EUROPEAN METALS HOLDINGS LIMITED
ARBN 154 618 989
ANNUAL REPORT
30 JUNE 2020
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CORPORATE DIRECTORY
Directors
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
Executive Chairman
Executive Director
Non-Executive Director
Nominated Advisor & Broker
Beaumont Cornish Limited
Building 3
566 Chiswick High Road
LONDON W4 FYA
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 2020
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 Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report to the members of European Metals Holdings Limited
Corporate Governance Statements
Additional Information
Tenement Schedule
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CHAIRMAN’S LETTER
Dear Shareholders
Welcome to the 2020 Annual Report for European Metals Holdings limited (“European Metals” or “the Company”).
On behalf of the Board of Directors, I am pleased to report to you on what has been another busy and transformational year
for your Company. Our strategy is to become a Czech based lithium and tin producer and we have made significant advances
through the year towards making that aim a reality.
The Project has been significantly de-risked and at the time of this report is moving rapidly towards a final investment
decision.
The year was marked primarily by the completion of an agreement with CEZ a.s., the Czech national power utility, by which
CEZ became a 51% shareholder of the Project Company, Geomet and injected approximately EUR 29 million into the Project.
This agreement not only provides all necessary funding to move the Project to final investment decision, it also provides
strong business and management support within the Czech Republic.
CEZ is an established, integrated energy group with operations in a number of Central and Southeastern European countries
and Turkey. CEZ’s core business is the generation, distribution, trade in, and sales of electricity and heat, trade in and sales
of natural gas, and coal extraction. CEZ Group has 33,000 employees and annual revenue of approximately EUR 7.24 billion.
The largest shareholder of its parent company, CEZ a.s., is the Czech Republic government with a stake of approximately 70%.
The shares of CEZ a.s. are traded on the Prague and Warsaw stock exchanges and included in the PX and WIG-CEE exchange
indices. CEZ’s market capitalization is approximately EUR 9 billion. As one of the leading Central European power companies,
CEZ intends to develop several projects in areas of energy storage and battery manufacturing in the Czech Republic and in
Central Europe. CEZ is also a market leader for E-mobility in the region and has installed and operates a network of EV charging
stations throughout Czech Republic. The automotive industry in Czech is a significant contributor to GDP and the number of
EV’s in the country is expected to grow significantly in coming years.
In addition to the partnership with CEZ, the Company announced post balance date, a partnership agreement with EIT
InnoEnergy, a European Union body that is the principal facilitator and organiser of the European Battery Alliance (EBA). The
EBA was initiated by the European Commission to create a competitive and sustainable battery cell manufacturing value chain
in Europe.
The purpose of the partnership agreement with EIT InnoEnergy is to facilitate the accelerated construction financing and
ultimate commercialisation of Cinovec. This will be achieved through assistance in the sourcing of construction finance, grant
funding, and offtake introductions and negotiations.
There has been significant recent commitment within the EU to building a sustainable European Battery industry and Electric
Vehicle industry. In July, the EU approved a Green Stimulus Package of in excess of EUR 500 billion to address climate change
and ensure a green energy future. This, coupled with a growing global desire to develop local supply chains, has focused
attention on European based projects involved in the battery metals supply chain. Cinovec is set to benefit significantly from
these developments.
Global lithium prices continue to be depressed, largely due to the recent upheaval in the spodumene concentrate market.
We believe that this upheaval, combined with the macro factors outlined above strongly supports our strategy of becoming
an integrated producer of lithium hydroxide and/or lithium carbonate supplying directly into the European market. This
strategy eliminates counter party risk and delivers European product into the rapidly expanding European EV and battery
storage markets. We see a strong recovery in lithium prices.
The deposit is uniquely located, being in the centre of the Czech and European car industry and proximal to a large number
of new and planned battery factories. Europe has recently overtaken China as the largest producer of Electric Vehicles globally
and the EC has released an action plan on critical raw materials to ensure a more secure and sustainable supply.
The Project Company recently appointed SMS group, a German based world leading engineering firm as the lead engineer
for the minerals processing and lithium battery-grade chemicals production at Cinovec. This marks the beginning of the formal
Front-End Engineering Design study as the major component of the ongoing Definitive Feasibility Study. This detailed
engineering contract, along with advances in permitting and offtake discussions moves us closer to development of Europe’s
largest hard rock lithium resource for the benefit of all stakeholders.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CHAIRMAN’S LETTER
At a board level, our Chairman Dave Reeves resigned at the end of the year. Dave was instrumental in bringing the Cinovec
Project to the Company in 2013 and the development of the Project since. Dave’s workload in his Executive role with another
mining project has increased dramatically and requires a great deal of his time. We are very sorry to see him leave and wish
him all the very best with his future endeavours.
Finally, I would like to take this opportunity to thank all staff, advisors, contractors and our shareholders who have supported
us over the past year.
I look forward to updating you throughout the new financial year as we continue to advance the Cinovec Lithium/Tin Project.
Keith Coughlan
EXECUTIVE CHAIRMAN
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
PROJECT REVIEW
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project.
Geomet s.r.o. is owned 49% by European Metals and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. CEZ is a
significant energy group listed on various European Exchanges with the ticker CEZ. Following the investment of CEZ, the
Cinovec Project is fully funded to decision to construct.
Cinovec hosts a globally significant hard-rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45%
Li2O and 0.04% Sn and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04% Sn containing a combined 7.22
million tonnes Lithium Carbonate Equivalent and 263kt of tin reported 28 November 2017 (Further Increase in Indicated
Resource at Cinovec South). An initial Probable Ore Reserve of 34.5Mt at 0.65% Li2O and 0.09% Sn reported 4 July 2017
(Cinovec Maiden Ore Reserve – Further Information) has been declared to cover the first 20 years mining at an output of
22,500tpa of lithium carbonate reported 11 July 2018 (Cinovec Production Modelled to Increase to 22,500tpa of Lithium
Carbonate). The quantity of these resources directly attributable to the Company is equivalent to the 49% shareholding the
Company has in Geomet s.r.o.
This makes Cinovec the largest hard-rock 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. In June 2019 EMH completed an updated Preliminary Feasibility Study, conducted by
specialist independent consultants, which indicated a return post tax NPV of USD1.108B and an IRR of 28.8% and confirmed
that the Cinovec Project is a potential low operating cost, producer of battery grade lithium hydroxide or battery grade lithium
carbonate as markets demand. It confirmed the deposit is amenable to bulk underground mining. Metallurgical test-work has
produced both battery grade lithium hydroxide and battery grade lithium carbonate in addition to 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.
Agreement with CEZ on Significant Project Investment
A significant highlight of the year has been the agreement with CEZ involving the investment of approximately EUR 29.1
million for 51% of the Cinovec Project. The first announcement of this proposed agreement was made in July 2019.
As part of the then agreement, CEZ conditionally agreed to provide a EUR 2 million finance facility by way of a convertible
loan whilst they were conducting due diligence on the Company and Project.
On 27 March 2020, the Company announced that it had reached final agreement with CEZ, regarding the strategic partnership
and significant investment, subject only to the approval of European Metals Shareholders. This approval was received on 23
April and on 28 April 2020, European Metals announced that the investment of EUR 29.1 million by CEZ had been completed.
The payment of EUR 29.1 million will see the Cinovec project fully funded to the decision to construct, paving the way for
Cinovec to become the first European Union producer of battery grade lithium compounds from a local lithium resource.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
Preliminary Mining Permits
PROJECT REVIEW
Throughout the year the Company has made regulatory advancements to the project in the form of progressive permitting.
In August 2019, the Company advised the granting of an extension to the Cinovec Exploration Licence that covers the two
granted Preliminary Mining Permits (“PMP’s”). The granted PMP’s convey the sole and exclusive rights upon the Company
to apply for a Final Mining Permit, however do not allow for further drilling. As the Company wished to conduct further
metallurgical testing and measured resource drilling, the extension to the exploration license that was due to expire in July
2018 was sought. The licence has now been extended until 31 December 2020.
On 30 April 2020, European Metals advised that the Czech Ministry of the Environment had granted Geomet with the PMP
relating to the Northwestern part of the Cinovec project. The preliminary approval for the Northwestern part of the deposit
covers an area of 1.27 km2 and, together with the existing Preliminary Mining Permit for the Southern part, now encompasses
the entire Cinovec ore reserve. This permit significantly strengthens Geomet’s position as the only possible miner and paves
the way for obtaining the remaining permits to start construction, mining and processing activities.
On 16 June 2020, European Metals advised that the Czech Ministry of the Environment had granted Geomet an updated PMP
related to the Eastern part of the Cinovec deposit. The permit was issued for a period of 8 years.
The approval for the Cinovec-East PMP of the deposit covers an area of 0.201 km2 and, together with the existing PMP‘s,
encompases the entire Cinovec ore reserve with PMP‘s. There are three PMP‘s issued with medium-term validity periods;
Cinovec Northwest and Cinovec-East are valid until 2028 and Cinovec-South until 2025. The Company intends to amalgamate
all three PMP‘s into a single PMP as a pre-requisite for a single Final Mining Area and Final Mining Permit to simplify the
development of the mine.
Corporate
The Company made two small capital raisings during the year, the proceeds of which were used to advance the Company’s
strategy including progressing the development of the Project, progressing discussions with CEZ and discussions with
potential off take and strategic partners.
The first raising was for GBP 750,000 (A$1,349,831) in August 2019 and the second for GPB 350,000 (AUD 675,074) in January
2020.
Board Changes
On 30 June 2020, the Company announced that Mr David Reeves had resigned as a Director and Non-Executive Chairman of
the Company due to the increased demands on his time as Managing Director of Calidus Resources. At the same time Mr
Keith Coughlan moved from his position of Managing Director to Executive Chairman as an interim measure.
Covid-19 Update
On 24 April 2020, the Company provided the market with an update regarding the operations and Covid-19.
It was reported that all management and staff of both EMH and Geomet were unaffected by COVID-19 and the restrictions
on travel at the time and meetings were not expected to have any impact for the foreseeable future; all staff were able and
continued to work remotely. To-date, the Cinovec Project has drilled in excess of 13,800m of diamond drilling under the
management of EMH. Extensive sample quantities are available from the resulting drill core as well as material recovered
from historic adit drives into the ore body. Significant quantities of ore sample are held at our laboratory partners in Germany
and at the project office in the Czech Republic. European Metals and Geomet have confirmed with our laboratory and
engineering partners in Germany and Australia that staff and laboratories involved in the DFS and FEED programmes over the
next 3 months are ready and open for work on an immediate basis.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
PROJECT REVIEW
POST REPORTING PERIOD
Measured Resource Drilling Commenced
On 10 August 2020, the Company advised that the Measured Resource drilling had commenced at the Cinovec project.
Highlights included:
o A total of nineteen resource drill holes will be completed during this campaign for a total of 5,550 m.
o A further two hydro-geological drill holes and four geotechnical drill holes are planned once resource drilling has been
completed.
The programme will provide approximately 10t of drill core for further metallurgical testing and to generate samples.
o
Partnership Agreement with European Union Body
On 28 July 2020, the Company announced that a ”Value Added Services Agreement” with KIC InnoEnergy SE (“EIT
InnoEnergy”), the principal facilitator and organiser of the European Battery Alliance, had been entered into by Geomet s.r.o.
in respect of the Cinovec Lithium Project.
The purpose of the financing agreement with EIT InnoEnergy is to support the construction financing and ultimate
commercialisation of Cinovec by EIT InnoEnergy providing assistance to EMH to support the:
Sourcing of construction finance;
Securing of grant funding; and
o
o
o Assisting in offtake introductions and negotiations.
Appointment of European Investor Relations Advisor
On 14 July 2020 EMH advised it had appointed DGWA, the German Institute for Asset and Equity Allocation and Valuation
("Deutsche Gesellschaft für Wertpapieranalyse GmbH", "DGWA"), one of the leading mining and resource focused European
investment banking boutiques, as its Investor and Corporate Relations advisor in Europe.
DGWA will collaborate with European Metals to help gain investor awareness and drive investment opportunities from the
European financial markets and will provide investor relations services to help European Metals position itself in the German-
speaking financial markets. DGWA will also introduce European Metals to its extensive network within the European
corporate and federal community to assist the Company in exploring offtake-agreements and potential grants and subsidies.
Proposed Czech Listing
The Company is in discussions with the Prague Stock Exchange regarding the proposed listing of the Company's securities.
Given the high profile that the Cinovec Project has within the Czech Republic, the Company would like to provide the
opportunity for Czechs to invest directly via their domestic exchange.
Interim Funding
EMH has arranged an interim funding facility to assist in financing new initiatives and for ongoing operations. The facility has
been provided by an Australian based sophisticated investor, 6466 Investments Pty Ltd, and allows for a drawdown of up to
AUD 1 million in tranches as required over 12 months. Any funds drawn down will convert to CDI's in the Company at a 15%
discount to the 10-day vwap in the Company's securities. The issue of shares pursuant to draw downs is not subject to
shareholder approval.
The first draw down was completed on 17 July 2020 and the second draw down was completed on 27 August 2020.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
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 2020.
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 Keith Coughlan
Executive Chairman
Previously Managing Director
Appointed 30 June 2020
Appointed 6 September 2013
Mr David Reeves
Non-Executive Chairman
Appointed 6 March 2014; Resigned 30 June 2020
Mr Richard Pavlik
Executive Director
Appointed 27 June 2017
Mr Kiran Morzaria
Non-Executive Director
Appointed 10 December 2015
Company Secretary
Ms Julia Beckett holds a Certificate in Governance Practice and Administration and is an Affiliated Member of the Governance
Institute of Australia. Julia is a Corporate Governance professional, having worked in corporate administration and
compliance for the past 13 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)
Ragnar Metals Limited (ASX: RAG), Los Cerros Limited (formerly known as Metminco Limited) (Joint) (ASX: LCL) and a number
of non-listed companies. Julia 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 2020 Financial Year has been one of significant growth and development for the Company. For further information refer
to the Project Review section of this report.
Results of Operations
The consolidated income after tax for year ended 30 June 2020 amounted to profit after tax of $2,813,807 (2019 loss:
$3,252,815).
Financial Position
The net assets of the Group have increased by $5,610,438 to $18,069,503 at 30 June 2020 (2019: $12,459,065).
Significant Changes in the State of Affairs
On 28 April 2020, the Company announced that the investment of EUR29.1 million by CEZ a.s. (“CEZ”) for a 51% equity interest
in Geomet, the Company’s Czech subsidiary and holder of the Cinovec licenses, had been completed. The payment of EUR29.1
million, which has been received into the Geomet account, will see the Cinovec project fully funded to the decision to
construct, paving the way for Cinovec to become the first European Union producer of battery grade lithium compounds
from a local lithium resource. The payment of EUR 29.1 million was split into two payments - EUR 12.3m (A$20.6m) was
contributed to Geomet’s registered share capital and EUR 16.8m (A$28.1m) is a monetary contribution to the equity Geomet
outside of the Geomet’s registered share capital.
The Company ceased to fully consolidate Geomet’s results within EMH’s consolidated accounts effective 28 April 2020. From
28 April 2020 onward, Geomet had been equity accounted (ie 49% of share of the profit or loss of the investee after the date
of acquisition) for as Investment in Associate by EMH (Note 13 and Note 20). The Company was appointed to provide services
of managing the Cinovec project development.
Dividends Paid or Recommended
No dividends were declared or paid during the year and the Directors do not recommend the payment of a dividend.
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
Information on Directors
Keith Coughlan
Executive Chairman – Appointed 30 June 2020
Previously Managing Director (CEO) – Appointed 6 September 2013 to 30 June 2020
Qualifications
Experience
Interest in CDIs and Options
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.
Mr Coughlan has 850,000 CDIs direct interest and 8,500,000 indirect interest held
by Inswinger Holdings Pty Ltd, an entity of which Mr Coughlan is a director and a
shareholder.
Special Responsibilities
Member of Audit and Risk Committee
Directorships held
listed entities
David Reeves
Qualifications
Experience
Member of Nomination Committee
in other
Non-Executive Chairman of Doriemus plc
Non-Executive Director of Calidus Resources Limited
Non-Executive Director of Southern Hemisphere Mining Limited
Non-Executive Chairman – Appointed 6 March 2014; Resigned on 30 June 2020
Mining Engineer
Mr Reeves is a qualified mining engineer with 30 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*
Mr Reeves has 300,000 CDIs direct interest and 4,045,840 CDI indirect interest held
by Eleanor Jean Reeves , Mr Reeves’ spouse.
325,587 Class A Performance Shares
1,000,000 options, 16.6 cents, expire 17 August 2020
Special Responsibilities
Member of all the Committees (Resigned on 30 June 2020)
Directorships held
listed entities
in other
Managing Director of Calidus Resources Limited (ASX)
Director of Keras Resources Plc (AIM)
* Shareholdings as at 30 June 2020, date of resignation
9
Richard Pavlik
Qualifications
Experience
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
Executive Director – Appointed 27 June 2017
Masters Degree in Mining Engineer
Mr Pavlik is the Chief Advisor to the CEO of Geomet s.r.o, 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
Special Responsibilities
Member of Audit and Risk Committee
Member of Nomination Committee
Directorships held
listed entities
in other
Nil
Kiran Morzaria
Qualifications
Experience
Interest in CDIs and Options
Non-Executive Director – Appointed 10 December 2015
Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines
and an MBA (Finance) from CASS Business School
Mr Morzaria has extensive experience in the mineral resource industry working in
both operational and management roles. He spent the first four years of his career
in exploration, mining and civil engineering before obtaining his MBA. Mr Morzaria
has served as a director of a number of public companies in both an executive and
non-executive capacity.
Mr Morzaria has 200,000 direct interest in CDIs. Mr Morzaria is a director and chief
executive of Cadence Minerals Plc which owns 23,259,751 CDIs. Mr Morzaria has
no control on the acquisition or sale of the shares held by Cadence Minerals plc.
Special Responsibilities
Member of Audit and Risk Committee
Member of Nomination 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
6
6
6
6
6
6
6
6
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
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 and warrant at the date of this report is as follows:
Expiry date
15 June 2022
1 January 2021
1 June 2021
1 December 2021
22 November 2021
31 December 2022
Exercise Price
Number under option
25.0 cents
35.0 cents
40.18 cents
31.11 cents
31.5 cents
25.0 cents
200,000
200,000
100,000
100,000
116,875
15,000,000
Since the end of the reporting year, the following options were issued and exercised:
On 17 July 2020, the Company issued 250,000 options exercisable at 25.0 cents on or before 15 June 2022 to consultants in
accordance with their consultancy agreements. 50,000 CDIs were exercised on 17 September 2020, raising $12,500. (2019:
nil).
On 5 August 2020 and 18 August 2020, the Company issued 750,000 and 3,000,000 CDIs upon the exercise of 750,000 and
3,000,000 unquoted options exercisable at 16.6 cents respectively. The option conversion raised $622,500 (2019: nil).
No person entitled to exercise the option or warrant has or has any right by virtue of the option or warrant to participate in
any share issue of any other body corporate.
Performance Shares
Performance shares on issue at the date of this report is as follows:
Issue date
Expiry date
Number on issue
A Class
18 Dec 2018
18 Dec 2021
3,000,000
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EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
CDIs Issued Under Employee Securities Incentive Plan (ESIP)
CDIs issued under ESIP as at the date of this report is as follows:
Number on issue
Issue date
1,650,000
100,000
14 Dec 2017
6 Jun 2018
During the financial year, 1,400,000 CDIs were cancelled following resignations of previous executive members. No additional
CDIs were issued under ESIP.
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.
Non-audit Services
Stantons International has not provided any non-audit services during the year.
Significant events after the reporting date
•
•
•
•
•
•
On 14 July 2020, the Company announced that the Company is in discussion with the Prague Stock Exchange regarding
the proposed listing of the Company’s securities. Given the high profile that the Cinovec project has within the Czech
Republic, the Company would like to provide the opportunity for Czechs to invest directly via their domestic exchange.
In the interim, the Company has arranged for an interim funding facility to assist in financing these new initiatives and
ongoing operations. The facility has been provided by an Australian based sophisticated investor, 6466 Investments Pty
Ltd, and allows for a drawdown of up to AUD1m in tranches as required over 12 months.
On 17 July 2020, the Company advises that it has issued 1,049,825 CDIs in the Company at a price of 13.176 pence per
CDIs in relation to the first draw down of the Fund Facility Agreement between 6466 Investments Pty Ltd and EMH as
announced on 14 July 2020. The issue of new CDIs is in respect of the first advance of AUD250,000. The funds will be
used to assist in funding new initiatives and ongoing operations.
On 17 July 2020, the Company issued 250,000 options exercisable at 25.0 cents on or before 15 June 2022 to consultants
in accordance with their consultancy agreements.
On 5 August 2020 and 18 August 2020, the Company issued 750,000 and 3,000,000 CDIs upon the exercise of 750,000
and 3,000,000 unquoted options exercisable at $0.166 respectively. The option conversion raised $622,500.
On 27 August 2020, the Company advises that it has issued 927,300 CDIs in the Company in respect to the second draw
down of A$250,000 under the Fund Facility Agreement between 6466 Investments Pty Ltd and the Company.
On 17 September 2020, the Company issued 50,000 upon the exercise of 50,000 unquoted options exercisable at $0.25.
The option conversion raised $12,500.
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 2020 has been received and can be found on page 22 of
the financial report.
12
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
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 2020 are set out in the following tables:
The maximum amount of remuneration for non-executive directors is $300,000 as approved by shareholders.
During the financial period, the Company did not engage any remuneration consultants.
13
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
2020
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
Super-
annuation
Directors
$
$
$
David Reeves(i)
36,000
Keith Coughlan(ii)
240,000
Kiran Morzaria
24,000
Richard Pavlik(iii)
140,691
440,691
-
-
-
-
-
-
-
-
-
-
$
-
$
-
4,822
22,800
26,663
-
-
-
-
-
-
4,822
22,800
26,663
Long
Service
Leave
$
-
Equity Options3
$
$
$
-
-
-
-
-
-
-
-
36,000
294,285
24,000
-
-
-
29,802
170,493
17.4%
29,802
524,778
-
Notes:
(i) Resigned 30 June 2020.
(ii) Effective 28 April 2020, a portion of the Mr Coughlan’s remuneration has been reimbursed by Geomet s.r.o. The Company was appointed to
provide services of managing the Cinovec project development subsequent to finalization of final agreement with CEZ Group. During the financial
year, a total of $22,880 was reimbursed by Geomet s.r.o.
(iii) Represents remuneration from 1 July 2020 to 27 April 2020. Effective 28 April 2020, Mr Pavlik’s remuneration has been paid by Geomet s.r.o
directly.
2019
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
165,878
Key Management
Personnel
James Carter(i)
18,231
Neil Meadows(ii)
183,333
667,442
Notes:
(i) Resigned 21 Sept 2018.
(ii) Resigned 10 June 2019.
$
-
$
-
$
$
-
- 34,571
26,084
-
-
-
-
-
-
-
3,810
- 38,381
-
-
1,610
17,779
45,473
$
86,824
-
-
-
-
260,148
$
$
-
-
-
122,824
300,655
24,000
71%
-
-
59,117
224,995
26%
-
-
19,841
465,070
-
56%
346,972
59,117 1,157,385
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. During the year ended 30 June 2019, Mr Coughlan and Mr Meadows received payouts of $34,571 and $3,810, respectively, representing unused annual
leave.
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.
14
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
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 $240,000 per annum plus superannuation contribution of 9.5%
from 1 April 2017.
D. Share-based compensation
During the financial year, nil CDIs were issued to KMP under the Employee Securities Incentive Plan (ESIP) (2019: nil).
Loan CDIs on issue to KMP under the ESIP are as follows:
30 June 2020
Loan CDIs Grant Details
Exercised
Lapsed/Cancelled
Balance at End of Year
Grant Date
No.
Value
No.
Value
No.
Value
No.
No.
Value
$
$
$
Vested
Not Vested
$
Group KMP
David Reeves*
Keith Coughlan
Richard Pavlik
Kiran Morzaria
30 Nov 2017
300,000
209,028
30 Nov 2017
850,000
592,245
30 Nov 2017
300,000
209,028
30 Nov 2017
200,000
139,352
1,650,000 1,149,653
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
300,000
850,000
300,000
200,000
1,650,000
-
-
-
-
-
209,028
592,245
209,028
139,352
1,149,653
* Resigned on 30 June 2020
30 June 2019
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
Keith Coughlan
Richard Pavlik
Kiran Morzaria
James Carter(i, iii)
Neil Meadows(ii, iv)
30 Nov 2017
300,000
209,028
30 Nov 2017
850,000
592,245
30 Nov 2017
300,000
209,028
30 Nov 2017
200,000
139,352
6 June 2018
400,000
106,550
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
- 2,650,000
400,000 1,522,579
Notes:
(i)
(ii)
(iii)
(iv)
Resigned 21 Sept 2018.
Resigned 10 June 2019.
Mr Carter’s CDIs were cancelled during the period.
Mr Meadows’s CDIs were cancelled during the period.
The terms of the loan CDIs are disclosed in Note 16.
15
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
E. Options issued as part of remuneration for the year ended 30 June 2020
No options were issued as part of the remuneration for the year ended 30 June 2020 (2019: nil).
F. Options on issue as part of remuneration
30 June 2020
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
Richard Pavlik
Kiran Morzaria
-
-
-
-
-
-
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 has been included in Section B of the
remuneration report as at 30 June 2019. The options were unexercised and lapsed on 3 January 2020.
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
There were no loans issued to Key Management Personnel during the financial year.
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 2020 and 2019 reporting period by each of the Key
Management Personnel of the Group; including their related parties are set out below.
Balance at the
start of the
year
Granted
during the
year
30 June 2020
Exercised during
the year
Other changes
during the year
Balance at the
end of the year
Vested and
exercisable
Unvested
David Reeves*
1,000,000
Keith Coughlan
2,000,000
Kiran Morzaria
-
Richard Pavlik
400,000
Total
3,400,000
*Note: Resigned on 30 June 2020
-
-
-
-
-
-
-
-
-
-
-
-
-
(400,000)
1,000,000
1,000,000
2,000,000
2,000,000
-
-
-
-
(400,000)
3,000,000
3,000,000
-
-
-
-
-
16
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
J. Other information (continued)
Balance at the
start of the
year
Granted
during the
year
30 June 2019
David Reeves
1,000,000
Keith Coughlan
2,000,000
Kiran Morzaria
Richard Pavlik
James Carter(i)
Neil Meadows(ii)
-
400,000
-
-
Total
3,400,000
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
400,000
-
-
3,400,000
3,000,000
400,000
Note:
(i) Resigned 21 September 2018. The balance at end of year represents balance at date of resignation.
(ii) Resigned 10 June 2019. The balance at end of year represents balance at date of resignation.
Chess Depositary Interests (‘CDIs’) held by Key Management Personnel
The number of ordinary CDIs held in the Company during the 2020 and 2019 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.
2020
Name
David Reeves(i)
Indirect1
Keith Coughlan
Indirect2
Kiran Morzaria
Indirect3
Richard Pavlik
Total
Balance at
Start of year
Granted as
remuneration
during the year
Issued on
exercise of
options
300,000
3,720,244
850,000
8,500,000
200,000
27,896,470
300,000
41,766,714
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other
Changes
during the
year
Balance at
end of year
-
300,000
325,5964
4,045,840
-
-
-
850,000
8,500,000
200,000
(4,636,719)
23,259,751
-
300,000
(4,311,123)
37,455,591
Notes:
1. Mr Reeves has 300,000 CDIs direct interest and 4,045,840 CDI indirect interest held by Eleanor Jean Reeves , Mr Reeves’
spouse.
2. Mr Coughlan has 850,000 CDIs direct interest and 8,500,000 indirect interest held by Inswinger Holdings Pty Ltd, an entity of which Mr
Coughlan is a director and a shareholder.
3. Mr Morzaria has 23,259,751 indirect interest held by Cadence Minerals Plc, an entity of which Mr Morzaria is a director and chief
4.
executive.
Issued on conversion of A Class Performance Shares and B Class Performance Shares
(i) Resigned 30 June 2020. The balance at end of year represents balance at date of resignation.
17
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
2019
Name
David Reeves
Indirect1
Keith Coughlan
Indirect2
Kiran Morzaria
Indirect3
Richard Pavlik
James Carter(i)
Neil Meadows(ii)
Total
Balance at
Start of year
Granted as
remuneration
during the year
Issued on
exercise of
options
Other
Changes
during the
year
300,000
3,720,244
850,000
8,500,000
200,000
27,846,470
300,000
400,000
1,000,000
43,116,714
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
end of year
300,000
3,720,244
850,000
8,500,000
200,000
-
-
-
-
-
50,000
27,896,470
-
-
-
300,000
400,000
1,000,000
50,000
43,166,714
Notes:
1. Mr Reeves has 300,000 CDIs direct interest and 3,720,244 CDI indirect interest held by Eleanor Jean Reeves , Mr Reeves’
spouse.
2. Mr Coughlan has 850,000 CDIs direct interest and 8,500,000 indirect interest held by Inswinger Holdings Pty Ltd, an entity of which Mr
Coughlan is a director and a shareholder.
3. Mr Morzaria has 27,846,470 indirect interest held by Cadence Minerals Plc, an entity of which Mr Morzaria is a director and chief
executive.
Resigned 21 September 2018. The balance at end of year represents balance at date of resignation.
Resigned 10 June 2019. The balance at end of year represents balance at date of resignation.
(i)
(ii)
Performance Shares held by Key Management Personnel
The number of Performance shares held in the Company during the 2020 reporting period held by each of the Key
Management Personnel of the Group:
30 June 2020
Grant Details
Exercised
Lapsed/cancelled Balance at End of Year
Grant Date
No.
Value
No.
Value
No.
Value
No.
Value
$
$
$
Unvested
$
Group KMP
David Reeves(i)
David Reeves(i)
Keith Coughlan
Richard Pavlik
Kiran Morzaria
A Class 18 Dec 2018
542,651
86,824
(217,064)
34,730
-
-
325,587
52,094
B Class 24 Nov 2016
542,651
289,932
(108,532)
57,987
(434,119) 231,945
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,085,302
376,756
(325,596)
92,717
(434,119) 231,945
325,587
52,094
(i)
Resigned 30 June 2020. The balance at end of the year represents balance at the date of resignation.
18
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
30 June 2019
Grant Details
Exercised
Lapsed/cancelled Balance at End of Year
Grant Date
No.
Value
No.
Value
No.
Value
No.
Value
$
$
$
Unvested
$
Group KMP
David Reeves
David Reeves
Keith Coughlan
Richard Pavlik
Kiran Morzaria
A Class 18 Dec 2018
542,651
86,824
B Class 24 Nov 2016
542,651
289,932
-
-
-
-
-
-
-
-
-
James Carter(i)
B Class 24 Nov 2016
514,650
274,971
Neil Meadows(ii)
-
-
-
1,599,952
651,727
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i)
(ii)
Resigned 21 September 2018. The balance at end of year represents balance at date of resignation.
Resigned 10 June 2019. The balance at end of year represents balance at date of resignation.
Description of Performance Shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
542,651
86,824
542,651
289,932
-
-
-
-
-
-
514,650
274,971
-
-
- 1,599,952
651,727
In financial year ended 30 June 2019, it had become apparent that the B Class Performance Shares approved at the 2016
AGM only represented half the value contemplated by the Original Performance Shares, as a result of the conversion
mechanism provided for under the B Class Terms. As an incentive to the vendors, the Company issued 5,000,000 A Class
Performance Shares on the same terms and conditions as the B Class Performance shares.
During the financial year 30 June 2020, the Company issued 3,000,000 CDIs upon conversion of 2,000,000 A Class Performance
Shares and 1,000,000 B Class Performance Shares in satisfaction of milestone being met. The remaining 4,000,000 B Class
Performance Shares lapsed during the year. Of the 3,000,000 CDIs issued on conversion of Performance Shares, 217,064 A
Class Performance Shares and 108,532 B Class Performance Shares were converted by Key Management Personnel. Under
the applicable terms and conditions, the performance shares convert into new CDIs in accordance with the following
milestones:
2,000,000 A Class Performance Shares
1.
2.
1,000,000 of the performance shares 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 register; and
1,000,000 of the performance shares convert into Shares and an equivalent number of CDIs upon the issuance of the
preliminary mining licenses relating to the Cinovec Project.
1,000,000 B Class Performance Shares
1.
1,000,000 of the performance shares convert into Shares and an equivalent number of CDIs upon the issuance of the
preliminary mining licenses relating to the Cinovec Project.
The remaining 4,000,000 B Class Performance Shares lapsed during the year.
19
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED)
The terms of the Performance Shares are as follows:
The remaining 3,000,000 A Class Performance Shares will convert in accordance with the below:
(i)
3,000,000 A 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 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
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)
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
2020
$
2019
$
2020
$
2019
$
Wilgus Investments Pty
Ltd/Wild West Enterprises Pty
Ltd
Rental
David Reeves
15,600
40,200
-
-
There were no other transactions with Key Management Personnel during the financial year.
End of Remuneration Report
20
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ REPORT
Signed in accordance with a resolution of the Board of Directors.
Keith Coughlan
EXECUTIVE CHAIRMAN
Dated at 30 September 2020
21
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
30 September 2020
Board of Directors
European Metals Holdings Limited
Suite 12, Level 1
11 Ventnor Avenue
WEST PERTH WA 6005
Dear Directors
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
RE:
EUROPEAN METALS HOLDINGS LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of European Metals Holdings Limited.
As the Audit Director for the audit of the financial statements of European Metals Holdings Limited for
the year ended 30 June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir R Tirodkar
Director
Liability limited by a scheme approved
under Professional Standards Legislation
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2020
Revenue
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
Share registry expense
Depreciation expense
Equity accounting on investment in Geomet s.r.o
13
Foreign exchange gain/(loss)
Other expenses
Loss before income tax
Income tax expense
Loss from continuing operations
Gain/(loss) from discontinued operations – De-consolidation of Geomet
s.r.o
Income/(Loss) for the year attributable to the members of the
Company
Other comprehensive income
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 income/(loss) for the year attributable to
members of the Company
Note
30 June 2020
$
30 June 2019
$
6
7
183,835
47,244
1,461
355,744
(2,043,727)
(1,153,379)
(54,450)
(60,000)
(40,000)
(60,000)
17
(2,439,192)
(1,179,090)
(175,052)
(294,342)
(98,576)
(15,600)
(25,552)
(139,514)
(1,344)
490,051
45,018
(27,528)
(94,879)
(473,902)
(166,090)
(40,200)
(9,953)
(97,211)
(1,344)
-
27,096
(33,604)
(4,608,729)
(2,965,351)
-
-
(4,608,729)
(2,965,351)
7,422,536
(287,464)
3
20
2,813,807
(3,252,815)
(1,522,451)
(1,522,451)
443,780
443,780
1,291,356
(2,809,035)
Earnings per share for income/(loss) from continuing operations
Basic earnings per CDI (cents)
Diluted earnings per CDI (cents)
Earnings per share for loss from discontinued operations
Basic earnings per CDI (cents)
Diluted earnings per CDI (cents)
8
8
8
8
(3.05)
(3.05)
4.92
4.92
The above statement should be read in conjunction with the accompanying notes.
(2.05)
(2.05)
(0.20)
(0.20)
23
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation expenditure
Investments accounted for using equity method
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
9
10
11
12
13
14a
14b
2020
$
2019
$
58,951
17,252
5,110
81,313
426,178
92,180
23,587
541,945
869
385,158
-
11,684,072
18,966,531
-
18,967,400
12,069,230
19,048,713
12,611,175
924,592
54,618
979,210
128,977
23,133
152,110
979,210
152,110
18,069,503
12,459,065
15
16
23,954,204
22,074,314
7,715,587
6,798,846
(13,600,288)
(16,414,095)
18,069,503
12,459,065
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 2020
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
Issued Capital
Share Based
Payment Reserve
Foreign Currency
Translation
Reserve
Accumulated
Losses
$
$
$
$
Total
$
Balance at 1 July 2018
20,413,074
4,303,819
843,485
(13,161,280)
12,399,098
Loss attributable to members of the
Company
Other comprehensive income
Total comprehensive loss for the year
Transactions with owners, recognized
directly in equity
-
-
-
-
-
-
-
(3,252,815)
(3,252,815)
443,780
-
443,780
443,780
(3,252,815)
(2,809,035)
CDIs issued during the year, net of costs
1,661,240
28,672
-
1,179,090
-
-
-
-
1,689,912
1,179,090
22,074,314
5,511,581
1,287,265
(16,414,095)
12,459,065
Equity based payments
Balance at 30 June 2019
Balance at 1 July 2019
22,074,314
5,511,581
1,287,265
(16,414,095)
12,459,065
Income attributable to members of the
Company
Other comprehensive income/(loss)
Total comprehensive (loss)/income for
the year
-
-
-
Transactions with owners, recognized
directly in equity
CDIs issued during the year, net of costs
1,879,890
-
-
-
-
-
2,439,192
Equity based payments
Balance at 30 June 2020
-
2,813,807
2,813,807
(1,522,451)
-
(1,522,451)
(1,522,451)
2,813,807
1,291,356
-
-
-
-
1,879,890
2,439,192
23,954,204
7,950,773
(235,186)
(13,600,288)
18,069,503
The above statement should be read in conjunction with the accompanying notes.
25
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Revenue received
Government grant
Payments to suppliers and employees
Interest received
R&D Rebate
Note
30 June 2020
$
30 June 2019
$
275,736
39,370
-
-
(2,177,875)
(2,714,709)
11
-
1,461
355,745
Net cash (used in) operating activities
17
(1,862,758)
(2,357,503)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation expenditure
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of CDIs
Capital raising costs paid
Net cash from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Exchange differences in foreign currency held
Cash and cash equivalents at the end of financial year
(331,372)
(1,165,022)
(331,372)
(1,165,022)
2,024,905
1,817,303
(145,015)
(127,391)
1,879,890
1,689,912
(314,240)
(1,832,613)
426,178
(52,987)
58,951
2,223,109
35,682
426,178
The above statement should be read in conjunction with the accompanying notes.
26
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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 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 2019 but determined that their application to the financial statements is either not
relevant or not material.
(a) New and Revised Accounting Standards Adopted by the Group
The Group has considered the implications of new or amended Accounting Standards which have become applicable for
the current financial reporting year and the group had to change its accounting policies as a result of adopting the following
standard:
AASB 16: Leases
The Group as lessee
At inception of a contract, the Group assesses if the contract contains a lease or is a lease. If there is a lease present,
a right-of-use asset and a corresponding lease liability are recognised by the Group where the Group is a lessee.
However, all contracts that are classified as short-term leases (i.e. a lease with a remaining lease term of 12 months
or less) and leases of low-value assets are recognised as an operating expense on a straight-line basis over the term
of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at the commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
fixed lease payments less any lease incentives;
Lease payments included in the measurement of the lease liability are as follows:
•
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
•
•
•
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if the lessee is reasonably certain to exercise the options; and
The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease payments
made at or before the commencement date and any initial direct costs. The subsequent measurement of the right-of-
use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset.
Based on director’s assessment, the adoption of AASB 16 did not have any material impact on the Group as its existing
lease contract is short-term in nature.
27
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) New and revised Accounting Standards for Application in Future Periods
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial
performance or position of the company.
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity
in the current or future reporting period and on foreseeable future transactions.
(ii)
Statement of Compliance
The financial report was authorised for issue on 30 September 2020.
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 2020, the consolidated entity comprising the Company and its subsidiaries has incurred a profit for the year
amounting to $2,813,807 (2019: loss $3,252,815). The Consolidated entity has a net working capital deficit of $897,897
(2019: $389,835), current liabilities of $979,210 (2019: $152,110) and cash and cash equivalents of $58,951 (2019:
$426,178). Since 30 June 2020, the Company has raised a further of $635,000 through exercised options as disclosed in
Note 26.
The directors consider these funds, combined with the loan arrangement entered into with 6466 Investments Pty Ltd which
allows for a drawdown of up to A$1million in tranches as required over 12 months, and the additional funds from any
capital raising to be sufficient for planned expenditure on the project for the ensuing 12 months as well as for corporate
and administrative overhead costs. The first drawdown was completed on 17 July 2020.
The ability of the Group to continue as a going concern and meet its planned exploration, administration and other
commitments is dependent upon the Group raising further working capital. In the event that the Group is not successful in
raising further equity, the Group may not be able to meet its liabilities as and when they fall due and the realisable value
of the Group’s current and non-current assets may be significantly less than book values.
(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 and consultants 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.
28
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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.
29
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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 income is recognised using the effective interest method.
Services Revenue
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the
contract with a customer; identifies the performance obligations in the contract; determines the transaction price which
takes into account estimates of variable consideration and the time value of money; allocates the transaction price to
the separate performance obligations on the basis of the relative stand-alone selling price of each distinct good or service
to be delivered; and recognises revenue when or as each performance obligation is satisfied in a manner that depicts
the transfer to the customer of the goods or services promised. Effective 28 April 2020, the Group started providing
services of managing the Cinovec project development.
(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.
30
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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) 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.
(i)
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.
31
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j)
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:
The expenditures are expected to be recouped through successful development and exploitation of the area of interest, or
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:
Sufficient data exists to determine technical feasibility and commercial viability, and
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.
(k)
Financial Instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the
financial instrument. Financial instruments (except for trade receivables) are measured initially at fair value adjusted by
transaction costs, except for those carried at ‘fair value through profit or loss’, in which case transaction costs are expensed
to profit or loss. Where available, quoted prices in an active market are used to determine the fair value. In other
circumstances, valuation techniques are adopted. Subsequent measurement of financial assets and financial liabilities are
described below.
Trade receivables are initially measured at the transaction price if the receivables do not contain a significant financing
component in accordance with AASB 15.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expired.
Classification and measurement
Financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with AASB 15, all financial assets are initially measured at fair value adjusted for transaction costs (where
applicable).
For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging
instruments are classified into the following categories upon initial recognition:
•
•
•
amortised cost;
fair value through other comprehensive income (FVOCI); and
fair value through profit or loss (FVPL).
Classifications are determined by both:
•
•
the contractual cash flow characteristics of the financial assets; and
the Group’s business model for managing the financial asset.
32
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet with the following conditions (and are not
designated as FVPL);
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash
flows; and
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest
on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
Financial assets at fair value through other comprehensive income
The Group measures debt instruments at fair value through OCI if both of the following conditions are met:
the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding; and
the financial asset is held within a business model with the objective of both holding to collect contractual cash flows
and selling the financial asset.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses
or reversals are recognised in the statement of profit or loss and computed in the same manner as for financial assets
measured at amortised cost. The remaining fair value changes are recognised in OCI.
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments
designated at fair value through OCI when they meet the definition of equity under AASB 132 Financial Instruments:
Presentation and are not held for trading.
Financial assets at fair value through profit or loss (FVPL)
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated
upon initial recognition at fair value through profit or loss or financial assets mandatorily required to be measured at
fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term.
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans
and borrowings, payables or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless
the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for
derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with gains or losses
recognised in profit or loss.
All interest-related charges and, if applicable, gains and losses arising on changes in fair value are recognised in profit
or loss.
33
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l)
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.
(m) 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.
(n) 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 as expenses in the period in which they are incurred.
(o) 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.
(p) 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.
34
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) 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.
(r)
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.
(s)
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.
35
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) 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 22.
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.
(u)
Investments in associates
Associates are entities over which the consolidated entity has significant influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the profits
or losses of the associate is recognised in profit or loss and the share of the movements in equity is recognised in other
comprehensive income. Investments in associates are carried in the statement of financial position at cost plus post-
acquisition changes in the consolidated entity's share of net assets of the associate. Goodwill relating to the associate is
included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.
Dividends received or receivable from associates reduce the carrying amount of the investment.
When the consolidated entity's share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over the associate
and recognises any retained investment at its fair value. Any difference between the associate's carrying amount, fair
value of the retained investment and proceeds from disposal is recognised in profit or loss.
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.
36
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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*
30 June 2020
30 June 2019
$
$
-
-
-
-
-
-
-
-
-
-
-
-
* Any capital gain on disposal of shares in Geomet held by EMH UK is tax-exempt under the current UK legislation (Schedule 7AC
of the Taxation of Chargeable Gains Act 1992). For this reason, no deferred tax liability has been recognised as at 30 June 2020.
(b) Reconciliation of income tax expense to prima facie tax payable
Net profit/(loss) before tax
Prima facie tax on operating loss at 27.5% (2019: 30%)
Add / (Less): Non-deductible items
(Non-assessable income)/non-deductible expenses
Current year tax loss not recognised
Income tax attributable to operating profit/loss
The applicable weighted average effective tax rates are as follows:
Balance of franking account at year end
Deferred tax assets
Tax losses
Other assets
Unrealised foreign exchange gain
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
2,813,807
(3,252,815)
773,797
(975,845)
(1,035,056)
261,259
439,967
535,878
-
Nil%
Nil
-
Nil%
Nil
1,080,484
1,234,662
(1,406)
(12,380)
53,784
155
40,296
-
-
12,750
30,574
13,123
1,160,933
1,291,109
-
(1,068)
1,160,933
1,290,041
-
-
-
-
-
-
(1,068)
(1,068)
1,068
-
Unused tax losses for which no deferred tax asset has been recognised
3,929,089
4,115,539
37
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
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 was
subject to the taxation regulations of the Czech Republic where it holds mining license via Geomet s.r.o as associates, 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 2020 and 30 June 2019.
The totals of remuneration paid to KMP during the year are as follows:
Short-term benefits
Post-employment benefits
Long service leave
Equity settled
Other payments
Loans to Key Management Personnel
2020
$
2019
$
445,513
22,800
26,663
29,802
-
667,442
45,473
-
406,089
38,381
524,778
1,157,385
There were no loans to Key Management Personnel during the financial year. The total value of loan CDIs amounted to $1,442,666.
1,650,000 loan CDIs were issued to Directors with fair value of $1,149,653. Of the 1,500,000 loan CDIs that were issued to
employees, 400,000 loan CDIs were forfeited in prior year. The fair value of the remaining 1,100,000 loan CDIs was $293,013.
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.
38
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 5: KEY MANAGEMENT PERSONNEL COMPENSATION (continued)
Entity
Nature of transactions
Wilgus Investments Pty
Ltd/Wild West Enterprises
Pty Ltd
Rental
Key
Management
Personnel
David Reeves
Total Transactions
2019
2020
$
$
Payable Balance
2019
2020
$
$
15,600
40,200
-
-
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. There were no other transactions with Key
Management Personnel during the financial year. The Company paid a premium of $30,000 (2019: $15,000) to insure the Directors.
NOTE 6: REVENUE
Service revenue
Interest revenue
NOTE 7: AUDITOR’S REMUNERATION
2020
$
2019
$
183,824
11
183,835
-
1,461
1,461
2020
$
2019
$
Included in the details of the amounts paid to the auditor of the Group, Stantons International Audit and
Consulting Pty Ltd for audit services provided during the year are set out below:
Auditor’s services
Audit and review of financial report
- Under provision in prior year
NOTE 8: BASIC AND DILUTED LOSS PER CDI
Earnings per share for income from continuing operations
Loss attributable to owners
Basic earnings per CDI (cents)
Diluted earnings per CDI (cents)
Earnings per share for gain/(loss) from discontinued operations
Profit attributable to owners
Basic earnings per CDI (cents)
Diluted earnings per CDI (cents)
Weighted average number of CDIs
46,525
7,925
54,450
40,000
-
40,000
2020
2019
(4,608,729)
(2,965,351)
(3.05)
(3.05)
(2.05)
(2.05)
7,422,536
(287,464)
4.92
4.92
(0.20)
(0.20)
Weighted average number of CDIs used in calculating earnings per share
150,957,617
144,514,487
Adjustments for calculation of diluted earnings per share:
CDIs under options with diluted effect
51,370
-
Weighted average number of CDI used in calculating diluted earnings per share
151,008,987
144,514,487
39
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 9: CASH AND CASH EQUIVALENTS
Cash at bank
Total cash and cash equivalents in the Statement of Cash Flows
NOTE 10: OTHER RECEIVABLES
CURRENT
GST and VAT Receivable
Other receivables
2020
$
2019
$
58,951
58,951
426,178
426,178
2020
$
2019
$
9,378
7,874
17,252
33,526
58,654
92,180
Current trade receivables are non-interest bearing and are normally settled on 60-day terms. This balance is current receivables
incurred on a day to day operational basis and considered unimpaired.
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Land at cost
Deemed disposal due to deconsolidation of Geomet s.r.o
Buildings at cost
Less accumulated depreciation
Deemed disposal due to deconsolidation of Geomet s.r.o
Plant and equipment at cost
Less accumulated depreciation
Deemed disposal due to deconsolidation of Geomet s.r.o
Total Property, Plant and Equipment at cost
Less accumulated Depreciation
Deemed disposal due to deconsolidation of Geomet s.r.o
Total Property, Plant and Equipment
Reconciliation
Reconciliation of the carrying amounts set out below.
Opening Property, Plant and Equipment
Additions
Deemed disposals due to deconsolidation of Geomet s.r.o
Depreciation
Foreign currency differences
Carrying amount at the end of the year
2020
$
357,438
(357,438)
2019
$
371,458
-
-
371,458
5,927
(990)
(4,937)
-
20,136
(14,754)
(4,513)
869
383,501
(15,744)
(366,888)
6,160
(767)
-
5,393
14,388
(6,081)
-
8,307
392,006
(6,848)
-
869
385,158
385,158
372,997
-
(366,888)
(2,977)
(14,424)
869
-
-
(4,180)
16,341
385,158
40
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 12: EXPLORATION AND EVALUATION EXPENDITURE
Exploration at cost
Balance at the beginning of the year
Exploration of tenements
Deemed disposal due to deconsolidation of Geomet s.r.o
Foreign exchange movement
NOTE 13: INVESTMENT IN ASSOCIATE
On initial recognition at fair value
Share of profit – associates
2020
$
2019
$
11,684,072
10,169,177
211,372
1,086,353
(11,553,630)
-
(341,814)
428,542
-
11,684,072
2020
$
18,476,480
490,051
18,966,531
2019
$
-
-
-
Effective 28 April 2020, Geomet was equity accounted (ie 49% of share of the profit or loss of the investee after the date of
acquisition) for as Investment in Associate by EMH (Note 20). The Company was appointed to provide services of managing the
Cinovec project development.
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Summarised statement of profit or loss and other comprehensive income*
Revenue
Expenses
(Loss)/profit for the year
* The results for FY2020 is from 28 April 2020 – 30 June 2020.
NOTE 14: TRADE AND OTHER PAYABLES
a. CURRENT
Trade payables
Accrued expenses and other liabilities
Payables are normally due for payment within 30 days.
b) PROVISIONS
Provision for annual leave
Provision for long service leave
2020
$
2019
$
47,280,678
104,684
9,497,797
9,439,300
56,778,475
9,543,984
132,262
28,068
-
11,032,083
132,262
11,060,151
56,646,213
(1,516,167)
2,709
563,703
(1,002,813)
(359,535)
(1,000,104)
204,168
2020
$
2019
$
572,071
352,521
924,592
53,763
75,214
128,977
27,955
26,663
54,618
23,133
-
23,133
41
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15: ISSUED CAPITAL
(a) Issued and paid up capital
154,703,973 (30 June 2019: 146,642,227 CDIs)
Total issued capital
(b) Movements in CDIs
Balance at the beginning of the year
CDI issue under Placement @ $0.351 per CDI
Capital raising cost
Balance at the end of the year
Balance at the beginning of the year
CDI issue under Placement @ A$0.324 (£0.18) per CDI
CDI issue under Placement @ A$0.294 (£0.1525) per CDI
Forfeiture of CDIs
Conversion of A Class Performance Shares
Conversion of B Class Performance Shares
Conversion of A Class Performance Shares
Capital raising cost
Balance at the end of the year
Number
$
154,703,973
23,954,204
154,703,973
23,954,204
Date
Number
$
1 July 2018
141,464,727
20,413,074
27 November 2018
5,177,500
-
1,817,303
(156,063)
30 June 2019
146,642,227
22,074,314
Date
Number
$
1 July 2019
146,642,227
22,074,314
29 August 2019
23 January 2020
4,166,666
1,349,831
2,295,080
675,074
30 January 2020
(1,400,000)
30 April 2020
30 April 2020
4 June 2020
1,000,000
1,000,000
1,000,000
-
-
-
-
30 June 2020
154,703,973
23,954,204
-
(145,015)
(c) Loan CDIs Reserve
Balance at beginning of the year
CDI movement during the year
Balance at end of the year
Balance at beginning of the year
CDI movement during the year
Balance at end of the year
Date
1 July 2018
-
30 June 2019
1 July 2019
30 January 2020
30 June 2020
Number
3,150,000
-
3,150,000
3,150,000
(1,400,000)
1,750,000
Amount Expensed
1,157,632
285,035
1,442,667
1,442,667
-
1,442,667
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.
On 30 January 2020, the Company announced a total of 1,400,000 CDIs have been cancelled following resignations of executive
members. The CDIs were issued to the previous executive members under the Employee Securities Incentive Plan on 6 June 2018.
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.
42
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15: ISSUED CAPITAL (CONTINUED)
(d) Movements Performance Shares
Balance at the beginning of the year
Issue of A Class Performance Shares
Balance at the end of the year
Balance at the beginning of the year
B Class Performance Shares Lapsed1
Conversion of A Class Performance Shares
Conversion of B Class Performance Shares1
Conversion of A Class Performance Shares
Balance at the end of the year
Date
Number
$
1 July 2018
18 Dec 2018
5,000,000
5,000,000
2,671,444
800,000
30 June 2019
10,000,000
3,471,444
1 July 2019
29 Nov 2019
30 April 2020
30 April 2020
4 June 2020
30 June 2020
10,000,000
3,471,444
(4,000,000)
(1,000,000)
(1,000,000)
(1,000,000)
-
-
-
-
3,000,000
3,471,444
1 The milestone was achieved prior to B Class Performance Share expiring.
No performance shares were issued during the year (30 June 2019: 5,000,000 Class A). B Class performance shares lapsed during
the year. During the year, under the applicable terms and conditions, the performance shares convert into new CDIs in accordance
with the following milestones:
2,000,000 A Class Performance Shares
1.
1,000,000 of the performance shares 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 register; and
1,000,000 of the performance shares convert into Shares and an equivalent number of CDIs upon the issuance of the
preliminary mining licenses relating to the Cinovec Project.
2.
1,000,000 B Class Performance Shares
1.
1,000,000 of the performance shares convert into Shares and an equivalent number of CDIs upon the issuance of the
preliminary mining licenses relating to the Cinovec Project. The remaining 4,000,000 B Class Performance Shares lapsed
during the year.
The terms of the Performance Shares are as follows:
The remaining 3,000,000 A Class Performance Shares will convert in accordance with the below:
(i)
3,000,000 A 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 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 and A 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 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.
(ii)
43
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 15: ISSUED CAPITAL (CONTINUED)
(e) Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it may continue to
provide returns for shareholders and benefits for other stakeholders.
The capital structure of the Group consists of equity comprising issued capital, reserves and accumulated losses.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities,
with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk management is to maintain
sufficient current working capital position to meet the requirements of the Group to meet exploration programs and corporate
overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with
a view to initiating appropriate capital raisings as required.
The working capital position of the Group at 30 June is as follows:
Cash and cash equivalents
Other receivables
Other assets
Trade and other payables
Provisions
Working capital (deficit)/surplus
The Group is not subject to any externally imposed capital requirements.
NOTE 16: RESERVES
Option and Warrant Reserve
Performance Shares Reserve
CDIs Reserve
Foreign Currency Translation Reserve
Total Reserves
Option and Warrant Reserve
Balance at the beginning of the financial year
Equity based payment expense
Equity based payment as capital raising cost
Balance at the end of the financial year
2020
$
58,951
17,252
5,110
2019
$
426,178
92,180
23,587
(924,592)
(128,977)
(54,618)
(23,133)
(897,897)
389,835
2020
$
2019
$
3,036,662
597,470
3,471,444
3,471,444
1,442,667
1,442,667
(235,186)
1,287,265
7,715,587
6,798,846
2020
$
597,470
2,439,192
-
2019
$
474,743
94,055
28,672
3,036,662
597,470
44
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 16: RESERVES (CONTINUED)
The following option and warrant existed as at 30 June 2019 and 30 June 2020:
On 17 August 2015, 3,750,000 unlisted options exercisable at 16.6 cents on or before 17 August 2020 were issued to key management
personnel.
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. The remaining share based payment expense of $29,802 (2019: $59,117) was recognised in profit
and loss in FY2020. The options were unexercised and lapsed on 3 January 2020.
On the 22 November 2018, 116,875 warrants were granted to brokers as a cost of capital raising. The warrants have an exercise of 20
pence (31.5 cents) in line with the capital raise on the 20 November 2018. Warrants are exercisable on or before 22 November 2021.
On 12 July 2019, 200,000 unlisted options exercisable at 35 cents on or before 1 January 2021 were issued to consultant. The share-
based expense of $23,136 was fully recognised in the profit or loss as at 30 June 2019.
On 12 July 2019, 100,000 unlisted options exercisable at 40.18 cents on or before 1 June 2021 were issued to consultant. The share-
based expense of $11,802 was fully recognised in the profit or loss as at 30 June 2019.
On 6 December 2019, 100,000 unlisted options exercisable at 31.11 cents on or before 1 December 2021 were issued to consultants.
The options were valued under the Black and Scholes at $15,428 was recognised as share based payment expense.
On 26 March 2020, 15,000,000 unlisted options exercisable at 25 cents on or before 31 December 2022 were granted to consultants.
The share-based expense of $2,393,961 was fully recognised in the profit or loss as at 30 June 2020.
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 employees - equity based expense
Balance at the end of the financial year
2020
$
2019
$
3,471,444
2,671,444
-
800,000
3,471,444
3,471,444
2020
$
2019
$
1,442,667
1,157,632
-
285,035
1,442,667
1,442,667
45
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 16: RESERVES (CONTINUED)
Employee securities incentive plan
In prior 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.
Loan Forgiveness
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.
vi.
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:
(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.
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 and the
effect of the deconsolidation of Geomet s.r.o.
Balance at the beginning of the financial year
Movement during the year
Derecognition of foreign currency reserve
Balance at the end of the financial year
2020
$
1,287,265
(1,582,667)
60,216
2019
$
843,485
443,780
-
(235,186)
1,287,265
46
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: SHARE BASED PAYMENT EXPENSE
During the financial year, the Company granted and issued 15,100,000 options to consultants. The Company also issued 300,000
options and 116,875 warrants, which were granted in FY2019.
Options and warrants Outstanding as at 1 July 2018
Warrants granted during the period (i)
Options granted during the period (ii)
Options and warrants outstanding as at 30 June 2019
Options and warrants outstanding as at 1 July 2019
Options granted during the period (iii)
Options lapsed
Options and warrants outstanding as at 30 June 2020
Number
Weighted
Average
Exercise Price
4,150,000
116,875
300,000
4,566,875
4,566,875
15,100,000
(400,000)
19,266,875
$0.206
$0.315
$0.264
$0.219
$0.219
$0.250
$0.580
$0.236
The following option share-based payment arrangements existed 30 June 2020:
Granted in prior year and issued in current financial year:
(i) On the 22 November 2018, 116,875 warrants were granted to brokers as a cost of capital raising. The warrants have an exercise of
20 pence (31.5 cents) in line with the capital raise on the 20 November 2018. Warrants are exercisable on or before 22 November
2021. The warrants were valued under the Black and Scholes at $28,672 with the share based payment recognised as a capital raising
cost. The key inputs to the models used were as follows.
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
22 November 2018
Expected life of warrants (years)
Nil
Underlying share price ($)
91.27%
2.115%
Warrant exercise price ($)
3 Years
$0.39
$0.315
Value of warrant ($)
$0.24532
47
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: SHARE BASED PAYMENT EXPENSE (CONTINUED)
(ii) On 12 July 2019, 200,000 unlisted options exercisable at 35 cents on or before 1 January 2021 were issued to a consultant. The
options were valued under the Black and Scholes at $23,136 with the share based payment recognised in the Statement of Profit or
Loss in 2019. The key inputs to the models used were as follows.
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
1 January 2019
Expected life of options (years)
Nil
Underlying share price ($)
Option exercise price ($)
92.16%
1.85%
Value of option ($)
$0.11568
3 Years
$0.27
$0.35
On 12 July 2019, 100,000 unlisted options exercisable at 40.18 cents on or before 1 June 2021 were issued to a consultant. The options
were valued under the Black and Scholes at $11,802 with the share based payment recognised in the Statement of Profit or Loss in
2019. The key inputs to the models used were as follows.
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
1 January 2019
Expected life of options (years)
Nil
Underlying share price ($)
92.16%
1.01%
Option exercise price ($)
Value of option ($)
3 Years
$0.27
$0.4018
$0.11802
Granted and issued in current financial year
(iii) On 6 December 2019, 100,000 unlisted options exercisable at 31.11 cents on or before 1 December 2021 were issued to
consultants. The options were valued under the Black and Scholes at $15,428 with the share based payment recognised as share based
payment expense. The key inputs to the models used were as follows.
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
2 January 2019
Expected life of options (years)
Nil
97.5%
0.92%
Underlying share price ($)
Option exercise price ($)
Value of option ($)
3 Years
$0.27
$0.311
$0.1543
On 26 March 2020, 15,000,000 unlisted options exercisable at 25 cents on or before 31 December 2022 were granted to consultant.
The share-based expense of $2,393,961 was fully recognised in the profit or loss for the year ended 30 June 2020.
Grant date
Dividend yield (%)
Expected volatility (%)
Risk-free interest rate (%)
26 March 2020
Expected life of options (years)
Nil
113.3%
0.23%
Underlying share price ($)
Option exercise price ($)
Value of option ($)
2.8 Years
$0.245
$0.25
$0.1596
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. The remaining share based payment expense of $29,802 (2019: $59,117) was recognised in profit
and loss in FY2020. The options were unexercised and lapsed on 3 January 2020.
48
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: SHARE BASED PAYMENT EXPENSE (CONTINUED)
The following performance share-based payment arrangements existed at 30 June 2020 and 30 June 2019:
Performance Shares granted are as follows:
Grant Date
Number
$
Number
$
2020
2019
B Class - 18 November 2016 (related parties)
B Class - 18 November 2016 (non-related parties)
A Class- 18 December 2018 (related parties)*
A Class- 18 December 2018 (non-related parties)
-
-
-
3,000,000
3,000,000
* David Reeves resigned on 30 June 2020.
-
-
-
1,057,301
564,903
3,942,699
2,106,541
542,651
480,000
4,457,349
86,824
713,176
480,000
10,000,000
3,471,444
No additional performance shares were granted during the year. During the financial year 30 June 2020, the Company issued
3,000,000 CDIs upon conversion of 2,000,000 A Class Performance Shares and 1,000,000 B Class Performance Shares in satisfaction
of milestone being met. The remaining 4,000,000 B Class Performance Shares lapsed during the year.
Fair value of Loan CDIs in existence at 30 June 2019 and 30 June 2020
The fair value of 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.
The following Loan CDIs share-based payment arrangements existed at 30 June 2019 and 30 June 2020.
No loan CDIs were granted during the financial year.
Director Loan CDIs
Employee Securities Incentive Plan Loan CDIs 1
Note:
1.
These Loan CDIs are being expensed over the vesting period.
Number
1,650,000
100,000
Value recognised
2020
Value recognised
2019
-
-
-
285,035
Value to be
recognised in
future years
-
-
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
Expected volatility
Expiry date
Expected dividends
Risk free interest rate
Value per loan CDI
Number of loan CDIs
Total value
30 November 2017
30 November 2017
30 November 2017
30 November 2017
143.41%
143.41%
143.41%
143.41%
30 November 2032
30 November 2032
30 November 2032
30 November 2032
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
49
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 17: SHARE BASED PAYMENT EXPENSE (CONTINUED)
A summary of the inputs used in valuation of the loan CDIs issued to employees in prior years.
Loan CDIs
Exercise price
Share price at date of issue
Tranche 1
Tranche 2 1
Tranche 3 2
Tranche 4 3
Tranche 5 4
$0.4848
$0.365
$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
6 June 2018
Expected volatility
85.9%
85.9%
85.9%
85.9%
85.9%
Expiry date
6 June 2025
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
Nil
2.42%
$0.2664
250,000
$66,594
Notes:
1. Tranche 2 escrowed until company announcing completion of the definitive feasibility study
2. Tranche 3 escrowed until company announcing construction has commenced at the Cinovec Project
3. Tranche 4 escrowed until the completion of project finance for the Cinovec Project
4. Tranche 5 escrowed until the practical completion of the Cinovec Project
On 30 January 2020, the Company announced a total of 1,400,000 CDIs have been cancelled due to resignations of executive
members. The CDIs were issued to the previous executive members under the Employee Securities Incentive Plan on 6 June 2018.
Only 100,000 CDIs (under Tranche 1) remained as at 30 June 2020 (30 June 2019:1,500,000 CDIs).
NOTE 18: CASH FLOW INFORMATION
(a) Reconciliation of cash flow from operating activities with the loss after tax
Income/(Loss) after income tax
Adjustments for:
Share based payments
Unrealised foreign exchange loss/ (gain)
Depreciation expense
Loss from discontinued operations to date of disposal
Equity accounted of investment in Geomet s.r.o
Gain on de-consolidation of Geomet s.r.o
Changes in assets and liabilities net of deemed disposal of subsidiary
Decrease/ (increase) in other receivables
Decrease/(increase) in other assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Cash flow (used in)/from operating activities
(b) Credit standby facilities
The Company had no credit standby facilities as at 30 June 2020 and 2019.
(c) Investing and Financing Activities – Non-Cash
There were no non-cash movements during the year.
2020
$
2019
$
2,813,807
(3,252,815)
2,439,192
1,179,090
(45,018)
(37,814)
1,344
209,510
(490,051)
(7,632,046)
4,180
-
-
-
74,928
18,478
(59,540)
(11,605)
715,613
(127,483)
31,485
(51,516)
(1,862,758)
(2,357,503)
50
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 19: 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.
Effective 28 April 2020, the Group has 49% equity investment in Geomet s.r.o. The principal activity of Geomet s.r.o is exploration
of Lithium. 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 2020
REVENUE
Interest revenue
Other revenue
Total segment revenue
Net expenditure
(Loss)/Profit before income tax from continuing operations
Segment assets
Segment liabilities
30 June 2019
REVENUE
Interest revenue
Other revenue
Total segment revenue
Net expenditure
Loss before income tax
Segment assets
Segment liabilities
Australia
$
Czech
$
Total
$
11
231,068
231,079
(4,839,808)
(4,608,729)
19,048,713
979,210
-
-
-
-
-
-
-
11
231,068
231,079
(4,839,808)
(4,608,729)
19,048,713
979,210
Australia
$
Czech
$
Total
$
1,461
355,745
357,206
(3,322,556)
(2,965,350)
-
68,898
68,898
(356,363)
(287,465)
1,461
424,643
426,104
(3,252,815)
(3,252,815)
437,644
12,173,531
12,611,175
124,042
28,068
152,110
51
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20: DECONSOLIDATION OF GEOMET S.R.O
On 28 April 2020, the Company announced that the investment of EUR29.1 million by CEZ a.s. (“CEZ”) for a 51% equity interest in
Geomet, the Company’s Czech subsidiary and holder of the Cinovec licenses, had been completed. The payment of EUR29.1 million,
which has been received into the Geomet account, will see the Cinovec project fully funded to the decision to construct, paving the
way for Cinovec to become the first European Union producer of battery grade lithium compounds from a local lithium resource.
The payment of EUR 29.1 million was split into two payments - EUR 12.3m (A$20.6m) was contributed to Geomet’s registered share
capital and EUR 16.8m (A$28.1m) is a monetary contribution to the equity Geomet outside of the Geomet’s registered share capital.
The Company ceased to fully consolidate Geomet’s results within EMH’s consolidated accounts effective 28 April 2020. From 28
April 2020 onward, Geomet had been equity accounted (ie 49% of share of the profit or loss of the investee after the date of
acquisition) for as Investment in Associate by EMH (Note 13). The Company was appointed to provide services of managing the
Cinovec project development.
No cash consideration was received by EMH (Holdings) Limited as a result of the EUR29.1million investment by CEZ. The 100%
shareholding in Geomet s.r.o by EMH (Holdings) Limited was diluted through the issuance of shares to CEZ. This is commonly
referred as “deemed disposal”. A “deemed disposal” that results in the loss of control of a subsidiary (ie Geomet s.r.o) is accounted
for as a regular disposal.
a. Financial performance information
Other income
Employees' benefits
Interest expense
Other expenses
Professional fees
Depreciation expense
Travel and accommodation
Office and rent expense
Loss from discontinued operations – Until date of disposals
Gain on disposal
Gain from discontinued operation - De-consolidation of Geomet s.r.o
b. Cash flows from discontinued operations – De-consolidation of Geomet s.r.o
Period ended
12 months ended
27 April 2020
30 June 2019
$
11,530
(131,423)
(942)
(17,471)
(45,512)
(1,663)
(4,958)
(19,071)
(209,510)
7,632,046
7,422,536
$
68,898
(166,389)
-
(121,887)
(33,890)
(2,835)
(7,529)
(23,832)
(287,464)
-
-
Period ended
12 months ended
27 April 2020
30 June 2019
$
$
Cash flows from discontinued operations
Net cash inflow/(ouflow) from operating activities
(191,325)
(287,464)
52
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 20: DECONSOLIDATION OF GEOMET s.r.o (CONTINUED)
c. Details of the de-consolidation of Geomet s.r.o
Fair value of interest retained in Geomet s.r.o A
Analysis of extracted assets and liabilities of Geomet s.r.o on date of de-consolidation:
Current assets
Cash and cash equivalents
Accounts receivable
Total current assets
Non Current assets
Property, plant and equipment
Exploration assets
Total non current assets
Current liabilities
Accounts payables
Others
Total Current liabilities
Net assets deconsolidated
Derecognition of foreign currency reserve
Foreign currency movement for the current period
Gain on de-consolidation of Geomet s.r.o
A Represents the fair value of 49% interest in Geomet s.r.o
NOTE 21: FINANCIAL RISK MANAGEMENT
21,982
84,520
106,502
366,887
11,553,630
11,920,517
9,928
27,937
37,865
30 June 2020
$
19,796,466
11,989,154
60,216
(235,482)
7,632,046
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
2020
$
2019
$
58,951
17,252
76,203
426,178
92,180
518,358
924,592
924,592
128,977
128,977
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.
53
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: FINANCIAL RISK MANAGEMENT (CONTINUED)
(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.
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 EUR.
At 30 June 2020, the Group has financial assets and liabilities denominated in the foreign currencies detailed below:
Cash and cash equivalents
in EMHL
Intercompany payables to
EMHL by subsidiaries
5% effect in foreign
exchange rates
Amount
in EUR
2020
Amount
in GBP
Amount in AUD
Amount in
EUR
7,846
15,436
-
-
-
10,919,537
7,846
15,436
10,919,537
392
772
545,977
-
-
-
-
2019
Amount
in GBP
111,156
Amount in AUD
-
-
11,143,599
111,156
11,143,599
5,558
557,180
Other than intercompany balances there were no financial assets and liabilities denominated in foreign currencies for EMH UK.
54
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: FINANCIAL RISK MANAGEMENT (CONTINUED)
(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
2020
$
2019
$
-
22,715
29,954
28,997
17,252
76,203
240,107
163,356
92,180
518,358
(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 following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact
of netting arrangements.
As at 30 June 2020
Trade and other payables
As at 30 June 2019
Trade and other payables
Carrying Amount
$
Contractual Cash
flows
$
924,592
924,592
924,592
924,592
Carrying Amount
$
Contractual Cash
flows
$
128,977
128,977
128,977
128,977
<3 months
$
924,592
924,592
<3 months
$
128,977
128,977
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.
55
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 21: 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
$
2020
Total
Floating
Interest
Rate
$
$
Non-
interest
bearing
$
2019
Total
$
Financial assets
- Within one year
Cash and cash equivalents
Other receivables
Total financial assets
Weighted average interest rate
Financial Liabilities
- Within one year
Trade and other Payables
Total financial liabilities
58,951
-
58,951
0.00%
-
17,252
17,252
58,951
17,252
76,203
426,178
-
426,178
0.11%
-
426,178
92,180
92,180
92,180
518,358
-
-
(924,592)
(924,592)
(924,592)
(924,592)
-
-
(128,977)
(128,977)
(128,977)
(128,977)
Net financial assets/ (liabilities)
58,951
(907,340)
(848,389)
426,178
(36,797)
389,381
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 $590 (2019: loss $13,509).
(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 22: 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 **
EMH (Australia) Pty Ltd
Geomet s.r.o
British Virgin Islands
Republic of Congo
United Kingdom
Australia
Czech Republic
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2020
100%
100%
100%
100%
49%
2019
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 was the parent company for Geomet s.r.o up to 27 April 2020. Refer to Note 13 for further details.
56
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 23: 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 (LIABILITIES)/ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Profit or Loss and Other Comprehensive Income
Loss for the year
Total comprehensive loss
Guarantees
2020
$
2019
$
79,689
1,513
81,202
435,430
2,214
437,644
979,210
979,210
124,043
124,043
(898,008)
313,601
2020
$
2019
$
23,954,204
22,074,314
7,950,773
5,511,581
(32,802,985)
(27,272,294)
(898,008)
313,601
(5,530,691)
(4,455,724)
(5,530,691)
(4,455,724)
There are no guarantees entered into by European Metals Holdings Limited for the debts of its subsidiaries as at 30 June 2020.
Contingent liabilities
There are no contingent liabilities as at 30 June 2020.
Commitments
There were no commitments as at 30 June 2020.
NOTE 24: CAPITAL COMMITMENTS
There are no capital commitments as at 30 June 2020.
NOTE 25: CONTINGENT LIABILITIES
There are no contingent liabilities as at 30 June 2020.
57
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL FINANCIAL REPORT 30 JUNE 2020
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2020
NOTE 26: SIGNIFICANT EVENTS AFTER THE REPORTING DATE
•
•
•
•
•
•
On 14 July 2020, the Company announced that the Company is in discussion with the Prague Stock Exchange regarding the
proposed listing of the Company’s securities. Given the high profile that the Cinovec project has within the Czech Republic,
the Company would like to provide the opportunity for Czechs to invest directly via their domestic exchange. In the interim,
the Company has arranged for an interim funding facility to assist in financing these new initiatives and ongoing operations.
The facility has been provided by an Australian based sophisticated investor, 6466 Investments Pty Ltd, and allows for a
drawdown of up to AUD1million in tranches as required over 12 months.
On 17 July 2020, the Company advises that it has issued 1,049,825 CDIs in the Company at a price of 13.176 pence per CDIs
in relation to the first draw down of the Fund Facility Agreement between 6466 Investments Pty Ltd and EMH as announced
on 14 July 2020. The issue of new CDIs is in respect of the first advance of AUD250,000. The funds will be used to assist in
funding new initiatives and ongoing operations.
On 17 July 2020, the Company issued 250,000 options exercisable at $0.25 on or before 15 June 2022 to consultants in
accordance with their consultancy agreements.
On 5 August 2020 and 18 August 2020, the Company issued 750,000 and 3,000,000 CDIs upon the exercise of 750,000 and
3,000,000 unquoted options exercisable at $0.166 respectively. The option conversion raised $622,500.
On 27 August 2020, the Company advises that it has issued 927,300 CDIs in the Company in respect to the second draw down
of A$250,000 under the Fund Facility Agreement between 6466 Investments Pty Ltd and the Company.
On 17 September 2020, the Company issued 50,000 upon the exercise of 50,000 unquoted options exercisable at $0.25. The
option conversion raised $12,500.
Except for the matters noted above there have been no other significant events arising after the reporting date.
58
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
DIRECTORS’ DECLARATION
The Directors of the Company declare that:
1.
the financial statements, notes and the additional disclosures are in accordance with the Corporations Act 2001
including :
(a)
(b)
(c)
complying with Accounting Standards;
are in accordance with International Financial Reporting Standards issued by the International Accounting
Standards Board, as stated in Note 1 to the financial statements; and
give a true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended
on that date of the Group.
2.
the Chief Executive Officer and Chief Finance Officer have each declared that:
(a)
the financial records of the Group for the financial year have been properly maintained in accordance with
s286 of the Corporations Act 2001;
(b)
the financial statements and notes for the financial year comply with the Accounting Standards; and
(c)
the financial statements and notes for the financial year give a true and fair view.
3.
in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
Directors by:
Keith Coughlan
EXECUTIVE CHAIRMAN
Dated at Perth on 30 September 2020
59
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
EUROPEAN METALS HOLDINGS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of European Metals Holdings Limited (the Company), and its subsidiaries (the
Group), which comprises the statement of the consolidated financial position as at 30 June 2020, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial
statements, including a summary of significant accounting policies, and the directors' declaration
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter Relating to Going Concern
Without modifying our audit opinion expressed above, attention is drawn to the following matter.
As referred to in Note 1 (a) to the financial statements, the consolidated financial statements have been prepared
on the going concern basis. At 30 June 2020, the Group had cash and cash equivalents of $58,951, and incurred
a loss from continuing operations after income tax of $4,608,729.
The ability of the Group to continue as a going concern and meet its planned exploration, administration and other
commitments is dependent upon the Group raising further working capital. In the event that the Group is not
successful in raising further equity, the Group may not be able to meet its liabilities as and when they fall due and
the realisable value of the Group’s current and non-current assets may be significantly less than book values.
Liability limited by a scheme approved
under Professional Standards Legislation
Key Audit Matters
We have determined the matters described below to be key audit matters to be communicated in the report.
We have defined the matters described below to be key audit matters to be communicated in our report. Key audit
matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
How the matter was addressed in the audit
Deemed Sales of Subsidiary and
Deconsolidation
Effective 28 April 2020, the Group ceased to fully
consolidate Geomet’s
results within EMH’s
consolidated accounts due to the investment made
by CEZ a.s. (“CEZ”) for a 51% equity interest in
Geomet. Therefore,
injection
the
reduced the Group’s interest to 49% and required to
deconsolidating Geomet’s account on 27 April 2020.
From 28 April 2020 onward, Geomet had been
equity accounted (i.e. 49% of share of the profit or
loss of the investee after the date of acquisition) for
as Investment in Associate by EMH.
investment
The Group has recognised gain from discontinued
operations totalling $7,422,536 (refer to Note 20) as
a result of the deconsolidation.
We have determined that the deconsolidation as a
key audit matter due to the complexity of the
deconsolidation processes required to properly
eliminate Geomet’s accounts and the fact that this is
material to the financial statement for the year ended
30 June 2020.
Inter alia, our audit procedures
following:
included
the
i. Performing audit of Geomet’s accounts for the
period ended 27 April 2020;
ii. Reviewing the documentation supporting the
transaction:
• Minutes of the Board and Management;
• Announcements made by the Group to
the Australian Securities exchanges; and
• Signed agreement with CEZ.
iii. Reviewing the deconsolidation workings to
ensure Geomet’s accounts have been
correctly deconsolidated;
iv. Ensuring disclosures made in the financial
statements are complete and in accordance
with accounting standards.
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 30 June 2020, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form
of assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true and
fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the
Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional skepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Group's preparation of the financial report that gives a true and fair view in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 20 of the directors’ report for the year ended 30
June 2020. The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion
on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards
Opinion on the Remuneration Report
In our opinion, the Remuneration Report of European Metals Holdings Limited for the year ended 30 June 2020
complies with section 300A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
30 September 2020
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CORPORATE GOVERNANCE
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
https://www.europeanmet.com/corporate-governance/.
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
roles and
sets out
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
the Chairman and Company Secretary,
establishment, operation and management of Board
Committees, Directors access to company records
and information, details of the Board’s relationship
the Board’s
with management, details of
performance review and details of the Board’s
disclosure policy.
A copy of the Company’s Board Charter is stated in
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.
64
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CORPORATE GOVERNANCE
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,
the
monitoring
measurable objectives.
reporting
and
on
(b) The Diversity Policy is stated in Schedule 13 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
independent advisor. The
the aid of an
Performance Evaluation Policy can be found in
Schedule 7 of the Company’s Corporate
Governance Plan.
(b) The Company’s Corporate Governance Plan
requires the Board to disclosure whether or not
performance evaluations were conducted
during the relevant reporting period.
Due to the size of the Board and the nature of
the business, it has not been deemed necessary
to institute a formal documented performance
review program of individuals. However, the
Chairman intends to conduct formal reviews
each financial year whereby the performance of
the Board as a whole and the
individual
contributions of each director are disclosed. The
Board considers that at this stage of the
Company’s development an informal process is
appropriate.
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CORPORATE GOVERNANCE
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
7 ‘Performance Evaluation Policy’ 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)
the charter of the committee;
(iv)
the members of the committee; and
(v)
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
individual
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
and to ensure that the board has the
(a) The Company has a Nomination Committee
comprising of three members of the Committee
being Mr Morzaria (Chairman), Richard Pavlik
and Mr Coughlan, being all directors of the
Company. None of the directors are considered
independent. Prior to Mr Reeves
to be
resignation on 30 June 2020 he held the position
as Chairman.
The role and responsibilities of the Nomination
Committee and Charter is outlined in Schedule 4
of the Corporate Governance Plan and Policies
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
The Board regularly updates the Company’s
(in accordance with
board skills matrix
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CORPORATE GOVERNANCE
appropriate balance of skills, experience,
independence and knowledge of the entity to
its duties and
it to discharge
enable
responsibilities effectively.
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)
interest, position,
if a director has an
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
the
that
independence of the director, the nature of
interest, position, association or
the
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
3
3
3
3
3
3
3
3
2
3
3
0
3
0
0
(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
considered to be independent. 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,
positions associations and relationships are
that
and
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EUROPEAN METALS HOLDINGS LIMITED
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CORPORATE GOVERNANCE
relationship in question and an explanation
of why the board is of that opinion; and
provided in the Annual Reports and Company
website.
(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.
(c) The Board
for
Charter
provides
the
determination of the Directors’ terms and
requires the length of service of each Director to
be disclosed. The length of service of each
Director is provided in the Annual Reports and
Company website.
Not
complying
The Board Charter requires that where practical the
majority of the Board will be independent.
Given the Company’s present size and scope it is
currently not Company policy to have a majority of
Independent Directors.
At this time no members of the board are considered
independent.
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.
Recommendation 2.6
Complying
and providing
A listed entity should have a program for inducting
new directors
appropriate
for
professional development opportunities
continuing directors to develop and maintain the
skills and knowledge needed to perform their role
as a director effectively.
Mr Keith Coughlan is the Executive Chairman of the
Board 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.
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
Complying
(a) The Corporate Code of Conduct applies to the
Company’s directors, senior executives and
employees.
(a) have a code of conduct for its directors,
senior executives and employees; and
(b) disclose that code or a summary of it.
(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 majority of whom are independent
directors; and
(a) The Company has a combined Audit and Risk
Committee comprising of three members of the
Committee being Mr Morzaria (Chairman),
Richard Pavlik and Mr Coughlan, being all
directors of the Company. None of the directors
are considered to be independent. Prior to Mr
Reeves resignation on 30 June 2020 he was a
member of the Audit and Risk Committee.
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CORPORATE GOVERNANCE
(ii)
is chaired by an independent director,
who is not the chair of the board,
and disclose:
(iii)
the charter of the committee;
The role and responsibilities of the Audit and
Risk Committee and Charter is outlined in
Schedule 3 of the Corporate Governance Plan
and Policies available online on the Company’s
website.
(iv)
(v)
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,
it
disclose that fact and the processes
independently verify and
employs that
safeguard the
financial
integrity of
reporting, including the processes for the
appointment and removal of the external
auditor and the rotation of the audit
engagement partner.
its
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.
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
In addition,
Company’s disclosure policy.
Schedule 6 of the Corporate Governance Plan is
entitled
‘Continuous Disclosure Policy’ and
details the Company’s disclosure requirements
as required by the ASX Listing Rules and other
relevant legislation.
(b) The Board Charter and Continuous Disclosure
Policy within the Corporate Governance Plan are
available on the Company website.
Principle 6: Respect the rights of security holders
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CORPORATE GOVERNANCE
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.
Shareholder
The Company has adopted a
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 Policy can be
found in Schedule 10 of the Board Charter which is
available on the Company website.
The Shareholder Communications Policy 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
The board of a listed entity should:
Part
complying
(a) have a committee or committees to oversee
risk, each of which:
(i)
has at least three members, a majority
of whom are independent directors;
and
(ii)
is chaired by an independent director,
and disclose:
(iii)
the charter of the committee;
(iv)
the members of the committee; and
(v)
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
(a) The Company has an Audit and Risk Committee
comprising the following members of the
Committee, being Mr Kiran Morzaria (Chair), Mr
Pavlik and Mr Coughlan, being all directors of
the company. None of the directors are
considered to be independent. Prior to Mr
Reeves resignation on 30 June 2020 he was a
member of the Audit and Risk Committee.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3 of the
Company’s
Plan
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
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CORPORATE GOVERNANCE
individual
of
members at those meetings; or
attendances
the
associated
procedures.
internal compliance and control
(b)
if it does not have a risk committee or
committees that satisfy (a) above, disclose
that fact and the process it employs for
overseeing the entity’s risk management
framework.
Recommendation 7.2
Complying
(a)
The board or a committee of the board should:
(a) review
the entity’s
risk management
framework with management at
least
annually to satisfy itself that it continues to
be sound, to determine whether there have
been any changes in the material business
risks the entity faces and to ensure that they
remain within the risk appetite set by the
board; and
(b) disclose in relation to each reporting period,
whether such a review has taken place.
Recommendation 7.3
Complying
A listed entity should disclose:
(a)
(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.
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
internal compliance and
procedure and
controls.
(b) The Audit and Risk Committee 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.
The Audit and Risk Committee Charter, Schedule 3 of
the Company’s Corporate Plan, provides for the
internal audit function of the Company. The Board
review and
Charter outlines
assessment of a range of internal audit functions and
procedures.
the monitoring,
The Audit and Risk Committee Charter 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
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.
risk management
framework
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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)
the charter of the committee;
(iv)
the members of the committee; and
(v)
as at the end of each reporting period,
the number of times the committee
met throughout the period and the
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
listed entity which has an equity-based
A
remuneration scheme should:
Complying
to enter
(a) have a policy on whether participants are
permitted
transactions
(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.
(a) The Company’s Remuneration Committee
comprising of three members of the Committee
being Mr Morzaria (Chairman), Richard Pavlik
and Mr Coughlan, being all directors of the
Company. None of the directors are considered
to be
Prior to Mr Reeves
resignation on 30 June 2020 he was a member
of the Remuneration Committee.
independent.
and
role
responsibilities
Committee and Charter
the
The
is
Remuneration
outlined
in Schedule 5 of the Corporate
Governance Plan and Policies available online
on the Company’s website.
of
to
fulfilling
The Board devote time at annual board
meetings
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.
roles
the
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) The Company’s Remuneration and Committee
Charter states that the Board is required to
review, manage and disclose the policy (if any)
on whether participants are permitted to enter
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.
(b) A copy of the Company’s Corporate Governance
Plan which includes the Remuneration and
Committee Charter
the
Company’s website.
is available on
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EUROPEAN METALS HOLDINGS LIMITED
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CORPORATE GOVERNANCE
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/2020/07/EMH-Corporate-Governance-Plan-Policies-4th-Edition.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
Geomet s.r.o. controls the mineral exploration licenses awarded by the Czech State over the Cinovec Lithium/Tin Project.
Geomet s.r.o. is owned 49% by European Metals and 51% by CEZ a.s. through its wholly owned subsidiary, SDAS. Cinovec
hosts a globally significant hard rock lithium deposit with a total Indicated Mineral Resource of 372.4Mt at 0.45% Li2O and
0.04% Sn and an Inferred Mineral Resource of 323.5Mt at 0.39% Li2O and 0.04% Sn containing a combined 7.22 million tonnes
Lithium Carbonate Equivalent and 263kt of tin reported 28 November 2017. An initial Probable Ore Reserve of 34.5Mt at
0.65% Li2O and 0.09% Sn reported 4 July 2017 has been declared to cover the first 20 years mining at an output of 22,500tpa
of lithium carbonate reported 11 July 2018.
The quantity of these resources directly attributable to the Company is equivalent to the 49% shareholding the Company has
in Geomet s.r.o.
This makes Cinovec the largest hard rock 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.
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, Executive Chairman, who is available to
answer investor relations enquiries.
The Company has adopted a Shareholder Communications Policy 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 Policy can be found in Schedule 10 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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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. After Mr Reeves resignation on 30 June 2020 the Committee members
changed to Mr Morzaria (Chairman), Mr Pavlik and Mr Coughlan, being all directors of the Company. 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 ‘Risk
Management Policy’ 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 3 members: 2 Executive members (the Executive Chairman, Keith Coughlan and Executive
Director, Richard Pavlik) and 1 Non-Executive member (Kiran Morzaria). On 30 June Mr Reeves resigned as a director of the
Company. 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 an Audit and Risk Committee, a Remuneration Committee and a Nomination Committee,
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 David Reeves acted as a Director and Non-Executive Chairman of the Company until his resignation on 30 June 2020, and
Mr Keith Coughlan was appointed as Executive Chairman on an interim basis. The Board will continue to evaluate the
possibility of appointing additional Non-Executive directors, but following the completion of the new partnership
arrangements with CEZ earlier this year, the Board does not currently intend to make any new appointments of non-executive
directors until the Company’s operations increase in size and scale. Board composition will remain however under review.
Mr Morzaria is a Board nominee of Cadence Minerals Plc (previously named Rare Earth Minerals Plc), which owns 23,259,751
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. However, the Board believes that Mr Morzaria is relevant qualified
74
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CORPORATE GOVERNANCE
professionals and with an understanding of what is expected of a Non-Executive Director and discharge his duties as an Non-
Executive Director in an effective and appropriate manner on behalf of shareholders as a whole.
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
Annual
website,
which
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 Keith Coughlan – Executive Chairman
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 Doriemus Limited (ASX), and Non-
executive Director of Calidus Resources Limited (ASX), and Southern Hemisphere Mining Limited (ASX).
Mr Coughlan is currently a member of the Audit and Risk Committee, the Remuneration Committee and the 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 Pavlik is currently a member of the Audit and Risk Committee, the Remuneration Committee and the Nomination
Committee.
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
75
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CORPORATE GOVERNANCE
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.
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).
Mr Morzaria is currently is currently Chairman of the Audit and Risk Committee, the Remuneration Committee and the
Nomination Committee.
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. As the Company does not currently have a Managing Director, Mr Keith
76
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
CORPORATE GOVERNANCE
Coughlan, in his role as Executive Chairman, is responsible for the management of the Company’s business and primary
contact with shareholders.
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. After Mr Reeves resignation on 30 June 2020 the Board membership changed
to Mr Morzaria (Chairman), Mr Pavlik 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.
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 and Risk 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. After Mr Reeves resignation on 30 June 2020 the Board membership changed to Mr Morzaria
(Chairman), Mr Pavlik and Mr Coughlan. The role and responsibilities of the Remuneration Committee are outlined in
Schedule 5 of
the Company’s website,
www.europeanmet.com/corporate-governance.
the Company’s Corporate Governance Plan available online on
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. After Mr Reeves resignation on 30 June 2020 the Board membership changed to Mr Morzaria
(Chairman), Mr Pavlik and Mr Coughlan. The role and responsibilities of the Nominations Committee are outlined in Schedule
Company’s website,
Plan
4
www.europeanmet.com/corporate-governance.
Corporate Governance
Company’s
available
online
the
the
on
of
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, Executive Chairman, 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.
77
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
ADDITIONAL INFORMATION
The following additional information is required by the Australian Securities Exchange Ltd in respect of listed public companies
only.
1
Shareholding as at 18 September 2020
(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
99
243
160
305
135
942
(b) The number of shareholdings held in less than marketable parcels is 98.
(c) Voting Rights
The voting rights attached to each class of equity security are as follows:
160,481,098 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 18 September 2020
Rank
Shareholder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
J P Morgan Nominees Australia Pty Limited
Armco Barriers Pty Ltd
Citicorp Nominees Pty Limited
Jim Nominees Limited
Inswinger Holdings Pty Ltd
Barclays Direct Investing Nominees Limited < Client1>
Hargreaves Lansdown (Nominees) Limited <15942>
Vidacos Nominees Limited
Hargreaves Lansdown (Nominees) Limited
HSDL Nominees Limited
Interactive Investor Services Nominees Limited
Lawshare Nominees Limited
Interactive Investor Services Nominees Limited
Lawshare Nominees Limited
HSDL Nominees Limited
HSBC Global Custody Nominee (Uk) Limited <777329>
Share Nominees Ltd
Hargreaves Lansdown (Nominees) Limited
CGWL Nominees Limited
Hana Vanova
Number of CDIs
21,578,749
13,810,000
10,763,396
9,397,769
8,500,000
4,244,484
3,780,912
3,675,696
3,080,197
2,942,586
2,840,220
2,345,789
2,175,656
1,974,667
1,919,389
1,910,000
1,799,002
1,793,587
1,703,433
1,405,015
% Held
13.45
8.61
6.71
5.86
5.30
2.64
2.36
2.29
1.92
1.83
1.77
1.46
1.36
1.23
1.20
1.19
1.11
1.11
1.06
0.87
Total Top 20 Shareholders
101,640,547
63.33
78
EUROPEAN METALS HOLDINGS LIMITED
ABRN 154 618 989
ANNUAL REPORT 30 JUNE 2020
ADDITIONAL INFORMATION
2
3
The name of the Company Secretary is Ms Julia Beckett.
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 15,600,000 options over unissued CDIs are on issue.
A total of 3,000,000 A Class Performance Shares
7
Use of Funds
The Company has used its funds in accordance with its initial business objectives.
TENEMENT SCHEDULE
Permit
Code
Deposit
Interest at
beginning of
Quarter
Acquired /
Disposed
Interest at end
of Quarter
Exploration
Area
Cinovec
Cinovec II
Cinovec III
Cinovec IV
N/A
Preliminary
Mining
Permit
Cinovec II
Cinovec South
Cinovec III
Cinovec East
Cinovec IV
Cinovec NorthWest
100%
100%
100%
100%
100%
100%
100%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
100%
100%
100%
100%
100%
100%
100%
79