ANNUAL
REPORT
2022
CORPORATE DIRECTORY
Australian Business Number
31 112 731 638
Country of Incorporation
Australia
Board of Directors
Antony Sage
Mark Hancock
Nicholas Sage
Executive Chairman
Executive Director
Non-Executive Director
Company Secretary
Catherine Grant-Edwards
Melissa Chapman
Principal Administrative Office
and Registered Office
Unit 3, 32 Harrogate Street
West Leederville, WA 6007
Telephone:
+61 (08) 6181 9793
Share Registry
Auditors
ASX
Link Market Services
Level 12, QV1 Building
250 St Georges Terrace
Perth WA 6000
Telephone:
Email:
Website:
Stantons
Level 2, 40 Kings Park Road
West Perth, WA 6005
1300 554 474 (within Australia)
+61 (8) 9211 6670 (overseas)
info@linkmarketservices.com.au
www.linkmarketservices.com.au
CuFe Ltd’s fully paid ordinary shares are quoted on the Official List of
ASX (ASX Codes: CUF and CUFO).
Contents
CONTENTS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION TO DIRECTORS
CORPORATE GOVERNANCE STATEMENT
CONSOLIDATED STATEMENT OF 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 AUDITOR’S REPORT
SCHEDULE OF TENEMENTS
ADDITIONAL SHAREHOLDER INFORMATION
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Annual Report 2022
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Directors’ Report
Annual Report 2022
DIRECTORS’ REPORT
The directors of CuFe Ltd (formerly Fe Limited) (CUF or the Company) present their report and the financial
statements comprising CUF and its controlled entities (together the Group) for the year ended 30 June 2022.
DIRECTORS
The names and details of the Company’s directors in office during the year and until the date of this report are
as follows. All directors were in office for the entire period unless stated otherwise.
Antony Sage, (B Com, FCPA, CA, FTIA) Executive Chairman
Mr Antony Sage has more than 30 years’ experience in the fields of corporate advisory services, funds
management and capital raising. Mr Antony Sage is based in Western Australia and has been involved in the
management and financing of listed mining and exploration companies for over 20 years. Mr Antony Sage has
operated in Argentina, Brazil, Peru, Romania, Russia, Sierra Leone, Guinea, Cote d’Ivoire, Congo, South Africa,
Indonesia, China and Australia. Mr Antony Sage is currently a director of ASX-listed Cyclone Metals Ltd
(previously Cape Lambert Resources Limited) (which was AIM Company of the year in 2008), and is the
chairman of ASX-listed company, European Lithium Limited. Mr Antony Sage is also the sole owner of A League
football club Perth Glory that plays in the National competition in Australia. Mr Antony Sage currently is, or has
been a director of the following listed entities in the three years immediately before the end of the current
financial year:
▪ Cyclone Metals Limited (previously Cape Lambert Resources Ltd) (December 2000 to Present);
▪
▪
European Lithium Limited (September 2016 to Present); and
International Petroleum Limited (January 2006 to September 2019).
Interest in shares & options at
date of this report:
29,173,010 fully paid ordinary shares
7,500,000 unlisted options at $0.06 expiring 30 June 2023
Mark Hancock, (B.Bus, CA, FFin) Executive Director
Mr Mark Hancock has over 30 years’ experience in key financial, commercial and marketing roles across a
variety of industries with a strong focus on natural resources. During his 13 years at Atlas Iron Ltd, Mr Hancock
served in numerous roles including CCO, CFO, Executive Director and Company Secretary. Mr Mark Hancock is
currently a director or has been a director of the following listed companies in the three years immediately
before the end of the current financial year:
▪ Centaurus Metals Ltd (September 2011 to Present);
▪
▪ Cyclone Metals Limited (previously Cape Lambert Resources Ltd) (February 2020 to August 2020).
Strandline Resources Ltd (August 2020 to Present); and
Interest in shares & options at
date of this report:
2,500,000 fully paid ordinary shares
7,500,000 unlisted options at $0.06 expiring 30 June 2023
Nicholas Sage, Non-Executive Director
Mr Nicholas Sage is a marketing and communications professional with more than 25 years’ experience in
various management and consulting roles. Mr Nicholas Sage is based in Western Australia and currently
consults to various companies and has held various management roles with Tourism Western Australia. He also
runs his management consulting business. Mr Nicholas Sage is currently a director or has been a director of the
following listed companies in the three years immediately before the end of the current financial year:
▪
International Goldfields Limited (January 2018 to Present).
Interest in shares & options at
date of this report:
None
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Directors’ Report
Annual Report 2022
JOINT COMPANY SECRETARY
Catherine Grant-Edwards and Melissa Chapman
Ms Catherine Grant‐Edwards (Chartered Accountant (CA)) and Ms Melissa Chapman (Certified Practicing
Accountant (CPA), AGIA/ACIS, GAICD) are appointed as Joint Company Secretary. Ms Chapman and Ms Grant-
Edwards are directors of Bellatrix Corporate Pty Ltd (Bellatrix), a company that provides company secretarial
and accounting services to several ASX listed companies. Between them, Ms Grant‐Edwards and Ms Chapman
and have over 30 years’ experience in the provision of accounting, finance and company secretarial services to
public listed resource and private companies in Australia and the UK, and in the field of public practice external
audit.
PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES STATE OF AFFAIRS
CuFe Ltd (ASX: CUF) (CUF or the Company) is an Australian mining and mineral exploration company which
holds, or has rights or interests in, various tenements prospective for copper, iron ore, gold and base metals
located in Western Australia and the Northern Territory. The Company’s main focus is its iron ore assets in
Western Australia (JWD Iron Ore Project) and the Northern Territory (Yarram Iron Ore Project), and the Tennant
Creek Copper Project in the Northern Territory. The remaining projects are all subject to various joint venture
agreements under which CUF does not have operational control.
There have been no changes in the state of affairs of the Group other than those disclosed in the review of
corporate activities and review of operations.
DIVIDENDS AND DISTRIBUTIONS
No dividends or distributions were paid to members during the year and none were recommended or declared
for payment (30 June 2021: nil).
REVIEW OF OPERATIONS
CORPORATE
Operating Results
The consolidated loss after income tax for the year ended 30 June 2022 amounted to $164,915 (30 June 2021:
$2,510,540 loss after income tax).
Extraordinary General Meeting
The Company held an extraordinary general meeting (EGM) on 12 July 2021. All resolutions put to shareholders
were passed via a poll.
Annual General Meeting
The Company’s annual general meeting (AGM) was held on 24 November 2021. All resolutions put to the
meeting were passed and decided by way of a poll.
Change of Company Name and ASX Code
The Company changed its name from Fe Limited to CuFe Ltd on 25 November 2021. From commencement of
trading on 10 December 2021, the Company’s ASX Code was changed from ‘FEL’ to ‘CUF’.
Placement
On 24 September 2021, the Company announced a capital raising of $5,000,000 through a placement of
100,000,000 ordinary shares (Placement Shares) to sophisticated investors at $0.05 per share (Placement).
Investors were also issued one option (exercise price $0.06, expiring 2 years from issue) for every two shares
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Directors’ Report
Annual Report 2022
issued (Placement Options). The Placement lead manager was also entitled to receive 20,000,000 options on
same terms as the Placement Options (Lead Manager Options).
The Placement Shares were issued on 1 October 2021.
The Placement Options and Lead Manager Options were issued on 25 November 2021, following receipt of
shareholder approval at the Company’s AGM. These options were quoted on 24 December 2021 (ASX: CUFO).
Completion of Tennant Creek Acquisition
On 24 September 2021, the Company announced that it had entered into a binding agreement to acquire a 60%
interest in copper / gold assets which have been the subject of historical mining at Tennant Creek in the
Northern Territory from Gecko Mining Company Pty Ltd (GMC) (Tennant Creek Acquisition).
The Tennant Creek Acquisition was completed on 9 December 2021. Consideration included $5,000,000 cash
(payable in three instalments) (Cash Consideration), 85,000,000 shares, and 75,000,000 unlisted options
exercisable at $0.10 expiring 3 years from date of issue. The shares and unlisted options which were approved
for issue by shareholders at the Company’s AGM were issued and the transaction was completed on 9 December
2021. At that date, there remained a deferred cash payment of $2,000,000 (part of the Cash Consideration)
(Deferred Consideration) which was payable six months from completion.
Variation of Tennant Creek Acquisition
On 8 April 2022, the Company advised a variation of terms to the binding agreement previously entered into
with GMC. The parties agreed to vary the agreement such that the Deferred Consideration amount would be
settled as follows:
•
•
$1,000,000 payable in cash 8 April 2022;
$500,000 to be settled via the issue of 12,500,000 ordinary shares at a deemed issue price of $0.04 each on
11 April 2022 (fair value on date of issue $425,000); and
$500,000 payable in cash 1 July 2022 (Final Cash Payment).
•
The Final Cash Payment was settled on 1 June 2022 at a discounted amount of $490,000 (representing a saving
of $10,000 for early payment).
CUF and GMC have formed an unincorporated joint venture in respect of the Tennant Creek Project tenements,
with CUF as manager of the joint venture. CUF will pay the first $10,000,000 of joint venture expenditure
incurred (noting that $1,119,144 has been spent to 30 June 2022).
Refer “Projects” section for summary of exploration activities conducted during the year.
JWD Iron Ore Project
Decision to Mine
As detailed in the FY21 Annual report, in April 2021, the Company made a payment of $230,000 in cash to
GVIO, representing an advance payment of the additional consideration payable (as agreed to be varied from
$250,000) pursuant to the Wiluna Transaction upon a decision to mine.
During the year, the cash advance was refunded to CUF (plus interest of $20,000), and 4,807,692 shares were
issued in settlement of the $250,000 consideration component payable upon decision to mine in respect of the
JWD Iron Ore Project.
Increase of JWD Interest to 60%
As announced on 25 May 2021, CUF paid a A$1,000,000 refundable deposit to its joint venture partner to secure
an option to increase its interest in the JWD Iron Ore Project from 51% to 60% for consideration of
A$2,500,000.
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Following receipt of shareholder approval at the Company’s EGM to issue equity to complete this transaction,
CUF exercised its option and elected to settle payment of the consideration amount via the issue of 43,859,649
shares. During the year, the $1,000,000 refundable deposit has been repaid to CUF and on 28 July 2021 the
shares were issued.
Variation to JWD Mining Rights Agreement
As announced 12 November 2021, the Company entered into a variation with GWR Group Ltd on the JWD Mining
Rights Agreement whereby rather than having to pay $4,250,000 by mid-January 2022 to secure the right to
export a further 2.7MT of iron ore from the deposit, the JWD JV pays $1,800,000 to secure the right to export
1.2MT (100%) and then can elect to make subsequent payments to secure rights to export further tonnes.
Executing the variation provided flexibility to both parties in light of the volatile iron ore market experienced
during the year.
Offtake Agreement and USD Loan Arrangement
As announced on 27 July 2021, the Company, via its wholly owned subsidiary Wiluna FE Pty Ltd, entered an
exclusive offtake agreement with leading international trading house Glencore International AG (Glencore), for
100% of the JWD product (iron ore lumps and fines) over the life of CUF’s operations at the mine, subject to
GWR Group Ltd’s existing right to elect to purchase up to 50,000 tonnes of fines product at the mine gate.
Pursuant to the terms of the offtake agreement, Glencore provided a USD$7,500,000 prepayment, to be repaid
by the JV via instalments from shipments plus applicable interest (Initial Loan). The Initial Loan was repaid by
the JV during the year.
As announced 12 January 2022, the agreement has been restructured to allow drawdowns of up to
USD$3,000,000 against stock held at port, to assist the Company in management of working capital as required
as Operator of the JWD JV (Proposed Stock Facility). USD$1,500,000 has been drawn at 30 June 2022
against stock at port, with additional security granted in line with that of the initial prepayment facility, pending
the finalisation of warehouse management protocols with the port provider (Short-term Facility). The Short-
term Facility has been repaid from the July 2022 shipment. The Short-term Facility has provided access to
working capital whilst full-form documentation is being completed to allow draw down under the Proposed Stock
Facility.
Refer “Projects” section for summary of mining activities conducted during the year.
Sale of Pilbara Exploration Tenements
On 17 June 2021, the Company announced that it had entered two separate binding agreements with Global
Lithium Ltd (ASX:GL1) (Global Lithium) and Mercury Resources Group Pty Ltd (Mercury Resources) to
dispose of its Pilbara exploration tenure for a total cash consideration of $550,000, with a trailing royalty on
certain of the tenements (refer to ASX Announcement dated 17 June 2021 for a summary of key terms).
The transactions with Global Lithium and Mercury Resources were completed and funds received during the year.
Shares issued
During the period the Company issued the following shares:
▪
▪
▪
▪
▪
▪
4,807,692 shares issued in settlement of the $250,000 consideration component payable upon decision
to mine in respect of the JWD Project
43,859,649 shares issued upon CUF’s exercise of its option to acquire an additional 9% interest in the
JWD Project
100,000,000 shares were issued pursuant to the Placement raising a total of $5,000,000 (before costs)
85,000,000 shares were issued as part consideration for the Tennant Creek Acquisition
6,000,000 shares issued upon exercise of unlisted options exercisable at $0.03 expiring 31 August
2022, raising $180,000
7,000,000 shares issued upon exercise of unlisted options exercisable at $0.025 expiring 31 March
2022, raising $175,000
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Annual Report 2022
▪
12,500,000 shares were issued on 11 April 2022 as consideration for the Tennant Creek Acquisition
(variation deed)
Option issued
During the year the Company issued the following options:
▪
▪
▪
▪
▪
▪
▪
15,000,000 unlisted options exercisable at $0.06 expiring 30 June 2023 with vesting conditions issued
to directors (or their nominees) following receipt of shareholder approval at the July 2021 EGM
1,000,000 unlisted options exercisable at $0.074 expiring 31 December 2022 issued pursuant to the
Company’s Employee Securities Incentive Plan (ESIP) (ESIP approved by shareholders at the July 2021
EGM)
3,000,000 unlisted options exercisable at $0.04 expiring 31 August 2023 with vesting conditions issued
pursuant to the Company’s ESIP
14,500,000 unlisted options exercisable at $0.06 expiring 30 June 2023 with vesting conditions issued
pursuant to the Company’s ESIP
50,000,000 options at $0.06 expiring 24 November 2023 were issued (being the Placement Options)
(quoted on 24 December 2021 ASX:CUFO)
20,000,000 options at $0.06 expiring 24 November 2023 were issued (being the Lead Manager Options)
(quoted on 24 December 2021 ASX:CUFO)
75,000,000 unlisted options at $0.10 expiring 9 December 2024 were issued as part consideration for
the Tennant Creek Acquisition
Options exercised
The following options were exercised during the year:
▪
▪
6,000,000 unlisted options exercisable at $0.03 expiring 31 August 2022
7,000,000 unlisted options exercisable at $0.025 expiring 31 March 2022
Options lapsed or expired
The following options lapsed or expired during the year:
▪
▪
4,000,000 unlisted options at $0.06 expiring 30 June 2023
3,000,000 unlisted options at $0.025 expiring 31 March 2022
PROJECTS
Western Australia
The Company holds, or has rights or interests in, various tenements prospective for copper, iron ore, gold and
base metals located in Western Australia and the Northern Territory. The Company’s main focus is its iron ore
assets in Western Australia (JWD Iron Ore Project) and the Northern Territory (Yarram Iron Ore Project), and
development of the recently acquired Tennant Creek Copper Project in the Northern Territory. The remaining
projects are all subject to various joint venture agreements for which the Company does not have operational
control.
JWD Iron Ore Project - Wiluna Iron JV (60%) (Western Australia)1
With mining operations at the JWD Iron Ore Project commencing in May 2021, followed by processing and
haulage to port commencing in July 2021, financial year 2022 marks the first full year of production from JWD
(JWD, JWD Project). During the year volatile iron ore prices resulted in numerous iron ore mines of a similar
scale ceasing production, with most still not having returned into operation. This period has also been
challenging for JWD, with the Company managing the volatility through hedging of the iron ore price, careful
management of working capital and a continued focus on cost reduction post commissioning and ramp up of
production. Key milestones for the year include:
1 Amounts referred to in this section of the Directors’ Report are stated at 100% of the amounts recorded in by
the JWD JV. In accordance with its accounting policy in respect of the joint operation, CUF takes up its 60%
share of assets, liabilities and results of the JWD JV in the Group’s consolidated financial statements presented in
this annual report.
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• Commencement of processing and haulage to Geraldton Port in July 2021, following commencement of
mining in May 2021
•
•
The first shipment of high-grade lump product departed Geraldton Port on 2 October 2021, with a total of six
(6) cargos exported during the year.
Six 60m road trains introduced to the haulage fleet, carrying approximately 30% higher payload than
standard quad road trains.
• Consistently delivered high grade Lump product resulting in realised FOB pricing outcomes that are
favourable when compared to that reported by other West Australian iron ore producers.
• Contract with leading South East Asian steel mill for 360,000 wmt +/- 15%, for delivery over the period May
to December 2022, equating to six shipments over the period, with pricing linked to the index. The proximity
of South East Asia to Geraldton is beneficial as it results in reduced freight costs when compared to the
China market. As at 30 June 2022, two (2) vessels had been shipped under the contract.
Key Points:
•
•
Iron Ore prices have been extremely volatile during the year, with 62% index prices soaring to highs of
USD222/dmt and then dipping as low as USD84/dmt during the year and closing at USD120/dmt at the end
of June. The closing price on 21 September 2022 is USD96.40/dmt. Lump premiums have also been
volatile. The first quarter of the financial year experienced the strongest pricing and CuFe did not complete
its first shipment until the second quarter so did not have the opportunity to benefit from the highest part of
the cycle.
In response to extreme iron ore price volatility experienced from late September 2022, the Company worked
with its service providers and contractors to implement certain cost savings and a change to its operating
strategy which allowed JWD to continue to maintain continuity in its supply of iron ore to the market
throughout the entirety of the 2022 financial year. The Company was also able to benefit from hedges taken
out over the year.
• Realised hedge gains for the year of A$8.9m (100%).
•
•
•
The Company installed a new crushing and screening plant at JWD in April 2022 for the purpose of achieving
improved reliability and processing capacity which enabled record production across mining, processing,
haulage and shipping.
Escalation in diesel, labour and consumables (in particular unprecedented cost of diesel fuel) has negatively
impacted on production costs, particularly toward the end of the year.
The company has continued to work on reducing production costs with the current focus being on the
potential to reduce strip ratio and improve ore recovery through revision to the mine plan, and further
reduce the cost of haulage to port, along with other site based initiatives related to reducing the cost of
production ex-mine.
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Annual Report 2022
Figure 1: JWD Pit, Waste Dump, ROM & Process Plant July 2022
Operations Summary
Production metrics
(100%)
Total material moved
Ore mined
Ore processed
Ore hauled to port
Ore shipped
Inventory
ROM
Site Finished Product
Port
Revenue (FOB)
Revenue (FOB)
Hedging Gains
Total Revenue
Measure
Q1
Q2
Q3
Q4
FY22
BCM
wmt
wmt
wmt
wmt
wmt
wmt
wmt
201,441
21,634
203,443
328,901
755,419
266,028
47,427
200,888
195,244
697,248
114,068
102,677
135,520
211,809
564,074
62,181
79,643
80,894
140,453
363,171
-
119,804
89,328
121,615
330,747
151,960
58,316
123,684
102,724
102,724
18,320
4,688
17,462
62,181
21,633
13,199
20,081
38,424
20,081
38,424
US$/wmt
A$/wmt
A$/wmt
A$/wmt
-
-
-
-
$100.56
$139.89
$116.91
$117.19
$138.78
$195.26
$161.32
$162.35
$65.53
-$2.01
$10.16
$26.93
$204.31
$193.25
$171.48
$189.28
C1 Costs ($/wmt by Activity)
A$/wmt
101.52
122.08
$136.36
$148.53
$138.18
C1 Costs ($/wmt Shipped)
A$/wmt
-
$130.92
$144.56
$166.03
$158.59
Yarram Project – Yarram Iron JV (50%) (Northern Territory)
The Company holds a 50% interest in Gold Valley Iron and Manganese Pty Ltd, the owner of the iron ore rights
over the Yarram project, located some 110km from Darwin Port.
During the year, as a precursor to drilling the Company received the Aboriginal Areas Protection Authority
(AAPA) sacred site clearance certificate along with approval of the Mining Management Plan (MMP) from the
Department of Industry, Tourism and Trade (DITT). The Company capitalised on an opportunity to secure a drill
rig that had just completed drilling on a neighbouring tenement, allowing completion of a short drilling program
late in the 2021 calendar year before the wet season. The results of the drilling confirmed extensions to known
mineralisation and also confirmed intersections of high grade haematite mineralisation.
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Results from the holes drilled with significant intersections including:
•
•
•
•
36m @ 58.2% Fe from 15m in hole YARC2113 incl 11m @ 62.2% Fe from 23m, 7m @ 61.8% Fe
from 37m and 6m @ 63.8% Fe from 45m
9m @ 59.8% Fe from 22m in hole YARC2118
3m @ 58.7% Fe from 41m in hole YARC2126
5m @ 59.3% Fe from 66m in hole YARC 2130
During the wet season the Company undertook a survey using micro ground gravity geophysical techniques to
assist in future drill targeting. The gravity work is indicative only but can provide interesting insight to support
subsequent drilling, with a focus on areas identified as having a higher gravity response.
A recent field trip post the end of the financial year focused on reconciling gravity and orebody extensional
targets with outcrop and detailed geological mapping having further increased confidence and prospectivity
within MLN1163. A comprehensive drill program is planned for September 2022 and will include RC drilling,
Diamond drilling and bulk sampling.
Tennant Creek Mining Rights (Northern Territory)
On 24 September 2021 the Company announced the transaction to acquire a 60% interest in copper / gold
assets which have been the subject of historical mining at Tennant Creek in the Northern Territory. The
acquisition was completed on 9 December 2021.
The project is centered around an open pit cut-back to the existing Orlando open pit. During the year work was
focused on studies that would underpin the approvals process, other packages of work related to development of
the project, and commencing a preliminary drill program:
•
•
•
•
•
•
Existing core in Tennant Creek was consolidated and relocated to Perth, allowing technical consultants to
complete an inspection of the core and ascertain additional core requirements that would be provided from
the drill program;
A geological review of the existing drillhole information together with inputs provided by consultants was
used to plan an RC and Diamond drill program for the purpose of increasing confidence in the Resource,
testing step out targets, installing monitoring bores, and providing core for metallurgical testwork;
In parallel to working with relevant stakeholders on land access for the drill program, in June the Company
updated the existing Resource at Tennant Creek to be compliant with the 2012 JORC code, as it had
previously been issued under the 2004 JORC code. The Company engaged Mr Ian Glacken from Snowden
Optiro Consultants to conduct a review of the stated 2004 resources and complete the necessary additional
requirements to allow reporting under JORC 2012 requirements;
Exploration access agreement concluded with pastoralist;
After receiving the Aboriginal Areas Protection Authority (AAPA) sacred site clearance certificate and
approval of the Mining Management Plan (MMP) from the Department of Industry, Tourism and Trade
(DITT), the drilling program commenced on the 12th June 2022 and was completed post the financial year
end on the 9th August 2022.
Various key studies that are required for future mining approvals have been commenced or completed:
Flora and fauna surveys have been completed
o
o Wet season surface water sampling has been completed
o A groundwater assessment, important to both the approvals process and operational considerations
for the project, has commenced with the appointment of SLR Consulting; and
o A scoping study level of assessment has been completed by Tetratech Coffey, exploring various
options for tailings storage.
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Figure: Existing Orlando Copper / Gold pit
Bryah Basin Joint Venture Projects - CUF 20% rights
CUF, via its wholly owned subsidiary Jackson Minerals Pty Limited (Jackson Minerals), has a 20% interest in
tenements covering an area of 804 km² in the highly prospective Bryah Basin proximal to Sandfire Resources NL
(ASX: SFR) Doolgunna Project and DeGrussa copper gold mine.
The Bryah Basin Project tenements are subject to joint ventures and farm-ins with Billabong Gold Pty Ltd
(Billabong), Alchemy Resources (Three Rivers) Ltd (ASX: ALY), Auris Minerals Ltd (ASX: AUR) and SFR. SFR is
currently actively exploring the area.
The Bryah Basin is a highly prospective and largely under-explored mineral field with potential for further
discovery of gold and base metals.
Morck Well Project - AUR/SFR/CUF- E51/1033, E52/1613, E52/1672
The Morck Well project is located in the eastern part of the Bryah Basin and contains approximately 40km strike
length of the highly prospective Narracoota Volcanic Formation. The northern boundary of Morck Well is adjacent
to SFR’s DeGrussa-Doolgunna exploration tenements. CUF holds a 20% interest in all minerals in three
exploration licences (E51/1033, E52/1613 and E52/1672) within AUR’s Morck Well JV project. SFR has a farm-in
and joint venture with CUF and AUR where SFR can earn an interest in the Morck Well Project tenements by
completing a minimum spend of $2,000,000 on exploration over 2 years which has been met. SFR can earn a
70% interest in the Morck Well Project tenements by continuing to sole fund exploration to a discovery of not
less than 50,000 tonnes contained Cu (or metal equivalent) and completion of a feasibility study on such a
discovery. If SFR makes a discovery and completes a feasibility study then the interests in the tenements will be
70% SFR, 24% AUR and 6% CUF.
Peak Hill Project Base Metals Rights – ALY/IGO/CUF - E52/1668, E52/1678, E52/1722 and
E52/1730
The Peak Hill project covers approximately 45km strike of the prospective Narracoota Volcanic Formation
sequence in the Bryah Basin and is proximal to SFR’s Doolgunna Project and the Monty mine.
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ALY has entered into a formal joint venture with SFR (refer to ASX: ALY 23 September 2019 for relevant
information and diagrams). SFR has earned a 70% interest in base metals rights, excluding iron ore rights, in
relation to whole area of E52/1722 and parts of E52/1668, E52/1678 and E52/1730. CUF holds its 20% free
carried interests in all minerals to decision to mine, via wholly owned subsidiary Jackson Minerals.
Peak Hill Project All Mineral Rights - ALY/Billabong/CUF - E52/1668, E52/1678, E52/1730,
P52/1538, P52/1539
Billabong, through an assignment of interests from NST, entered into a Farm-In and Joint Venture agreement
with ALY (refer to ASX:ALY 24 February 2015), in regard to parts of E52/1668, E52/1678, E52/1730 (excluding
those parts being farmed into by SFR) and also to earn an 80% interest in the whole of E52/1852. CUF retains
its 20% free carried interests in all minerals to decision to mine, via wholly owned subsidiary Jackson Minerals.
Figure: CUF exploration tenement portfolio in the Bryah Basin showing AUR, ALY, SFR and Billabong JV areas
Mt Ida Iron Ore Project - Mt Ida Gold
Mt Ida Iron Ore Project is approximately 80km northwest of the operational railway at Menzies, which offers
access to existing port facilities at Esperance. The Project area covers part of the Mt Ida - Mt Bevan banded iron
formation, which is currently being explored and evaluated by Jupiter Mines Limited and Legacy Iron Ore
Limited.
The Mt Ida Iron Ore Project (Mt Ida Iron Project) provides CUF the rights to explore and mine for iron ore on
exploration license E29/640 and mining leases M29/2, M29/165 and M29/422 held by Mt Ida Gold Pty Ltd,
covering approximately 120km2 in the emerging Yilgarn Iron Province. The rights give provision for CUF to retain
revenue from any iron ore product it mines from the tenure. CUF has no registered interest in these tenements.
Competent Person Statement
The information in this report is compiled and collected by Mr Olaf Frederickson, who is a Member of the
Australasian Institute of Geoscientists. Mr Frederickson has sufficient experience that is relevant to the style of
11
Directors’ Report
Annual Report 2022
mineralisation, type of deposit under consideration and to the activity being undertaken to qualify as a
Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration, Results,
Mineral Resource and Ore Reserves (JORC Code 2012). Mr Frederickson consents to the inclusion in the report of
the matters based on this information in the form and context in which it appears.
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Issue of Shares
The following shares were issued subsequent to year end:
▪
7,500,000 shares upon exercise of unlisted options at $0.03 expiring 31 August 2022, raising $225,000.
Issue of Options
The following options were issued subsequent to year end:
▪
14,250,000 unlisted options at $0.027 expiring 7 September 2024.
Expiry of Options
A total of 16,500,000 unlisted options at $0.03 expired on 31 August 2022.
There have been no other events subsequent to 30 June 2022 up to the date of this report that would materially
affect the operations of the Group or its state of affairs which have not otherwise been disclosed in this financial
report.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group continues to meet all environmental obligations across its tenements. No reportable incidents
occurred during the year. Environmental regulations applicable to the Group include the Environmental
Protection Act 1994.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company has entered a Deed of Access, Insurance and Indemnity with each of the directors. Under the
terms of these Deeds, the Company has undertaken, subject to restrictions in the Corporations Act 2001, to:
•
•
indemnify each director in certain circumstances;
advance money to a director for the payment of any legal costs incurred by a director in defending legal
proceedings before the outcome of those proceedings is known (subject to an obligation by the director
to repay any money advanced if a court determines that the director was not entitled to it);
• maintain directors’ and officers’ insurance cover in favour of each director whilst they remain a director
•
of CuFe Ltd and for a run out year after ceasing to be such a director; and
provide each director with access to Board papers and other documents provided or available to the
director as an officer of CuFe Ltd.
During the year, the Company had in place and paid premiums for insurance policies indemnifying directors and
officers of the Company against certain liabilities incurred in the conduct of business or in the discharge of their
duties as directors or officers. The contracts of insurance contain confidentiality provisions that preclude
disclosure of the premium paid, the nature of the liability covered by the policies, the limit of liability and the
name of the insurer.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Stantons International, as
part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for
an unspecified amount). No payment has been made to indemnify Stantons International during or since the
financial year.
12
Directors’ Report
Annual Report 2022
LIKELY DEVELOPMENTS AND FUTURE RESULTS
The Company remains focused on its activities within the mineral production and mineral exploration industry on
its retained tenements and interests and is also investigating projects for future acquisition.
DIRECTORS’ MEETINGS
The following table sets out the number of directors’ meetings held during the year and the number of meetings
attended by each director.
Director
T Sage
M Hancock
N Sage
Eligible
3
3
3
Attended
3
3
3
REMUNERATION REPORT (AUDITED)
This Report outlines the remuneration arrangements in place for key management personnel (KMP) who are
defined as those persons having authority and responsibility for planning and directing the major activities of the
Group, directly or indirectly, including any director (whether executive or otherwise) of the parent company.
Details of Key Management Personnel
Directors
A Sage
M Hancock
N Sage
Executive Chairman
Executive Director
Non-Executive Director
Other Key Management Personnel
J Sinclair
Project Director
Remuneration Philosophy
The performance of the Group depends on the quality of its directors, executives and employees. Consequently,
the Group must attract, motivate and retain appropriately qualified industry personnel.
The following principles are embodied in the remuneration framework:
•
•
provide competitive rewards to attract and retain high calibre executives, directors and employees; and
link executive rewards to shareholder value.
Remuneration Policy
During the year, the Company did not have a separately established remuneration committee. The Board is
responsible for determining and reviewing remuneration arrangements for the executive and non-executive
directors and the Chairman. The Board assesses the appropriateness of the nature and amount of remuneration
of such officers on a yearly basis by reference to relevant employment market conditions with the overall
objective of ensuring maximum stakeholder benefit from retention of a high-quality board. The directors receive
their base emolument in the form of cash.
Remuneration in the form of share-based payments to Directors are issued to align directors’ interests with that
of shareholders, including options issued to Executive Directors that vest on satisfaction of specific performance
conditions.
The Group has a policy which restricts executives and directors entering into contracts to hedge their exposure
to options granted as part of their remuneration package.
13
Directors’ Report
Annual Report 2022
The appointment of Directors is subject to provisions of the Company’s Constitution dealing with retirement of
directors by rotation and vacation of office in certain circumstances. Nothing in the agreements with each of the
Directors excludes or varies the terms of the Constitution or the Corporations Act, including the right to
terminate the appointment. Termination benefits are not paid to Directors.
Remuneration report at 2021 AGM
The 2021 remuneration report received positive shareholder support at the 2021 AGM whereby of the proxies
received 99.8% voted in favour of the adoption of the remuneration report.
Performance and Shareholder Wealth
Below is a table summarising key performance statistics for the Group as well as share price over the last five
financial years. Comparative statistics have not been adjusted for the impact of the new accounting standards.
Financial year
Loss after tax ‘000s
30 June 2018
30 June 2019
30 June 2020
30 June 2021
30 June 2022
(1,082)
(1,668)
5,908
(2,511)
(165)
Loss per share
(Cents)
(0.32)
(0.44)
1.22
(0.44)
(0.02)
Share Price
(Cents)
2.40
1.70
1.30
5.10
1.80
Executive Chairman’s Remuneration – Mr Antony Sage
The Company aims to reward the Chairman with a level and mix of remuneration commensurate with his
position and responsibilities within the Company to:
•
•
align the interests of the Chairman with those of shareholders; and
ensure that total remuneration is competitive by market standards.
The consulting arrangement for Mr Antony Sage’s services are provided through Okewood Pty Ltd (Okewood),
pursuant to which Okewood is entitled to receive $180,000 per annum.
Executive Director Remuneration – Mr Mark Hancock
The Company has entered into a consulting agreement with Haven Resources Pty Ltd (Haven Resources), a
company controlled by Mr Mark Hancock, for the provision of executive director services. Mr Hancock was
entitled to receive remuneration of $210,000 per annum (based on 3.5 days per week service at a full time
equivalent fee of $300,000 per annum).
Non-Executive Director Remuneration – Mr Nicholas Sage
The Company has entered into a consulting agreement with Pembury Nominees Pty Ltd (Pembury), a company
controlled by Mr Nicholas Sage, for the provision of non-executive director services. Mr Nicholas Sage was
entitled to receive remuneration of $60,000 per annum.
The Board seeks to set remuneration of non-executive directors at a level which provides the Company with the
ability to attract and retain directors of the highest calibre, whilst incurring a cost which is acceptable to
shareholders.
As approved previously by shareholders, the maximum aggregate amount of remuneration payable to non-
executive directors is $1,000,000.
Other Key Management Personnel Remuneration – Mr Jeremy Sinclair
The Company has entered into a consulting agreement with Verbain Nominees Pty Ltd trading as ValMax
(ValMax) in respect of services provided by Mr Jeremy Sinclair in the role of Projects Director. Consulting fees
payable under the agreement were $320,000 per annum (reduced by 20% for the month of February 2022).
14
Directors’ Report
Annual Report 2022
The Company has agreed to the following performance incentive payments (Performance Incentive
Payments) as part of Mr Jeremy Sinclair’s remuneration package:
•
•
•
$100,000 milestone payment upon first ore ship from JWD Project within 10 months from
Commencement Date, the payment amount reducing by 1/3 per month after that, with no payment
made if takes more than 13 months ($33,333 payment made during the year);
$100,000 milestone payment for completion of 300kt (+/-10%) of shipments from JWD Project and
completion of Phase 2 feasibility assessment within 14 months, from Commencement Date, amount
reducing by 1/2 per month after that, with no payment made if takes more than 16 months
(performance condition not met);
$50,000 milestone payment on achieving decision to mine at Yarram within 16 months from
Commencement Date (performance condition not met).
15
Directors’ Report
Annual Report 2022
Compensation of Key Management Personnel
Consolidated
Short-Term
Short-Term
Year ended 30 June 2022
Salary & Fees
Directors
A Sage
M Hancock
N Sage
Other KMP
J Sinclair
Total
$
180,000
210,000
60,000
314,667
764,667
Performance
Incentive
$
-
-
-
33,333
33,333
Post-
Employment
Superannuation
Share-based
Payment
Share Options (i)
Total
Performance
Based
Comprising
Options
$
$
$
%
%
-
-
-
-
-
106,449
106,449
-
114,195
327,093
286,449
316,449
60,000
462,195
1,125,093
-
-
-
7%
3%
37%
34%
-
25%
29%
(i) This amount refers to the share-based payment expense recorded in the statement of comprehensive income in the period in respect of options issued. The
recorded values of options will only be realised by the KMPs in the event the Company’s share price exceeds the option exercise price.
Consolidated
Short-Term
Short-Term
Year ended 30 June 2021
Salary & Fees
Performance
Incentive
Post-
Employment
Superannuation
Share-based
Payment
Share Options (i)
Total
Performance
Based
Comprising
Options
$
$
$
$
%
%
Directors
A Sage
M Hancock
N Sage
Other KMP
J Sinclair
Total
167,500
105,000
55,000
216,667
544,167
-
-
-
-
-
-
-
-
-
-
117,080
117,080
33,342
66,357
333,859
284,580
222,080
88,342
283,024
878,026
-
-
-
-
-
41%
53%
38%
23%
38%
(i) This amount refers to the share-based payment expense recorded in the statement of comprehensive income in the period in respect of options issued. The
recorded values of options will only be realised by the KMPs in the event the Company’s share price exceeds the option exercise price.
16
Directors’ Report
Annual Report 2022
Shareholdings of Key Management Personnel
30 June 2022
Directors
A Sage(i)
M Hancock
N Sage
Other KMP
J Sinclair
(i)
Indirectly held.
30 June 2021
Directors
A Sage(i)
M Hancock
N Sage
Other KMP
J Sinclair
(i)
Indirectly held.
Balance at 1 July
2021
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2022
21,673,010
2,500,000
-
230,000
24,403,010
-
-
-
-
-
-
-
-
-
-
-
1,750,000
1,750,000
(880,000)
(880,000)
-
-
-
-
-
21,673,010
2,500,000
-
1,100,000
25,273,010
Balance at 1 July
2020
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2021
9,173,010
-
-
-
9,173,010
-
-
-
-
-
12,500,000
2,500,000
-
230,000
15,230,000
-
-
-
-
-
-
-
-
-
-
21,673,010
2,500,000
-
230,000
24,403,010
17
Directors’ Report
Annual Report 2022
Option and right holdings of Key Management Personnel
30 June 2022
Directors
A Sage
M Hancock
N Sage
Other KMP
J Sinclair
Balance at 1 July
2021
Acquired
/granted
during year
Exercised
Net change
other
Balance at
30 June 2022
Exercisable
Not
Exercisable
15,000,000
15,000,000
2,500,000
10,000,000
42,500,000
-
-
-
-
-
-
-
-
(2,500,000)(i)
15,000,000
15,000,000
-
10,500,000
10,500,000
-
4,500,000
4,500,000
-
5,000,000
5,000,000
(1,750,000)
(1,750,000)
-
(2,500,000)
13,250,000
43,250,000
6,250,000
27,250,000
7,000,000
16,000,000
(i) On 2 August 2021, Mr Nicholas Sage sold 2,500,000 unlisted options at an exercise price of $0.03 expiring 31 August 2022 via an off market transfer for
$125,000.
30 June 2021
Directors
A Sage
M Hancock
N Sage
Other KMP
J Sinclair
Balance at 1 July
2020
Acquired
/granted
during year(i)
Exercised
Net change
other
Balance at
30 June 2021
Exercisable
Not
Exercisable
10,000,000
2,500,000
2,500,000
15,000,000
15,000,000
2,500,000
(12,500,000)
(2,500,000)
-
2,500,000(ii)
-
(2,500,000)(iii)
15,000,000
15,000,000
2,500,000
7,500,000
7,500,000
2,500,000
7,500,000
7,500,000
-
-
15,000,000
10,000,000
42,500,000
(230,000)
(15,230,000)
230,000
230,000
10,000,000
42,500,000
5,000,000
22,500,000
5,000,000
20,000,000
(i)
Includes 7,500,000 unlisted options with vesting conditions granted to each of Mr Tony Sage (or nominee) and Mr Mark Hancock (or nominee) (total of
15,000,000 options) at an exercise price of $0.06 each and an expiry date of 30 June 2023, which were formally issued on 4 August 2021 following receipt
of shareholder approval at the Company’s July 2021 EGM. These options were granted as remuneration for services performed to motivate and reward the
performance of the holder in his role as a Director in a manner that aligns the holders’ interests with the Company and minimises cash spend.
(ii) On 5 January 2021, Mr Antony Sage sold 2,500,000 unlisted options at an exercise price of $0.02 expiring 31 May 2021 via an off market transfer for
$20,000. On 29 January 2021, Mr Antony Sage purchased 5,000,000 unlisted options at an exercise price of $0.025 expiring 31 March 2022 for $100,000.
(iii) On 4 December 2020, Mr Nicholas Sage sold 2,500,000 unlisted options at an exercise price of $0.02 expiring 31 May 2021 via an off market transfer for
$2,500.
18
Directors’ Report
Annual Report 2022
Options awarded, vested and lapsed during the year
Share options do not carry any voting rights and can be exercised once the vesting conditions have been met
until their expiry date.
Options awarded to Directors
No unlisted options were awarded to Directors or other KMPs during the year ended 30 June 2022.
As announced on 26 April 2021, the Directors agreed to issue a total of 15,000,000 unlisted options with vesting
conditions to directors at an exercise price of $0.06 each and an expiry date of 30 June 2023, subject to receipt
of shareholder approval (Director Options). Shareholder approval for the issue of the Director Options was
received at the Company’s general meeting held 12 July 2021 and the securities were formally issued on 4
August 2021. The grant date fair value presented in the 30 June 2021 financial statements was provisional,
estimated by reference to the period end share price. This provisional amount has been revised and adjusted for
in the year ended 30 June 2022.
Vesting conditions in respect of the Director Options are as follows:
▪
▪
▪
40% vest upon successful earn-in to JWD by meeting Stage 1 earn-in milestone by exporting 300,000
tonnes (vested during FY22);
26.67% vest and become exercisable upon export of 1MT from JWD by 31 December 2022; and
33.33% vest and become exercisable upon export of 0.25MT from Yarram by 31 December 2022.
Details of the Director Options awarded are summarised as follows:
A Sage
M Hancock
Number of
Options
Exercise price
per option
Expiry date
7,500,000
7,500,000
$0.06
$0.06
30 June 2023
30 June 2023
Estimated fair value of
options at grant date
$0.0412
$0.0412
Options awarded to Other KMP
During the year ended 30 June 2022, Mr Jeremy Sinclair was awarded 5,000,000 unlisted options at an exercise
price of $0.06 and an expiry date of 30 June 2023 with vesting conditions under the Company’s shareholder
approval Employee Securities Incentive Plan (ESIP) (ESIP Options).
Vesting conditions in respect of the ESOP Options are as follows:
▪
▪
60% vest upon successful earn-in to JWD by meeting Stage 1 earn-in milestone by exporting 300,000
tonnes (vested during FY22); and
40% vest and become exercisable upon export of 1MT from JWD by 31 December 2022
Details of the ESIP Options awarded are summarised as follows:
J Sinclair
5,000,000
$0.06
30 June 2023
$0.043
Number of
Options
Exercise price
per option
Expiry date
Fair value of options at
grant date
No unlisted options awarded to Directors or other KMPs lapsed during the year ended 30 June 2022.
Transactions with directors, director related entities and other related parties
During the year ended 30 June 2022, an aggregate amount of $686 (30 June 2021: $750) was paid or payable
to Cyclone Metals Ltd (Cyclone) for reimbursement of travel and other corporate costs. At 30 June 2022, nil
was payable to Cyclone (30 June 2021: nil). During the year ended 30 June 2022, an aggregate amount of
$250 was received or receivable from Cyclone for reimbursement of other corporate costs (30 June 2021: $754).
At 30 June 2022, $250 was receivable from Cyclone (30 June 2021: $754).
During the year ended 30 June 2022, an aggregate amount of $13,007 (30 June 2021: $15,313) was paid or
payable to European Lithium Ltd (European Lithium) for reimbursement of travel and other corporate costs.
At 30 June 2022, nil was payable to European Lithium (30 June 2021: $538). During the year ended 30 June
19
Directors’ Report
Annual Report 2022
2022, an aggregate amount of $1,410 was received or receivable from European Lithium for reimbursement of
other corporate costs (30 June 2021: nil). At 30 June 2022, nil was receivable from European Lithium (30 June
2021: nil).
During the year ended 30 June 2022, an aggregate amount of $130,475 (30 June 2021: $52,300) was paid or
payable to Okewood Pty Ltd (Okewood) for rent, corporate box sponsorship, and for reimbursement of COVID
19 test kits purchased in bulk. At 30 June 2022, nil was payable to Okewood (30 June 2021: nil). Mr Antony
Sage is a director of Okewood.
End of Remuneration Report
20
Directors’ Report
Annual Report 2022
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 (Cth) requires the Company’s auditor, Stantons International, to
provide the directors of the Company with an Independence Declaration in relation to the audit of the financial
report. This Independence Declaration for the year is set out on page 22 and forms part of this Directors’ Report.
The Directors are satisfied with the independence of the auditor.
NON-AUDIT SERVICES
No non-audit services were provided to the Group by the auditor, Stantons International, during the year.
This report is signed in accordance with a resolution of the Board of Directors.
Mr Antony Sage
Executive Chairman
23 September 2022
21
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
23 September 2022
Board of Directors
CuFe Limited
32 Harrogate Street,
West Leederville, WA 6017
Dear Directors
RE:
CUFE 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 CuFe Limited.
As Audit Director for the audit of the financial statements of CuFe Limited for the year ended 30 June
2022, 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 Tirodkar
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement for the year ended 30 June 2022 (which reports against the
ASX Corporate Governance Council’s Principles and Recommendations) may be accessed from the Company’s
website at www.cufe.com.au.
Annual Report 2022
23
Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2022
Notes
Consolidated
Year ended
30 June 2022
Year ended
30 June 2021
Revenue from continuing operations
Revenue
Cost of sales
Gross profit/(loss)
Interest income
Other income
Employee benefits expense and director
remuneration
Exploration and evaluation expenditure
Finance costs
Legal costs
Share-based payment expense
Amortisation and depreciation expense
Accounting and audit fees
Consultancy fees
Compliance costs
Share of net losses of joint venture accounted
for using the equity method
Other expenses
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
-
Other comprehensive income/(loss) for the
year
3(a)
3(d)
3(b)
3(c)
3(e)
25(a)
3(f)
4
$
32,997,036
(34,381,296)
(1,384,260)
37,450
9,132,230
(1,102,528)
(1,153,373)
(407,123)
(99,332)
(562,797)
(2,768,060)
(296,833)
(240,557)
(184,594)
(266,879)
(868,259)
(164,915)
-
(164,915)
$
-
-
-
58,551
62,986
(364,677)
(551,914)
-
(35,788)
(754,554)
(2,856)
(179,847)
(143,236)
(136,887)
(78,770)
(383,548)
(2,510,540)
-
(2,510,540)
-
-
-
-
Total comprehensive loss for the year
(164,915)
(2,510,540)
Loss per share attributable to ordinary equity
holders of the parent
- basic loss for the year (cents per share)
- diluted loss for the year (cents per share)
5
5
(0.02)
(0.02)
(0.44)
(0.44)
The accompanying notes form part of these financial statements.
Annual Report 2022
24
Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
Notes
Consolidated
ASSETS
Current Assets
Cash and cash equivalents
Restricted cash
Inventory
Trade and other receivables
Other assets
Financial asset
Held for sale assets
Total Current Assets
Non-Current Assets
Exploration and evaluation expenditure
Mine properties and development costs
Plant and equipment
Right of use assets
Investments accounted for using the equity method
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Interest-bearing borrowings
Lease liability
Provisions
Income tax payable
Total Current Liabilities
Non-Current Liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
Reserves
TOTAL EQUITY
The accompanying notes form part of these financial statements.
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
21
30 June
2022
30 June
2021
$
$
7,193,910
469,242
4,568,168
4,621,391
177,485
3,405,067
-
20,435,263
8,866,852
5,331,936
22,900
328,955
2,999,352
17,549,995
37,985,258
5,830,848
109,242
-
1,664,064
1,412,479
77,562
250,000
9,344,195
-
2,892,656
26,242
-
3,266,230
6,185,128
15,529,323
11,147,544
1,304,510
276,852
131,208
-
12,860,114
2,340,293
-
-
-
78,896
2,419,189
505,637
505,637
160,140
160,140
13,365,751
2,579,329
24,619,507
12,949,994
22
23
24
58,622,052
(38,248,811)
4,246,266
24,619,507
48,172,188
(38,083,896)
2,861,702
12,949,994
Annual Report 2022
25
Consolidated Statement of Changes in Equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Contributed
equity
$
Accumulated
losses
$
Share-based
payments reserve
$
48,172,188
(38,083,896)
2,861,702
-
-
-
(164,915)
-
(164,915)
Consolidated
Balance at 1 July 2021
Loss for the year ended
30 June 2022
Other comprehensive income/(loss)
-
-
-
-
-
-
-
-
-
715,500
222,698
562,797
-
Transactions with owners in their capacity as owners:
Shares issued, net of costs (Placement)
Shares issued (Exercise of options)
Shares issued (JWD Project – DTM)
Shares issued (JWD Project – Additional 9% interest)
Shares issued (Tennant Creek acquisition)
Shares issued (Tennant Creek acquisition)
Options issued (Tennant Creek acquisition)
Options issued (Lead Manager to Placement)
Share-based payments
Change in interest in Joint Operation (JWD Project)
4,592,562
355,000
250,000
2,500,000
2,550,000
425,000
-
(222,698)
-
-
-
-
-
-
-
-
-
-
-
-
Balance at 30 June 2022
58,622,052
(38,248,811)
4,362,697
Consolidated
Balance at 1 July 2020
Loss for the year ended
30 June 2021
Other comprehensive income/(loss)
Transactions with owners in their capacity as owners:
Shares issued during the year (net of share issue costs)
Share-based payments
Balance at 30 June 2021
Contributed
equity
$
Accumulated
losses
$
Share-based
payments reserve
$
41,236,293
(35,573,356)
2,107,148
-
-
-
6,935,895
-
48,172,188
(2,510,540)
(2,510,540)
-
-
(38,083,896)
-
-
-
-
754,554
2,861,702
The accompanying notes form part of these financial statements.
Other Reserve
$
-
-
-
-
-
-
-
-
-
-
-
-
-
(116,431)
(116,431)
Total
$
12,949,994
(164,915)
-
(164,915)
4,592,562
355,000
250,000
2,500,000
2,550,000
425,000
715,500
-
562,797
(116,431)
24,619,507
Other reserve
Other Reserve
$
-
-
-
-
-
-
-
$
7,770,085
(2,510,540)
-
(2,510,540)
6,935,895
754,554
12,949,994
Annual Report 2022
26
Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
Notes
Consolidated
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Payments for exploration and evaluation costs
Payment of interest and other finance costs
Income taxes paid
Reimbursement of funds from JV partner
Transfer of funds to restricted cash
Net cash flows from/(used in) operating activities
6(a)
Cash flows from investing activities
Purchase of exploration assets
Purchase of plant and equipment
Payment for right to mine (allocated to capitalised mine
development)
Payments for JWD Acquisition (allocated to capitalised
mine development)
Payments for capitalised mine development
Refund of advance payment upon DTM of JWD Project
Refund of consideration paid to acquire additional 9%
interest in JWD Project
Purchase of investment
Advance payment (additional 9% interest JWD Project)
Investment in joint venture
Proceeds from sale of exploration assets
Proceeds from sale of royalty asset
Receipts from commodity collar/swaps transactions
closed
Transfer of funds to security deposit
Transfer of funds to restricted cash
Net cash flows from/(used in) investing activities
Cash flows from financing activities
Proceeds from shares issued (net of costs)
Proceeds from exercise of options
Proceeds from borrowings
Repayment of borrowings
Principal payments on lease liabilities
Loan advance to unrelated party
Repayment of loan from unrelated party
11(a)
Net cash flows from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
6
The accompanying notes form part of these financial statements.
Year ended
30 June 2022
$
Year ended
30 June 2021
$
33,199,992
(36,095,366)
27,450
(777,672)
(313,868)
(78,896)
500,000
-
(3,538,360)
-
(1,408,226)
58,551
(693,488)
-
-
-
(109,242)
(2,152,405)
(5,091,352)
(6,518)
-
(26,463)
(1,080,000)
-
-
(900,958)
250,000
1,000,000
-
-
(532,063)
575,000
-
5,559,470
(360,000)
(209,657)
(796,078)
4,592,562
355,000
9,551,504
(8,456,845)
(344,721)
-
-
5,697,500
1,363,062
5,830,848
7,193,910
(1,080,000)
(2,226,671)
-
-
(30,000)
(1,000,000)
(1,634,100)
-
2,650,000
-
-
-
(3,347,234)
5,267,625
918,270
-
-
-
(500,000)
500,000
6,185,895
686,256
5,144,592
5,830,848
Annual Report 2022
27
Notes to the Consolidated Financial Statements
Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1
CORPORATE INFORMATION
The financial report of CuFe Ltd (formerly Fe Limited) (CUF or the Company) and the financial
statements comprising CUF and its controlled entities (together the Group) for the year ended 30
June 2022 was authorised for issue in accordance with a resolution of the directors on 23 September
2022.
CUF is a for profit company limited by shares incorporated and domiciled in Australia.
The nature of the operations and principal activities of the Company are mineral production, mineral
exploration and project development which is further described in the Directors’ Report.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001 (Cth), Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board.
The financial report has been prepared on a historical cost basis, except for available-for-sale financial
assets which are carried at fair value. The financial report is presented in Australian dollars unless
otherwise stated.
(b)
Statement of compliance
The financial report complies with Australian Accounting Standards as issued by the Australian
Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board.
(c)
Going concern
The financial statements have been prepared on a going concern basis which contemplates the
continuity of normal business activities and the realisation of assets and the settlement of liabilities in
the ordinary course of business.
At balance date, the Group had cash and cash equivalents of $7,193,910 (30 June 2021: $5,830,848)
and a net working capital surplus of $7,105,907 (excluding restricted cash) (30 June 2021:
$6,815,764 surplus).
Additional funding may be necessary for the Group to continue its planned mineral production and
exploration activities associated with its projects in the next 12 months, including expenditure and
commitments associated with the Company’s existing projects (JWD Project, Yarram Project and
Tennant Creek Project).
The ability of the Group to continue as a going concern is dependent on it being able to either
generate sufficient cashflow from operations or successfully raise additional funding in the next 12
months, to pursue its current strategy. At the date of this report, the directors are satisfied there are
reasonable grounds to believe that the Group will be able to continue its planned operations and the
Group will be able to meet its obligations as and when they fall due because the Directors are
confident that the Group will be able to obtain the additional funding required either through a further
capital raising, continued support from its existing shareholders, funding from the exercise of unlisted
options, and through continuing realisation of value upon sale of product from the JWD Project.
Should the Group not achieve the matters set out above, there is significant uncertainty whether the
Group would continue as a going concern and therefore whether it would realise its assets and
extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report. The financial statements do not include any adjustment relating to the recoverability or
classification of recorded asset amounts or to the amounts or classification of liabilities that might be
necessary should the Group not be able to continue as a going concern.
(d)
New standards, interpretations and amendments adopted by the Group
Standards and Interpretations applicable to 30 June 2022
Annual Report 2022
28
Notes to the Consolidated Financial Statements
Annual Report 2022
During the year ended 30 June 2022, the Directors have reviewed all of the new and revised
Standards and Interpretations issued by the AASB that are relevant to the Company and effective for
the year end reporting period beginning on or after 1 July 2021. No changes were required.
As a result of this review, the Directors have applied all new and amended Standards and
Interpretations that were effective as at 1 July 2021 with no material impact on the amounts or
disclosures included in the financial report.
(e)
New accounting standards and interpretations not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet mandatory, have not been early adopted by the Company for the annual reporting period
ended 30 June 2022. The Company’s assessment of the impact of these new standards and
interpretations has not identified any impact.
There are no other standards that are not yet effective and that would be expected to have a material
impact on the Group in the current or future reporting periods and on foreseeable future transactions.
(f)
Basis of consolidation
The consolidated financial statements comprise the financial statements of CuFe Ltd and its
subsidiaries as at and for the year ended 30 June 2022.
Subsidiaries are all those entities over which CuFe Ltd has control. Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee. Specifically, the Group controls
an investee if and only if the Group has:
•
•
•
Power over the investee (i.e. existing rights that give it the current ability to direct the
relevant activities of the investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
The financial statements of the Company’s subsidiaries are prepared for the same reporting period as
the Company, using consistent accounting policies. In preparing the consolidated financial
statements, all intercompany balances and transactions, income and expenses and profit and losses
resulting from intra-group transactions, have been eliminated in full.
Subsidiaries are consolidated from the date on which control is transferred to the Group and cease to
be consolidated from the date on which control is transferred out of the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The
acquisition method of accounting involves recognising at acquisition date, separately from goodwill,
the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the
acquiree. The identifiable assets acquired and the liabilities assumed are measured at their fair values
at the date of acquisition. Any difference between the fair value of the consideration and the fair
values of the identifiable net assets acquired is recognised as goodwill or a gain on bargain purchase.
A change in the ownership interest of a subsidiary that does not result in a loss of control, is
accounted for as an equity transaction.
(g)
Cash and cash equivalents
Cash and short-term deposits in the statement of financial position comprise cash at bank and in hand
and short-term deposits with an original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(h)
Trade and other receivables
Trade receivables are measured initially at the transaction price determined under AASB 15. Other
receivables are initially recognised at fair value. Receivables that are held to collect contractual cash
flows and are expected to give rise to cash flows representing solely payments of principle and
interest are classified and subsequently measured at amortised cost. Receivables that do not meet
the criteria for amortised cost are measured at fair value through profit or loss. Following initial
recognition, the amortised cost is calculated using the effective interest method.
Annual Report 2022
29
Notes to the Consolidated Financial Statements
Annual Report 2022
The Group assesses on a forward-looking basis the expected credit loss associated with its trade and
short-term receivables carried at amortised cost. The expected credit loss is calculated based on the
lifetime expected credit loss. In determining the expected credit loss the Group assesses the profile of
the debtors and compares with historical recoverability trends, adjusted for factors that are specific to
the debtors’ general economic conditions and an assessment of both the current and forecast
conditions as a reporting date.
The Group considers an event of default has occurred when a financial asset is more than 90 days
past due or external sources indicate that the debtor is unlikely to pay its creditors, including the
Group. A financial asset is credit impaired when there is evidence that the counterparty is in
significant financial difficulty or a breach of contract, such as a default event has occurred. The Group
writes off a financial asset when there is information indicating the counterparty is in severe financial
difficulty and there is no realistic prospect of recovery and not subject to enforcement activity.
(i)
Inventory
Diesel fuel stock, work in progress and finished goods are stated at the lower of cost and net
realisable value. For partly processed and saleable iron ore, cost is based on the weighted average
cost method and includes:
• Material and production costs directly attributable to the extraction, processing and
transportation of iron ore;
Production and transportation overheads; and
•
• Depreciation of property, plant and equipment used in the extraction, processing and
transportation of iron ore.
Iron ore stockpiles represent iron ore that has been extracted and is available for further processing
or sale. Quantities are assessed primarily through internal and third party surveys. Where there is an
indication that inventory is impaired, inventory is written down to net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business less the estimated costs of
completion and the estimated costs necessary to make the sale.
(j)
Exploration and evaluation
Exploration and evaluation expenditure in relation to the Group’s mineral tenements, other than
acquisition costs, is expensed as incurred. Acquisition costs in relation to mineral tenements are
capitalised and carried forward provided the rights to tenure of the area of the interest are current
and such costs are expected to be recouped through successful development, or by sale, or where
exploration and evaluation activities have not, at balance date, reached a stage to allow a reasonable
assessment regarding the existence of economically recoverable reserves. When the Directors decide
to progress the development of an area of interest all further expenditure incurred relating to the area
will be capitalised. Projects are advanced to development status and classified as mine development
when it is expected that further expenditure can be recouped through sale or successful development
and exploitation of the area of interest. Such expenditure is carried forward up to commencement of
production at which time it is amortised over the life of the economically recoverable reserves. All
projects are subject to detailed review on an annual basis and accumulated costs written off to the
extent that they will not be recoverable in the future.
(k)
Mine property and development costs
Recognition and measurement
Expenditure on the acquisition and development of mine properties within an area of interest are
carried forward at cost separately for each area of interest. Accumulated expenditure is amortised on
a straight-line basis over the expected life of the operation. A regular review is undertaken of each
area of interest to determine the appropriateness of continuing to carry forward costs in relation to
that area of interest.
Amortisation
The Group applies the life of mine method of amortisation to its mine properties and development
costs.
Impairment
The Group assess each asset or cash generating unit (CGU) at the end of each reporting period to
determine whether an indication of impairment exists. Where an indicator of impairment exists, a
formal estimate of the recoverable mount is made, which is considered to be the higher of value in
Annual Report 2022
30
Notes to the Consolidated Financial Statements
Annual Report 2022
use (VIU) (being net present value of expected future cash flows of the relevant cash generating
unit) and fair value less costs to sell (FVLCS). The future recoverability of capitalised mine
development expenditure is dependent on a number of factors, including the level of proved, probable
and inferred mineral resources, future technological changes, which could impact the cost, future
legal changes (including changes to environmental restoration obligations) and changes to commodity
prices.
The Group regularly reviews the carrying values of its mine development assets in the context of
independent expert valuations, internal and external consensus forecasts for commodity prices and
foreign exchange rates, with the application of appropriate discount rates for the assets concerned.
To the extent that capitalised mine development expenditure is determined not to be recoverable in
the future, this will reduce profit in the period in which this determination is made. Capitalised mine
development expenditure is assessed for recoverability in a manner consistent with property, plant
and equipment as described below.
(l)
Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
Land is measured at cost.
Depreciation is calculated on a reducing balance basis over the estimated useful life of the asset as
follows:
Plant and equipment – 3 to 5 years
(m)
Impairment of non-financial assets
At each reporting date, the Group assesses whether there is any indication that an asset may be
impaired. Where an indicator of impairment exists, the Group makes a formal estimate of
recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the
asset is considered impaired and is written down to its recoverable amount.
An assets recoverable amount is the greater of the assets fair value less costs to sell and its value in
use. For an asset that does not generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. 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. In
determining fair value less costs of disposal, recent market transactions are taken into account. If no
such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other
available fair value indicators.
(n)
Financial Instruments
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 receivable 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 a fair value adjusted for transaction costs (where applicable).
Annual Report 2022
31
Notes to the Consolidated Financial Statements
Annual Report 2022
For the purpose of subsequent measurement, financial assets other than those designated and
effectiveness 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.
Financial assets at amortised cost
Financial assets are measured at amortised costs 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 does not hold any financial assets at fair value through other comprehensive income.
Financial assets at fair value through profit or loss
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 in the near term.
The Group has designated its commodity collar contracts and commodity swap contracts as financial
assets at FVPL at inception (when it becomes a party to the contract).
Shares held for trading have been classified as financial assets at FVPL.
After initial recognition, financial assets designated at FVPL, are subsequently remeasured at fair
value with gains or losses recognised in profit or loss (presented in ‘Other income’).
Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and
borrowings, or payables, 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 FVPL.
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.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that
an input that is significant to the measurement can be categorised into as follows:
Level 1 – Measurements based on quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date.
Level 2 – Measurements based on inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3 – Measurements based on unobservable inputs for the asset or liability.
Annual Report 2022
32
Notes to the Consolidated Financial Statements
Annual Report 2022
(o)
Assets classified as held for sale
Non-current assets are classified as held for sale and measure at the lower of their carrying amount
and fair value less costs to sell if their carrying amount will be recovered principally through a sale
transaction instead of use. They are not depreciated or amortised. For an asset to be classified as
held for sale, it must be available for immediate sale in its present condition and its sale must be
highly probable.
An impairment loss is recognised for any initial or subsequent write-down of the asset to fair value
less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of
an asset, but not in excess of any cumulative impairment loss previously recognised. A gain or loss
not previously recognised by the date of the sale of the non-current asset is recognised at the date of
derecognition.
(p)
Trade and other payables
Trade payables and other payables are carried at cost and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services.
(q)
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in the profit or loss over the period of the
borrowings using the effective interest rate method. Fees paid on the establishment of loan facilities
are recognised as transaction costs of the loan to the extent that it is probable that some or all of the
facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the
extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity purposes and amortised over the period of the facility
to which it relates.
Borrowings are removed from the Consolidated Statement of Financial Position when the obligation
specified in the contract is discharged, cancelled or expired. The difference between the carrying
amount of a financial liability that has been extinguished or transferred to another party and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in
other income or other expenses.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
(r)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented in the statement of
comprehensive income net of any reimbursement.
If the effect of the time value of money is material, 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, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a
finance cost.
(s)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Annual Report 2022
33
Notes to the Consolidated Financial Statements
Annual Report 2022
(t)
Revenue from contracts with customers
AASB 15 Revenue from Contracts with Customers requires an entity to recognise revenue in a
manner that represents the transfer of promised goods or services in an amount that reflects the
consideration to which the entity expects to be entitled. This means that revenue will be recognised
when control of goods and/or are transferred, rather than on transfer of risks and rewards.
The Group produces and sells product free on board. Revenue from the sale of goods is recognised
at a point in time when control of the product is transferred to the customer, which occurs when the
product is physically transferred onto a vessel.
Revenue is measured at the fair value of the consideration received or receivable. That amount of
revenue arising on a transaction is determined by an agreement between the Company and the
customer.
Revenue is initially recognised based on the most recently determined estimate of product using the
expected value approach based on initial assay and weight results (provisional pricing). The Group
has determined that it is highly unlikely that a significant reversal of the amount of revenue
recognised will occur due to variations in assay and weight results. Subsequent changes in the fair
value based on the customer’s final sampling and analysis results are recognised in revenue
(adjustment).
(u)
Interest revenue and other income
Interest
Income is recognised as the interest accrues (using the effective interest method, which is the rate
exactly discounts estimated future cash flow receipts through the expected life of the financial
instrument) to the net carrying amount of the financial asset.
(v)
Income tax and other taxes
Deferred income tax is provided on all temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
•
except where the deferred income tax liability arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; and
•
in respect of taxable temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, except where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences, and the carry-forward of unused tax
assets and unused tax losses can be utilised:
•
•
except where the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries,
associates and interests in joint ventures, deferred tax assets are only recognised to the extent
that it is probable that the temporary differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to
the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date.
Annual Report 2022
34
Notes to the Consolidated Financial Statements
Annual Report 2022
Income taxes relating to items recognised directly in equity are recognised in equity and not in the
statement of comprehensive income.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
•
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of
cash flows arising from investing and financing activities, which is recoverable from, or payable to,
the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable
to, the taxation authority.
(w)
Earnings per share
Basic earnings per share is calculated as net profit/(loss) attributable to members of the Company,
adjusted to exclude any costs of servicing equity (other than dividends) and preference share
dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is calculated as net profit/(loss) attributable to members of the Company,
adjusted for:
- Costs of servicing equity (other than dividends) and preference share dividends;
-
The after-tax effect of dividends and interest associated with the dilutive potential ordinary
shares that have been recognised as expenses; and
- Other non-discretionary changes in revenues or expenses during the year that would result
from the dilution of potential ordinary shares;
- Divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
Where a loss has been reported the dilutive effects of options are not adjusted for, in accordance with
AASB 133 Earnings per share.
(x)
Foreign currency
The functional currency of the Company and its controlled entities is Australian dollars (A$).
Transactions in foreign currencies are initially recorded in the function currency at the exchange rate
prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the rate of exchange rate prevailing at the balance sheet date. All such
exchange differences are recorded through profit or loss.
(y)
Operating segments
An operating segment is a component of an entity that engages in business activities from which it
may earn revenues and incur expenses (including revenues and expenses relating to transactions with
other components of the same entity), whose operating results are regularly reviewed by the entity’s
chief operating decision maker to make decisions about resources to be allocated to the segment and
assess their performance and for which discrete financial information is available.
Operating segments have been identified based on the information provided to the chief operating
decision makers – being the board of directors.
(z)
Investment in joint arrangements
Joint arrangements are arrangements of which two or more parties have joint control. Joint Control is
the contractual agreed sharing of control of the arrangement which exists only when decisions about
the relevant activities require unanimous consent of the parties sharing control. Joint arrangements
Annual Report 2022
35
Notes to the Consolidated Financial Statements
Annual Report 2022
are classified as ether a joint operation or a joint venture, based on the rights and obligations arising
from the contractual obligations between the parties to the arrangement.
The Group undertakes a number of activities through joint arrangements. A joint arrangement is an
arrangement over which two or more parties have joint control. Joint control is the contractually
agreed sharing of control over an arrangement which exists only when the c
The Group’s joint arrangements are in the form of a joint operation (with respect to the Wiluna Iron
JV) and a joint venture (with respect to the Yarram Iron JV).
(i)
Joint operation
A joint operation is a type of joint arrangement in which the parties with joint control of the
arrangement have rights to the assets and obligations for the liabilities in relation to the
arrangement.
The Group recognises in relation to its joint operations:
Assets, including its share of any assets held jointly
Liabilities, including its share of any liabilities held jointly
▪
▪
▪ Revenue from the sale of its share of the output arising from the joint operation
▪
▪
Share of the revenue from the sale of the output by the joint operation
Expenses, including its share of any expenses incurred jointly
These amounts have been incorporated in the financial statements under the appropriate
classifications.
The Wiluna Iron JV is accounted for as a joint operation.
(ii)
Joint venture
A joint venture is an arrangement that the Group controls jointly with one or more other investors,
and over which the Group has rights to a share of the arrangement’s net assets rather than direct
rights to underlying assets and obligations for underlying liabilities.
The joint venture is accounted for using the equity method. Under the equity method, the share of
the profits or losses of the joint venture is recognized in profit or loss and the share of the
movements in equity is recognized in other comprehensive income. Investments in joint ventures
are carried in the statement of financial position at cost plus post-acquisition changes in the Group’s
share of net assets of the joint venture.
Any goodwill or fair value adjustment attributable to the Group’s share in the joint venture is not
recognized separately and is included in the amount recognized as investment.
The carrying amount of the investment in joint venture is increased or decreased to recognize the
Group’s share of the profit or loss and other comprehensive income of the joint venture, adjusted
where necessary to ensure consistency with the accounting policies of the Group.
Unrealised gains and losses on transactions between the Group and the joint venture are eliminated
to the extent of the Group’s interest in those entities. Where unrealised losses are eliminated, the
underlying asset is also tested for impairment.
The Yarram Iron JV is accounted for as a joint venture.
(aa)
Share-based payments
The Group provides benefits to employees (including Directors) in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares
(equity-settled transactions).
The cost of equity-settled transactions is determined by the fair value at the date when the grant is
made using an appropriate valuation model. That cost is recognised, together with a corresponding
increase in other capital reserves in equity, over the period in which the performance and/or service
conditions are fulfilled in employee benefits expense. The cumulative expense recognised for equity-
settled transactions at each reporting date until the vesting date reflects the extent to which the
vesting period has expired and the Consolidated Entities best estimate of the number of equity
instruments that will ultimately vest.
Annual Report 2022
36
Notes to the Consolidated Financial Statements
Annual Report 2022
The statement of profit or loss expense or credit for a period represents the movement in cumulative
expense recognised as at the beginning and end of that period and is recognised in employee benefits
expense.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer
awards vest than were originally anticipated to do so. Any award subject to a market condition is
considered to vest irrespective of whether or not the market condition is fulfilled, provided that all
other conditions are satisfied.
If a non-vesting condition is within the control of the Group, Company or the employee, the failure to
satisfy the condition is treated as a cancellation. If a non-vesting condition within the control of
neither the Group, Company nor employee is not satisfied during the vesting period, any expense for
the award not previously recognised is recognised over the remaining vesting period, unless the
award is forfeited.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the
terms had not been modified. An additional expense is recognised for any modification that increases
the total fair value of the share-based payment arrangement, or is otherwise beneficial to the
employee, as measured at the date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award,
as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of dilutive earnings per share.
(bb)
Intangible assets
Intangible assets acquired separately are recorded at cost less accumulated amortisation and
impairment. Amortisation is charged on a straight-line basis over their estimated useful lives. The
estimated useful life and amortisation method is reviewed at the end of each annual reporting period,
with any changes in these accounting estimates being accounted for on a prospective basis.
(cc)
Leases
The Group enters into contractual arrangements for mining contractor services, mining plant and
equipment, haulage, vehicles, port access, port storage facilities, camp rental, and other assets.
The nature of these arrangements can be lease contracts or service contracts with embedded assets.
Typically, the duration of these contracts is for period of between one to three years, some of which
include extension options.
Leases are recognised on the balance sheet as a right of use asset, representing the lessee’s
entitlement to the benefits of the identified asset over the lease term, and a lease liability
representing the lessee’s obligation to make the lease payments. Each lease payment is allocated
between its liability and finance cost component. The finance cost is charged to the income
statement over the lease period so as to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right of use asset is amortised on a straight-line basis
over the shorter of the useful life of the asset and lease term.
Liabilities arising from contractual arrangements which contain leases are initially measured at the
present value of the future lease payments. These payments include the present value of fixed
payments prescribed in the contract; variable lease payments based on an index or prescribed rate;
amounts expected to be payable by the lessor under residual value guarantees; and exercise price of
a purchase option if it is reasonably certain that the option will be exercised.
Right of use assets are initially measured at the amount of the initial lease liability plus any lease
payments at or before commencement date less incentives received, plus any initial direct costs, and
any costs required for dismantling and rehabilitation. Right of use assets are subsequently measured
at cost less any accumulated depreciation and accumulated impairment losses; and any adjustment
for remeasurement of the lease liability. Lease liabilities are subsequently measured at present
value, adjusted for any variations to the underlying contract terms.
Lease payments are discounted using the interest rate implicit in the lease. If this rate cannot be
determined, the Group’s incremental borrowing rate is used, which is the rate which the Group would
Annual Report 2022
37
Notes to the Consolidated Financial Statements
Annual Report 2022
have to pay to borrow the funds necessary to obtain an asset of a similar value in a similar economic
environment over a similar term and security.
Payments for short term leases and low value assets are recognised on a straight-line basis as an
expense in the income statement. Short term leases are for a period of 12 months or less and
contracts involving low value assets typically comprise small items of IT hardware and minor sundry
assets.
(dd)
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and
assumptions of future events. The key estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of certain assets and liabilities within the next
annual reporting year are:
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 which could impact the future recoverability include the level of proved, probable and inferred
mineral 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, this will reduce profits and net assets in the period in which this
determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest
have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves. To the extent that it is determined in the future that this
capitalised expenditure should be written off, this will reduce profits and net assets in the period in
which this determination is made.
Impairment of assets
In determining the recoverable amount of assets, in the absence of quoted market prices, estimations
are made regarding the present value of future cash flows using asset-specific discount rates and the
recoverable amount of the asset is determined. Value-in-use calculations performed in assessing
recoverable amounts incorporate a number of key estimates.
Share-based payment transactions
The Group measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by an appropriate
valuation model, using the assumptions as discussed in note 25.
Taxes
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable
profit will be available against which the losses can be utilised. Significant management judgement is
required to determine the amount of deferred tax assets that can be recognised, based upon the
likely timing and the level of future taxable profits together with future tax planning strategies.
The Group has tax losses carried forward. These losses relate to subsidiaries that have a history of
losses, do not expire and may not be used to offset taxable income elsewhere in the Group. The
subsidiaries neither have any taxable temporary differences nor any tax planning opportunities
available that could partly support the recognition of these losses as deferred tax assets. On this
basis, the Group has determined that it cannot recognise deferred tax assets on the tax losses carried
forward.
Joint Arrangements – Control assessment
The Directors have determined that CUF’s wholly owned subsidiary Wiluna Fe Pty Ltd (60% interest)
and Gold Valley Iron Ore Pty Ltd (40% interest) jointly control the Wiluna Iron JV. Decisions about
Annual Report 2022
38
Notes to the Consolidated Financial Statements
Annual Report 2022
the relevant activities (being those that significantly affect the returns of the arrangement) require
the unanimous consent of the parties sharing control.
The Directors have determined that CUF’s wholly owned subsidiary Yarram Fe Pty Ltd (50%
shareholder) and Gold Valley Brown Stone Pty Ltd (50% shareholder) jointly control the Yarram Iron
JV. Each of the shareholder groups have one board member representing their interest, with
decisions around the Yarram Iron JV being made jointly.
Iron ore sales
Where the Group's sales invoices are provisionally priced at the date of shipment, a subsequent final
invoice, which is typically once the vessel has arrived at its destination, is issued and adjustments
arise as a consequence of changes in moisture or ore quality, and price adjustments to reflect the
final FOB price. Where a shipment remains subject to a final invoice being issued at balance date, the
provisional price assumptions form the basis for revenue recognised in relation to such a shipment.
3 REVENUE, INCOME AND EXPENSES
(a)
Revenue from continuing operations
Iron ore sales
(b)
Interest income
Bank Interest
Other interest earned
(c)
Other income
Realised gain on commodity collar/swap contracts
Unrealised gain on financial asset – commodity collar/swap
contracts (FVPL)
Management fee income (JV)
Tenement management fee
Rental recharges income/(reversal)
Gain on sale of tenements
Gain on acquisition (Tennant Creek)
Fair value gain/(loss) on financial asset through profit and
loss (refer note 11)
(d)
Cost of sales
Royalty expense
Mining and processing
Haulage
Sales commission
Port and demurrage
Salaries, wages and other employee benefits
Inventory movement
Inventory impairment (write down to NRV)
Other operating costs
(e)
Employment benefits and director remuneration
Directors’ fees
Salaries, wages and other employee benefits
Payroll Tax
Short-term incentive
(f)
Other expenses
Promotional and investor relations
Occupancy costs
Insurance costs
Stamp Duty
Other
2022
$
32,997,035
32,997,036
7,478
29,972
37,450
5,344,496
3,325,609
48,900
7,525
2,717
325,000
75,000
2,983
9,132,230
(3,203,865)
(11,555,212)
(17,493,271)
(730,840)
(3,986,473)
(449,615)
4,823,038
(520,067)
(1,264,991)
(34,381,296)
(450,000)
(446,046)
(40,732)
(165,750)
(1,102,528)
(78,668)
(62,374)
(219,493)
(126,038)
(381,686)
(868,259)
2021
$
-
-
8,551
50,000
58,551
-
-
29,400
-
28,164
-
-
5,422
62,986
-
-
-
-
-
-
-
-
-
(327,500)
(20,400)
(16,777)
-
(364,677)
-
(61,129)
(57,937)
(210,228)
(54,254)
(383,548)
Annual Report 2022
39
Notes to the Consolidated Financial Statements
Annual Report 2022
4
INCOME TAX
(a) Income tax expense
The major components of income tax expense are:
Current tax
Deferred tax
Income tax expense reported in the statement of comprehensive
income
(b) Reconciliation between aggregate tax expense recognised in
the statement of comprehensive income and tax expense
calculated per the statutory tax rate
Accounting loss before tax
Tax at the statutory income tax rate of 25% (2021: 26%)
Tax effect on non-temporary differences
Unrecognised tax losses and temporary differences
Utilised tax losses
Income tax expense reported in statement of comprehensive income
(c) Deferred tax liabilities
Accrued income
Less: offset by deferred tax asset
Deferred tax liabilities
(d) Deferred tax assets
Accrued expenditure
Accrued interest
Provision for rehabilitation
Provision for demobilisation
Employee leave provision
Loss on financial assets
Tax losses
Less: offset against deferred tax liabilities
Deferred tax assets not recognised
The Group has formed a tax consolidated group.
2022
$
2021
$
-
-
-
-
-
-
2022
$
2021
$
(164,915)
(2,510,540)
(41,228)
148,923
21,672
(129,367)
-
(652,740)
197,691
455,049
-
-
-
-
-
7
(7)
-
5,500
1,443
87,921
71,290
24,379
1,751
2,984,219
3,176,503
-
3,176,503
5,980
-
41,636
-
5,022
2,597
3,238,129
3,293,369
(7)
3,293,357
The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current
tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same tax authority. The Group has tax losses which arose in Australia of $2,984,219
(tax effected) (2021: $3,238,129 (tax effected)) that are available indefinitely for offsetting against future
taxable profits of the companies in which the losses arose. In addition, the Group has capital losses of
$7,361,617 (tax effected) (2021: $7,656,081 (tax effected)) which are not shown in the above table.
Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset
taxable profits elsewhere in the Group, they have arisen in companies that have been loss-making for some
time, and there is no other evidence of recoverability in the near future.
Annual Report 2022
40
Notes to the Consolidated Financial Statements
Annual Report 2022
5 LOSS PER SHARE
Basic loss per share
Continuing operations
Diluted loss per share
Continuing operations
2022
Cents
(0.02)
(0.02)
(0.02)
(0.02)
2021
Cents
(0.44)
(0.44)
(0.44)
(0.44)
Basic earnings/(loss) per share amounts are calculated by dividing net profit/(loss) for the year attributable
to ordinary equity holders of the Company by the weighted average number of shares on issue during the
year.
Diluted earnings per share amounts are calculated by dividing the net profit/(loss) attributable to
shareholders by the weighted average number of shares on issue during the period (adjusted for the effects
of dilutive options). Where a loss has been reported the dilutive effects of options are not adjusted for, in
accordance with AASB 133 Earnings per share.
In the year ended 30 June 2022 and 30 June 2021 the diluted loss per share was equal to the basic loss per
share as the options on issue as at the respective periods were anti-dilutive.
The following reflects the income and share data used in the basic and diluted earnings/(loss) per share
computations:
Loss used in calculation of basic and diluted loss per share
Continuing operations
2022
$
2021
$
(164,915)
(164,915)
(2,510,540)
(2,510,540)
2022
No.
2021
No.
Weighted average number of ordinary shares for basic
earnings/(loss) per share
Effect of dilution:
Unlisted options
Adjusted weighted average number of ordinary shares for diluted
earnings/(loss) per share
880,735413
574,508,178
-
-
880,735413
574,508,178
The unlisted options outstanding at 30 June 2022 and 30 June 2021 were found to have an anti-dilutive
effect on the calculation. At 30 June 2022 and 30 June 2021, the basic earnings/(loss) per share is equal to
the diluted earnings/(loss) per share.
6 CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Cash at bank and on hand
2022
$
2021
$
7,193,910
5,830,848
Cash at bank and on hand earns interest at the floating rates based on daily bank deposit rates.
Annual Report 2022
41
Notes to the Consolidated Financial Statements
Annual Report 2022
(a) Reconciliation of net loss after tax to net cash flows from operations
Net loss for the year
Adjustments for:
Depreciation
Amortisation
Share-based payment expense
Share of net losses of joint venture accounted for using equity method
Realised gain on financial asset – commodity collar/swap contracts
(FVPL)
Unrealised gain on financial asset – commodity collar/swap contracts
(FVPL)
Gain on extinguishment of liabilities with shares (Tennant Creek
acquisition)
Gain on Tennant Creek acquisition (interest)
Fair value gain/loss on financial asset through profit and loss
Changes in assets and liabilities
(Increase) / decrease in restricted cash
(Increase) / decrease in trade and other receivables
(Increase) / decrease in prepayments
(Increase) / decrease in inventory
Increase / (decrease) in trade and other payables
Increase / (decrease) in employee provisions
Increase / (decrease) in tax payable
2022
$
2021
$
(164,915)
(2,510,540)
9,860
2,758,200
562,797
266,878
(5,559,470)
(3,325,609)
(75,000)
(10,000)
(2,983)
(5,375,327)
-
(2,746,581)
234,992
(4,568,167)
9,101,645
58,889
(78,896)
2,001,882
2,856
-
754,554
78,770
-
-
-
-
(5,422)
830,758
(109,242)
(396,438)
(374,435)
-
407,492
-
-
(472,623)
Net cash flow from / (used in) operating activities
(3,538,360)
(2,152,405)
(b) Non-cash investing and financing activities
Year ended 30 June 2022
CUF issued 4,807,692 shares as milestone payment upon decision to mine in relation to the Wiluna
Transaction, representing a non-cash payment of $250,000. Refer note 14(b) for further details.
CUF issued 43,859,649 shares as consideration to acquire an additional 9% interest in the Wiluna Iron
Joint Venture (increasing from 51% to 60% interest), representing a non-cash payment of $2,500,000.
Refer note 14(c) for further details.
In respect of the Tennant Creek Acquisition, CUF issued 85,000,000 shares (non-cash payment
$2,550,000) and 75,000,000 unlisted options (non-cash payment $715,500) upon completion of the
transaction on 9 December 2021. Pursuant to a variation to the agreement, CUF issued a further
12,500,000 shares (non-cash payment $425,000) on 11 April 2022. Refer note 13(a) for further
details.
Year ended 30 June 2021
CUF issued 12,500,000 shares as part consideration for the Wiluna Transaction, representing a non-
cash payment of $250,000. Refer note 13(a) for further details.
CUF issued 31,250,000 shares pursuant to the Yarram Transaction, representing a non-cash payment of
$500,000 being part of the initial cost of investment accounted for using the equity method. Refer to
note 15(b) for further details.
Annual Report 2022
42
Notes to the Consolidated Financial Statements
Annual Report 2022
7 RESTRICTED CASH
Restricted cash
8
INVENTORY
Diesel fuel
Work in Progress Run of Mine
Finished Goods Site
Finished Goods Port
9 TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Net GST receivable
Accrued interest receivable
Deposits
Other receivable (a)
Tax receivable
2022
$
2021
$
469,242
109,242
2022
$
114,614
1,399,933
365,360
2,688,261
4,568,168
2022
$
46,735
1,632,318
-
209,657
2,632,181
100,500
4,621,391
2021
$
-
-
-
-
-
2021
$
1,888
252,580
27
-
1,409,569
-
1,664,064
(a) Relates to an amount receivable in respect of the Wiluna Iron Joint Operation, including an advance
of $2,628,181 and management fees receivable of $4,000. The Wiluna Iron JV is accounted for as
a joint operation. In accordance with the Group’s accounting policy, the Group recognises its share
of the joint operation’s assets and liabilities. The advance amount of $2,628,181 shown in the
consolidated financial statements reflects $6,570,450 (being 100% of the advance receivable by
CuFe Ltd from Wiluna Iron Joint Venture) less $3,938,269 (being elimination of the 60% share of
the advance payable from Wiluna Iron Joint Venture to CuFe Ltd). The advance arises in respect of
JWD-related expenses which have been recharged from CuFe Ltd to Wiluna Iron Joint Venture
during the period.
Other receivables are amounts which generally arise from transactions outside the usual operating
activities of the Group and are non-interest bearing with no fixed terms. Other receivables do not
contain impaired assets, are not past due date and are expected to be received in full.
Due to the short-term nature of these receivables, their carrying value is assumed to approximate
their fair value. The maximum exposure to credit risk is the fair value of receivables. It is not the
Group’s policy to transfer (on-sell) receivables to special purpose entities.
(b) None of the receivables are past due and/or impaired.
Annual Report 2022
43
Notes to the Consolidated Financial Statements
Annual Report 2022
10 OTHER ASSETS
Advance payment (additional 9% interest JWD Project) (a)
Prepaid production royalty (JWD Project)
Prepaid expenses
2022
$
-
-
177,485
177,485
2021
$
1,000,000
114,750
297,729
1,412,479
(a) As announced on 25 May 2021, CUF paid a $1,000,000 refundable deposit to its joint venture
partner to secure an option to increase its interest in JWD from 51% to 60% for consideration of
$2,500,000. This option was exercised during the year ended 30 June 2022. The $1,000,000
refundable deposit was repaid on 27 July 2021, with CUF electing to settlement payment of the
$2,500,000 consideration for the additional interest in equity (refer note 14(c)).
11 FINANCIAL ASSET
Fair value through profit or loss (FVTPL) – equity investment (a)
Fair value through profit or loss (FVTPL) – commodity collars/swaps
(a) Movements
Balance at beginning of year
Purchase of equity investment
FVTPL
Balance at end of the year
12 HELD FOR SALE ASSETS
Exploration assets - Pilbara exploration assets
Movements:
Balance at beginning of year
Exploration assets reclassified as held for sale
Sale of exploration assets held for sale
Balance at end of year
13 EXPLORATION ASSETS
2022
$
80,545
3,324,522
3,405,067
77,562
-
2,983
80,545
2021
$
77,562
-
77,562
42,140
30,000
5,422
77,562
2022
$
2021
$
-
250,000
250,000
-
(250,000)
-
-
250,000
-
250,000
Acquisition Cost – Tenements pursuant to Tennant Creek Transaction
8,866,852
2022
$
Movements in exploration assets
Carrying value at beginning of period
Consideration in cash (Tennant Creek Transaction) (a)
Consideration in shares (Tennant Creek Transaction) (a)
Consideration in options (Tennant Creek Transaction) (a)
Deferred Consideration (Tennant Creek transaction) settled (a)
Stamp duty (Tennant Creek Transaction) (a)
Consideration in shares (Wiluna Iron Joint Operation) (b)
Cash consideration and payments pursuant to transaction agreement
(Wiluna Iron Joint Operation) (b)
Transferred to Mine Properties and Development Costs (Wiluna Iron Joint
Venture) (b)
Transferred to assets classified as held for sale (c)
Balance at end of period
2021
$
-
250,000
-
-
-
-
-
250,000
-
3,000,000
2,550,000
715,500
2,000,000
601,352
-
-
850,000
-
-
8,866,852
(1,100,000)
(250,000)
-
Annual Report 2022
44
Notes to the Consolidated Financial Statements
Annual Report 2022
(a) On 24 September 2021, the Company announced that it had entered into a binding agreement to
acquire a 60% interest in copper / gold assets which have been the subject of historical mining at
Tennant Creek in the Northern Territory from Gecko Mining Company Pty Ltd (GMC) (Tennant
Creek Acquisition). The Tennant Creek Acquisition was completed on 9 December 2021.
Consideration included $5,000,000 cash (payable in three instalments) (Cash Consideration),
85,000,000 shares (Tennant Creek Consideration Shares), and 75,000,000 unlisted options
exercisable at $0.10 expiring 3 years from date of issue (Tennant Creek Consideration
Options). The shares and unlisted options which were approved for issue by shareholders at the
Company’s AGM were issued and the transaction was completed on 9 December 2021. At that
date, there remained a deferred cash payment of $2,000,000 (part of the Cash Consideration)
(Deferred Consideration) which was payable six months from completion.
The fair value of the Tennant Creek Consideration Shares paid of $2,550,000 (refer note 22),
based on the Company’s share price on 9 December 2021 of $0.03 per share, has been used to
record the value of exploration and evaluation assets on initial recognition in accordance with the
Group’s accounting policies.
The fair value of the Tennant Creek Consideration Options of $715,500 has been determined in
reference based on a Black and Scholes valuation on 9 December 2021. Refer note 25 for further
details regarding this share based payment.
Stamp duty in respect of the Tennant Creek Acquisition was assessed at $601,352 which has been
paid during the year ended 30 June 2022.
Variation of Tennant Creek Acquisition
On 8 April 2022, the Company advised a variation of terms to the binding agreement previously
entered into with GMC. The parties agreed to vary the agreement such that the Deferred
Consideration amount would be settled as follows:
▪ $1,000,000 payable in cash 8 April 2022;
▪ $500,000 to be settled via the issue of 12,500,000 ordinary shares at a deemed issue price
of $0.04 each on 11 April 2022 (fair value on date of issue $425,000); and
▪ $500,000 payable in cash 1 July 2022 (Final Cash Payment).
The Final Cash Payment was settled on 1 June 2022 at a discounted amount of $490,000
(representing a saving of $10,000 for early payment).
CUF and GMC have formed an unincorporated joint venture in respect of the Tennant Creek
Project tenements, with CUF as manager of the joint venture. CUF will pay the first $10,000,000
of joint venture expenditure incurred (noting that $1,119,144 has been spent to 30 June 2022).
(b) Refer to note 14(a).
(c) On 17 June 2021, the Company announced that it had entered two separate binding agreements
with Global Lithium Ltd (ASX:GL1) (Global Lithium) and Mercury Resources Group Pty Ltd
(Mercury Resources) to dispose of its Pilbara exploration tenure for a total cash consideration
of $550,000, with a trailing royalty on certain of the tenements. The transactions completed
subsequent to year end. The carrying value of the Pilbara exploration tenements were
reclassified as held for sale at 30 June 2021 (refer note 12).
Annual Report 2022
45
Notes to the Consolidated Financial Statements
Annual Report 2022
14 MINE PROPERTIES AND DEVELOPMENT COSTS
Acquisition and capitalised costs – Wiluna Iron JV
Accumulated amortisation – Wiluna Ion JV
Movements
Carrying value at beginning of year
Transferred from Exploration Assets (Wiluna Iron JV) (a)
Milestone consideration paid / (refunded) in cash (decision to
mine) (b)
Milestone consideration paid in shares (decision to mine) (b)
Consideration paid in shares (additional 9% interest) (c)
Transfer prepaid royalty to Wiluna Iron Joint Venture
Expenditure incurred (d)
Amortisation (e)
Closing value at end of year
2022
$
2021
$
7,710,381
(2,378,445)
5,331,936
1,330,000
1,562,656
2,892,656
2,892,656
-
(230,000)
250,000
2,500,000
(225,000)
2,522,725
(2,378,445)
5,331,936
-
1,100,000
230,000
-
-
-
1,562,656
-
2,892,656
(a)
As announced 17 September 2020, CUF entered a binding agreement to acquire a 51% interest in
the Mining Rights Agreement held by the Gold Valley Iron Ore Pty Ltd (GVIO) over the Wiluna West
JWD deposit (JWD Mining Rights or JWD Iron Ore Project) (Wiluna Transaction).
Consideration included $500,000 in cash and 12,500,000 shares (deemed value of $250,000) upon
settlement with a further commitment to fund a $125,000 instalment due to GWR Group on 30
September 2020, and to prepay an amount of $225,000 representing the first 50% instalment of a
royalty.
The initial $1,100,000 cost of acquisition of the Wiluna Transaction was transferred from exploration
assets to mine properties and development costs on 1 January 2021.
(b)
In April 2021, the Company made a payment of $230,000 in cash to GVIO, representing an advance
payment of the additional consideration payable (as agreed to be varied from $250,000) pursuant
to the Wiluna Transaction upon a decision to mine.
During the year ended 30 June 2022, the cash advance was refunded to CUF (plus interest of
$20,000), and 4,807,692 shares were issued in settlement of the $250,000 consideration
component payable upon decision to mine in respect of the JWD Project.
(c)
As announced on 25 May 2021, CUF paid a $1,000,000 refundable deposit to its joint venture
partner to secure an option to increase its interest in the JWD Iron Ore Project from 51% to 60%
for consideration of $2,500,000.
Following receipt of shareholder approval at the Company’s EGM to issue equity to complete this
transaction, CUF exercised its option and elected to settle payment of the consideration amount via
the issue of 43,859,649 shares. During the year, the $1,000,000 refundable deposit has been
repaid to CUF and on 28 July 2021 the shares were issued.
CUF’s holds a 60% interest in the JWD Project at 30 June 2022.
(d)
Costs incurred in respect of the development of the JWD Iron Ore Project have been capitalised.
(e)
Production of the JWD Iron Ore Project commenced during the year. Accordingly, amortisation of
mine property and development costs has commenced from 1 July 2021.
Volatility of Iron Ore Prices
The market price of iron ore has been volatile during the year. The Company is continuing to advance its
iron ore projects (including JWD Project operations), manages a hedging program, is taking steps to
mitigate cash outflow, and will continue to monitor the market price of iron ore prices and the impact this
may have on planned activities.
Annual Report 2022
46
Notes to the Consolidated Financial Statements
Annual Report 2022
15 PLANT AND EQUIPMENT
Gross carrying value at cost
Accumulated depreciation
Movements in plant and equipment
Carrying value at beginning of year
Additions
Depreciation charge for the period
Carrying value at end of year
16 RIGHT OF USE ASSETS
Cost
Accumulated amortisation
Movements in Right of Use Assets
Balance as at beginning of period
Recognition of right of use asset at inception of lease (a)
Amortisation of right of use assets
Balance at end of period
2022
$
37,543
(14,643)
22,900
26,242
6,518
(9,860)
22,900
2022
$
716,827
(387,872)
328,955
-
716,827
(387,872)
328,955
2021
$
31,025
(4,783)
26,242
2,635
26,463
(2,856)
26,242
2021
$
-
-
-
-
-
-
(a) The Group has entered into a lease agreement for camp room hire and facilities located near to
the JWD Project site. The period of the lease expires 31 May 2023.
17 INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
(a) Reconciliation of carrying amount of investments accounted for using the equity method
Investments accounted for using the equity method –
Yarram Iron JV
Movement in Investment
Balance at beginning of period
Initial cost of investment (b)
Share of profit/(loss) of joint venture
Balance at end of period
2022
$
2021
$
2,999,352
3,266,230
3,266,230
-
(266,878)
2,999,352
-
3,345,000
(78,770)
3,266,230
(a) On 22 December 2020, the Company advised it had completed the transaction (initially announced
to ASX on 21 August 2020) to acquire a 50% interest in the Yarram iron ore project (Yarram
Iron JV) in the Northern Territory (Yarram Transaction). Completion of the transaction was
effected on 22 December 2020, via CUF (via its wholly owned subsidiary Yarram FE Pty Ltd
(Yarram FE)) purchasing a 50% share in Gold Valley Iron and Manganese Pty Ltd (GVIM), being
the entity which owns the Yarram Iron Ore Rights.
Annual Report 2022
47
Notes to the Consolidated Financial Statements
Annual Report 2022
(b) The initial cost of investment is summarised as follows:
Cash1
Shares2
Subscription amount payable to GVIM3
Cost of
investment
$
945,000
500,000
1,900,000
3,345,000
1 Cash consideration pursuant to agreement of $1,000,000 less $55,000 liabilities assumed.
2 Being 31,250,000 shares valued at $500,000 based on deemed issue price of $0.016 per share
(refer to note 22).
3 Refers to subscription funds payable in relation to 500,000 shares in GVIM, being:
(i) a minimum payment of $1,500,000; and
(ii) up to an additional $400,000 as directed by the Board of GVIM;
at a date to be determined by the Board of GVIM.
Note, if the minimum payment amount is unpaid at payment date, shares to be cancelled
proportionally to the unpaid amount.
(c) Summarised financial information for the Yarram Iron JV
The tables below provide summarised consolidated financial information for the Yarram Iron JV
company (GVIM) and its wholly owned subsidiary (Yarram Iron Pty Ltd). The information disclosed
reflects the amounts presented in the financial statements of the joint venture and not CUF’s share
of those amounts.
Summarised balance sheet:
ASSETS
Current Assets
Trade and other receivables
Other assets
Total Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
2022
$
2021
$
677,807
99,376
777,183
777,183
1,211,345
99,596
1,310,941
1,310,941
546
546
546
546
546
546
776,637
1,310,395
Annual Report 2022
48
Notes to the Consolidated Financial Statements
Annual Report 2022
18 TRADE AND OTHER PAYABLES
Trade payables (a)
Employee related liabilities
Subscription funds payable (b)
Other payables and accruals (c)
2022
$
2021
$
8,832,717
159,825
677,352
1,477,650
11,147,544
404,292
104,865
1,210,900
620,236
2,340,293
(a) Trade payables are non-interest bearing and are normally settled on 30-day terms. The majority of
trade payables at 30 June 2022 are attributable to the Wiluna Iron Joint Venture (refer to Note
9(a).
(b) Relates to the initial subscription funds payable for shares in GVIM of $1,900,000 (refer to note
17(b)(3)), adjusted for $1,222,648 in total payments made by CUF for and on behalf of the Yarram
Iron JV.
(c) Other payables are non-interest bearing and have varying terms.
19 INTEREST-BEARING BORROWINGS
USD Loan – Principal (a)
USD Loan – Interest (a)
Movements in borrowings
Balance at beginning of year
Receipt of loan funds
Interest accrued
Repayment of principal loan
Payment of interest
FX revaluation
Balance at end of year
2022
$
2021
$
1,298,737
5,773
1,304,510
-
9,551,504
321,997
(8,456,839)
(319,647)
207,495
1,304,510
-
-
-
-
-
-
-
-
(a) As announced on 27 July 2021, the Company, via its wholly owned subsidiary Wiluna FE Pty Ltd,
entered an exclusive offtake agreement with leading international trading house Glencore
International AG (Glencore), for 100% of the JWD product (iron ore lumps and fines) over the life
of CUF’s operations at the mine, subject to GWR Group Ltd’s existing right to elect to purchase up
to 50,000 tonnes of fines product at the mine gate.
Pursuant to the terms of the offtake agreement, Glencore provided a USD$7,500,000 prepayment
(CUF’s 60% share: USD$4,500,000), to be repaid by the JV via instalments from shipments plus
interest (12% p.a.) (Initial Loan). The Initial Loan was repaid during the year.
As announced 12 January 2022, the agreement has been restructured to allow drawdowns of up
to USD$3,000,000 against stock held at port, to assist the Company in management of working
capital as required as Operator of the JWD JV (Proposed Stock Facility). USD$1,500,000 (CUF’s
60% share: USD$900,000) has been drawn at 30 June 2022 against stock at port, with additional
security granted in line with that of the initial prepayment facility, pending the finalisation of
warehouse management protocols with the port provider (Short-term Facility). Funds drawn
pursuant to the Short-Term Facility are shown in the above table as A$1,298,737 (being CUF’s
60% share in AUD equivalent). The Short-term Facility has been repaid from the July 2022
shipment. The Short-term Facility has provided access to working capital whilst full-form
documentation is being completed to allow draw down under the Proposed Stock Facility.
Annual Report 2022
49
Notes to the Consolidated Financial Statements
Annual Report 2022
20 LEASE LIABILITY
Current
Right of use lease liability
Non-current
Right of use lease liability
Total
21 PROVISIONS
Current
Provision for demobilisation – JWD Project (a)
Non-current
Provision for rehabilitation – JWD Project (b)
Provision for demobilisation – JWD Project
2022
$
2021
$
276,852
-
276,852
2022
$
131,208
131,208
351,684
153,953
505,637
-
-
-
2021
$
-
-
160,140
-
160,140
Total
636,845
160,140
(a) Included within the provision for demobilisation at 30 June 2022 is an amount of $131,208 which
reflects the Group’s 60% share of a total $218,680 amount due at end of the camp lease (refer to
note 16(a)).
(b) The provision for rehabilitation of $351,684 recorded in the statement of financial position at 30
June 2022 reflects the Group’s 60% share of the total $586,140 provision for rehabilitation of
Wiluna Iron JV (accounted for as a joint operation in accordance with the Group’s accounting
policy). The provision for rehabilitation of $586,140 of Wiluna Iron JV has been calculated using the
Rehabilitation Estimate Calculation pursuant to the Mining Rehabilitation Fund Regulations 2013
based on an estimate of area of disturbance (calculated at $986,140), less $400,000 (project to
date) which has been prepaid pursuant to an agreement.
Annual Report 2022
50
Notes to the Consolidated Financial Statements
Annual Report 2022
22 CONTRIBUTED EQUITY
Ordinary shares
Issued and fully paid
2022
$
2021
$
58,622,052
48,172,188
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
Movements in ordinary shares on issue
Balance at beginning of year
Shares issued – completion shares (Wiluna
JWD acquisition) (a)
Shares issued - milestone shares (Wiluna
JWD DTM) (b)
Shares issued - consideration (Wiluna JWD
additional 9% interest) (c)
Shares issued – completion shares
(Yarram JV acquisition) (d)
Shares issued - completion shares
(Tennant Creek Transaction) (e)
Shares issued – completion shares
(Tennant Creek acquisition) (e)
Shares issued – placement at $0.045 per
share (f)
Shares issued - Placement at $0.050 per
share (g)
Shares issued – exercise of options (h)
Shares issue costs – shares issued to
option underwriter
Share issue costs - options issued to Lead
Manager to Placement (g)
Share issue costs - cash
Balance at end of year
2022
No. of shares
2022
2021
$ No. of shares
2021
$
699,445,024
48,172,188
488,701,620
41,236,293
-
-
12,500,000
250,000
4,807,692
250,000
43,859,649
2,500,000
-
-
-
-
-
-
31,250,000
500,000
85,000,000
2,550,000
12,500,000
425,000
-
-
-
-
-
-
123,381,655
5,552,174
100,000,000
13,000,000
5,000,000
355,000
-
43,601,749
-
918,285
-
-
10,000
460
-
-
958,612,365
(222,698)
(407,438)
58,622,052
-
-
699,445,024
-
(285,024)
48,172,188
(a) Refer to note 14(a).
(b) Refer to note 14(b).
(c) Refer to note 14(c).
(d) Refer to note 17(b).
(e) Refer to note 13(a).
(f) On 18 February 2021, the Company announced it had successfully completed a placement to
sophisticated and professional investors at an issue price of $0.045 raising $5,552,174 (before
capital raising costs). On 24 February 2021, the Company issued 123,381,655 Placement shares.
(g) On 24 September 2021, the Company announced that it had received commitments to raise
$5,000,000 through a placement of 100,000,000 ordinary shares (Placement Shares) to
sophisticated investors at $0.05 per share (Placement). The Placement Shares were issued on 1
October 2021.
Following receipt of shareholder approval, investors were also to be issued one option (exercise
price $0.06, expiring 2 years from issue) for every two shares issued (Placement Options). The
Placement lead manager was also entitled to receive 20,000,000 options on same terms as the
Placement Options (Lead Manager Options).
(h) During the year ended 30 June 2022, the Company raised a total of $355,000 from the exercise of
the following unlisted options:
• 6,000,000 shares issued upon exercise of unlisted options exercisable at $0.03 expiring 31
August 2022, raising $180,000
Annual Report 2022
51
Notes to the Consolidated Financial Statements
Annual Report 2022
• 7,000,000 shares issued upon exercise of unlisted options exercisable at $0.025 expiring 31
March 2022, raising $175,000
During the year ended 30 June 2021, the Company raised a total of $918,285 from the exercise of
the following unlisted options:
▪
▪
▪
5,000,000 unlisted options at $0.025 expiring 31 March 2022
36,476,749 unlisted options at $0.02 expiring 31 May 2021
2,125,000 unlisted options at $0.03 expiring 13 March 2021
Other Securities on Issue
Options over ordinary shares
Unlisted options
Listed options (ASX:CUFO)
2022
No.
2021
No.
148,500,000
70,000,000
218,500,000
79,000,000
-
79,000,000
Movements in options on issue
Balance at
1 July 2021
Granted
Exercised
Expired/
lapsed
No.
No.
No.
No.
Balance at
30 June
2022
No.
Share-based payments (refer note
25):
Unlisted options at $0.025 expiring
31/03/2022
Unlisted options at $0.030 expiring
31/08/2022
Unlisted options at $0.040 expiring
31/08/2023
Unlisted options at $0.030 expiring
31/08/2022
Unlisted options at $0.030 expiring
31/08/2022
Unlisted options at $0.030 expiring
31/08/2022
Unlisted options at $0.035 expiring
12/10/2023
Unlisted options at $0.045 expiring
12/04/2024
Unlisted options at $0.060 expiring
12/10/2024
Unlisted options at $0.060 expiring
30/06/2023
Unlisted options at $0.074 expiring
31/12/2022
Unlisted options at $0.04 expiring
31/08/2023
Unlisted options at $0.06 expiring
30/06/2023
Unlisted options at $0.10 expiring
09/12/2024
Listed options at $0.06 expiring
24/11/2023
Free-attaching options:
Listed options at $0.06 expiring
24/11/2023
10,000,000
5,000,000
5,000,000
17,500,000
2,500,000
5,000,000
5,000,000
5,000,000
5,000,000
15,000,0001
1,000,0001
3,000,0001
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,500,000
75,000,000
(7,000,000)
(3,000,000)
-
(1,750,000)
-
-
-
(4,250,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,250,000
5,000,000
17,500,000
2,500,000
750,000
5,000,000
5,000,000
5,000,000
15,000,000
1,000,000
3,000,000
(4,000,000)
10,500,000
-
75,000,000
20,000,000
79,000,000 109,500,000
-
-
(13,000,000)
20,000,000
(7,000,000) 168,500,000
-
-
-
50,000,000
50,000,000
-
-
-
-
50,000,000
50,000,000
TOTAL
79,000,000 159,500,000
(13,000,000)
(7,000,000) 218,500,000
1Being options granted in year ended 30 June 2021 which were issued in August 2021.
Annual Report 2022
52
Notes to the Consolidated Financial Statements
Annual Report 2022
23 ACCUMULATED LOSSES
2022
2021
$
$
Accumulated losses
(38,248,811)
(38,083,896)
Movements in accumulated losses
Balance at beginning of year
Loss for the year
Balance at end of year
24 RESERVES
Share-based payments reserve (a)
Other equity reserve
(a) Movements in Share-based payments reserve
Balance at beginning of year
Share-based payments made during the year (refer note 25)
Balance at end of year
Nature and purpose of reserve
(38,083,896)
(164,915)
(38,248,811)
(35,573,356)
(2,510,540)
(38,083,896)
2022
2021
$
$
4,362,697
(116,431)
4,246,266
2,861,702
-
2,861,702
2,861,702
1,500,995
4,362,697
2,107,148
754,554
2,861,702
This reserve is used to record the value of share-based payments made to directors, consultants, and as
consideration to acquire assets (in the form of unlisted options).
25 SHARE-BASED PAYMENTS
Share-based payment transactions recognised during the year were as follows:
(a) Share-based payments expensed through profit and loss:
Options(i)
2022
$
2021
$
562,797
754,554
(b) Share-based payments included in statement of financial position:
Share-based payments – shares (capitalised mine development)
Share-based payments - shares (Tennant Creek Acquisition)
Share-based payments - shares (exploration assets)
Share-based payments - options (exploration assets) (ii)
Share-based payments - investment accounted for using equity
2,750,000
2,550,000
425,000
715,500
method
(c) Share-based payments expensed through equity:
Options (iii)
Sub-total share-based payments – Options
Sub-total share-based payments – Shares
Total share-based payments
-
6,440,500
222,698
222,698
1,500,995
5,725,000
7,225,995
-
250,000
-
-
500,000
750,000
-
-
754,554
750,000
1,504,554
(i) During the year, the Company issued or granted the following options:
▪ 15,000,000 unlisted options exercisable at $0.06 expiring 30 June 2023 with vesting
conditions issued to Directors Mr Tony Sage (7,500,000 options), Mr Mark Hancock
(7,500,000 options) (or their nominees) (Director Options)^;
▪ 1,000,000 unlisted options exercisable at $0.074 expiring 31 December 2022 issued pursuant
to the Company’s Employee Securities Incentive Plan (ESIP) (ESIP approved by shareholders
at the July 2021 EGM) (ESIP Options A)^;
Annual Report 2022
53
Notes to the Consolidated Financial Statements
Annual Report 2022
▪ 3,000,000 unlisted options exercisable at $0.04 expiring 31 August 2023 with vesting
conditions issued pursuant to the Company’s ESIP (ESIP Options B)^; and
▪ 14,500,000 unlisted options exercisable at $0.06 expiring 30 June 2023 with vesting
conditions issued pursuant to the Company’s ESIP (ESIP Options C).
^Granted in year ended 30 June 2021, issued in year ended 30 June 2022.
(ii) During the year, the Company issued or granted the following options:
▪ 75,000,000 unlisted options at $0.10 expiring 9 December 2024 were issued as part
consideration for the Tennant Creek Acquisition (Tennant Creek Options).
(iii) During the year, the Company issued or granted the following options:
▪ 20,000,000 options at $0.06 expiring 24 November 2023 were issued (being the Lead
Manager Options) (quoted on 24 December 2021 ASX:CUFO) (Lead Manager Options).
(d) Fair value of options issued or granted
The fair value of unlisted options issued or granted during the period has been determined using a
Black-Scholes option pricing model. The following table lists the inputs to the model:
Expiry date
Valuation date
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
Expiry date
Valuation date
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
Director
Options*
ESIP Options
A
ESIP
Options B
ESIP
Options C
30 Jun 2023
12 Jul 2021
Nil
100%
0.04%
$0.060
Nil
1.97
$0.073
$0.0412
31 Dec 2022
3 May 2021
Nil
100%
0.07%
$0.074
Nil
1.66
$0.057
$0.0236
31 Aug 2023
22 Mar 2021
Nil
100%
0.09%
$0.040
Nil
2.44
$0.045
$0.0266
30 Jun 2023
9 Aug 2021
Nil
100%
0.02%
$0.060
Nil
1.89
$0.076
$0.0430
Tennant Creek
Options
Lead Manager
Options
9 Dec 2024
9 Dec 2021
Nil
91.5%
0.95%
$0.10
Nil
3.00
$0.03
$0.0095
24 Nov 2023
24 Nov 2021
Nil
92.3%
0.56%
$0.060
Nil
2.00
$0.033
$0.0111
* Director Options (subject to receipt of shareholder approval) were initially proposed to be issued as announced 26
April 2021. Shareholder approval was received at the Company’s general meeting held 12 July 2021.
(e) Summary of options granted
The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of, and
movements in options during the year:
Outstanding at the beginning of the year
Options granted
Options exercised
Options expired
Outstanding at the end of the year
Exercisable at the end of the year
Not exercisable at the end of the year
2022
No.
79,000,000
109,500,000
(13,000,000)
(7,000,000)
168,500,000
147,300,000
21,200,000
2022
WAEP
$0.040
$0.087
$0.027
$0.045
$0.071
$0.074
$0.052
2021
No.
38,101,748
69,000,000
(28,101,748)
-
79,000,000
50,000,000
29,000,000
2021
WAEP
$0.022
$0.042
$0.021
-
$0.040
$0.031
$0.055
Annual Report 2022
54
Notes to the Consolidated Financial Statements
Annual Report 2022
(f) Weighted average remaining contractual life
The weighted average remaining contractual life for the options outstanding as at 30 June 2022 is 1.65
years (2021: 1.71 years).
(g) Fair value
The fair value of options granted during the year ended 30 June 2022 was $0.0142 (30 June 2021:
$0.0178).
(h) Options expired
The following unlisted options expired during the year (2021: nil):
▪
▪
▪
1,000,000 unlisted options at $0.06 lapsed 10 December 2021
3,000,000 unlisted options at $0.025 expired 31 March 2022
3,000,000 unlisted options at $0.06 lapsed 4 May 2022
26 SEGMENT INFORMATION
The Group has identified its operating segments based on the internal reports are reviewed and used by the
Board of Directors in assessing performance and in determining the allocation of resources. The Group has
one segment being mining and exploration activities in Australia.
27 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s objective regarding financial risk management is to ensure the effective management of
business risks crucial to the financial integrity of the business without affecting the ability of the Group to
operate efficiently or execute its business plans and strategies.
The Board has overall responsibility for the determination of the Group’s risk management objectives and
policies and has the responsibility for designing and operating processes that ensure the effective
management of all significant financial risks to the business. The Board may delegate specific responsibilities
as appropriate.
Capital risk management
The Group’s capital base comprises its ordinary shareholders equity, which was $24,916,507 at 30 June
2022 (30 June 2021: $12,949,994). The Group manages its capital to ensure that the entities in the Group
will be able to continue to meet its working capital requirements and operate as a going concern while
seeking to maximise the return to stakeholders.
In making its decisions to adjust its capital structure, either through new share issues or consideration of
debt, the Group considers not only its short-term working capital needs but also its long-term operational
and strategic objectives. The Board continually monitors the capital requirements of the Group.
The Group is not subject to any externally imposed capital requirements.
Financial instrument risk exposure and management
The Group’s principal financial instruments comprise cash and cash equivalents, trade and other receivables,
financial assets held for trading, trade and other payables, borrowings, and lease liabilities.
The main purpose of these financial instruments is to manage short term cash flows for the Group’s
operations.
The Group also enters into derivative transactions, including commodity collar options and iron ore swaps.
The purpose of these financial instruments is to manage the commodity price risks arising from the Group’s
operations.
The main risks arising from the Group’s financial instruments are foreign currency risk, commodity price
risk, interest rate risk, credit risk, and liquidity risk. The Board reviews and agrees policies for managing
each of these risks and they are summarised below.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class
of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.
Annual Report 2022
55
Notes to the Consolidated Financial Statements
Annual Report 2022
The Group’s financial assets and financial liabilities are as follows:
Financial assets
Cash and cash equivalents
Restricted cash
Financial liabilities
Trade and other payables
Income tax payable
Interest-bearing borrowings
Lease liability
Provisions
Market risk
Note
2022
$
2021
$
6
7
18
19
20
21
7,193,910
469,242
7,663,152
5,830,848
109,242
5,940,090
11,147,544
-
1,304,510
276,852
636,845
13,365,751
2,340,293
78,896
-
-
160,140
2,579,329
Market risk is the risk that changes in market prices will affect the Group’s income or the value of its
holdings of financial instruments. At 30 June 2022, the Group was exposed to market risks in the form of
foreign currency, commodity price, and interest rate risk.
Foreign currency risk
The Group is exposed to the risk of adverse movement in the AUD compared to the USD as its iron ore sales
receipts and borrowings are denominated in USD.
At balance date, the Group’s exposure to foreign currency risks on financial assets and financial liabilities,
are as follows:
Financial assets
Cash and cash equivalents
Financial liabilities
Trade and other payables
Interest-bearing loans and borrowings
2022
$
43,900
(203,480)
(1,304,510)
(1,464,090)
2021
$
-
-
-
The net exposure in USD at balance date is USD$1,008,944 (30 June 2021: nil).
Commodity price risk
The Group’s operations are exposed to commodity price risk as the Group sells iron ore to its customers.
The majority of the Group’s sales revenue is derived under an exclusive offtake agreement with leading
international trading house Glencore International AG (Glencore) (refer ‘Credit Risk’ below for further
details). The pricing mechanism in these contracts reflect market-based index pricing terms.
During the year, the Group entered into commodity collar option and swap contracts in relation to dry metric
tonnes (dmt) of iron ore, with maturity dates spread over the period October 2021 to 30 June 2022. The
contracts provided floor price protection in relation to sales from the JWD Project. This hedging strategy
resulted in realised gains of $8,907,493 (CUF’s 60% share: $5,344,496) being recognised in the year ended
30 June 2022 (closed positions).
At balance date, a series of contracts remained open (settlement dates between July to October 2022) with
a fair value of $5,540,869 (CUF’s 60% share: $3,324,522). The fair value of these contracts has been
recognised in the balance sheet as a financial asset and the marked-to-market unrealised gain has been
recognised in the profit or loss during the year ended 30 June 2022.
Interest rate risk
The Group’s exposure to market interest rates relates primarily to the Group’s cash and cash equivalents,
term deposits and borrowings.
Annual Report 2022
56
Notes to the Consolidated Financial Statements
Annual Report 2022
At balance date, the Group’s maximum exposure to interest rate risks on financial assets and financial
liabilities was as follows:
30 June 2022
Financial assets
Cash and cash equivalents
Restricted cash (term deposits)
Financial liabilities
Loans and borrowings
30 June 2021
Financial assets
Cash and cash equivalents
Restricted cash (term deposits)
Financial liabilities
Loans and borrowings
Range of
effective
interest
rates
%
Carrying
amount
Variable
interest
rate
Fixed
interest
rate
Total
$
$
$
$
0 – 0.16%
0.25%
7,193,910
469,242
7,193,910
-
-
469,242
7,193,910
469,242
12%
(1,298,737)
6,364,415
-
7,193,910
(1,298,737)
(829,495)
(1,298,737)
6,364,415
0 – 0.16%
0.25%
5,830,848
109,242
5,830,848
-
-
109,242
5,830,848
109,242
-
-
5,940,090
-
5,830,848
-
109,242
-
5,940,090
The following table details the effect on profit or loss and other comprehensive income after tax of a 0.25%
change in interest rates, in absolute terms in respect of those financial instruments exposed to variable
interest rates:
+0.25% (25 basis points)
-0.25% (25 basis points)
Profit/(loss)
(Higher)/Lower
2022
$
17,985
(17,985)
2021
$
14,577
(14,577)
Equity
Higher/(Lower)
2022
$
-
-
2021
$
-
-
The sensitivity analysis of the Group’s exposure to Australian variable interest rates at balance date has
been determined based on exposures at balance sheet date. A positive number indicates an increase in
profit and equity.
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents and
trade and other receivables. The Group’s exposure to credit risk arises from potential default of the counter
party, with a maximum exposure equal to the carrying amount of these instruments. Exposure at reporting
date is addressed in each applicable note.
The Company, via its wholly owned subsidiary Wiluna Fe Pty Ltd, entered an exclusive offtake agreement
with Glencore, for 100% of the JWD product (iron ore lumps and fines) over the life of CUF’s operations at
the mine, subject to GWR Group Ltd’s existing right to elect to purchase up to 50,000 tonnes of fines
product at the mine gate. The Group minimises concentrations of credit risk in relation to trade receivables
by use of advance payments and letters of credit which effectively protect at least 90% of the estimated
receivable amount at the time of sale. The Board are of the opinion that the credit risk arising as a result of
the concentration of the Group’s receivables is more than offset by the benefits gained under the offtake
arrangement.
For cash balances held with bank or financial institutions, only independently rated parties with a minimum
rate of ‘AA’ are accepted.
The Group trades only with recognised and 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 not significant. Other than the cash balance with a AA credited bank, there are no other
significant concentrations of credit risk within the Group.
Annual Report 2022
57
Notes to the Consolidated Financial Statements
Annual Report 2022
Liquidity risk
Liquidity risk arises from the Group’s management of working capital. It is the risk that the Group will
encounter difficulty in meeting its financial obligations as they fall due. The Group’s objective is to ensure
that it will always have sufficient liquidity to meet its liabilities through ensuring it has sufficient cash
reserves to meet its ongoing working capital and long-term operational and strategic objectives. The Group
manages liquidity risk by maintaining adequate borrowing facilities and monitoring forecast and actual cash
flows on an ongoing basis.
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the
remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows:
Less than
6 months
6-12
months
1-5
years
Over 5
years
$
$
10,391,989
-
78,204
-
160,579
1,304,510
11,935,282
-
-
-
131,208
131,780
-
262,988
$
-
-
-
-
-
-
-
$
-
677,352
-
-
-
-
677,352
Total
contractual
cash flows
$
Carrying
amount of
liabilities
$
10,391,989
677,352
78,204
131,208
292,359
1,304,510
12,875,622
10,391,989
677,352
78,204
131,208
292,359
1,304,510
12,875,622
1,110,080
-
19,314
78,896
1,208,290
-
-
-
-
-
-
-
- 1,210,900
-
-
-
-
- 1,210,900
1,110,080
1,210,900
19,314
78,896
2,419,190
1,110,080
1,210,900
19,314
78,896
2,419,190
30 June 2022
Trade and other payables
Subscription funds payable
Employee leave liabilities
Provision for demobilisation
Lease liabilities
Loans and borrowings
30 June 2021
Trade and other payables
Subscription funds payable
Employee leave liabilities
Income tax payable
Fair value estimation
All financial instruments for which fair value is recognised or disclosed are categorised within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that is not based on observable market data (unobservable inputs).
30 June 2022
Equity investment
Commodity collars/swaps
30 June 2021
Equity investment
Commodity collars/swaps
Carrying
Amount
$
Fair Value
Level 1
$
Level 2
$
Level 3
$
80,545
3,324,522
3,405,067
80,545
-
80,545
-
3,324,522
3,324,522
77,562
-
77,562
77,562
-
77,562
-
-
-
-
-
-
-
-
-
Annual Report 2022
58
Notes to the Consolidated Financial Statements
Annual Report 2022
28 COMMITMENTS AND CONTINGENCIES
Commitments
Office Rental Commitments
The Group has entered into a 12-month lease with Okewood for office premises for a lease term expiring 31
March 2023. The expenditure commitments with respect to rent payable under lease arrangement is as
follows:
Within one year
After one year but less than five years
More than five years
2022
$
56,250
-
-
56,250
2021
$
56,250
-
-
56,250
Commitments of CUF in relation to the Tennant Creek Project (in which CUF has a 60% interest)
Pursuant to the terms of the Tennant Creek Acquisition, CUF is to sole fund the Tennant Creek joint venture
activities for the first $10,000,000 expended by the joint venture following settlement which is not time
bound. GMC is not required to contribute to the joint venture expenditure until after that $10,000,000
expenditure has been met, regardless of when a decision to mine is made. Noting that $1,119,144 has
been spent to 30 June 2022, the remaining commitment at 30 June 2022 is $8,880,856).
Commitments in relation to Wiluna Iron JV (in which CUF has a 60% interest)
Various operating agreements have been entered into in relation to the Wiluna Iron JV. Certain operating
agreements include terms which constitute commitments, summarised as follows:
• Port Access and Services Agreement for Geraldton Port has been entered into with Mid West Ports
Authority. The current term of the agreement expires 30 June 2023 and can be extended for a further
one year period at the Company’s election.
• Licence Agreement Geraldton Port has been entered into with Geraldton Bulk Handling Pty Ltd. The
current term of the agreement expires 30 June 2023. The licence fee is only payable for each day
product is stored at the shed facility.
• Haulage contract has been entered into with David Campbell Transport Pty Ltd. The current term of the
contract expires 4 July 2024, unless terminated. The contract includes a 14 day termination clause for
financial hardship.
• Mining Services Agreement has been entered into with Big Yellow Mining Pty Ltd. The current term of
the agreement expires 31 January 2024, unless terminated. The contract includes a 14 day termination
clause for financial hardship.
• Agreement with Main Roads WA to fund the upgrade of the intersection where the trucks enter the
Goldfields Highway from the JWD mine access road.
Contractual commitments at 30 June 2022 are as follows (amounts shown as 100% of the commitment of
the Wiluna Iron JV):
Up to 1 year
Between 1 and 5 years
Later than 5 years
2022
$
3,731,124
-
-
3,731,124
2021
$
-
-
-
-
The Company previously disclosed in its 30 June 2021 annual report that it had agreed to provide a working
capital facility of $3m to the Wiluna Iron JV following decision to mine (repayable against sale proceeds).
This facility has been repaid during the year from funds from operations.
Annual Report 2022
59
Notes to the Consolidated Financial Statements
Annual Report 2022
Exploration Expenditure Commitments
To maintain rights to tenure to tenements, the Group is required to fulfil various minimum expenditure
requirements up until expiry of licenses. The expected expenditure commitments with respect to the
exploration grounds in Australia are as follows:
Within one year
After one year but less than five years
More than five years
Contingencies
2022
$
-
-
-
-
2021
$
159,750
-
-
159,750
Contingent Liabilities of Wiluna Iron JV (in which CUF has a 60% interest)
Mining Rights Agreement
The 2021 Annual Report disclosed additional payments that were required by the JV to satisfy the
underlying Mining Rights Agreement, as follows:
• Should the Wiluna Iron JV elect to exercise its option to extract a further 2.7Mt from the JWD deposit, an
amount of $4,250,000 will be payable;
• Royalties are payable to GWR Group on the basis of iron ore price and to a third party; and
• $3.50 per tonne for each tonne sold in excess of 3Mt.
During the year ended 30 June 2022, the Company (via its subsidiary Wiluna FE Pty Ltd as Operator and
60% equity interest holder in the JV) entered into a variation with GWR Group Ltd on the JWD Mining Rights
Agreement whereby rather than having to pay the above-mentioned $4,250,000 by mid-January 2022 to
secure the right to export a further 2.7MT of iron ore from the deposit, the JV pays $1,800,000 to secure
the right to export 1.2MT; the material to be transported from the JWD tenements by than 30 June 2024
(MRA Variation). Executing the variation provided flexibility to both parties in light of the volatile iron ore
market experienced during the period.
Further, pursuant to the MRA Variation, the JV can then export additional tonnes of iron ore on the following
terms:
• 900,000T upon payment of $2,250,000 by not later than 30 June 2024, with tonnes to be exported by
30 June 2026; and
• 900,000T upon payment of $2,700,000 by not later than 30 June 2026, with the tonnes to be exported
by the 10th anniversary of the original MRA.
Contingent Liabilities of CUF in respect to the Yarram Transaction
A milestone payment will be payable by CUF to Gold Valley Brown Stone Pty Ltd if the Company discovers a
JORC indicated resource of greater than 3MT with greater than 60% Fe, as follows:
• $1,500,000 cash; or
• at CUF’s election, $500,000 in cash and $1,000,000 in CUF shares (calculated as 10-day VWAP upon
announcement of Milestone Resource).
At 30 June 2022 there were no other contingent liabilities or contingent assets.
Contingent Liability in respect of Yarram Iron Pty Ltd
During the year ended 30 June 2022, a director penalty notice has been received in respect of a claim by
the Australian Taxation Office in respect of Yarram Iron Pty Ltd (YIPL). This matter has not yet been
settled and is being contested. The maximum exposure of the claim amount is $131,000. The claim relates
to a period which pre-dates CUF’s acquisition of its 50% interest in YIPL, and is covered by warranties in
favour of CUF.
Annual Report 2022
60
Notes to the Consolidated Financial Statements
Annual Report 2022
29 CONTROLLED ENTITIES AND ASSOCIATED ENTITIES
The consolidated financial statements include the financial statements of CuFe Ltd and the subsidiaries listed
in the following table.
Subsidiaries:
Wiluna FE Pty Ltd
Yarram FE Pty Ltd
CuFe Tennant Creek Pty Ltd
Jackson Minerals Pty Ltd
Mooloogool Pty Ltd
Bulk Ventures Ltd
Bulk Ventures (Bermuda) Limited
Associates:
Gold Valley Iron and Manganese Pty Ltd
Yarram Iron Pty Ltd
Country of
Incorporation
Equity interest
%
2022
2021
Australia
Australia
Australia
Australia
Australia
Australia
Bermuda
Australia
Australia
100
100
100
100
100
100
100
50
50
100
100
-
100
100
100
100
50
50
30 PARENT ENTITY FINANCIAL INFORMATION
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Share-based payment reserve
Total shareholders’ equity
Loss for the period
Total comprehensive loss for the period
2022
$
2021
$
8,182,064
25,710,878
33,892,942
6,819,876
6,909,940
13,729,816
(9,273,435)
-
(9,273,435)
(779,822)
-
(779,822)
24,619,507
12,949,994
58,622,052
(38,365,242)
4,362,697
24,619,507
48,172,188
(38,083,896)
2,861,702
12,949,994
(281,346)
(281,346)
(2,589,435)
(2,589,435)
The parent entity, on behalf of its subsidiary Wiluna FE Pty Ltd, has provided a guarantee to GWR Group
Limited (GWR) in respect of amounts payable or owing under or in connection with the Minerals Rights
Agreement (being the agreement between GWR and GVIO pursuant to which the JWD Mining Rights are
held) (30 June 2021: nil).
Commitments, contingent liabilities and contingent assets of the parent entity are the same as those of the
Group as detailed at note 28.
31 AUDITORS’ REMUNERATION
Amounts received or due and receivable by Stantons International for:
An audit or review of the financial report of the entity and any other entity
in the Group
Amounts paid or payable relating to current year audit and half year
review
2022
2021
$
$
87,468
44,904
Annual Report 2022
61
Notes to the Consolidated Financial Statements
Annual Report 2022
32 RELATED PARTY DISCLOSURES
Note 29 provides the information about the Group’s structure including the details of the subsidiaries and
the holding company.
Transactions with directors, director related entities and other related parties
During the year ended 30 June 2022, an aggregate amount of $686 (30 June 2021: $750) was paid or
payable to Cyclone Metals Ltd (Cyclone) for reimbursement of travel and other corporate costs. At 30 June
2022, nil was payable to Cyclone (30 June 2021: nil). During the year ended 30 June 2022, an aggregate
amount of $250 was received or receivable from Cyclone for reimbursement of other corporate costs (30
June 2021: $754). At 30 June 2022, $250 was receivable from Cyclone (30 June 2021: $754).
During the year ended 30 June 2022, an aggregate amount of $13,007 (30 June 2021: $15,313) was paid
or payable to European Lithium Ltd (European Lithium) for reimbursement of travel and other corporate
costs. At 30 June 2022, nil was payable to European Lithium (30 June 2021: $538). During the year ended
30 June 2022, an aggregate amount of $1,410 was received or receivable from European Lithium for
reimbursement of other corporate costs (30 June 2021: nil). At 30 June 2022, nil was receivable from
European Lithium (30 June 2021: nil).
During the year ended 30 June 2022, an aggregate amount of $130,475 (30 June 2021: $52,300) was paid
or payable to Okewood Pty Ltd (Okewood) for rent, corporate box sponsorship, and for reimbursement of
COVID 19 test kits purchased in bulk. At 30 June 2022, nil was payable to Okewood (30 June 2021: nil).
Mr Antony Sage is a director of Okewood.
Options issued to directors or director related entities
Following receipt of shareholder approval at the Company’s July 2021 EGM, a total of 15,000,000 unlisted
options were issued to directors (or their nominees) (being the Director Options).
Refer note 25 for further details.
Significant shareholders
At 30 June 2022, Cyclone held a significant interest of 15.25% of CUF (30 June 2021: 20.89%). Mr
Antony Sage is a director of Cyclone.
Terms and conditions of transactions with related parties other than KMP
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s
length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement
occurs in cash. There have been no guarantees provided or received for any related party receivables or
payables.
Transactions with key management personnel
Compensation of key management personnel
Short-term employee benefits
Share-based payments
2022
$
798,000
327,093
1,125,093
2021
$
544,167
333,859
878,026
Annual Report 2022
62
Notes to the Consolidated Financial Statements
Interests held by Key Management Personnel
Movements in shares held by key management personnel is as follows:
30 June 2022
Balance at 1 July
2021
Granted as
remuneration
Exercise of
options
Shares sold Net change other
Directors
A Sage(i)
M Hancock
N Sage
Other KMP
J Sinclair
(i)
Indirectly held.
21,673,010
2,500,000
-
230,000
24,403,010
-
-
-
-
-
-
-
-
-
-
-
1,750,000
1,750,000
(880,000)
(880,000)
-
-
-
-
-
Balance at
30 June 2022
21,673,010
2,500,000
-
1,100,000
25,273,010
Movements in unlisted options held by key management personnel to purchase ordinary shares is summarised as follows:
30 June 2022
Balance at 1
July 2021
Acquired
/granted
during year
Exercised Net change
other
Balance at
30 June 2022
Exercisable
Not
Exercisable
Ex.
Price
Exp.
Date
Directors
A Sage
M Hancock
N Sage
Other KMP
J Sinclair
7,500,000
7,500,0001
7,500,000
7,500,0001
2,500,000
5,000,000
5,000,000
-
42,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(2,500,000)2
7,500,000
7,500,000
7,500,000
7,500,000
-
7,500,000
3,000,000
7,500,000
3,000,000
-
-
4,500,000
-
4,500,000
-
-
-
5,000,000
5,000,000
(1,750,000)
-
-
(1,750,000)
-
-
-
(2,500,000)
3,250,000
5,000,000
5,000,000
43,250,000
3,250,000
-
3,000,000
27,250,000
-
5,000,000
2,000,000
16,000,000
$0.03
$0.06
$0.03
$0.06
$0.03
$0.03
$0.04
$0.06
31/08/2022
30/06/2023
31/08/2022
30/06/2023
31/08/2022
31/08/2022
31/08/2023
30/06/2023
1 Includes 7,500,000 unlisted options with vesting conditions granted to each of Mr Tony Sage (or nominee) and Mr Mark Hancock (or nominee) (total of 15,000,000
options) at an exercise price of $0.06 each and an expiry date of 30 June 2023, which were formally issued on 4 August 2021 following receipt of shareholder
approval at the Company’s July 2021 EGM (being the Director Options).
2 On 2 August 2021, Mr Nicholas Sage sold 2,500,000 unlisted options at an exercise price of $0.03 expiring 31 August 2022 via an off market transfer for $125,000.
Shares issued to directors or director related entities
There were nil shares issued to directors during the year ended 30 June 2022 in relation to remuneration (2021: nil).
Annual Report 2022
63
Notes to the Consolidated Financial Statements
33 EVENTS AFTER THE REPORTING DATE
Issue of Shares
The following shares were issued subsequent to year end:
▪
7,500,000 shares upon exercise of unlisted options at $0.03 expiring 31 August 2022, raising
$225,000.
Issue of Options
The following options were issued subsequent to year end:
▪
14,250,000 unlisted options at $0.027 expiring 7 September 2024.
Expiry of Options
A total of 16,500,000 unlisted options at $0.03 expired on 31 August 2022.
There have been no other events subsequent to 30 June 2022 up to the date of this report that would
materially affect the operations of the Group or its state of affairs which have not otherwise been disclosed
in this financial report.
Annual Report 2022
64
Directors’ Declaration
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of CuFe Ltd, I state that:
1.
In the opinion of the directors:
a)
the financial statements and notes of CuFe Ltd for the year ended 30 June 2022 are 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 2022 and its
performance for the year ended on that date; and
(ii) complying with Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Regulations 2001;
b)
c)
the financial statements and notes also comply with International Financial Reporting Standards
as disclosed in note 2(b);
subject to the matters described in note 2(c), there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and payable;
2.
This declaration has been made after receiving the declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act 2001 for the year ended 30 June 2022.
On behalf of the Board
Mr Antony Sage
Executive Chairman
23 September 2022
Annual Report 2022
65
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
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
CUFE LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CuFe Limited (“the Company”), and its subsidiaries (“the Group”),
which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated
statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial 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 2022 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.
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
66
Material Uncertainty Relating to Going Concern
Without modifying our audit opinion expressed above, attention is drawn to the following matter.
As referred to in Note 2(c) to the financial statements, the consolidated financial statements have been
prepared on a going concern basis. As at 30 June 2022, the Group had cash and cash equivalents of
$7,193,910, a net working capital surplus of $7,105,907 (excluding restricted cash) and incurred a loss
after income tax for the year ended 30 June 2022 of $164,915.
The ability of the Group to continue as a going concern and meet its planned operation, exploration,
administration and other commitments is dependent upon the Group generating sufficient cashflow from
operations or raising further equity and/or successfully exploiting its mineral assets.
In the event that the Group is not successful in achieving the matters set out above, these events or
conditions, along with other matters as set forth in Note 2(c), indicate that a material uncertainty exists
that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter
Key Audit Matters
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matter described below to be Key Audit Matter 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
Revenue Recognition
The Group’s revenue totalled $32,997,036
during the financial year ended 30 June 2022
(refer to Note 3(a) of the financial statements).
Note 1 to the financial statements describes the
accounting policies applicable to the revenue
from contracts with customers.
The Group produces and sells the iron ore free
on board and revenue from the sale of iron ore
is recognised at a point in time when control of
the product is transferred to the customer,
which occurs when the product is physically
transferred onto a vessel. The Group generated
$32,997,036 in revenue during the period.
Accounting for revenue recognition was a key
audit matter due to the:
▪
▪
significance of revenue to understanding
the financial results for users of the financial
report;
judgement required by
in
applying the requirements of AASB 15 -
Revenue from Contracts with Customers
(AASB 15), such as:
the Group
✓ identifying the performance obligations
under its contracts with customers;
Inter alia, our audit procedures included the
following:
▪
▪
▪
▪
Assessed whether the Group’s accounting
policies were
the
requirements of AASB 15.
in accordance with
Evaluated the judgements made by the
management in applying the accounting
policy by obtaining an understanding of the
revenue streams.
Tested iron ore revenue transactions by
agreeing outward movements recorded in
the inventory during the year to the relevant
supporting documents and verified that the
revenue has been correctly recorded in the
general ledger and recognised when the
performance obligation has been satisfied;
and
Evaluated the adequacy of the disclosures
in respect of revenue recognition with the
the applicable
criteria prescribed by
standard.
67
✓ determining
the
transaction price,
applying the expected value approach
based on the initial assay and weight
result and subsequent adjustment
final sampling and
the
based on
analysis results;
✓ the method of allocating the transaction
price in the contract to the performance
obligations; and
✓ identifying the timing of recognition of
the revenue based on performance
obligations satisfaction.
Key Audit Matters
How the matter was addressed in the audit
Inventory valuation and existence
As at 30 June 2022, the Group held an inventory
of $4,568,168.
Inter alia, our audit procedures included the
following:
As described in note 2(i) of the financial
statements, the inventory is carried at a lower of
cost and net realisable value on a weighted
average basis in accordance with AASB 102 –
Inventories (AASB 102).
Inventory valuation and existence was
considered a key audit matter due to the
significance of the balance carried and the
judgment applied in the valuation.
▪ Confirmed the quantities through internal
and third-party surveys.
▪
▪
▪
▪
Performed site visit close to ending of the
year
the existence of
operation and inventory.
to substantiate
Assessed the Group’s Inventory valuation
methodology with
the requirements of
AASB 102.
the
Assessed
assumptions used
valuation model.
reasonableness of
in
the
the
inventory
Tested the mathematical accuracy of the
inventory valuation model.
▪ Recalculated
the cost and
the net
realisable value of the inventory; end
▪
Ensured the amount presented in the
financial statements was the lower of cost
and net releasable value
Key Audit Matters
How the matter was addressed in the audit
Financial Assets – Commodity collar/swap
contracts
The Group realised a gain of $5,344,496 for the
financial year ended 30 June 2022 through
Commodity collar/swap contracts (see note
3(c)) and as at 30 June 2022, the Group held
Commodity collar/swap contracts for a total of
$3,324,522 (refer to Note 11 of the financial
statements)
As described in note 2(n) to the financial
statements, these financial assets have been
classified as financial assets at fair value
Inter alia, our audit procedures included the
following:
▪
Tested gains from commodity collar/swap
contracts obtaining relevant trading
confirmations, reperforming the calculation
and agreeing realised gains to the bank
statements and general ledger.
68
through profit and loss in accordance with
AASB 9 – Financial Instruments (AASB 9).
▪ Obtained the fair value calculation of the
Commodity collar/swap contracts open as
at 30 June 2022.
collar/swap
contracts were
Commodity
considered a key audit matter due to the
judgment applied in the valuation.
▪ Obtained the trading confirmations signed
by the two parties at the start of the
contracts.
▪ Obtained independent confirmation of the
forward prices used in the fair value
valuation of the contracts; end
▪
Ensured mathematical accuracy of the
calculation.
Key Audit Matters
How the matters were addressed in the audit
Carrying Value of Exploration and
Evaluation Expenditure
As at 30 June 2022, exploration and evaluation
expenditure totalled $8,866,852.
Inter alia, our audit procedures included the
following:
As per Note 13 of the financial report, during the
period the Group acquired a 60% interest in the
copper/gold project Tennant Creek.
▪
The carrying value of capitalised exploration and
evaluation expenditure is a key audit matter due
to:
•
•
•
Amount of Exploration assets is significant.
the requirements of
The necessity to assess management’s
application of
the
accounting standard AASB 6 - Exploration
for and Evaluation of Mineral Resources
(“AASB 6”), considering any indicators of
impairment that may be present; and
The assessment of significant judgements
made by management in relation to the
capitalised exploration and evaluation
expenditure.
Assessed the Group’s right to tenure over
the
exploration assets by corroborating
ownership of
for
licences
the relevant
mineral resources to government registries
and relevant third-party documentation.
▪ Reviewed the directors’ assessment of the
the exploration and
carrying value of
evaluation costs, ensuring the veracity of the
data presented and that management has
considered the effect of potential impairment
indicators, commodity prices and the stage
of the Group’s projects also against AASB 6;
▪
the Group’s documents
Evaluated
for
consistency with the intentions for continuing
exploration and evaluation activities
in
certain areas of interest and corroborated
with
interviews with management. The
documents we evaluated included:
▪ Minutes of the board and management.
▪ Announcements made by the Group to the
Australian Securities Exchange; and
▪ Cash forecasts; and
▪ Considered the requirements of accounting
standard AASB 6 and reviewed the financial
statements
appropriate
disclosures were made.
ensure
to
69
Key Audit Matters
Measurement of Share-based Payments
How the matters were addressed in the audit
As disclosed in Note 25 to the financial
statements, during the year the Group granted
and/or issued:
Inter alia, our audit procedures included the
following:
•
•
•
•
•
•
as
15,000,000 options to Directors
18,500,000 options to employees
20,000,000 options to a consultant
75,000,000
part
options
consideration for the Tennant Creek
project.
2,750,000 shares in relation to the
acquisition of an additional 9% of
Wiluna JV
2,550,000 shares as part consideration
for the Tennant Creek project.
The Group accounted for these options and
shares in accordance with AASB 2 - Share-
based Payment (AASB 2).
Measurement of share-based payments is a key
audit as they involved judgment in assessing the
fair value of the equity instruments granted, the
grant date, vesting conditions and vesting
periods.
i.
ii.
iii.
iv.
Obtained an understanding of
underlying
transactions,
agreements, minutes of
meetings and ASX announcements.
the
reviewing
the Board
Reviewed management’s determination
of the fair value of the share-based
payments granted, considering
the
appropriateness of the valuation models
used, the underlying assumptions used
and discussing with management the
justification for these inputs.
Assessed the accounting treatment and
its application in accordance with AASB
2;
Assessed
disclosures
applicable accounting standards.
the adequacy of
in accordance with
the
the
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 2022 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.
70
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report 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 scepticism 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 entity's preparation of the financial
report that gives a true and fair view to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the entity'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 are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
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
71
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
Opinion 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 2022.
In our opinion, the Remuneration Report of CuFe Limited for the year ended 30 June 2022 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir T Tirodkar
Director
West Perth, Western Australia
23 September 2022
72
Schedule of Tenements
SCHEDULE OF TENEMENTS
As at 13 September 2022:
Schedule of tenement interests of the Company and its subsidiary entities:
Tenement
reference
Project & Location
Interest
Notes
M53/971-I
Wiluna West – Western Australia
M53/972-I
Wiluna West – Western Australia
M53/1018-I
M53/1078-I
L53/115
L53/146
Wiluna West – Western Australia
Wiluna West – Western Australia
Wiluna West – Western Australia
Wiluna West – Western Australia
MLN1163
Yarram – Northern Territory
ELR125
ELR146
Yarram – Northern Territory
Yarram – Northern Territory
EL 26595
Tennant Creek – Northern Territory
EL 28777
Tennant Creek – Northern Territory
EL 28913
Tennant Creek – Northern Territory
EL 29012
Tennant Creek – Northern Territory
EL 29488
Tennant Creek – Northern Territory
EL 30488
Tennant Creek – Northern Territory
EL 30614
Tennant Creek – Northern Territory
EL 31249
Tennant Creek – Northern Territory
EL 32001
Tennant Creek – Northern Territory
ML 23969
Tennant Creek – Northern Territory
ML 29917
Tennant Creek – Northern Territory
ML 29919
Tennant Creek – Northern Territory
ML 30714
Tennant Creek – Northern Territory
ML 30745
Tennant Creek – Northern Territory
ML 30783
Tennant Creek – Northern Territory
ML 30873
Tennant Creek – Northern Territory
ML 31021
Tennant Creek – Northern Territory
ML 31023
Tennant Creek – Northern Territory
MLC 21
Tennant Creek – Northern Territory
MLC 323
Tennant Creek – Northern Territory
MLC 324
Tennant Creek – Northern Territory
MLC 325
MLC 326
MLC 327
MLC 506
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
MLC 69
Tennant Creek – Northern Territory
60%
60%
60%
60%
60%
60%
50%
50%
50%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
1
1
1
1
1
1
2
2
2
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
Annual Report 2022
73
Schedule of Tenements
MLC 70
MLC 78
MLC 85
MLC 86
MLC 87
MLC 88
MLC 89
MLC 90
MLC 96
MLC 97
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
Tennant Creek – Northern Territory
E52/1668
Peak Hill - Western Australia
E52/1678
Peak Hill - Western Australia
E52/1722
Peak Hill - Western Australia
E52/1730
Peak Hill - Western Australia
P52/1538
Peak Hill - Western Australia
P52/1539
Peak Hill - Western Australia
P52/1494
Forrest - Western Australia
P52/1495
Forrest - Western Australia
P52/1496
Forrest - Western Australia
E29/640
Mt Ida – Western Australia
M29/2
Mt Ida – Western Australia
M29/165
Mt Ida – Western Australia
M29/422
Mt Ida – Western Australia
NOTES:
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
20%
20%
20%
20%
20%
20%
20%
20%
20%
100%
100%
100%
100%
3
3
3
3
3
3
3
3
3
3
4
4
5
4
4
4
6
6
6
7
7
7
7
1
2
3
4
5
6
7
CUF (via Wiluna FE Pty Ltd) holds a 60% interest in the Mining Rights Agreement over the Wiluna
West JWD deposit (iron ore rights).
CUF (via Yarram FE Pty Ltd) holds a 50% interest in Gold Valley Iron and Manganese Pty Ltd, the
owner of the iron ore rights over the Yarram Project.
CUF (via CuFe Tennant Creek Pty Ltd) holds a 60% interest in copper / gold assets at the Tennant
Creek Project in the Northern Territory from Gecko Mining Company Pty Ltd (GMC). CUF and GMC
have formed an unincorporated joint venture in respect of the Tennant Creek Project tenements.
CUF is the manager of the joint venture. CUF will pay the first $10,000,000 of joint venture
expenditure incurred.
Billabong (Operator), ALY and SFR hold various mineral rights under various earn in agreements
for an 80% interest in the tenements. CUF (via Jackson Minerals) holds the remaining 20%
interest in all minerals free carried to decision to mine.
SFR (Operator) and ALY hold various mineral rights for an 80% interest in the tenement. CUF (via
Jackson Minerals) holds the remaining 20% interest in all minerals free carried to decision to mine.
AUR (Operator) holds an 80% interest in all minerals. CUF (via Jackson Minerals) holds the
remaining 20% interest in all minerals free carried to decision to mine.
CUF holds 100% interest in iron ore rights over the Mt Ida Project tenements via the Mt Ida Iron
Ore Rights Sale Agreement.
Annual Report 2022
74
Schedule of Tenements
The mining tenements with beneficial interest held in farm-in/farm-out agreements
Farm-in/out
Agreement and
Tenement reference
Project & Location
Interest
Notes
E51/1033-I
Morck Well – Western Australia
E52/1613-I
Morck Well – Western Australia
E52/1672-I
Morck Well – Western Australia
20%
20%
20%
1, 2, 3
1, 2, 3
1, 2, 3
NOTES:
1
2
3
AUR (Operator) hold 80% in all minerals and CUF (via Jackson Minerals Pty Ltd) holds 20%
interest in all minerals.
AUR to pay PepinNini Robinson Range Pty Ltd a 0.8% gross revenue royalty from the sale or
disposal of iron ore.
Sandfire Farm-in: Subject to a Farm-in Letter Agreement between SFR, AUR and CUF. If SFR
makes a Discovery on the tenements and a JV is formed then the interests in the tenements will
be 70% SFR, 24% AUR and 6% CUF. Full details of the agreement are described in the AUR ASX
announcement dated 27 February 2018.
Annual Report 2022
75
Additional Shareholder Information
ADDITIONAL SHAREHOLDER INFORMATION
Shares
The total number of Shares on issue as at 13 September 2022 was 966,112,365, held by 1,788 registered
Shareholders. 700 shareholders hold less than a marketable parcel, based on the market price of a share as at
13 September 2022.
Each Share carries one vote per Share without restriction.
Escrowed Shares
The Company does not have any Escrowed Shares on issue.
Twenty Largest Shareholders
As at 13 September 2022, the twenty largest Shareholders were as shown in the following table and held
56.77% of the Shares.
1
2
3
4
5
6
7
Legal Holder
DEMPSEY RESOURCES PTY LTD
GECKO MINING COMPANY PTY LTD
GOLD VALLEY IRON ORE PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
DEMPSEY RESOURCES PTY LTD
ANTONY WILLIAM PAUL SAGE & LUCY FERNANDES SAGE
ANT NICHOLSON PTY LTD
CAULDRON ENERGY LIMITED
LSG RESOURCES PTY LTD
8
9
10 WHITEY TIGER PTY LTD
11 ORCA CAPITAL GMBH
12
13 GECKO MINING COMPANY PTY LTD
14 MRS SAMANTHA HELEN LOUISE YOUNG
15
16 MR BRIAN PETER BYASS
17
18
19
20 GOLDVALLEY BROWN STONE PTY LTD
COLLEGE SEARCH PTY LTD
Total Top 20
Balance of register
TOTAL
Distribution Schedule
KUN SONG
THE JMS FOUNDATION PTY LTD
H & K SUPER MANAGEMENT PTY LTD
Holding
120,848,635
95,125,000
53,667,341
38,504,926
29,419,693
25,300,000
23,923,010
18,284,725
17,913,868
14,915,554
14,266,955
13,946,259
13,000,000
12,500,000
11,000,000
10,382,745
10,000,000
8,809,994
8,493,464
8,205,288
548,507,457
417,604,908
966,112,365
%
12.51
9.85
5.55
3.99
3.05
2.62
2.48
1.89
1.85
1.54
1.48
1.44
1.35
1.29
1.14
1.07
1.04
0.91
0.88
0.85
56.77
43.23
100.00
A distribution schedule of the number of Shareholders, by size of holding, as at 13 September 2022 is below:
Size of holdings
1 – 1000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Substantial Holders
Number of
Shares
28,055
497,308
1,632,028
34,452,068
929,502,906
966,112,365
%
0.00%
0.05%
0.17%
3.57%
96.21%
100.00%
Number of
Shareholders
88
161
201
789
549
1,788
Set out below are all substantial holders who have given notice of a holding of more than 5% of the Company’s
voting rights (as per notice given):
Substantial Holder
DEMPSEY RESOURCES PTY LTD / CYCLONE METALS LTD
GOLD VALLEY IRON ORE PTY LTD / GOLDVALLEY BROWN STONE PTY LTD /
GECKO MINING COMPANY PTY LTD
Holding
146,148,635
%
15.25
161,792,341
16.88
Annual Report 2022
76
Quoted Options
Additional Shareholder Information
The Company has 70,000,000 quoted Options on issue (ASX:CUFO). The names of security holders holding more than 20% of this class of security are listed
below.
Holder
Evolution Capital Pty Ltd
Holders individually less than 20%
Total
Unquoted Options
Options
$0.06
24/11/2023
20,000,000
50,000,000
70,000,000
At 13 September 2022 the Company has on issue 124,500,000 Unquoted Options on issue. The names of security holders holding more than 20% of an unlisted
class of security are listed below.
Holder
Bell Potter Nominees
Gecko Mining Company Pty Ltd
Mark Hancock & Julie Hancock
Alan Jepson
Okewood Pty Ltd
Mr Matthew Campbell Ramsden
Jeremy Andrew Sinclair
Holders individually less than 20%
Total
Unlisted
Options
$0.04
31/08/2023
-
-
-
-
-
3,000,000
5,000,000
-
8,000,000
Unlisted
Options
$0.035
12/10/2023
5,000,000
-
-
-
-
-
-
-
5,000,000
Unlisted
Options
$0.045
12/04/2024
5,000,000
-
-
-
-
-
-
-
5,000,000
Unlisted
Unlisted
Options
Options
$0.06
$0.06
30/06/2023
12/10/2024
-
5,000,000
-
-
7,500,000
-
-
-
7,500,000
-
-
-
-
-
- 10,500,000
5,000,000 25,500,000
Unlisted
Options
$0.074
31/12/2022
-
-
-
1,000,000
-
-
-
-
1,000,000
Unlisted
Options
$0.10
09/12/2024
-
75,000,000
-
-
-
-
-
-
75,000,000
Annual Report 2022
77
cufe.com.au