website.
(c)
included
(i) The measurable objectives set by the Board
will be
in the annual key
performance indicators for the CEO, MD
and senior executives. In addition, the
Board will review progress against the
objectives
its annual performance
assessment.
in
(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
accordance with that process.
in the reporting period
(a) The Board is responsible for evaluating the
performance of the Board and
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
individual
the Board as a whole and the
contributions of each director are disclosed. The
Board considers that at this stage of the
Company’s development an informal process is
appropriate.
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EUROPEAN METALS HOLDINGS LIMITED
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The review will assist to indicate if the Board’s
performance is appropriate and efficient with
respect to the Board Charter.
for
remains appropriate
The Board regularly reviews its skill base and
whether
the
it
Company’s operational,
legal and financial
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 encouraged 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
conduct annual
performance of the senior executives. Schedule
6 ‘Performance Evaluation’ requires the Board
to disclose whether or not performance
evaluations were conducted during the relevant
reporting period.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically
evaluating the performance of its senior
executives; and
(b) disclose in relation to each reporting period,
whether a performance evaluation was
in
undertaken
accordance with that process.
in the reporting period
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
the
of
attendances
members at those meetings; or
(b)
if it does not have a nomination committee,
disclose that fact and the processes
it
employs to address board succession issues
(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 are outlined
in Nomination
Committee Charter available online on the
Company’s website.
The Board devotes time at board meetings to
discuss board succession issues. All members of
the Board are
in the Company’s
nomination process, to the maximum extent
permitted under the Corporations Act and ASX
Listing Rules.
involved
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and to ensure that the board has the
appropriate balance of skills, experience,
independence and knowledge of the entity to
enable
its duties and
it to discharge
responsibilities effectively.
The Board regularly updates the Company’s
board skills matrix
(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
interest, position,
association or relationship of the type
described in Box 2.3 of the ASX Corporate
Governance Principles and Recommendation
(3rd Edition), but the board is of the opinion
that
the
independence of the director, the nature of
it does not
compromise
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
- legal2
- IT expertise 2
4
4
4
4
4
4
4
4
3
4
4
0
4
0
1
(1) Skill gap noticed however an external taxation
taxation
is employed
to maintain
firm
requirements.
(2) Skill gap noticed however an legal 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
interest, positions, associations and
their
relationships
the
requires
independence of Directors is regularly assessed
by the Board in light of the interests disclosed by
Directors. Details of the Directors interests,
that
and
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EUROPEAN METALS HOLDINGS LIMITED
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ANNUAL REPORT 30 JUNE 2018
the
interest, position, association or
relationship in question and an explanation
of why the board is of that opinion; and
(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.
positions associations and relationships are
provided in the Annual Reports and Company
website.
(c) The Board Charter
for
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
and providing
A listed entity should have a program for inducting
appropriate
new directors
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
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) 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
scope of
the Company’s operations, no
efficiencies or benefits would be gained by
having a third non-executive director member.
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EUROPEAN METALS HOLDINGS LIMITED
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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
qualifications
the
and
experience of the members of the
committee; and
in relation to each reporting period,
the number of times the committee
met throughout the period and the
individual
the
of
attendances
members at those meetings; or
(b)
if it does not have an audit committee,
disclose that fact and the processes
it
independently verify and
employs that
financial
integrity of
safeguard the
reporting, including the processes for the
appointment and removal of the external
auditor and the rotation of the audit
engagement partner.
its
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 its AGM and is
available to answer questions from security
holders relevant to the audit.
intends
the
The Board
requirement
for another member as the
Company’s operations increase in size and scale.
re-evaluate
to
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.
to
the
roles
internal
fulfilling
The Board devote time at annual board
meetings
and
responsibilities associated with maintaining the
Company’s
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.
function
audit
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.
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
disclosure
requirements as required by the ASX Listing
Rules and other relevant legislation.
Company’s
details
the
(b) The Board Charter and Schedule 7 of the
Corporate Governance Plan are available on the
Company website.
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EUROPEAN METALS HOLDINGS LIMITED
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Principle 6: Respect the rights of security holders
Recommendation 6.1
Complying
A listed entity should provide information about
itself and its governance to investors via its
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
processes
in place to facilitate and
encourage participation at meetings of security
holders.
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.
Information about the Company and its governance
is available in the Corporate Governance Plan which
can be found on the Company’s website.
The Company has adopted a
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.
Principle 7: Recognise and manage risk
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
(a) The Audit and Risk Committee was formed on 26
August 2015, with directors appointed as
members of the Committee, being Mr Kiran
Morzaria, Mr Reeves and Mr Coughlan.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3 of the
Plan
Company’s
available online on the Company’s website.
Corporate Governance
The Board devote time at annual board meeting
to
fulfilling the roles and responsibilities
associated with overseeing risk and maintaining
the entity’s risk management framework and
65
EUROPEAN METALS HOLDINGS LIMITED
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(v)
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
individual
the
of
attendances
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
least
framework with management at
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)
(b)
if it has an internal audit function, how the
function
it
performs; or
is structured and what role
if it does not have an internal audit function,
that fact and the processes it employs for
evaluating and continually improving the
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.
associated
procedures.
internal compliance and control
internal
includes
The Company process for risk management
and
a
compliance
requirement to identify and measure risk,
monitor the environment for emerging factors
and trends that affect these risks, formulate
risk 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
internal compliance and
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.
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 associated internal compliance and
control procedures.
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EUROPEAN METALS HOLDINGS LIMITED
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Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
Part -
Complying
(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
the
of
attendances
individual
members at those meetings; or
(b)
remuneration
if
it does not have a
committee, disclose that
fact and the
processes it employs for setting the level and
composition of remuneration for directors
and senior executives and ensuring that such
remuneration
is appropriate and not
excessive.
Recommendation 8.2
Complying
A listed entity should separately disclose its
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 reflected
level and
composition of their remuneration.
the different
non-executive
that
of
the
in
Recommendation 8.3
Complying
listed entity which has an equity-based
A
remuneration scheme should:
to enter
(a) have a policy on whether participants are
transactions
permitted
(whether through the use of derivatives or
otherwise) which limit the economic risk of
participating in the scheme; and
into
(b) disclose that policy or a summary of it.
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.
The Company’s Corporate Governance Plan requires
the Board to disclose its policies and practices
regarding
the remuneration of non-executive,
executive and other senior directors.
(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
transactions (whether through the use of
limit the
derivatives or otherwise) which
economic risk of participating in the scheme.
The Board must review and approve any equity
based plans.
to enter
(b) A copy of the Company’s Corporate Governance
Plan is available on the Company’s website.
67
EUROPEAN METALS HOLDINGS LIMITED
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QCA CORPORATE GOVERNANCE REPORT
The following sets out the Company’s Corporate Governance Report in accordance with the AIM Rules for Companies, a copy
of which is also available from the Company’s website at:
https://www.europeanmet.com/wp-content/uploads/2018/09/Corporate-Governance-Website-Disclosure-EMH-
Sept-2018-Final.pdf
INTRODUCTION
In April 2018, the Quoted Companies Alliance (QCA) published an updated version of its Code which provides UK small and
mid-sized companies such as European Metals Limited with a corporate governance framework that is appropriate for a
Company of our size and nature. The Board considers the principles and recommendations contained in the QCA Code are
appropriate and have therefore chosen to apply the QCA Code.
The updated 2018 QCA Code has 10 principles that should be applied. Each principle is listed below together with an
explanation of how the Company applies or otherwise departs from each of the principles.
PRINCIPLE ONE
Business Model and Strategy
The Company is a minerals exploration and development company and has a clear and definitive vision of the Company’s
purpose, business model and strategy, being to develop the Cinovec lithium-tin project. The Company is currently preparing
a definitive feasibility study.
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 @ 0.39 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.
PRINCIPLE TWO
Understanding Shareholder Needs and Expectations
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The
Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company's Annual General Meeting. Investors also have access to current information on the
Company though its website, www.europeanmet.com, and via Keith Coughlan, Managing Director, who is available to answer
investor relations enquiries.
The Company has adopted a 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, www.europeanmet.com/corporate-governance.
PRINCIPLE THREE
Considering wider stakeholder and social responsibilities
The Board recognises that the long term success of the Company is reliant upon the efforts of the employees of the
Company and its contractors, suppliers, regulators and other stakeholders.
The Company has close ongoing relationships with a broad range of its stakeholders and provides them with the opportunity
to raise issues and provide feedback to the Company.
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EUROPEAN METALS HOLDINGS LIMITED
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ANNUAL REPORT 30 JUNE 2018
PRINCIPLE FOUR
Risk Management
The Audit and Risk Committee was formed on 26 August 2015, with directors appointed as members of the Committee, being
Mr Kiran Morzaria, 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,
www.europeanmet.com/corporate-governance.
The Board devotes time at board meetings to fulfilling the roles and responsibilities associated with overseeing risk and
maintaining the entity’s risk management framework and associated internal compliance and control procedures.
The Company process for risk management and internal compliance includes a requirement to identify and measure risk,
monitor the environment for emerging factors and trends that affect these risks, formulate risk 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 internal compliance and controls.
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.
PRINCIPLE FIVE
A Well Functioning Board of Directors
The Board currently comprises of 4 members: 2 Executive members (the Managing Director, Keith Coughlan and Executive
Director, Richard Pavlik) and 2 Non-Executive members (the Chairman, Dave Reeves and Non-executive Director, Kiran
Morzaria). Biographical details of the current Directors are set out within Principle Six below. Pursuant to Article 8.5 of the
Company’s Articles of Association, at each annual general meeting one third of the directors (or, if their number is not a
multiple of three, the number nearest to but nor more than one-third shall retire from office by rotation. A retiring director
shall be eligible for re-election. All the Executive Directors are full time and the Non-Executive Directors are considered to be
part time but are expected to provide as much time to the Company as is required.
All letters of appointment of Directors are available for inspection at the Company's registered office during normal business
hours. The Board elects a Chairman to chair every meeting.
All letters of appointment of Directors are available for inspection at the Company's registered office during normal business
hours. The Board elects a Chairman to chair every meeting.
The Board holds formal meetings periodically as issues arise and require more details. The Directors are in contact and discuss
all necessary issues on a regular basis and to ensure that the Non-Executive Directors while not involved in the day to day
running of the Company are still kept up to date on a regular basis.
The Company has established Audit, Remuneration, and Nomination committees, particulars of which are set out in Principle
Nine below.
The QCA recommends a balance between executive and non-executive Directors and recommends that there be two
independent non-executives. The Board Charter provides for the disclosure of the names of Directors considered by the Board
to be independent.
Mr Morzaria is a Board nominee of Cadence Minerals Plc (previously named Rare Earth Minerals Plc), which owns 26,860,756
CDIs in the Company. Mr Morzaria is also a director and chief executive of Cadence Minerals Plc. On this basis, Mr Morzaria
is not an independent Non-executive Director. Mr Reeves is interested in CDIs, options and Class B Performance Shares, and
on this basis is also not an independent Non-executive Director. However, the Board believes that both Mr Reeves and
Morzaria are relevant qualified professionals and with an understanding of what is expected of a Non-Executive Director and
discharge their duties as Non-Executive Directors in an effective and appropriate manner on behalf of shareholders as a
whole.
Given the Company’s present size and scope of the Company’s operations, no efficiencies or benefits would be gained
appointing a Senior Independent Director (“SID”). The Board intends to re-evaluate the requirement for a SID as the
Company’s operations increase in size and scale.
69
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
The details of the directors are disclosed in the Annual Report and Company website, www.europeanmet.com/directors-and-
senior-management.
The Board Charter requires Directors to disclose their interest, positions, associations and relationships and requires that the
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,
www.europeanmet.com/directors-and-senior-management.
The Board Charter provides for 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,
www.europeanmet.com/directors-and-senior-management. The Corporate Code of Conduct, which applies to the
Company’s directors, senior executives and employees. is in Schedule 2 of the Corporate Governance Plan which is on the
Company’s website, www.europeanmet.com/corporate-governance.
PRINCIPLE SIX
Appropriate Skills and Experience of the Directors
The Company believes the current balance of skills in the Board as a whole, reflects a very broad range of commercial and
professional skills across geographies and industries and each of the Director’s has experience in public markets. An
assessment of the Board’s skills and expertise is also set out in the Corporate Governance Report included in the Company’s
website,
which
Annual
https://www.europeanmet.com/shareholdercentre-reports.
Company’s
Accounts,
available
Report
and
and
the
on
is
The Board shall review annually the appropriateness and opportunity for continuing professional development whether
formal or informal.
Profiles of the Directors are set out below:
Mr David Reeves – Non-executive Chairman
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. Mr Reeves is the Managing
Director of Calidus Resources Limited (ASX). Mr Reeves is currently a member of the Remuneration Committee, Audit and
Risk Committee and Nomination Committee.
Mr Keith Coughlan – Managing Director
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. Mr Coughlan is currently Non-executive Chairman of Calidus Resources Limited (ASX), and Non-
executive Director of Southern Hemisphere Mining Limited (ASX). He previously held the position of Non-executive Chairman
of Talga Resources Limited (ASX) from 17 September 2013 to 8 February 2017. Mr Coughlan is currently a member of the
Audit and Risk Committee and Nomination Committee.
Mr Richard Pavlik – Executive Director
Mr Pavlik is the General Manager of Geomet s.r.o., 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
Mr Kiran Morzaria – Non-executive Director
Mr Morzaria has a Bachelor of Engineering (Industrial Geology) and an MBA (Finance). He 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 (AIM) and a director of UK Oil & Gas plc (AIM). He was previously a Director of Bacanora Minerals plc (AIM). Mr
Morzaria is currently a member of the Remuneration Committee and the Audit and Risk Committee.
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EUROPEAN METALS HOLDINGS LIMITED
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ANNUAL REPORT 30 JUNE 2018
The CFO is not currently a member of the Board, which the Company believes is acceptable given the current focus of the
Company on preparation of a definitive feasibility on the Cinovec deposit. As the scale and complexity of the Group develops,
the Board will consider any further appointments to the Board as appropriate. The Company’s Chief Financial Officer, James
Carter, is a CPA and Chartered Company Secretary with 20 years’ international experience in the mining industry and he is
currently the Chief Financial Officer (CFO) of Keras Resources Plc (AIM).
PRINCIPLE SEVEN
Evaluation of Board Performance
The Board is responsible for evaluating the performance of the Board and 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 which requires the Board to disclose 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.
The review will assist to indicate if the Board’s performance is appropriate and efficient with respect to the Board Charter.
The Board regularly reviews its skill base and whether it remains appropriate for the Company’s operational, legal and
financial 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 encouraged to avail themselves of resources required to fulfil the performance of their duties.
PRINCIPLE EIGHT
Corporate Culture
The Corporate Code of Conduct applies to the Company’s directors, senior executives and employees.
The purpose of the Corporate Code of Conduct is to provide a framework for decisions and actions in relation to ethical
conduct in employment. It underpins the Company’s commitment to integrity and fair dealing in its business affairs and to a
duty of care to all employees, clients and stakeholders. The document sets out the principles covering appropriate conduct
in a variety of contexts and outlines the minimum standard of behaviour expected from employees.
The directors consider that at present the Company has an open culture facilitating comprehensive dialogue and feedback
and enabling positive and constructive challenge. The Company has adopted, with effect from the date on which its shares
were admitted to AIM, a code for Directors' and employees' dealings in securities which is appropriate for a company whose
securities are traded on AIM and is in accordance with the requirements of the Market Abuse Regulation which came into
effect in 2016.
PRINCIPLE NINE
Maintenance of Governance Structures and Processes
The QCA Code recommends that the Company maintains governance structures and processes in line with its culture and
appropriate to its size and complexity.
Ultimate authority for all aspects of the Company's activities rests with the Board, the respective responsibilities of the
Chairman and Chief Executive Officer arising as a consequence of delegation by the Board. The Board has adopted appropriate
delegations of authority which set out matters which are reserved to the Board. The Chairman is responsible for the
effectiveness of the Board, while management of the Company's business and primary contact with shareholders has been
delegated by the Board to the Managing Director.
The Board has established the following committees.
Audit and Risk Committee
The Audit and Risk Committee was formed on 26 August 2015, with directors appointed as members of the Committee, being
Mr Kiran Morzaria, Mr Reeves and Mr Coughlan. The role and responsibilities of the Audit and Risk Committee are outlined
71
EUROPEAN METALS HOLDINGS LIMITED
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ANNUAL REPORT 30 JUNE 2018
in Schedule 3 of the Company’s Corporate Governance Plan available online on the Company’s website,
www.europeanmet.com/corporate-governance.
This committee has primary responsibility for monitoring the Financial Reporting function and internal controls in order to
ensure that the financial performance of the Company is properly measured and reported. The committee receives the
financial reports from the executive management and auditors relating to the interim and annual accounts and the accounting
and internal control systems in use throughout the Company. The Audit Committee shall meet not less than twice in each
financial year and it has unrestricted access to the Company's auditors.
Remuneration Committee
The Remuneration Committee was formed on 26 August 2015, with directors appointed as members of the Committee, being
Mr Kiran Morzaria, Mr Reeves. The role and responsibilities of the Remuneration Committee are outlined in Schedule 3 of
the Company’s Corporate Governance Plan available online on the Company’s website, www.europeanmet.com/corporate-
governance.
The Remuneration Committee reviews the performance of the executive directors and employees and makes
recommendations to the Board on matters relating to their remuneration and terms of employment. The Remuneration
Committee also considers and approves the granting of share options pursuant to the share option plan and the award of
shares in lieu of bonuses pursuant to the Company's Remuneration Policy.
Nominations Committee
The Nominations Committee was formed on 26 August 2015, with directors appointed as members of the Committee, being
Mr Reeves and Mr Coughlan. The role and responsibilities of the Nominations Committee are outlined in Schedule 3 of the
Company’s Corporate Governance Plan available online on the Company’s website, www.europeanmet.com/corporate-
governance.
PRINCIPLE TEN
Shareholder Communication
The Board is committed to maintaining good communication and having constructive dialogue with its shareholders. The
Company has close ongoing relationships with its private shareholders. Institutional shareholders and analysts have the
opportunity to discuss issues and provide feedback at meetings with the Company. In addition, all shareholders are
encouraged to attend the Company's Annual General Meeting.
Investors also have access to current information on the Company though its website, www.europeanmet.com, and via Keith
Coughlan, Managing Director, who is available to answer investor relations enquiries.
The Company shall include, when relevant, in its annual report, any matters of note arising from the audit or remuneration
committees.
72
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
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 14 September 2018
(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
106
263
167
262
120
918
(b) The number of shareholdings held in less than marketable parcels is 136.
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
141,464,727 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 14 September 2018
Rank
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Citicorp Nominees Pty Limited
Armco Barriers Pty Ltd
J P Morgan Nominees Australia Limited
Inswinger Holdings Pty Ltd
Vidacos Nominees Limited
Mrs Eleanor Jean Reeves
Barclays Direct Investing Nominees Limited
JM Nominees Limited
Hargreaves Lansdown (Nominees) Limited <15942>
Lawshare Nominees Limited
Hargreaves Lansdown (Nominees) Limited
Interactive Investor Services Nominees Limited
HSBC Global Custody Nominees (UK) Limited <777329>
MR Neil Thacker MacLachlan
CGWL Nominees Limited
Interactive Investor Services Nominees Limited
Court Securities Pty Ltd
Mr Edward Francis Gerrard Nealon
HSDL Nominees Limited
Lichter Services Pty Ltd
Number of CDIs
28,862,460
12,902,000
9,082,965
8,500,000
3,746,283
3,720,244
2,869,515
2,799,825
2,643,116
2,281,904
2,217,863
2,034,295
1,910,000
1,902,202
1,879,433
1,597,699
1,580,000
1,571,429
1,469,481
1,400,000
% Held
20.40
9.12
6.42
6.01
2.65
2.63
2.03
1.98
1.87
1.61
1.57
1.44
1.35
1.34
1.33
1.13
1.12
1.11
1.04
0.99
Total Top 20 Shareholders
94,970,714
67.14
73
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2018
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 6245 2050.
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
Preliminary mining
permit
Cinovec
Cinovec II
Cinovec III
Cinovec IV
Cinovec II
Cinovec III
n.a.
Cinovec East
Cinovec South
Czech Republic
100%
74