2023
ANNUAL
REPORT
ASX: CUF
CORPORATE DIRECTORY
Australian Business Number
31 112 731 638
Country of Incorporation
Australia
Board of Directors
Antony Sage
Mark Hancock
Nicholas Sage
Scott Meacock
Executive Chairman
Executive Director
Non-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 Code: CUF)
The Company currently has listed options expiring 24 November 2023
with an exercise price of $0.06 (ASX Code: CUFO).
Contents
CONTENTS
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION TO DIRECTORS
CORPORATE GOVERNANCE STATEMENT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND 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 2023
1
Directors’ Report
Annual Report 2023
DIRECTORS’ REPORT
The directors of CuFe Ltd (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 2023.
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 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 (December 2000 to Present); and
European Lithium Limited (September 2016 to Present).
Interest in shares & options at
date of this report:
30,173,010 fully paid ordinary shares
10,000,000 unlisted options at $0.027 expiring 7 September 2024
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);
Strandline Resources Ltd (August 2020 to Present); and
Cyclone Metals Limited (February 2020 to August 2020).
Interest in shares & options at
date of this report:
5,000,000 fully paid ordinary shares
10,000,000 unlisted options at $0.027 expiring 7 September 2024
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 has not held any other listed company directorship
roles in the three years immediately before the end of the current financial year.
Interest in shares & options at
date of this report:
None
Scott Meacock, Non-Executive Director (Appointed 5 December 2022)
Mr Meacock holds a Bachelor of Laws (LLB) degree and a Bachelor of Commerce (BComm) degree from the
University of Western Australia and has a wealth of experience as external counsel acting in, and advising on,
complex corporate and commercial law transactions and disputes for clients in a wide range of industry sectors
including natural resources and financial services. Mr Meacock currently serves as the Chief Executive Officer and
General Counsel of the Gold Valley Group, the Company’s major shareholder and therefore is not considered by
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Directors’ Report
Annual Report 2023
the Board to be an independent director. Mr Meacock has not held any other listed company directorship roles in
the three years immediately before the end of the current financial year.
Interest in shares & options at
date of this report:
4,000,000 fully paid ordinary shares
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 IN STATE OF AFFAIRS
CuFe Ltd (ASX: CUF) (CUF or the Company) is an Australian based mineral producer and explorer with
holdings, or rights or interests in, various tenements prospective for copper, lithium, gold, rare earths and iron
ore located in Western Australia and the Northern Territory. The Company’s main focus is its mature iron ore
assets in Western Australia (JWD Iron Ore Project) and the Northern Territory (Yarram Iron Ore Project) and
copper asset (Tennant Creek Copper Project). During the year and after year end the Company has acquired
further early stage exploration projects to broaden its portfolio.
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 2022: nil).
REVIEW OF OPERATIONS
CORPORATE
Operating Results
The consolidated loss after income tax for the year ended 30 June 2023 amounted to $11,154,755 (30 June
2022: $164,915 loss after income tax). This gross loss from operations of $5,199,639 is offset by the realised
hedging gain for the year of $6,184,540. For accounting purposes $3,237,062 of the hedging gain had been
booked in the prior financial year as a mark to market of open hedge positions at 30 June 2022. The remainder
of the net loss relates to non cash amortisation and depreciation of $4,231,981, exploration and evaluation costs
expensed, including the Yarram JV of $1,603,324 and other corporate expenses.
Board Change
Mr Scott Meacock was appointed as a Non-Executive Director effective 5 December 2022.
Annual General Meeting
The Company’s annual general meeting (AGM) was held on 30 November 2022. All resolutions put to the
meeting were passed and decided by way of a poll.
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Directors’ Report
Annual Report 2023
Binding agreement to increase to 100% ownership of JWD Iron Ore Rights
During the year the Company announced that it has entered a binding agreement (Agreement) with entities
associated with its major shareholder, Gold Valley Group (GVG) to acquire the remaining 40% joint venture
interest in the JWD Iron Ore Project and to restructure various other obligations that exist between the parties
with respect to the Tennant Creek Joint Venture and the Yarram Joint Venture (Restructure Transaction).
Key terms of the Agreement includes the following:
•
•
•
•
•
CUF to increase its interest in the iron rights over the JWD iron ore mine from 60% to 100% via the
issue of 150 million CUF shares and refunding the historical GVG cash contributions (being $1.71m at 30
June 2023) (Cash Consideration);
The effective date for the transaction and determining the Cash Consideration is deemed to be 1
January 2023. The amount payable to Gold Valley Iron Ore Pty Ltd (an entity associated with GVG)
(GVIO) will be adjusted by cash paid by GVIO offset by amounts paid to GVIO under the JWD Joint
Venture, subsequent to the effective date and prior to completion of the transaction (Net Called Sums
Amount);
The Cash Consideration will be payable via monthly instalments following completion. For each month
following the settlement date where the amount of net profits (of the JWD Iron Ore Project) is a positive
number, the Company must pay GVIO a cash payment in immediately available funds equal to 100% of
the net profits for that month (unless a payment calculated for any given month would exceed
$500,000, in which case the maximum payable for any given month will be $500,000) (Monthly Cash
Payment) until such time as the aggregate amount of the Monthly Cash Payments paid to GVIO is
equal to the Net Called Sums Amount;
CUF exercises its right to access a further 900,000mt of iron ore at the JWD resource, with the original
exercise price of $2.25m to be settled via transfer of 5% of its joint venture interest in the Tennant
Creek Copper Project; and
Yarram milestone payments of $1.5m re-structured to defer majority of remaining milestone payment
until decision to mine rather than on announcement of indicated resource.
Refer to ASX Announcements dated 22 February 2023 and 11 May 2023 for further details.
Shareholder approval required in respect of the Restructure Transaction was received at the Company’s General
Meeting held 24 July 2023. Completion of the Restructure Transaction settled on 1 September 2023.
Acquisition of Tenure in Established Lithium Province (‘North Dam Project’) – Tenement E15/1495
On 9 May 2023 the Company announced it had entered into an agreement to acquire tenement E15/1495,
covering approximately 14km2 of ground 20kms south of Mineral Resources Mt Marion Mine and within 6kms of
the Spargos Reward Gold Mine. Tenement E15/1495 is located approximately 50km SSE of the township of
Coolgardie, within the Southern Yilgarn Lithium Belt that includes the known spodumene deposits such as the
Bald Hill Mine, the Mt Marion Mine, the Pioneer Dome Project, Manna Lithium Project and the Buldania Project.
Under the terms of the sale and purchase agreement, consideration includes $300,000 cash, a $300,000
milestone payment payable in the event production occurs in the future from the tenure (E15/1495 Milestone
Payment), and a 1% gross sales royalty. The vendor retains rights to gemstones on the tenement.
The tenement acquisition was completed on 6 June 2023.
Agreement to acquire rights to lithium and rare earth related minerals – Tenement Rights M15/1893
On 23 June 2023 the Company announced it had entered into an agreement to acquire rights to lithium and rare
earth related minerals over M15/1893, covering approximately 7.4km2 of ground, located 30km south of Mineral
Resources Mt Marion Mine. Tenement M15/1893 is approximately 48km SSE of the township of Coolgardie,
within the Southern Yilgarn Lithium Belt that includes the known spodumene deposits and projects such as the
Bald Hill Mine, the Mt Marion Mine, the Pioneer Dome Project, Manna Lithium Project and the West Spargoville
Project - Marquee Resources. The area over which the M15/1893 is located is 2km south and along strike of the
recently acquired E15/1495 (see above). The addition of this tenure gives CuFe over 12km of strike length
exposure to a 30km corridor that is proven to host Lithium-Caesium-Tantalum (LCT) bearing pegmatites.
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Directors’ Report
Annual Report 2023
Under the terms of the agreement, CuFe acquires rights to lithium and rare earth related minerals over
M15/1893 (a mining lease which is presently under application pending finalisation of native title negotiations)
and in return CuFe assigns rights to gold on its recently acquired E15/1495. The parties each assume the
obligations to pay the E15/1495 Milestone Payment to the previous owner in the event production occurs in the
future from the tenure and a 1% gross sales royalty.
The tenement rights acquisition and assignment has not yet been completed.
Shares issued
During the year the Company issued the following shares:
▪
7,500,000 shares issued upon exercise of unlisted options exercisable at $0.03 expiring 31 August
2022, raising $225,000
Option issued
During the year the Company issued the following options:
▪
▪
14,250,000 unlisted options exercisable at $0.027 expiring 7 September 2024 with vesting conditions
issued pursuant to the Company’s Employee Securities Incentive Plan (ESIP) (ESIP approved by
shareholders at the July 2021 EGM)
20,000,000 unlisted options exercisable at $0.027 expiring 7 September 2024 with vesting conditions
issued to directors (or their nominees) following receipt of shareholder approval at the AGM
Options exercised
The following options were exercised during the year:
▪
7,500,000 unlisted options exercisable at $0.03 expiring 31 August 2022
Options lapsed or expired
The following options lapsed or expired during the year:
▪
▪
▪
▪
▪
5,000,000 unlisted options exercisable at $0.04 expiring 31 August 2023 lapsed
25,500,000 unlisted options exercisable at $0.06 expiring 30 June 2023 lapsed or expired
6,500,000 unlisted options exercisable at $0.027 expiring 7 September 2024 lapsed
16,500,000 unlisted options exercisable at $0.03 expired on 31 August 2022
1,000,000 unlisted options exercisable at $0.074 expired on 31 December 2022
Key Risks
The business, assets and operations of the Company are subject to certain risk factors that have the potential to
influence the operating and financial performance of the Company in the future. The Board aims to manage
these risks by carefully planning its activities and implementing risk control measures. Some of these risks are,
however, highly unpredictable and the extent to which the Board can effectively manage them is limited.
A summary of the key risk areas of the Company are listed below:
▪
▪
▪
▪
▪
Future capital requirements and associated funding and dilution risk – the Company is likely to need to
raise additional capital to progress its exploration and evaluation activities and the ability to do that is
influenced by the state of global financial markets and risk appetite for investment in junior resources
companies
Commodity price volatility - a significant portion of the Company’s revenues and cash flows are derived
from the sale of iron ore which is subject to a high degree of volatility. Due to the location of its JWD
mine being ~800km from the port it has an above average cost base and so is vulnerable to price
reductions which may lead to suspension of activities
Exchange rate risk – the Company’s sales are denominated in USD and its expenses are predominately
in AUD so adverse movements in the two currencies could impact profitability
Fuel Price risk – given the haulage distance of the JWD mine the Company has exposure to diesel fuel
prices which are volatile. Fuel prices are also a major influence on sea freight rates for the export of the
product
Hedging Risk – the Company looks to mitigate the risks to items like commodity price and exchange
rates via hedge contracts. If the company cannot deliver hedge volumes this could create additional
liability for the Company
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Directors’ Report
Annual Report 2023
▪ Operational Risk – there are a number of factors such as geological, mining, approval, environmental,
weather, safety, infrastructure access risk which may adversely impact the Company’s operations
Exploration and development risk including lack of exploration success, no defined reserves, inaccurate
resource estimates, results of studies, metallurgy consideration could all impact adversely on the
Company’s activities
Joint Venture and rights agreement risk – the Company operates a number of assets in joint venture or
holds its interest via contractual rights which could be the subject of dispute or challenge
Personnel risks including loss of key personnel and reliance on agents and contractors could impact on
the Company’s ability to execute planned work
Environmental risks and changes to regulatory compliance requirements could impact the Company’s
ability to execute its plans
Aboriginal heritage matters could delay or prevent access to ground to perform intended activities
▪
▪
▪
▪
▪
PROJECTS
Western Australia
The Company holds, or has rights or interests in, various tenements prospective for copper, iron ore, gold,
lithium and rare earths 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 Yarram Iron Ore Project and Tennant Creek
Copper Project in the Northern Territory. Exploration has also commenced on the Company’s recently acquired
lithium tenements in Coolgardie Western Australia. The Bryah Basin 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
During the year volatile iron ore prices resulted in suspension of mining operations from October to December
2022 to conserve cash and minimising working capital outflow. Further hedging of the iron ore price, careful
management of working capital and a continued focus on cost reduction allowed the mine to restart operations
in January 2023 and JWD operated for the remainder of the financial period.
JWD produces a high grade, predominately lump material which is well regarded by customers for its low fines in
lump ratio and low impurity levels. This enables the product to regularly achieve a premium to index pricing. The
key challenge for the project is it location 800km from the port results in a high transport cost. The Company is
actively working to reduce cost via larger payload road trains, port sharing arrangements and optimised mining
schedules.
Key Points:
•
Iron Ore prices have been extremely volatile during the year, with 62% index prices reaching a lower peak
to recent years, with a high of USD127/dmt and then dipping as low as USD92/dmt during the year and
closing at USD112/dmt at the end of June. Lump premiums have also been volatile. The third quarter of the
financial year experienced the strongest pricing and this was the period where JWD was ramping back up its
operations so CuFe so did not have the opportunity to benefit from the highest part of the cycle.
The Company was able to benefit from hedges taken out over the year with realised hedge gains for the year of
A$6.18m.
1 Amounts referred to in this section of the Directors’ Report are stated at 100% of the amounts recorded in by
the JWD JV. In accordance with its accounting policy in respect of the joint operation, CUF takes up its 60%
share of assets, liabilities and results of the JWD JV in the Group’s consolidated financial statements presented in
this annual report. Cufe acquired 100% of the JWD project, effective 1 January 2023, with completion of the
transaction occurring 1 September 2023.
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Directors’ Report
Annual Report 2023
Operations Summary
Production metrics
(100%)
Total material moved
Ore mined
Ore processed
Ore hauled to port
Ore shipped
Lump
Fines
Inventory
ROM
Site Finished Product
Port
Measure
Q1
339,703
213,382
Q2
-
-
Q3
Q4
FY23
197,567
152,849
690,119
153,290
142,386
509,058
184,145
44,092
97,564
163,415
489,215
120,532
54,614
88,883
135,764
399,794
141,778
72,446
71,341
133,141
418,706
141,778
58,858
37,233
119,229
357,099
-
13,588
34,108
13,912
61,607
125,960
59,987
115,714
94,685
94,685
22,525
1,995
12,435
7,381
7,381
16,525
-
24,536
26,635
26,635
BCM
wmt
wmt
wmt
wmt
wmt
wmt
wmt
wmt
wmt
Revenue (FOB)
US$/wmt
$84.97
$87.00
$105.31
$99.84
$93.52
Revenue (FOB) Lump
US$/wmt
$84.97
$89.54
$121.61
$103.86
$95.85
Revenue (FOB) Fines
US$/wmt
-
$76.01
$87.50
$65.60
$80.01
Revenue (FOB)
Realised Hedging Gains/
(losses)
Total Revenue
A$/wmt
$125.61
$128.97
$152.89
$142.21
$136.12
A$/wmt
$53.50
$17.75
($2.61)
$12.18
$24.62
A$/wmt
$179.11
$146.72
$150.29
$154.39
$160.73
C1 Costs ($/wmt by Activity)
A$/wmt
$136.59
$115.16
$142.13
$126.29
$133.81
C1 Costs ($/wmt Shipped)
A$/wmt
$147.04
$153.64
$142.90
$139.90
$142.70
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 financial year a 24-hole Aircore drill program was undertake at Yarram on ML1163 to test and close
out open drilling and extension of the mineralisation envelope. This program led to the creation of a maiden
inferred resource at Yarram of 12.7Mt at 55.4%Fe, including a high-grade component of 5.6Mt at 60.4%. Refer
to ASX announcement dated 28 February 2023 for full details. As part of defining this resource a detailed
airborne LIDAR survey was also undertaken to allow an accurate representation of the surface topography.
A series of surface bulk samples were excavated from the Captain Morgan and Kraken deposits. Size by assay
analysis was undertaken on the samples indicating that the low-grade material could be upgraded by removal of
the lower (<2mm) size fractions). Late in the reporting period a diamond drill program was planned (executed in
August 2023) to supply PQ core for metallurgical and geotechnical testwork. This information is an important
input into ongoing feasibility studies and supporting mine planning work.
Over the reporting period SLR consulting undertook a flora and fauna survey over ML1163 including the
monsoonal vine thicket (MVT). The objective of the flora survey was to quantify baseline conditions of the MVT
and surrounding vegetation and provide a structured approach for future monitoring and impact assessment.
The fauna survey including camera trapping was to provide additional data to previous studies to enable impact
assessment and quantify the presence and species that occupy the tenements. Both surveys and their outcomes
are important components of environmental studies and approvals.
Ongoing engagement with the Traditional Owners was undertaken which included group meetings held on
country. Remediation and clean-up of the 24 Aircore holes was undertaken within the reporting period which
included employment of Traditional Owners to assist with the on groundwork.
With the development of the maiden resource a series on mine planning work fronts were executed as part of
ongoing concept and development studies. This included high level pit optimisations and mine schedules which
provide inputs to further studies and environmental and regulatory approvals.
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Directors’ Report
Annual Report 2023
Tennant Creek Mining Rights (Northern Territory)
The Company owns a 60% interest2 in copper / gold assets which have been the subject of historical mining at
Tennant Creek in the Northern Territory.
During the reporting period a resource update was undertaken for the Orlando Deposit by Snowdens-Optiro
consulting based on the results of the 2023 drill program (refer to ASX announcement 3rd April – Tennant Creek
Project – Orlando Mineral Resource Upgrade). The update saw an increase in Cu metal tonnes by 16% relative to
the previous June 2022 estimate.
Options to develop the open cut at Orlando were studied over the reporting period. A staged cut back design
was developed by mining planning consultant Strategic Mines based on the updated resource to test the
accessibility for a cut back into the Orlando Pit. The outputs of this work enable costing of mine plans and form
as inputs to the ongoing feasibility studies.
Figure: Existing Orlando Copper / Gold pit
North Dam Project – (Western Australia)
Following the acquisition of E15/1459 on 6 June 2023 CuFe commenced exploration across the tenement
comprising field reconnaissance, mapping and rock chip sampling. On 22 August 2023 CuFe announced
significant initial Rare Earth Elements, Niobium and Lithium results from the North Dam Project (refer to ASX
announcement 22 August 2023). The work to date has defined numerous LCT style outcropping pegmatites,
anomalous Rare Earth Elements (>up to 1770 ppm), columbite and tantalite chips containing niobium and
tantalum up to 43.93% and 14.53% respectively and lithium oxide (up to 3,206 ppm).
The work also identified a Li2O target zone supported by CuFe rock chips and also historical auger and soils
sampling by Ramelius Resources who were exploring for Au but also analysed for lithium. This target zone is an
area that will be focussed on in upcoming work programs that could potentially include first pass drill programs.
2 Reducing to 55% interest as part of the Restructure Transaction which completed on 1 September 2023.
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Directors’ Report
Annual Report 2023
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).
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 issued a
notice of withdrawal during the year.
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.
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. Sandfire withdrew from the
tenure during the year. 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 previously 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.
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.
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Annual Report 2023
Annual Resource Statements
JWD Iron Ore Mineral Resources
JWD Iron Ore Mineral Resources at 30 June 2023
Model
Cut-Off
Grade
Classification
Tonnes
(Mt)
Fe (%)
SiO2
(%)
Al2O3
(%)
P %
LOI %
Mineral
Resources
June 30
2020 (prior
to mining)
> 55%
Fe
Total Mining
Depletion to
June 30
2023
> 55%
Fe
Mineral
Resources
as of June
30 2023
> 55%
Fe
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
6.4
0.9
3.4
64.06
2.64
1.52
0.034
3.07
63.6
2.77
1.33
0.030
3.57
63.13
3.23
1.58
0.029
3.38
10.7
63.73
2.83
1.52
0.032
3.21
1.11
63.60
3.67
1.97
0.030
2.81
0.01
61.23
6.96
2.04
0.022
2.61
0.02
1.14
60.67
5.50
2.71
0.037
2.86
63.52
3.73
1.98
0.030
2.81
5.29
64.16
2.42
1.43
0.035
3.12
0.89
63.63
2.72
1.32
0.030
3.58
3.38
9.56
63.14
63.75
3.22
2.72
1.57
0.029
3.38
1.46
0.032
3.26
Notes:
1 Rounding may result in some inconsistencies in the values.
2 The cut-off grade for reporting is 55% Fe.
3 GWR Group previously reported a resource of 10.7Mt @ 63.7% Fe using a 55% Fe cut off for the JWD deposit.
This estimate of mineral resources is not reported in accordance with JORC 2012. A Competent Person has not
done sufficient work to classify the estimates of Mineral Resources in accordance with the JORC Code 2012. It is
possible that following further evaluation, the currently reported estimate may materially change and hence will
need to be reported afresh under and in accordance with the JORC Code 2012. Nothing has come to the
attention of CUF that causes it to question the accuracy or reliability of the former owner’s estimates. CUF has
not independently validated the former owner’s estimates and therefore is not to be regarded as reporting,
adopting or endorsing those estimates. This estimate was commissioned and formerly reported by GWR Group in
compliance with JORC 2004. An updated estimate was conducted by Optiro, a well-established consultancy firm,
in 2013 using data obtained during 2012 however the result was not considered materially different to the
earlier reported resource. Optiro / GWR Group elected to report the updated resource to JORC 2004 standards
citing the lack of material difference as the basis. The report can be found in the ASX announcement made by
GWR Group dated 11 April 2013 however this report may not conform to the requirements of the JORC Code
2012.
10
Directors’ Report
Annual Report 2023
Yarram Iron Ore Mineral Resources
Yarram Iron Ore Mineral Resources at 30 June 2023
Deposit
Cut-Off
Grade
Classification
Tonnes
(Mt)
Fe (%)
SiO2
(%)
Al2O3
(%)
P %
LOI %
Captain
Morgan
> 48%
Fe
Kraken
> 48%
Fe
Total
Mineral
Resources
> 48%
Fe
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
-
-
3.1
3.1
-
-
9.7
9.7
-
-
-
-
-
-
-
-
-
-
-
-
51.18
8.04
4.94
0.230
8.84
51.18
8.04
4.94
0.230
8.84
-
-
-
-
-
-
-
-
-
-
56.75
7.02
5.23
0.190
4.09
56.75
7.02
5.23
0.190
4.09
-
-
-
-
-
-
-
-
-
-
12.7
12.7
55.41
55.41
7.27
7.27
5.16
0.200
5.24
5.16
0.200
5.24
Notes:
1 Rounding may result in some inconsistencies in the values.
2 The cut-off grade for reporting is 48% Fe.
11
Directors’ Report
Annual Report 2023
Tennant Creek Copper Mineral Resources at 30 June 2023
Tennant Creek Copper Mineral Resources at 30 June 2023
Deposit
Cut-Off
Grade
Classification
Tonnes
(Mt)
Cu
(%)
Cu
Metal
(t)
Au
(g/t)
Au Oz
Au_eq
(g/t)
Au_eq
Oz
Gecko
>1%
Cu
Goanna
>1%
Cu
Orlando
>1%
Au eq
Total Group
Copper
Mineral
Resources
at 30 June
2023
>1%
Au eq
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
Measured
Indicated
Inferred
Total
-
-
-
1.4
2.54
35,416
0.08
1.54
1,228
1.48
2.48
36,644
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.92
1.84
53,766
0.16
14,700
2.92
1.84
53,766
0.16
14,700
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.13
1.36
29,077
1.44
98,462
3.25
222,799
0.75
0.98
7,302
1.31
31,396
2.61
62,620
2.88
1.26
36,380
1.4
129,858
3.08
285,419
-
-
-
-
-
-
3.53
1.83
64,494
1.44
98,462
3.25
222,799
3.74
1.66
62,296
0.38
46,096
2.61
62,620
7.27
1.74
126,790
0.62
144,558
3.08
285,419
Notes:
1 Gecko and Goanna deposits have been reported above a 1.0% Cu cut-off grade. The Orlando deposit has been
reported above a 1.) g/t gold equivalent cut-off grade.
2 The gold equivalent calculation for reporting at Orlando assumes a gold price of US$1,806/oz for gold and
US$3.74/lb for total copper, a FOREX of $0.66 AUD and assumes a 92% recover for gold and an 86% recovery
for copper through mining and processing. AU_EQ = AU_PPM + ((CU_PPM/10000) x 1.33).
3 Rounding may result in some inconsistencies in the values.
Competent Person Statements
Tennant Creek
The information in this report (being information contained in the Company’s ASX Announcement dated 3 April
2023) that relates to Exploration Results and data that was used to compile the Mineral Resource estimate at
Tennant Creek is based on, and fairly represents, information which has been compiled by Mr Ian Glacken. Mr
Glacken is a Fellow and Chartered Professional of The Australasian Institute of Mining and Metallurgy. Mr
Glacken is a consultant for Snowden Optiro engaged by CuFe. Mr Glacken has sufficient experience that is
relevant to the style of mineralisation and type of deposit under consideration and to the activity that is being
undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Glacken consents to the inclusion in
this report of the matters based on his information in the form and context in which they appear (being
information reported in the Company’s ASX Announcement dated 3 April 2023).
12
Directors’ Report
Annual Report 2023
JWD Iron Ore Project
The information in this report that relates to the JWD Iron Ore Project Resource Estimation is based on
information compiled by Matthew Ramsden, who is a Member of the Australasian Institute of Geoscientists and a
full-time employee of CuFe Ltd. Matthew Ramsden has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (the “JORC Code”). Mr Ramsden believes that the information in
this report pertaining to former resource reporting is an accurate representation of the available data and
studies for the material mining project. Mr Ramsden consents to the inclusion in the report of the Resource
Estimation in the form and context in which they appear.
Yarram Project
The information in this report that relates to the Yarram Project geology is based on, and fairly represents,
information which has been compiled by Siobhan Sweeney is a Member of the Australasian Institute of
Geoscientists and a full-time employee of CuFe. Siobhan Sweeney has sufficient experience that is relevant to
the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken to
qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Siobhan Sweeney consents to the inclusion in this
report of the matters based on his information in the form and context in which they appear.
North Dam Project
The information in this report that relates to the North Dam Project geology is based on, and fairly represents,
information which has been compiled by Matthew Ramsden, a Member of the Australasian Institute of
Geoscientists and a full-time employee of CuFe Ltd. Matthew Ramsden has sufficient experience that is relevant
to the style of mineralisation and type of deposit under consideration and to the activity that is being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Matthew Ramsden consents to the inclusion in this
report of the matters based on his information in the form and context in which they appear.
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Completion of Restructure Transaction
As detailed in the ‘Corporate’ section above, the Restructure Transaction was completed on 1 September 2023.
Upon completion, the Company now holds:
▪
▪
▪
100% interest in the JWD iron ore mine project;
55% interest in the Tennant Creek project; and
50% interest in the Yarram Iron Ore Project.
Acquisition of West Arunta (Niobium) and Tambourah (Lithium) Exploration Tenure
On 11 July 2023 the Company announced it had entered an agreement to acquire two exploration tenements:
•
•
E80/5925 located in the West Arunta region, approximately 620km south of Kununurra is considered
prospective for carbonatite hosted REE including niobium; and
P45/3061 located in the Tambourah region of the Pilbara, approximately 90km south of Pilgangoora and
Wodgina Lithium Operations and is considered prospective for lithium.
Consideration payable for the acquisition was 30,000,000 shares. The tenement acquisition was completed on 7
August 2023.
Issue of Shares
The following shares were issued subsequent to year end:
▪
▪
30,000,000 shares were issued as consideration for the acquisition of West Arunta (Niobium) and
Tambourah (Lithium) Exploration Tenure; and
150,000,000 shares were issued in respect of the Restructure Transaction.
13
Directors’ Report
Annual Report 2023
Movements in Options
The following movements in options occurred subsequent to year end:
▪
▪
13,000,000 unlisted options at $0.02 expiring 7 August 2023 were issued under the Company’s ESIP;
3,000,000 unlisted options at $0.04 expired on 31 August 2023.
There have been no other events subsequent to 30 June 2023 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, 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 during or since the financial year.
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
Scott Meacock
Eligible
2
2
2
-
Attended
2
2
2
-
14
Directors’ Report
Annual Report 2023
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
S Meacock
Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director (appointed 5 December 2022)
Other Key Management Personnel
J Sinclair
Project Director (ceased 2 December 2022)
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.
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 2022 AGM
The 2022 remuneration report received positive shareholder support at the 2022 AGM whereby of the proxies
received 99.65% voted in favour of the adoption of the remuneration report.
15
Directors’ Report
Annual Report 2023
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 2019
30 June 2020
30 June 2021
30 June 2022
30 June 2023
(1,668)
5,908
(2,511)
(165)
(11,155)
Loss per share
(Cents)
(0.44)
1.22
(0.44)
(0.02)
(1.15)
Share Price
(Cents)
1.70
1.30
5.10
1.80
1.40
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. During the year, Mr
Nicholas Sage was entitled to receive remuneration of:
▪
▪
$60,000 per annum for the period 1 July 2022 to 30 November 2022; and
$36,000 per annum for the period 1 December 2022 to 30 November 2023.
Non-Executive Director Remuneration – Mr Scott Meacock (Appointed 5 December 2022)
Effective from his date of appointment on 5 December 2022, in accordance with terms of his letter of
appointment, Mr Scott Meacock is entitled to receive fees of $36,000 (inclusive of statutory superannuation) per
annum for the provision of non-executive director services.
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 (Ceased 2 December 2022)
The Company 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. In addition, the Company made a short-term incentive
payment of $50,000, awarded on performance measures linked to FY22 JWD production volume, progress on
projects, and safety. Mr Jeremy Sinclair ceased to be engaged 2 December 2022.
16
Directors’ Report
Annual Report 2023
Compensation of Key Management Personnel
Consolidated
Short-Term
Short-Term
Year ended 30 June 2023
Salary & Fees
Directors
A Sage
M Hancock
N Sage
S Meacock (ii)
Other KMP
J Sinclair (iii)
Total
$
180,000
210,000
46,000
18,758
134,564
589,322
Performance
Incentive
$
-
-
-
-
50,000
50,000
Post-
Employment
Superannuation
Share-based
Payment
Share Options (i)
Total
Performance
Based
Comprising
Options
$
$
$
%
%
-
-
-
1,970
-
1,970
32,576
32,576
-
-
-
65,152
212,576
242,576
46,000
20,728
184,564
706,444
-
-
-
-
27%
7%
15%
13%
-
-
-
9%
(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.
(ii) Appointed 5 December 2022.
(iii) Ceased to be engaged 2 December 2022.
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.
17
Directors’ Report
Annual Report 2023
Shareholdings of Key Management Personnel
30 June 2023
Directors
A Sage(i)
M Hancock
N Sage
S Meacock (ii)
Other KMP
J Sinclair
(i)
Indirectly held.
Balance at
1 July 2022
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2023
21,673,010
2,500,000
-
-
1,100,000
25,273,010
-
-
-
-
-
-
7,500,000
-
-
-
-
7,500,000
-
-
-
-
1,000,000
2,500,000
-
4,000,000
(100,000)
(100,000)
(1,000,000)
6,500,000
30,173,010
5,000,000
-
4,000,000
-
39,173,010
(ii) Upon date of his appointment, Mr Meacock held 300,000 shares and an interest via agreement to acquire 1,700,000 shares (settled via off market transfer
on 20 December 2022). At 30 June 2023, Mr Meacock held an interest via agreement to acquire 2,000,000 shares (settled via off market transfer on 6
July 2023).
(iii) At the date he ceased as a consultant to the Company on 2 December 2022, Mr Sinclair held 1,000,000 shares.
30 June 2022
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
18
Directors’ Report
Annual Report 2023
Option and right holdings of Key Management Personnel
Acquired
/granted
during year
10,000,000 (i)
10,000,000 (i)
-
-
15,000,000
15,000,000
-
Directors
A Sage
M Hancock
N Sage
S Meacock
Other KMP
J Sinclair
30 June 2023
Balance at 1 July
2022
Exercised Expired/lapsed
during year
Net change
other
Balance at
30 June 2023
Exercisable
Not
Exercisable
13,250,000
43,250,000
5,000,000 (ii)
25,000,000
-
(7,500,000)
(15,250,000)
(37,750,000)
(3,000,000)(iii)
(3,000,000)
(7,500,000)
-
-
-
(7,500,000)
(15,000,000)
-
-
-
-
-
-
10,000,000
10,000,000
-
-
-
20,000,000
-
-
-
-
-
-
10,000,000
10,000,000
-
-
-
20,000,000
(i)
Includes 10,000,000 unlisted options with vesting conditions granted to each of Mr Tony Sage (or nominee) and Mr Mark Hancock (or nominee) (total of
20,000,000 options) at an exercise price of $0.027 each and an expiry date of 7 September 2024, which were formally issued following receipt of
shareholder approval at the Company’s AGM held 30 November 2022. 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. These options shall vest subject to remaining as an appointed Director of the Company on 7 September 2023.
(ii) Unlisted options at an exercise price of $0.027 each and expiry date of 7 September 2024 subject to vesting condition of remaining engaged on 7
September 2023.
(iii) At the date he ceased as a consultant to the Company on 2 December 2022, Mr Sinclair retained 3,000,000 unlisted options at an exercise price of $0.06
and expiry date of 30 June 2023.
30 June 2022
Balance at 1 July
2021
Acquired
/granted
during year
Exercised Expired/lapsed
during year
Net change
other
Balance at
30 June 2022
Exercisable
Not
Exercisable
Directors
A Sage
M Hancock
N Sage
Other KMP
J Sinclair
15,000,000
15,000,000
2,500,000
10,000,000
42,500,000
-
-
-
-
-
-
5,000,000
5,000,000
(1,750,000)
(1,750,000)
-
-
-
-
-
-
-
(2,500,000)(i)
15,000,000
15,000,000
-
10,500,000
10,500,000
-
4,500,000
4,500,000
-
-
(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.
19
Directors’ Report
Annual Report 2023
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
During the year ended 30 June 2023, shareholder approval was received for the issue of 20,000,000 unlisted at
an exercise price of $0.027 each and an expiry date of 7 September 2024 to Directors Mr Tony Sage
(10,000,000 options), Mr Mark Hancock (10,000,000 options) (or their nominees) (Director Options).
The vesting condition in respect of the Director Options is as follows:
▪
Vest and become exercisable subject to remaining as an appointed director of the Company on 7
September 2023.
Details of the Director Options awarded are summarised as follows:
Number of
Options
Exercise price
per option
Expiry date
Estimated fair value
of options at grant
date
A Sage
M Hancock
10,000,000
10,000,000
$0.027
$0.027
7 September 2024
7 September 2024
$0.0043
$0.0043
Options awarded to Other KMP
During the year ended 30 June 2023, Mr Jeremy Sinclair was awarded 5,000,000 unlisted options at an exercise
price of $0.027 and an expiry date of 7 September 2024 under the Company’s shareholder approval Employee
Securities Incentive Plan (ESIP) (ESIP Options).
The vesting condition in respect of the ESIP Options is as follows:
▪
Vest and become exercisable subject to remaining engaged as a consultant to the Company on 7
September 2023.
Details of the ESIP Options awarded are summarised as follows:
J Sinclair
5,000,000
$0.027
7 September 2024
$0.0078
Number of
Options
Exercise price
per option
Expiry date
Fair value of options at
grant date
Unlisted options awarded to Director or other KMPs which lapsed or expired during the year ended 30 June 2023
are summarised as follows:
Number of
Options
Exercise price
per option
Expiry date
Lapsed / Expired
during the year
A Sage
M Hancock
M Hancock
J Sinclair
J Sinclair
J Sinclair
J Sinclair
7,500,000
7,500,000
7,500,000
3,250,000
2,000,000
5,000,000
5,000,000
$0.060
$0.030
$0.060
$0.030
$0.060
$0.040
$0.027
30 June 2023
31 August 2022
30 June 2023
31 August 2023
30 June 2023
31 August 2023
7 September 2024
Expired
Expired
Expired
Expired
Lapsed
Lapsed
Lapsed
Transactions with directors, director related entities and other related parties
During the year ended 30 June 2023, an aggregate amount of $80,989 (30 June 2022: $686) was paid or
payable to Cyclone Metals Ltd (Cyclone) for warehouse rental, IT and other corporate costs. At 30 June 2023,
$36,731 (plus GST) was payable to Cyclone (30 June 2022: nil). During the year ended 30 June 2023, nil was
received or receivable from Cyclone for reimbursement of other corporate costs (30 June 2022: $250). At 30
June 2023, nil was receivable from Cyclone (30 June 2022: $250). Mr Antony Sage is a director of Cyclone.
During the year ended 30 June 2023, an aggregate amount of $1,000 (30 June 2022: $13,007) was paid or
payable to European Lithium Ltd (European Lithium) for reimbursement of travel and other corporate costs.
20
Directors’ Report
Annual Report 2023
At 30 June 2023, nil was payable to European Lithium (30 June 2022: nil). During the year ended 30 June 2023,
nil was received or receivable from European Lithium for reimbursement of other corporate costs (30 June 2022:
$1,410). At 30 June 2023, nil was receivable from European Lithium (30 June 2022: nil). Mr Antony Sage is a
director of European Lithium.
During the year ended 30 June 2023, an aggregate amount of $107,275 (30 June 2022: $130,475) was paid or
payable to Okewood Pty Ltd (Okewood) for office rent and corporate box sponsorship. At 30 June 2023, nil was
payable to Okewood (30 June 2022: nil). Mr Antony Sage is a director of Okewood.
During the year ended 30 June 2023, an amount of $654,578 (30 June 2022: nil) was paid or payable to Gold
Valley Iron Ore Pty Ltd (a substantial shareholder of the Company) (GVIO) for royalty payments following their
purchase of the rights of GWR Group Limited (GWR) over the JWD deposit (reflecting the Group’s 60% share of
the total $1,090,963 royalty expenses). At 30 June 2023, nil was payable to GVIO (30 June 2022: nil).
End of Remuneration Report
21
Directors’ Report
Annual Report 2023
AUDITOR’S INDEPENDENCE DECLARATION
Section 307C of the Corporations Act 2001 (Cth) requires the Company’s auditor, Stantons, 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 23 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, during the year.
This report is signed in accordance with a resolution of the Board of Directors.
Mr Antony Sage
Executive Chairman
28 September 2023
22
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
28 September 2023
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
2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(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
23
Corporate Governance Statement
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement for the year ended 30 June 2023 (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 2023
24
Consolidated Statement of Comprehensive Income
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2023
Notes
Consolidated
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)
24(a)
16
3(f)
4
Year ended
30 June 2023
Year ended
30 June 2022
$
$
35,021,811
(40,221,450)
(5,199,639)
32,997,036
(34,381,296)
(1,384,260)
47,585
3,211,614
37,450
9,132,230
(834,818)
(1,013,699)
(406,377)
(77,544)
(114,428)
(4,231,981)
(371,410)
(94,062)
(178,606)
(589,625)
(1,301,765)
(11,154,755)
-
(11,154,755)
(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)
-
-
-
-
Total comprehensive (loss) for the year
(11,154,755)
(164,915)
(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
(1.15)
(1.15)
(0.02)
(0.02)
The accompanying notes form part of these financial statements.
Annual Report 2023
25
Consolidated Statement of Financial Position
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Notes
Consolidated
ASSETS
Current Assets
Cash and cash equivalents
Restricted cash
Inventory
Trade and other receivables
Other assets
Financial asset
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
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
20
30 June
2023
30 June
2022
$
$
3,896,360
360,000
3,711,719
3,040,933
147,141
318,818
11,474,971
9,184,992
1,793,658
22,628
-
2,409,727
13,411,005
24,885,976
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
8,586,775
1,797,624
-
131,208
10,515,607
11,147,544
1,304,510
276,852
131,208
12,860,114
566,189
566,189
505,637
505,637
11,081,796
13,365,751
13,804,180
24,619,507
21
22
23
58,847,052
(49,403,566)
4,360,694
13,804,180
58,622,052
(38,248,811)
4,246,266
24,619,507
Annual Report 2023
26
Consolidated Statement of Changes in Equity
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2023
Consolidated
Balance at 1 July 2022
Loss for the year ended
30 June 2023
Other comprehensive income/(loss)
Transactions with owners in their capacity as owners:
Shares issued (Exercise of Options)
Share-based payments
Contributed
equity
$
Accumulated
losses
$
Share-based
payments reserve
$
Other Reserve
$
Total
$
58,622,052
(38,248,811)
4,362,697
(116,431)
24,619,507
-
-
-
(11,154,755)
-
(11,154,755)
-
-
-
225,000
-
-
-
-
114,428
-
-
-
-
-
(11,154,755)
-
(11,154,755)
225,000
114,428
Balance at 30 June 2023
58,847,052
(49,403,566)
4,477,125
(116,431)
13,804,180
Consolidated
Balance at 1 July 2021
Loss for the year ended
30 June 2022
Other comprehensive income/(loss)
Contributed
equity
$
Accumulated
losses
$
Share-based
payments reserve
$
48,172,188
(38,083,896)
2,861,702
-
-
-
(164,915)
-
(164,915)
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)
-
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
715,500
222,698
562,797
-
Balance at 30 June 2022
58,622,052
(38,248,811)
4,362,697
The accompanying notes form part of these financial statements.
Annual Report 2023
27
Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2023
Notes
Consolidated
Year ended
30 June 2023
$
Year ended
30 June 2022
$
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
Net cash flows from/(used in) operating activities
6(a)
Cash flows from investing activities
Receipts from commodity collar/swaps transactions closed
Purchase of exploration assets
Purchase of plant and equipment
Payment for right to mine (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
Investment in joint venture
Proceeds from sale of exploration assets
Transfer of funds from/(to) to security deposit
Transfer of funds from/(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
Net cash flows from/(used in) financing activities
Net (decrease)/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.
34,706,698
(40,865,823)
47,585
(1,422,556)
(378,487)
-
-
(7,912,583)
5,993,663
(308,165)
(8,993)
-
(51,570)
-
-
(1,107,470)
-
109,242
-
4,626,707
-
225,000
17,244,660
(17,188,975)
(292,359)
(11,674)
(3,297,550)
7,193,910
3,896,360
33,199,992
(36,095,366)
27,450
(777,672)
(313,868)
(78,896)
500,000
(3,538,360)
5,559,470
(5,091,352)
(6,518)
(1,080,000)
(900,958)
250,000
1,000,000
(532,063)
575,000
(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
Annual Report 2023
28
Notes to the Consolidated Financial Statements
Annual Report 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1
CORPORATE INFORMATION
The financial report of CuFe Ltd (CUF or the Company) and the financial statements comprising CUF
and its controlled entities (together the Group) for the year ended 30 June 2023 was authorised for
issue in accordance with a resolution of the directors on 28 September 2023.
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.
The Group had recorded a loss before income tax of $11,154,755 for year ended 30 June 2023. At
balance date, the Group had cash and cash equivalents of $3,896,360 (30 June 2022: $7,193,910)
and a net working capital surplus of $599,364 (excluding restricted cash) (30 June 2022: $7,105,907
surplus). During the year, the Group recorded net cash outflows from operations of $7,912,583, net
cash inflows from investing activities of $4,626,707 and net cash outflows from financing activities of
$11,674, resulting in net decrease in cash and cash equivalents of $3,297,550.
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, Tennant
Creek Project, North Dam and Tambourah).
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, 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 2023
Annual Report 2023
29
Notes to the Consolidated Financial Statements
Annual Report 2022
During the year ended 30 June 2023, 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 2022. 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 2022 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 2023. 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 2023.
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 2023
30
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 2023
31
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 of disposal (FVLCD). 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 asset’s 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 2023
32
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 2023
33
Notes to the Consolidated Financial Statements
Annual Report 2022
(o)
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.
(p)
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.
(q)
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.
(r)
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.
(s)
Revenue from contracts with customers
AASB 15 Revenue from Contracts with Customers requires an entity to recognise revenue in a
manner that represents performance obligations related to 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
Annual Report 2023
34
Notes to the Consolidated Financial Statements
Annual Report 2022
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).
(t)
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.
(u)
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.
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.
Annual Report 2023
35
Notes to the Consolidated Financial Statements
Annual Report 2022
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.
(v)
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.
(w)
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.
(x)
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.
(y)
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
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 decisions about the
relevant activities (being those that significantly affect the returns of the arrangement) require the
unanimous consent of the parties sharing control.
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.
Annual Report 2023
36
Notes to the Consolidated Financial Statements
Annual Report 2022
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.
(z)
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.
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.
Annual Report 2023
37
Notes to the Consolidated Financial Statements
Annual Report 2022
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.
(aa)
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.
(bb)
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
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.
(cc)
Significant accounting estimates and assumptions
In the process of applying the Group’s accounting policies management has the following significant
accounting judgements apart from those involving estimations, which have the most significant effect
on the amounts recognised in the financial statements.
Annual Report 2023
38
Notes to the Consolidated Financial Statements
Annual Report 2022
Determination of mineral resources and ore reserves
The Group reports its mineral resources and ore reserves in accordance with the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2004 Edition (‘the JORC code’)
as a minimum standard. The mineral resources for the JWD Iron Ore Project have been prepared in
accordance with JORC 2004. The mineral resources for the Yarram Iron Ore Project and Tennant
Creek Copper Project, and have been prepared in accordance with JORC 2012. The information on
mineral resources and ore reserves were prepared by or under the supervision of Competent Persons
as defined in the JORC code.
There are numerous uncertainties inherent in estimating mineral resources and ore reserves and
assumptions that are valid at the time of estimation may change significantly when new information
becomes available. Changes in the forecast prices of commodities, exchange rates, production costs
or recovery rates may change the economic status of reserves and may, ultimately, result in reserves
or resources being restated.
Impairment of capitalised acquisition costs on exploration and evaluation projects
Acquisition costs incurred in acquiring exploration assets are carried forward where right of tenure of
the area of interest is current. These costs are carried forward in respect of an area that has not at
balance sheet date reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves. The future recoverability of these costs is dependent on a number
of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it
successfully recovers the related exploration and evaluation asset through sale. Factors that could
impact the future recoverability include the level of reserves and resources, future technological
changes, which could impact the cost of mining, future legal changes (including changes to
environmental restoration obligations) and changes to commodity prices. To the extent these
capitalised costs are determined not to be recoverable in the future, profits and net assets will be
reduced in the period in which this determination is made.
Share-based payment transactions
The Group measures the cost of equity-settled and cash-settled transactions by reference to the fair
value of the goods or services received in exchange if it can be reliably measured. If the fair value of
the goods or services cannot be reliably measured, the costs is measured by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by
using the Black-Scholes model and the assumptions and carrying amount at the reporting date, if
any, is disclosed in note 24.
Deferred taxation
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, base level of future
taxable profits together with future tax planning strategies.
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
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.
Mine properties
Ore reserves are estimates of the quantum of ore that can be economically and legally extracted from
the Group’s mining properties. The Group estimates its Ore Reserves and Mineral Resources based on
information compiled by appropriately qualified persons relating to the geological data on the size,
depth, and shape of the ore body and this requires complex geological judgements to interpret data.
Annual Report 2023
39
Notes to the Consolidated Financial Statements
Annual Report 2022
The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange
rates, commodity prices, future capital requirements, and production costs along with geological
assumptions and judgements made in estimating the size and grade of the ore body. Changes in the
reserve or resource estimates may impact upon the carrying value of exploration and evaluation
assets, mine properties, property, plant and equipment, goodwill, provision for rehabilitation,
recognition of deferred assets, and depreciation and amortisation charges.
Inventories
Accounting for inventories involves the use of estimates, particularly the measurement and valuation
of inventory on hand. Critical estimates including pit volumes and density are calculated by
consultants using available industry, engineering and scientific data.
Estimation of useful lives of property, plant and equipment
Useful lives and residual value of property, plant and equipment are reviewed annually. Judgement is
applied in determining the useful lives of property, plant and equipment. Any reassessment of useful
lives and residual value in a particular year will affect depreciation and amortisation expense (either
increasing or decreasing) from the date of reassessment through to the end of the reassessed useful
life for both the current and future years.
Trade and other receivables
The collectability of trade and other receivables, including the receivable from the sale of mining
rights, is assessed continuously. At the reporting date, no allowances were made for any expected
credit losses based on a review of all outstanding amounts at reporting period-end.
Environmental rehabilitation provisions
A provision has been made for the present value of anticipated costs for future restoration of mineral
leases. The provision includes future cost estimates associated with rehabilitating areas of disturbance
caused through the exploration and mining activities of the Group. The calculation of this provision
requires assumptions such as the timing and cost estimates. In determining its calculation for the
JWD Iron Ore Project, the Group refers to the Rehabilitation Estimate Calculation pursuant to the
Mining Rehabilitation Fund Regulations 2013 based on an estimate of area of disturbance.
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 (loss)/gain on financial asset – commodity
collar/swap contracts (FVPL)1
Unrealised gain on financial asset – foreign currency
contracts (FVPL)
Management fee income (JV)
Tenement management fee
Rental recharges income
Recoverable of receivable
Gain on sale of tenements
Gain on acquisition (Tennant Creek)
Fair value gain/(loss) on financial asset through profit and
loss (refer note 11)
2023
$
2022
$
35,021,811
35,021,811
32,997,036
32,997,036
47,585
-
47,585
7,478
29,972
37,450
6,184,540
5,344,496
(3,237,062)
3,325,609
82,201
48,000
-
22,648
42,674
-
-
-
48,900
7,525
2,717
-
325,000
75,000
68,613
3,211,614
2,983
9,132,230
1 The loss amount shown for the year ended 2023 in this line item includes a reversal of $3,325,609
financial asset recorded at 30 June 2022 (unrealised gain reported in the year ended 2022).
Annual Report 2023
40
Notes to the Consolidated Financial Statements
Annual Report 2022
(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
(f)
Other expenses
Promotional and investor relations
Occupancy costs
Insurance costs
Stamp Duty
Doubtful debts expense
Other
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
2023
$
2022
$
(3,604,386)
(11,020,493)
(18,399,076)
(827,169)
(3,343,896)
(499,705)
(1,441,390)
-
(1,085,335)
(40,221,450)
(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)
(456,727)
(341,351)
(36,740)
(834,818)
(450,000)
(611,796)
(40,732)
(1,102,528)
(63,250)
(73,325)
(113,655)
-
(43,534)
(1,008,001)
(1,301,765)
(78,668)
(62,374)
(219,493)
(126,038)
-
(381,686)
(868,259)
2023
$
2022
$
-
-
-
-
-
-
2023
$
2022
$
(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% (2022: 25%)
Tax effect on impairment losses
Tax effect on non-temporary differences
Unrecognised tax losses and temporary differences
Utilised tax losses
Income tax expense reported in statement of comprehensive income
(11,154,755)
(164,915)
(2,788,688)
10,883
34,837
2,742,968
-
-
(41,228)
-
148,923
21,672
(129,367)
-
(c) Deferred tax liabilities
Employee leave provision
Accrued interest
Gain/loss on financial assets
Less: offset by deferred tax asset
Deferred tax liabilities
Annual Report 2023
(39)
(525)
(15,402)
(15,966)
15,966
-
-
-
-
-
-
-
41
Notes to the Consolidated Financial Statements
Annual Report 2022
(d) Deferred tax assets
Accrued expenditure
Accrued interest
Provision for rehabilitation
Provision for demobilisation
Employee leave provision
Gain/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.
2023
$
2022
$
4,375
-
103,899
70,450
-
-
5,723,375
5,902,099
(15,966)
5,886,133
5,500
1,443
87,921
71,290
24,379
1,751
2,984,219
3,176,503
-
3,176,503
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 $5,723,375
(tax effected) (2022: $2,984,219 (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) (2022: $7,361,617 (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.
5 LOSS PER SHARE
Basic loss per share
Continuing operations
Diluted loss per share
Continuing operations
2023
Cents
(1.15)
(1.15)
(1.15)
(1.15)
2022
Cents
(0.02)
(0.02)
(0.02)
(0.02)
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 2023 and 30 June 2022 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
2023
$
(11,154,755)
(11,154,755)
2023
No.
2022
$
(164,915)
(164,915)
2022
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
965,968,134
880,735,413
-
-
965,968,134
880,735,413
Annual Report 2023
42
Notes to the Consolidated Financial Statements
Annual Report 2022
The unlisted options outstanding at 30 June 2023 and 30 June 2022 were found to have an anti-dilutive
effect on the calculation. At 30 June 2023 and 30 June 2022, the basic earnings/(loss) per share is equal to
the diluted earnings/(loss) per share.
5 CASH AND CASH EQUIVALENTS
Cash and cash equivalents
Cash at bank and on hand
2023
$
2022
$
3,896,360
7,193,910
Cash at bank and on hand earns interest at the floating rates based on daily bank deposit rates.
(a) Reconciliation of net loss after tax to net cash flows from operations
Net loss for the year
(11,154,755)
(164,915)
2023
$
2022
$
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/loss on financial asset – commodity collar/swap
contracts (FVPL)
Unrealised gain on financial asset – foreign currency contracts (FVPL)
Recovery of receivable
Doubtful debts expense
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 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
9,265
4,222,716
114,428
589,625
9,860
2,758,200
562,797
266,878
(5,993,663)
(5,559,470)
3,237,062
(82,201)
(42,674)
43,534
-
-
(68,613)
2,029,479
2,168,991
30,344
856,449
(1,599,579)
(243,514)
-
1,212,693
(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
Net cash flow from / (used in) operating activities
(7,912,583)
(3,538,360)
(b) Non-cash investing and financing activities
Year ended 30 June 2023
There were no non-cash investing and financing activities during the year ended 30 June 2023.
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 13(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 13(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
Annual Report 2023
43
Notes to the Consolidated Financial Statements
Annual Report 2022
12,500,000 shares (non-cash payment $425,000) on 11 April 2022. Refer note 12(b) for further
details.
6
RESTRICTED CASH
Restricted cash
7
INVENTORY
Diesel fuel
Work in Progress Run of Mine
Finished Goods Site
Finished Goods Port
8 TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Net GST receivable
Deposits
Other receivable (a)
Other advance (b)
Tax receivable
2023
$
2022
$
360,000
469,242
2023
$
70,844
1,596,696
176,696
1,867,484
3,711,719
2023
$
373,129
956,879
29,657
1,097,513
431,591
152,164
3,040,933
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
(a) Relates to an amount receivable in respect of the Wiluna Iron Joint Operation, being an advance of
$1,097,513. 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 $1,097,513 shown in the consolidated financial statements
reflects $2,743,783 (being 100% of the advance receivable by CuFe Ltd from Wiluna Iron Joint
Venture) less $1,646,270 (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) As referred to at note 17(b) and note 16(b)(3), the Company obligation in respect of the
$1,900,000 subscription funds payable was satisfied during the year ended 30 June 2023. As at 30
June 2023, the Company had made total payments of $2,331,591 for and on behalf of the Yarram
Iron JV; the excess expenditure amount of $431,591 shown as ‘other advance’ above.
As part of the Restructure Transaction referred to at note 32, the Yarram milestone payment of
$1.5m has been re-structured from completion of the Restructure Transaction. Under the
subscription agreement pursuant to which the 50/50 Yarram Joint Venture was formed, CuFe
agreed to make a milestone payment to Goldvalley Brown Stone Pty Ltd (GVBS) of $500k in cash
and $1m in cash or shares at CuFe’s election, payable upon CuFe announcing an Indicated JORC
Mineral Resource Estimate of 3mt grading in excess of 60% Fe at the Yarram Iron Ore Project. This
obligation has been restructured such that CuFe has agreed to carry the next $500k of GVBS’s joint
venture costs (Next Carry) under the Yarram Joint Venture and the $1m payable to GVBS in cash
or shares at CuFe’s election is deferred until a decision to mine is made on the Yarram Iron Project.
Annual Report 2023
44
Notes to the Consolidated Financial Statements
Annual Report 2022
The ’other advance’ amount referred will be applied to the Next Carry obligation in the next financial
reporting period.
(c) None of the receivables are past due and/or impaired.
9 OTHER ASSETS
Prepaid expenses
10 FINANCIAL ASSET
Fair value through profit or loss (FVTPL) – equity investment (a)
Fair value through profit or loss (FVTPL) – commodity collars/swaps
Fair value through profit or loss (FVTPL) – foreign currency contracts
(a) Movements
Balance at beginning of year
Purchase of equity investment
FVTPL
Balance at end of the year
11 EXPLORATION ASSETS
Acquisition Cost – Tenements pursuant to Tennant Creek Transaction
Acquisition Cost – North Dam Project
Movements in exploration assets
Carrying value at beginning of period
Consideration in cash (North Dam Project) (a)
Stamp duty and other acquisition costs (North Dam Project) (a)
Consideration in cash (Tennant Creek Transaction) (b)
Consideration in shares (Tennant Creek Transaction) (b)
Consideration in options (Tennant Creek Transaction) (b)
Deferred Consideration (Tennant Creek transaction) settled (b)
Stamp duty (Tennant Creek Transaction) (b)
Balance at end of period
2023
$
2022
$
147,141
147,141
177,485
177,485
2023
$
149,158
87,459
82,201
318,818
80,545
-
68,613
149,158
2022
$
80,545
3,324,522
-
3,405,067
77,562
-
2,983
80,545
2023
$
2022
$
8,866,852
318,140
9,184,992
8,866,852
-
8,866,852
8,866,852
300,000
18,140
-
-
-
-
-
9,184,992
-
-
-
3,000,000
2,550,000
715,500
2,000,000
601,352
8,866,852
(a) On 9 May 2023 the Company announced it had entered into an agreement to acquire tenement
E15/1495, covering approximately 14km2 of ground 20kms south of Mineral Resources Mt Marion
Mine and within 6kms of the Spargos Reward Gold Mine. Tenement E15/1495 is located
approximately 50km SSE of the township of Coolgardie, within the Southern Yilgarn Lithium Belt
that includes the known spodumene deposits such as the Bald Hill Mine, the Mt Marion Mine, the
Pioneer Dome Project, Manna Lithium Project and the Buldania Project.
Under the terms of the sale and purchase agreement, consideration includes $300,000 cash, a
$300,000 milestone payment payable in the event production occurs in the future from the tenure
(E15/1495 Milestone Payment), and a 1% gross sales royalty. The vendor retains rights to
gemstones on the tenement. The tenement acquisition was completed on 6 June 2023.
(b) 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.
Annual Report 2023
45
Notes to the Consolidated Financial Statements
Annual Report 2022
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 2021 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 21),
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 was determined to be $715,500 based
on a Black and Scholes valuation on 9 December 2021.
Stamp duty in respect of the Tennant Creek Acquisition was assessed at $601,352 which was 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.
(c) Restructure Transaction (Tennant Creek impact)
As part of the Restructure Transaction detailed at note 32, CUF’s interest in the Tennant Creek
Project has decreased from 60% to 55% on 1 September 2023.
12 MINE PROPERTIES AND DEVELOPMENT COSTS
Acquisition and capitalised costs – Wiluna Iron JV (a)
Accumulated amortisation – Wiluna Ion JV (b)
Movements
Carrying value at beginning of year
Milestone consideration paid / (refunded) in cash (decision to
mine) (a)
Milestone consideration paid in shares (decision to mine) (a)
Consideration paid in shares (additional 9% interest) (b)
Transfer prepaid royalty to Wiluna Iron Joint Venture
Expenditure incurred (c)
Amortisation
Closing value at end of year
2023
$
2022
$
8,065,864
(6,272,206)
1,793,658
7,710,381
(2,378,445)
5,331,936
5,331,936
-
2,892,656
(230,000)
-
-
-
355,483
(3,893,761)
1,793,658
250,000
2,500,000
(225,000)
2,522,725
(2,378,445)
5,331,936
(a)
CUF’s holds a 60% interest in the JWD Project at 30 June 2023 (30 June 2022: 60%).
(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.
Annual Report 2023
46
Notes to the Consolidated Financial Statements
Annual Report 2022
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 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 ended 30 June 2022, the $1,000,000 refundable deposit has been repaid
to CUF and on 28 July 2021 the shares were issued.
(d)
Costs incurred in respect of the development of the JWD Iron Ore Project have been capitalised.
(e)
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.
(f)
Restructure Transaction (JWD project impact)
As part of the Restructure Transaction detailed at note 32, CUF increased its interest in the iron ore
rights over the JWD iron ore mine from 60% to 100% on 1 September 2023.
13 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
14 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
2023
$
46,536
(23,908)
22,628
22,900
5,651
(9,265)
22,628
2022
$
37,543
(14,643)
22,900
26,242
6,518
(9,860)
22,900
2023
$
2022
$
-
-
-
716,827
(387,872)
328,955
328,955
-
(328,955)
-
-
716,827
(387,872)
328,955
(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 expired on 31 May 2023.
Annual Report 2023
47
Notes to the Consolidated Financial Statements
Annual Report 2022
15 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
2023
$
2022
$
2,409,727
2,999,352
2,999,352
-
(589,625)
2,409,727
3,266,230
-
(266,878)
2,999,352
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.
(b) The initial cost of investment (completed 22 December 2020) 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.
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.
The subscription funds payable amount was fully satisfied during the year ended 30 June 2023.
(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
2023
$
455
36,070
36,525
36,525
439,137
439,137
439,137
2022
$
677,807
99,376
777,183
777,183
546
546
546
NET ASSETS/(LIABILITIES)
(402,612)
776,637
Annual Report 2023
48
Notes to the Consolidated Financial Statements
Annual Report 2022
16 TRADE AND OTHER PAYABLES
Trade payables (a)
Employee related liabilities
Subscription funds payable (b)
Other payables and accruals (c)
2023
$
2022
$
5,935,523
158,874
-
2,492,378
8,586,775
8,832,717
159,825
677,352
1,477,650
11,147,544
(a) Trade payables are non-interest bearing and are normally settled on 30-day terms. The majority of
trade payables at 30 June 2023 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
16(b)(3)) (satisfied during the year ended 30 June 2023).
(c) Other payables are non-interest bearing and have varying terms.
17 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
(a) Stock Finance Facility
2023
$
2022
$
1,793,950
3,674
1,797,624
1,298,737
5,773
1,304,510
1,304,510
17,292,509
346,647
(17,188,975)
(346,647)
389,580
1,797,624
-
9,551,504
321,997
(8,456,839)
(319,647)
207,495
1,304,510
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 GVIO’s right (assigned by GWR Group Ltd (GWR
Group) to GVIO in July 2022) to elect to purchase up to 50,000 tonnes of fines product at the
mine gate.
As announced 12 January 2022, the agreement has been restructured to allow drawdowns of up
to USD$3,000,000 (CUF’s 60% share: USD$1,800,000) against stock held at port, to assist the
Company in management of working capital as required as Operator of the JWD JV (Stock
Finance Facility).
USD$984,925 (CUF’s 60% share: USD$590,955) has been drawn at 30 June 2023 against stock at
port. Funds drawn pursuant to the Stock Finance Facility are included in the above as A$890,163
(being CUF’s 60% share in AUD equivalent).
Loan Facility
As announced 20 January 2023, to assist in funding the working capital associated with the ramp
up of activity the Company negotiated a USD$2,000,000 prepayment facility with Glencore (Loan
Facility), which was drawn down in January 2023. As at 30 June 2023, there remains
USD$600,000 (A$903,787 equivalent) plus interest (A$3,674) owing under the Loan Facility.
Annual Report 2023
49
Notes to the Consolidated Financial Statements
Annual Report 2022
18 LEASE LIABILITY
Current
Right of use lease liability
Non-current
Right of use lease liability
Total
19 PROVISIONS
Current
Provision for demobilisation – JWD Project (a)
Non-current
Provision for rehabilitation – JWD Project (b)
Provision for demobilisation – JWD Project (a)
2023
$
2022
$
-
-
-
2023
$
131,208
131,208
415,596
150,593
566,189
276,852
-
276,852
2022
$
131,208
131,208
351,684
153,953
505,637
Total
697,397
636,845
(a) Included within the provision for demobilisation at 30 June 2023 is an amount of $131,208 which
reflects the Group’s 60% share of a total $218,680 amount which may be payable at end of the
camp lease (refer to note 15(a)).
(b) The provision for rehabilitation of $415,596 recorded in the statement of financial position at 30
June 2023 reflects the Group’s 60% share of the total $692,660 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 $692,660 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 $1,492,660), less $800,000 (project to
date) which has been prepaid pursuant to an agreement.
Annual Report 2023
50
Notes to the Consolidated Financial Statements
Annual Report 2022
20 CONTRIBUTED EQUITY
Ordinary shares
Issued and fully paid
2023
$
2022
$
58,847,052
58,622,052
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
2023
No. of shares
2023
2022
$ No. of shares
2022
$
958,612,365
58,622,052
699,445,024
48,172,188
-
-
-
-
-
-
-
-
4,807,692
250,000
43,859,649
2,500,000
85,000,000
2,550,000
12,500,000
425,000
-
7,500,000
-
225,000
100,000,000
13,000,000
5,000,000
355,000
-
-
966,112,365
-
-
58,847,052
-
-
958,612,365
(222,698)
(407,438)
58,622,052
Movements in ordinary shares on issue
Balance at beginning of year
Shares issued - milestone shares (Wiluna
JWD DTM) (a)
Shares issued - consideration (Wiluna JWD
additional 9% interest) (b)
Shares issued - completion shares
(Tennant Creek Transaction) (c)
Shares issued – completion shares
(Tennant Creek acquisition) (c)
Shares issued - Placement at $0.050 per
share (d)
Shares issued – exercise of options (e)
Share issue costs - options issued to Lead
Manager to Placement (d)
Share issue costs - cash
Balance at end of year
(a) Refer to note 13(b).
(b) Refer to note 13(c).
(c) Refer to note 12(b).
(d) 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).
(e) During the year ended 30 June 2023, the Company raised a total of $225,000 from the exercise of
the following unlisted options:
• 7,500,000 shares issued upon exercise of unlisted options exercisable at $0.03 expiring 31
August 2022
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
• 7,000,000 shares issued upon exercise of unlisted options exercisable at $0.025 expiring 31
March 2022
Annual Report 2023
51
Notes to the Consolidated Financial Statements
Annual Report 2022
Other Securities on Issue
Options over ordinary shares
Unlisted options
Listed options (ASX:CUFO)
2023
No.
2022
No.
120,750,000
70,000,000
190,750,000
148,500,000
70,000,000
218,500,000
Movements in options on issue
Balance at
1 July 2022
Granted
Exercised
Expired/
lapsed
No.
No.
No.
No.
Balance at
30 June
2023
No.
Share-based payments (refer note
24):
Unlisted options at $0.030 expiring
31/08/2022
Unlisted options at $0.040 expiring
31/08/2023
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 $0.10 expiring
09/12/2024
Unlisted options at $0.27 expiring
07/09/2024
Listed options at $0.06 expiring
24/11/2023
Free-attaching options:
Listed options at $0.06 expiring
24/11/2023
24,000,000
8,000,000
5,000,000
5,000,000
5,000,000
25,500,000
1,000,000
75,000,000
-
-
-
-
-
-
-
-
-
34,250,000
(7,500,000)
(16,500,000)
-
-
-
-
-
-
-
-
-
(5,000,000)
3,000,000
-
-
-
5,000,000
5,000,000
5,000,000
(25,500,000)
(1,000,000)
-
-
-
75,000,000
(6,500,000)
27,750,000
20,000,000
168,500,000
-
34,250,000
-
(7,500,000)
20,000,000
(54,500,000) 140,750,000
-
50,000,000
50,000,000
-
-
-
-
-
-
50,000,000
50,000,000
TOTAL
218,500,000
34,250,000
(7,500,000)
(54,500,000) 190,750,000
21 ACCUMULATED LOSSES
2023
2022
$
$
Accumulated losses
(49,403,566)
(38,248,811)
Movements in accumulated losses
Balance at beginning of year
Loss for the year
Balance at end of year
(38,248,811)
(11,154,755)
(49,403,566)
(38,083,896)
(164,915)
(38,248,811)
Annual Report 2023
52
Notes to the Consolidated Financial Statements
Annual Report 2022
22 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 24)
Balance at end of year
Nature and purpose of reserve
2023
2022
$
$
4,477,125
(116,431)
4,360,694
4,362,697
(116,431)
4,246,266
4,362,697
114,428
4,477,125
2,861,702
1,500,995
4,362,697
This reserve is used to record the value of share-based payments made to directors, employees, and
consultants, and as consideration to acquire assets (in the form of unlisted options).
23 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)
2023
$
2022
$
114,428
562,797
(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)
Share-based payments - investment accounted for using equity
method
(c) Share-based payments expensed through equity:
Options
-
-
-
-
-
-
-
-
Sub-total share-based payments – Options
Sub-total share-based payments – Shares
Total share-based payments
114,428
-
114,428
2,750,000
2,550,000
425,000
715,500
-
6,440,500
222,698
222,698
1,500,995
5,725,000
7,225,995
(i) During the year, the Company issued or granted the following options:
▪ 20,000,000 unlisted options exercisable at $0.027 expiring 7 September 2024 with vesting
conditions issued to Directors Mr Tony Sage (10,000,000 options), Mr Mark Hancock
(10,000,000 options) (or their nominees) (Director Options); and
▪ 14,250,000 unlisted options exercisable at $0.027 expiring 7 September 2024 with vesting
conditions issued pursuant to the Company’s ESIP (ESIP Options).
Annual Report 2023
53
Notes to the Consolidated Financial Statements
Annual Report 2022
(d) Fair value of options issued or granted
The fair value of unlisted options issued or granted during the period has been determined using a
Black-Scholes option pricing model. The following table lists the inputs to the model:
Expiry date
Valuation date
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per option ($)
Director Options*
ESIP Options
7 September 2024
30 November 2022
Nil
93%
3.19%
$0.027
Nil
1.77
$0.014
$0.0043
7 September 2024
7 September 2022
Nil
86%
3.25%
$0.027
Nil
2.00
$0.020
$0.0078
* Director Options (subject to receipt of shareholder approval) were initially proposed to be issued as announced 8
September 2022. Shareholder approval was received at the Company’s annual general meeting held 30 November
2022 (grant date).
(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
(f) Weighted average remaining contractual life
2023
No.
168,500,000
34,250,000
(7,500,000)
(54,500,000)
140,750,000
110,000,000
30,750,000
2023
WAEP
$0.071
$0.027
$0.030
$0.042
$0.073
$0.085
$0.028
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
The weighted average remaining contractual life for the options outstanding as at 30 June 2023 is 1.15
years (2022: 1.65 years).
(g) Fair value
The fair value of options granted during the year ended 30 June 2023 was $0.0058 (30 June 2022:
$0.0142).
(h) Options expired or lapsed
The following unlisted options expired or lapsed during the year (2022: 7,000,000):
5,000,000 unlisted options at $0.04 with an expiry date of 31 August 2023
16,500,000 unlisted options at $0.03 with an expiry date of 31 August 2022
1,000,000 unlisted options at $0.074 with an expiry date of 31 December 2022
25,500,000 unlisted options at $0.06 with an expiry date of 30 June 2023
6,500,000 unlisted options at $0.027 with an expiry date of 7 September 2023
▪
▪
▪
▪
▪
24 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.
Annual Report 2023
54
Notes to the Consolidated Financial Statements
Annual Report 2022
25 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 $13,804,180 at 30 June
2023 (30 June 2022: $24,916,507). 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, 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 Group also enters into foreign currency forward contracts to manage its exposure to
fluctuations in USD.
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.
Market risk
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 2023, 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
Trade and other receivables
Financial liabilities
Trade and other payables
Interest-bearing loans and borrowings
Net asset / (liability)
2023
$
515,029
205,577
2022
$
43,900
-
-
(1,797,624)
(203,480)
(1,304,510)
(1,077,018)
(1,464,090)
Annual Report 2023
55
Notes to the Consolidated Financial Statements
Annual Report 2022
The net liability exposure in USD at balance date is USD$715,003 (30 June 2022: net liability exposure
USD$1,008,944).
During the year, the Group entered into foreign currency forward contracts to manage its exposure to
fluctuations in USD. At balance date, a series of contracts remained open (settlement in July 2023) with a
fair value of $137,002 (CUF’s 60% share: $82,201). The fair value of these contracts has been recognised in
the consolidated statement of financial position 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 2023.
Commodity price risk
The Group’s operations are exposed to commodity price risk as the Group sells iron ore to its customers in
USD. 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. The contracts provided floor price
protection in relation to sales from the JWD Project. This hedging strategy resulted in realised gains of
$10,307,567 (CUF’s 60% share: $6,184,540) being recognised in the year ended 30 June 2023 (closed
positions).
At balance date, a series of contracts remained open (settlement dates between July to September 2023)
with a fair value of $145,765 (CUF’s 60% share: $87,458). The fair value of these contracts has been
recognised in the consolidated statement of financial position 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 2023.
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.
At balance date, the Group’s maximum exposure to interest rate risks on financial assets and financial
liabilities was as follows:
30 June 2023
Financial assets
Cash and cash equivalents
Restricted cash (term deposits)
Financial liabilities
Loans and borrowings
30 June 2022
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%
3,896,360
360,000
3,896,360
-
-
360,000
3,896,360
360,000
12%
(1,793,950)
2,462,410
-
3,896,360
(1,793,950)
(1,433,950)
(1,793,950)
2,462,410
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
Annual Report 2023
56
Notes to the Consolidated Financial Statements
Annual Report 2022
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
2023
$
9,741
(9,741)
2022
$
17,985
(17,985)
Equity
Higher/(Lower)
2023
$
-
-
2022
$
-
-
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 GVIO’s right (assigned by GWR Group Ltd to GVIO in July 2022) 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 or letters of credit. 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.
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.
Annual Report 2023
57
Notes to the Consolidated Financial Statements
Annual Report 2022
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
30 June 2023
Trade and other payables
Subscription funds payable
Lease liabilities
Loans and borrowings
30 June 2022
Trade and other payables
Subscription funds payable
Provision for demobilisation
Lease liabilities
Loans and borrowings
Fair value estimation
$
8,508,725
-
-
1,797,624
10,306,349
$
-
-
-
-
-
10,391,989
-
-
160,579
1,304,510
11,857,078
-
-
131,208
131,780
-
262,988
$
-
-
-
-
-
-
-
-
-
-
-
Total
contractual
cash flows
$
Carrying
amount of
liabilities
$
8,508,725
-
-
1,797,624
10,306,349
8,508,725
-
-
1,797,624
10,306,349
$
-
-
-
-
-
-
677,352
-
-
-
677,352
10,391,989
677,352
131,208
292,359
1,304,510
12,797,418
10,391,989
677,352
131,208
292,359
1,304,510
12,797,418
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 2023
Equity investment
Commodity collars/swaps
Foreign currency forward contracts
30 June 2022
Equity investment
Commodity collars/swaps
Carrying
Amount
$
Fair Value
Level 1
$
Level 2
$
Level 3
$
149,158
87,459
82,201
318,818
149,158
-
-
149,158
-
87,459
82,201
169,660
80,545
3,324,522
3,405,067
80,545
-
80,545
-
3,324,522
3,324,522
-
-
-
-
-
-
-
Annual Report 2023
58
Notes to the Consolidated Financial Statements
Annual Report 2022
26 COMMITMENTS AND CONTINGENCIES
Commitments
The following disclosures reflect the commitments applicable to the Group as at 30 June 2023 and its
interest in the various projects at that date.
Office Rental Commitments
The Group has entered into a 12-month lease with Okewood for office premises for a lease term expiring 30
April 2024. 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
2023
$
53,000
-
-
53,000
2022
$
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 $1,991,412 has
been spent to 30 June 2023, the remaining commitment at 30 June 2023 is $8,008,588).
Commitments in relation to Wiluna Iron JV (in which CUF has a 60% interest at 30 June 2023)
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 2024 with the ability to cancel prior to 30
September 2023 at the Company’s election.
• Licence Agreement Geraldton Port has been entered into with Fenix Port Services Pty Ltd. The current
term of the agreement expires 30 September 2023. The licence fee is only payable at a daily rate when
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.
• Haulage contract has been entered into with Combined Haulage Pty Ltd. The contract includes a 14 day
termination clause for convenience.
• 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.
Contractual commitments at 30 June 2023 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
Parent entity guarantee
2023
$
629,912
-
-
629,912
2022
$
3,731,124
-
-
3,731,124
Cufe Ltd has provided guarantees over certain of the obligations of its subsidiary company Wiluna Fe Pty Ltd
to GWR Group relating to the JWD Mineral Rights Agreement and Glencore relating to the JWD offtake.
Annual Report 2023
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
2023
$
136,859
-
-
136,859
2022
$
-
-
-
-
The following disclosures reflect the contingent liabilities applicable to the Group as at 30 June 2023 and its
interest in the various projects at that date.
Contingent Liabilities of Wiluna Iron JV (in which CUF has a 60% interest)
Mining Rights Agreement (MRA)
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 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 (noting this obligation was settled subsequent to year end via the transfer of 5% in
Tennant Creek in the transaction which completed 1 September 2023); 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.
During the year ended 30 June 2023, GWR Group assigned its rights and obligations to GVIO in relation to
the Mining Rights Agreement.
Contingent Liabilities of CUF in respect to the Yarram Transaction
Under the terms of the original agreement, 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).
In the recent transaction with Gold Valley Group which completed on 1 September 2023 this was amended
such that CuFe has agreed to carry the next $500,000 of Gold Valley Group’s joint venture costs and the
$1,000,000 payable in cash or shares is deferred until a decision to mine is made under the Yarram Joint
Venture.
Annual Report 2023
60
Notes to the Consolidated Financial Statements
Annual Report 2022
Contingent Liability of CUF in respect of acquisition of tenement E15/1495
Under the terms of the sale and purchase agreement, consideration includes $300,000 cash, a $300,000
milestone payment payable in the event production occurs in the future from the tenure (E15/1495
Milestone Payment), and a 1% gross sales royalty.
At 30 June 2023 there were no other contingent liabilities or contingent assets.
27 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
28 PARENT ENTITY FINANCIAL INFORMATION
Country of
Incorporation
Equity interest
%
2023
2022
Australia
Australia
Australia
Australia
Australia
Australia
Bermuda
Australia
Australia
100
100
100
100
100
100
100
50
50
100
100
100
100
100
100
100
50
50
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
2023
$
2022
$
4,762,278
16,541,914
21,304,192
8,182,064
25,710,878
33,892,942
(7,500,012)
-
(7,500,012)
(9,273,435)
-
(9,273,435)
13,804,180
24,619,507
58,847,052
(49,519,997)
4,477,125
13,804,180
58,622,052
(38,365,242)
4,362,697
24,619,507
(11,154,755)
(11,154,755)
(281,346)
(281,346)
Commitments, contingent liabilities and contingent assets of the parent entity are the same as those of the
Group as detailed at note 27 (with the exception of the commitments and contingent liabilities detailed at
note 27 as relating to the Wiluna Iron JV).
29 AUDITORS’ REMUNERATION
Amounts received or due and receivable by Stantons 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
2023
2022
$
$
116,239
87,468
Annual Report 2023
61
Notes to the Consolidated Financial Statements
Annual Report 2022
30 RELATED PARTY DISCLOSURES
Note 28 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 2023, an aggregate amount of $80,989 (30 June 2022: $686) was paid or
payable to Cyclone Metals Ltd (Cyclone) for warehouse rental, IT and other corporate costs. At 30 June
2023, $36,731 (plus GST) was payable to Cyclone (30 June 2022: nil). During the year ended 30 June
2023, nil was received or receivable from Cyclone for reimbursement of other corporate costs (30 June
2022: $250). At 30 June 2023, nil was receivable from Cyclone (30 June 2022: $250). Mr Antony Sage is a
director of Cyclone.
During the year ended 30 June 2023, an aggregate amount of $1,000 (30 June 2022: $13,007) was paid or
payable to European Lithium Ltd (European Lithium) for reimbursement of travel and other corporate
costs. At 30 June 2023, nil was payable to European Lithium (30 June 2022: nil). During the year ended 30
June 2023, nil was received or receivable from European Lithium for reimbursement of other corporate costs
(30 June 2022: $1,410). At 30 June 2023, nil was receivable from European Lithium (30 June 2022: nil).
Mr Antony Sage is a director of European Lithium.
During the year ended 30 June 2023, an aggregate amount of $107,275 (30 June 2022: $130,475) was
paid or payable to Okewood Pty Ltd (Okewood) for rent and corporate box sponsorship. At 30 June 2023,
nil was payable to Okewood (30 June 2022: nil). Mr Antony Sage is a director of Okewood.
During the year ended 30 June 2023, an amount of $654,578 (30 June 2022: nil) was paid or payable to
Gold Valley Iron Ore Pty Ltd (a substantial shareholder of the Company) (GVIO) for royalty payments
following their purchase of the rights of GWR Group over the JWD deposit (reflecting the Group’s 60% share
of the total $1,090,963 royalty expenses). At 30 June 2023, nil was payable to GVIO (30 June 2022: nil).
Options issued to directors or director related entities
Following receipt of shareholder approval at the Company’s 2022 AGM, a total of 20,000,000 unlisted
options were issued to directors (or their nominees) (being the Director Options).
Refer note 24 for further details.
Significant shareholders
At 30 June 2023, GVIO and its associates (Gold Valley Group) held a significant interest of 19.55% of
CUF. Mr Scott Meacock (appointed as a Director during the year) currently serves as Chief Executive
Officer and General Counsel of the Gold Valley Group.
At 30 June 2023, Cyclone Metals held a significant interest of 15.09% of CUF (30 June 2022: 15.13%). 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
Post-employment benefits
Share-based payments
2023
$
639,322
1,970
65,152
706,444
2022
$
798,000
-
327,093
1,125,093
Annual Report 2023
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 2023
Directors
A Sage(i)
M Hancock
N Sage
S Meacock (ii)
Other KMP
J Sinclair
Balance at
1 July 2022
Granted as
remuneration
Exercise of
options
Shares sold
Net change
other
Balance at
30 June 2023
21,673,010
2,500,000
-
-
1,100,000
25,273,010
-
-
-
-
-
-
7,500,000
-
-
-
-
7,750,000
-
-
-
-
1,000,000
2,500,000
-
4,000,000
(100,000)
(100,000)
(1,000,000)
6,500,000
30,173,010
5,000,000
-
4,000,000
-
39,173,010
Indirectly held.
(i)
(ii) Upon date of his appointment, Mr Meacock held 300,000 shares and an interest via agreement to acquire 1,700,000 shares (settled via off market transfer
on 20 December 2022). At 30 June 2023, Mr Meacock held an interest via agreement to acquire 2,000,000 shares (settled via off market transfer on 6
July 2023).
(iii) At the date he ceased as a consultant to the Company on 2 December 2022, Mr Sinclair held 1,000,000 shares.
Movements in unlisted options held by key management personnel is summarised as follows:
30 June 2023
Balance at
1 July 2022
Acquired
/granted
during year
Exercised
Expired/
lapsed
during year
Net change
other
Balance at
30 June 2023
Exercisable
Not
Exercisable
Ex.
Price
Exp.
Date
Directors
A Sage
M Hancock
Other KMP
J Sinclair
7,500,000
7,500,000
-
7,500,000
7,500,000
-
3,250,000
5,000,000
5,000,000
-
43,250,000
-
-
10,000,000
-
-
10,000,000
(7,500,000)
-
-
-
-
-
-
(7,500,000)
-
(7,500,000)
(7,500,000)
-
-
-
-
-
-
-
-
-
-
5,000,000
25,000,000
(3,250,000)
(5,000,000)
(2,000,000)
(5,000,000)
(7,500,000) (37,750,000)
-
-
-
-
-
-
(3,000,000)
-
(3,000,000)
-
-
10,000,000
-
-
10,000,000
-
-
-
-
20,000,000
-
-
-
-
-
-
-
-
-
-
-
$0.03
-
$0.06
-
10,000,000 $0.027
$0.03
-
$0.06
-
10,000,000 $0.027
31/08/2022
30/06/2023
07/09/2024
31/08/2022
30/06/2023
07/09/2024
$0.03
-
$0.04
-
-
$0.06
- $0.027
31/08/2022
31/08/2023
30/06/2023
07/09/2024
20,000,000
Shares issued to directors or director related entities
There were nil shares issued to directors during the year ended 30 June 2023 in relation to remuneration (2022: nil).
Annual Report 2022
63
Notes to the Consolidated Financial Statements
31 RESTRUCTURE TRANSACTION
During the year the Company announced that it has entered a binding agreement (Agreement) with
entities associated with its major shareholder, Gold Valley Group (GVG) to acquire the remaining 40% joint
venture interest in the JWD Iron Ore Project and to restructure various other obligations that exist between
the parties with respect to the Tennant Creek Joint Venture and the Yarram Joint Venture (Restructure
Transaction).
Key terms of the Agreement includes the following:
▪
▪ CUF to increase its interest in the iron rights over the JWD iron ore mine from 60% to 100% via the
issue of 150 million CUF shares and refunding the historical GVG cash contributions (being $1.71m
at 30 June 2023) (Cash Consideration);
The effective date for the transaction and determining the Cash Consideration is deemed to be 1
January 2023. The amount payable to Gold Valley Iron Ore Pty Ltd (an entity associated with GVG)
(GVIO) will be adjusted by cash paid by GVIO offset by amounts paid to GVIO under the JWD Joint
Venture, subsequent to the effective date and prior to completion of the transaction (Net Called
Sums Amount);
The Cash Consideration will be payable via monthly instalments following completion. For each
month following the settlement date where the amount of net profits (of the JWD Iron Ore Project)
is a positive number, the Company must pay GVIO a cash payment in immediately available funds
equal to 100% of the net profits for that month (unless a payment calculated for any given month
would exceed $500,000, in which case the maximum payable for any given month will be
$500,000) (Monthly Cash Payment) until such time as the aggregate amount of the Monthly Cash
Payments paid to GVIO is equal to the Net Called Sums Amount;
▪
▪ CUF exercises its right to access a further 900,000mt of iron ore at the JWD resource, with the
original exercise price of $2.25m to be settled via transfer of 5% of its joint venture interest in the
Tennant Creek Copper Project; and
Yarram milestone payments of $1.5m re-structured to defer majority of remaining milestone
payment until decision to mine rather than on announcement of indicated resource.
▪
Refer to ASX Announcements dated 22 February 2023 and 11 May 2023 for further details.
Shareholder approval required in respect of the Restructure Transaction was received at the Company’s
General Meeting held 24 July 2023. Completion of the Restructure Transaction settled on 1 September
2023. Upon completion of the Restructure Transaction, GVG’s shareholding interest in CUF increased to
29.39%.
32 EVENTS AFTER THE REPORTING DATE
Completion of Restructure Transaction
As detailed at note 32, the Restructure Transaction was completed on 1 September 2023. Upon completion,
the Company holds:
▪
▪
▪
100% interest in the JWD iron ore mine project;
55% interest in the Tennant Creek project; and
50% interest in the Yarram Iron Ore Project.
Acquisition of West Arunta (Niobium) and Tambourah (Lithium) Exploration Tenure
On 11 July 2023 the Company announced it had entered an agreement to acquire two exploration
tenements:
•
•
E80/5925 located in the West Arunta region, approximately 620km south of Kununurra is
considered prospective for carbonatite hosted REE including niobium; and
P45/3061 located in the Tambourah region of the Pilbara, approximately 90km south of Pilgangoora
and Wodgina Lithium Operations and is considered prospective for lithium.
Consideration payable for the acquisition was 30,000,000 shares. The tenement acquisition was completed
on 7 August 2023.
Annual Report 2023
64
Notes to the Consolidated Financial Statements
Issue of Shares
The following shares were issued subsequent to year end:
▪
▪
30,000,000 shares were issued as consideration for the acquisition of West Arunta (Niobium) and
Tambourah (Lithium) Exploration Tenure; and
150,000,000 shares were issued in respect of the Restructure Transaction.
Movements in Options
The following movements in options occurred subsequent to year end:
▪
▪
13,000,000 unlisted options at $0.02 expiring 7 August 2023 were issued under the Company’s
ESIP; and
3,000,000 unlisted options at $0.04 expired on 31 August 2023.
There have been no other events subsequent to 30 June 2023 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 2023
65
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 2023 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 2023 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 2023.
On behalf of the Board
Mr Antony Sage
Executive Chairman
28 September 2023
Annual Report 2023
66
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 2023, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, and notes to the financial 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 2023 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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
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 2023, the Group had cash and cash equivalents of
$3,896,360, a net working capital surplus of $599,364 (excluding restricted cash) and incurred a loss after
income tax for the year ended 30 June 2023 of $11,154,755.
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
67
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
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 $35,021,811 during
the financial year ended 30 June 2023 (refer to
Note 3(a) of the annual report).
Note 2(s) 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 $35,021,811
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 the Group in applying
the requirements of AASB 15 - Revenue from
Contracts with Customers, such as:
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
the accounting
in applying
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 criteria
prescribed by the applicable standard.
✓ identifying the performance obligations
under its contracts with customers;
the
✓ determining
transaction price,
applying the expected value approach
based on the initial assay and weight
result and subsequent adjustment based
on
final sampling and analysis
the
results;
✓ the method of allocating the transaction
price in the contract to the performance
obligations; and
✓ identifying the timing of recognition of the
performance
based
on
revenue
obligations satisfaction.
68
Key Audit Matters
How the matter was addressed in the audit
Inventory valuation and existence
As at 30 June 2023, the Group held an inventory
of $3,711,719 (refer to the note 7 of the annual
report)
As described
financial
in note 2(i) of
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.
the
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.
Inter alia, our audit procedures included the
following:
▪
▪
Confirmed the quantities through internal and
third-party surveys.
Performed site visit close to ending of the year
to substantiate the existence of operation and
inventory.
▪ Assessed the Group’s Inventory valuation
methodology with the requirements of AASB
102.
Financial Assets – Commodity collar/swap
contracts
The Group realised a gain of $3,211,614 for the
financial year ended 30 June 2023 through
Commodity collar/swap contracts (see note 3(c))
and as at 30 June 2023, the Group held
Commodity collar/swap contracts for a total of
$169,660 (refer to Note 10 of the annual report)
financial
As described
statements, these financial assets have been
classified as financial assets at fair value
in note 2(n)
the
to
through profit and loss in accordance with AASB 9
– Financial Instruments .
Commodity collar/swap contracts were considered
a key audit matter due to the judgment applied in
the valuation.
▪
▪
▪
▪
the
Assessed
the
assumptions used in the inventory valuation
model.
reasonableness of
Tested the mathematical accuracy of the
inventory valuation model.
Recalculated the cost and the net realisable
value of the inventory; and
Ensured the amount presented in the financial
statements was the lower of cost and net
releasable 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.
▪ Obtained the fair value calculation of the
Commodity collar/swap contracts open as at
30 June 2023.
▪ 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; and
▪
Ensured mathematical accuracy of
calculation.
the
69
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Exploration
Evaluation Expenditure
and
As at 30 June 2023, exploration and evaluation
expenditure totalled $9,184,992.
Inter alia, our audit procedures included the
following:
As per Note 11 of the annual report, during the
year the Group acquired a tenure in established
lithium province (North Dam Project).
The carrying value of capitalised exploration and
evaluation expenditure is a key audit matter due
to:
•
•
•
Amount of Exploration assets is significant.
to assess management’s
The necessity
application of
the
requirements 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
evaluation
capitalised
expenditure.
exploration
and
▪
▪
▪
▪
Assessed the Group’s right to tenure over
exploration assets by corroborating
the
ownership of the relevant licences for mineral
resources
registries and
relevant third-party documentation.
to government
Reviewed the directors’ assessment of the
carrying value of
the exploration and
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 to ensure appropriate disclosures
were made.
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 2023 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.
70
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no
realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional 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
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the 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
71
matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included of the directors’ report for the year ended 30 June 2023.
In our opinion, the Remuneration Report of CuFe Limited for the year ended 30 June 2023 complies with section
300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir T Tirodkar
Director
West Perth, Western Australia
28 September 2023
72
Schedule of Tenements
SCHEDULE OF TENEMENTS
As at 18 September 2023:
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
Tennant Creek – Northern Territory
MLC 326
Tennant Creek – Northern Territory
MLC 327
Tennant Creek – Northern Territory
MLC 506
Tennant Creek – Northern Territory
MLC 69
Tennant Creek – Northern Territory
100%
100%
100%
100%
100%
100%
50%
50%
50%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
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 2023
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
E52/4236
Forrest - Western Australia
E51/1033-I
Morck Well – Western Australia
E52/1613-I
Morck Well – Western Australia
E52/1672-I
Morck Well – 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
E15/1495
East Yilgarn – Western Australia
M15/1893*
East Yilgarn – Western Australia
P45/3061
Pilbara – Western Australia
E80/5925*
Kimberley – Western Australia
E80/5950*
Kimberley – Western Australia
* Pending Application
NOTES:
55%
55%
55%
55%
55%
55%
55%
55%
55%
55%
20%
20%
20%
20%
20%
20%
20%
20%
20%
20%
100%
100%
100%
100%
100%
100%
100%
100%
100%
3
3
3
3
3
3
3
3
3
3
4
4
5
4
4
4
6
6
6
6
7
7
7
7
8
9
10
10
10
1
2
3
4
5
CUF (via Wiluna FE Pty Ltd) holds a 100% 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 55% 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.
Annual Report 2023
74
Schedule of Tenements
6
7
8
9
10
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 tenements via the Mt Ida Iron
Ore Rights Sale Agreement.
CUF holds 100% interest in the tenement. A milestone payment of $300,000 is payable if
production occurs, and a 1% gross sales royalty. James Karl Mansen as trustee for
Wildcard (WA) Pty Ltd retains rights to gemstones, Rosa Management Pty Ltd holds rights
to gold.
CUF holds 100% interest in lithium and rare earth related mineral rights.
CUF holds 100% interest in the tenements including all mineral rights.
Annual Report 2023
75
Additional Shareholder Information
ADDITIONAL SHAREHOLDER INFORMATION
Shares
The total number of Shares on issue as at 18 September 2023 was 1,146,112,365, held by 1,776 registered
Shareholders. 766 shareholders hold less than a marketable parcel, based on the market price of a share as at
18 September 2023. 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 18 September 2023, the twenty largest Shareholders were as shown in the following table and held
61.19% of the Shares.
1
2
3
4
5
6
Legal Holder
GOLD VALLEY IRON ORE PTY LTD
DEMPSEY RESOURCES PTY LTD
GECKO MINING COMPANY PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
DEMPSEY RESOURCES PTY LTD
ANTONY WILLIAM PAUL SAGE & LUCY FERNANDES SAGE
NORTH WEST IRON PTY LTD
CAULDRON ENERGY LIMITED
EUROPEAN LITHIUM LIMITED
LSG RESOURCES PTY LTD
7
8
9
10 WHITEY TIGER PTY LTD
11 GOLDVALLEY BROWN STONE PTY LTD
12
13 GECKO MINING COMPANY PTY LTD
14 MRS SAMANTHA HELEN LOUISE YOUNG
15
16
17
18 MR BRIAN PETER BYASS
19
20
20
RIMOYNE PTY LTD
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
REDSTONE METALS PTY LTD
COLLEGE SEARCH PTY LTD
KUN SONG
MR SCOTT BARRY FULCHER & MRS NICOLE SUZANNE FULCHER
Total Top 20
Balance of register
TOTAL
20
Holding
203,667,341
120,848,635
91,425,000
29,832,288
25,300,000
24,923,010
20,000,000
17,913,868
15,000,000
14,915,554
14,603,535
13,946,259
13,000,000
12,500,000
11,194,006
10,816,624
10,733,470
10,382,745
10,300,000
10,000,000
10,000,000
%
17.77
10.54
7.98
2.60
2.21
2.17
1.75
1.56
1.31
1.30
1.27
1.22
1.13
1.09
0.98
0.94
0.94
0.91
0.90
0.87
0.87
10,000,000
701,302,335
444,810,030
1,146,112,365
0.87
61.19
38.81
100.00
Distribution Schedule
A distribution schedule of the number of Shareholders, by size of holding, as at 18 September 2023 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
26,003
492,570
1,522,527
35,052,273
1,109,018,992
1,146,112,365
%
0.00%
0.04%
0.13%
3.06%
96.76%
100.00%
Number of
Shareholders
87
161
188
770
570
1,776
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 / LSG RESOURCES PTY LTD / YUZHENG XIE
Holding^
146,148,635
%
12.75
336,842,135
29.39
Annual Report 2023
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 18 September 2023 the Company has on issue a total of 130,750,000 Unquoted Options on issue (including 20,750,000 issued pursuant to the Company’s
Employee Securities Incentive Plan). In accordance with Listing Rule 4.10.16, 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
Okewood Pty Ltd
Holders individually less than 20%
Total
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
Options
$0.06
12/10/2024
5,000,000
-
-
-
-
5,000,000
Unlisted
Options
$0.027
07/09/2024
Unlisted
Options
$0.10
09/12/2024
-
75,000,000
-
-
-
20,000,000 75,000,000
-
-
10,000,000
10,000,000
-
Annual Report 2023
77
cufe.com.au
CuFe Ltd ABN: 31 112 731 638